EXHIBIT 4.1
THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT AND ALL OTHER APPLICABLE SECURITIES LAWS, UNLESS AN
EXEMPTION FROM THE REGISTRATION PROVISIONS OF SAID ACT AND ALL OTHER
APPLICABLE SECURITIES LAWS IS AVAILABLE AND THE COMPANY RECEIVES AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT AND THE REQUIREMENTS OF ALL OTHER APPLCABLE SECURITIES LAWS
HAVE BEEN SATISFIED.
UNITED FINANCIAL MORTGAGE CORP.
WARRANT
142,745 shares of Common Stock, no par value
December 15, 2003
This WARRANT (this "Warrant") of United Financial Mortgage Corp., a
corporation duly organized and validly existing under the laws of the State
of Illinois (the "Company"), is being issued pursuant to that certain
Underwriting Agreement, dated as of December 9, 2003, by and between the
Company and Maxim Group LLC (the "Underwriter") relating to a firm
commitment public offering (the "Offering") of 2,039,214 shares of common
stock, no par value, of the Company (the "Common Stock"), underwritten by
the Underwriter.
FOR VALUE RECEIVED, the Company hereby grants to Maxim Partners LLC and
its permitted successors and assigns (collectively, the "Holder") the right
to purchase from the Company up to ONE HUNDRED FORTY TWO THOUSAND SEVEN
HUNDRED FORTY- FIVE (142,745) shares of Common Stock (such shares underlying
this Warrant, the "Warrant Shares"), at a purchase price per share equal to
$8.00 (the "Exercise Price"), subject to the terms, conditions and
adjustments set forth below in this Warrant.
1. Vesting of Warrant. This Warrant shall vest and become
exercisable on the first anniversary of the Base Date (the "Vesting Date").
For purposes of this Warrant, the "Base Date" shall mean December 15, 2003.
Except as otherwise provided for herein or as permitted by applicable rules
of the National Association of Securities Dealers, Inc., this Warrant shall
not be sold, transferred, assigned, pledged or hypothecated prior to the
Vesting Date.
2. Expiration of Warrant. This Warrant shall expire on the three (3)
year anniversary of the Vesting Date (the "Expiration Date").
3. Exercise of Warrant. This Warrant shall be exercisable pursuant
to the terms of this Section 3.
3.1 Manner of Exercise.
(a) This Warrant may only be exercised by the Holder hereof on or
after the Vesting Date and on or prior to the Expiration Date, in accordance
with the terms and conditions hereof, in whole or in part (but not as to
fractional shares) with respect to any portion of this Warrant, in minimum
increments of 10,000 shares (or, if smaller, the total number of shares
underlying this Warrant), during the Company's normal business hours on any
day other than a Saturday or a Sunday or a day on which commercial banking
institutions in Chicago, Illinois or New York, New York are authorized by
law to be closed (a "Business Day"), by surrender of this Warrant to the
Company at its office maintained pursuant to Section 10.2(a) hereof,
accompanied by a written exercise notice in the form attached as Exhibit A
to this Warrant (or a reasonable facsimile thereof) duly executed by the
Holder, together with the payment of the Exercise Price. Upon surrender of
this Warrant, the Company shall cancel this Warrant document and shall, in
the event of partial exercise, replace it with a new Warrant document in
accordance with Section 3.3
(b) Except as provided for below, the Warrant must be accompanied
by payment in full of the aggregate Exercise Price in cash by wire transfer
in immediately available funds for the number of Warrant Shares being
purchased. The aggregate Exercise Price may, however, also be paid in full
or in part at the election of the Holder: (i) in the form of Common Stock
owned by the Holder (based on the Fair Market Value (as defined below) of
such Common Stock on the date of exercise), (ii) in the form of Warrant
Shares withheld by the Company from the Warrant Shares otherwise to be
received upon exercise of this Warrant having an aggregate Fair Market Value
on the date of exercise equal to the aggregate Exercise Price of the
Warrant, or (iii) by a combination of the foregoing, provided that the
combined value of all cash and the Fair Market Value of any shares
surrendered to the Company is at least equal to such aggregate Exercise
Price.
(c) For purposes of this Warrant, the term "Fair Market Value"
means the average closing price for the ten (10) trading days immediately
preceding the applicable date of publicly-traded shares of the Common Stock
on the principal securities exchange or market on which shares of Common
Stock are listed or quoted, if the shares of Common Stock are so listed or
quoted or, if not so listed or quoted, as determined by the Company in good
faith and in a reasonable manner, based on the information available to it.
3.2 When Exercise Effective. Each exercise of this Warrant shall
be deemed to have been effected immediately prior to the close of business
on the Business Day on which this Warrant shall have been duly surrendered
to the Company as provided in Sections 3.1 and 12 hereof, and, at such time,
the Holder in whose name any certificate or certificates for Warrant Shares
shall be issuable upon exercise as provided in Section 3.3 hereof shall be
deemed to have become the holder or holders of record thereof.
3.3 Delivery of Common Stock Certificates and New Warrant. As
soon as reasonably practicable after each exercise of this Warrant, in whole
or in part, and in any event within five (5) Business Days thereafter, the
Company, at its expense (including the payment by it of any applicable issue
taxes), will cause to be issued in the name of and delivered to the Holder
hereof or, subject to Sections 9 and 10 hereof, as the Holder (upon payment
by the Holder of any applicable transfer taxes) may direct:
(a) a certificate or certificates (with appropriate restrictive
legends, as applicable) for the number of duly authorized, validly issued,
fully paid and nonassessable Warrant Shares to which the Holder shall be
entitled upon exercise; and
(b) in case exercise is in part only, a new Warrant document of
like tenor, dated the date hereof and calling in the aggregate on the face
thereof for the number of Warrant Shares on the face of this Warrant minus
the number of Warrant Shares designated by the Holder upon exercise as
provided in Section 3.1 hereof (without giving effect to any adjustment
thereof).
4. Certain Adjustments. For so long as this Warrant is outstanding:
4.1 Mergers or Consolidations. If at any time after the date
hereof there shall be a capital reorganization (other than a combination or
subdivision of Warrant Shares otherwise provided for herein) resulting in a
reclassification to or change in the terms of securities issuable upon
exercise of this Warrant (a "Reorganization"), or a merger or consolidation
of the Company with another corporation, association, partnership,
organization, business, individual, government or political subdivision
thereof or a governmental agency (a "Person" or the "Persons") (other than a
merger with another Person in which the Company is a continuing corporation
and which does not result in any reclassification or change in the terms of
securities issuable upon exercise of this Warrant or a merger effected
exclusively for the purpose of changing the domicile of the Company) (a
"Merger"), then, as a part of such Reorganization or Merger, lawful
provision and adjustment shall be made so that the Holder shall thereafter
be entitled to receive, upon exercise of this Warrant, the number of shares
of stock or any other equity or debt securities or property that may be
issued by the Company in addition thereto or in substitution for the Warrant
Shares issuable upon the exercise hereof ("Other Securities") resulting from
such Reorganization or Merger, to which a holder of the Common Stock
deliverable upon exercise of this Warrant would have been entitled under the
provisions of the agreement in such Reorganization or Merger if this Warrant
had been exercised immediately before that Reorganization or Merger. In any
such case, appropriate adjustment shall be made in the application of the
provisions of this Warrant with respect to the rights and interests of the
Holder after the Reorganization or Merger to the end that the provisions of
this Warrant (including adjustment of the Exercise Price then in effect and
the number of Warrant Shares) shall be applicable after that event, as near
as reasonably may be, in relation to any Other Securities deliverable after
that event upon exercise of this Warrant.
4.2 Splits and Subdivisions; Dividends. In the event the Company
should at any time or from time to time effectuate a split or subdivision of
the outstanding shares of Common Stock or pay a dividend in or make a
distribution, payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock
(hereinafter referred to as the "Common Stock Equivalents") without payment
of any consideration by such holder for the additional shares of Common
Stock or Common Stock Equivalents (including the additional shares of Common
Stock issuable upon conversion or exercise thereof) except as otherwise
provided for in this Section 4 (and excluding, for the avoidance of doubt,
cash dividends or distributions to the holders of Common Stock, paid out of
current or retained earnings and declared by the Company's board of
directors), then, as of the applicable record date (or the date of such
distribution, split or subdivision if no record date is fixed), the per
share Exercise Price shall be appropriately decreased and the number of
Warrant Shares shall be appropriately increased in proportion to such
increase (or potential increase) of outstanding shares; provided, however,
that no adjustment shall be made in the event the spilt, subdivision,
dividend or distribution is not effectuated.
4.3 Combination of Shares. If the number of shares of Common
Stock outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Common Stock except as otherwise
provided for in this Section 4, the per share Exercise Price shall be
appropriately increased and the number of shares of Warrant Shares shall be
appropriately decreased in proportion to such decrease in outstanding
shares.
4.4 Adjustments for Other Distributions. In the event the
Company shall declare a distribution payable in securities of other Persons,
evidences of indebtedness issued by the Company or other Persons, assets
(excluding cash dividends or distributions to the holders of Common Stock,
paid out of current or retained earnings and declared by the Company's board
of directors) or options or rights not referred to in Sections 4.1, 4.2 or
4.3, then, in each such case for the purpose of this Section 4.4, upon
exercise of this Warrant, the Holder shall be entitled to a proportionate
share of any such distribution as though the Holder was the actual record
holder of the number of Warrant Shares as of the record date fixed for the
determination of the holders of Common Stock of the Company entitled to
receive such distribution.
5. No Impairment.
5.1 The Company will not, by amendment of its articles of
incorporation or by-laws or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all of the terms and in the taking
of all actions necessary or appropriate in order to protect the rights of
the Holder. Without limiting the generality of the foregoing, the Company:
(a) will not permit the par value of any shares of Common Stock receivable
upon the exercise of this Warrant (or the shares of Common Stock thereunder)
to exceed the amount payable therefor upon exercise, (b) will take all
actions necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock (or the
shares of Common Stock thereunder) on the exercise of the Warrant and (c)
will not take any action which results in any adjustment of the Exercise
Price if the total number of shares of Common Stock (or the shares of Common
Stock thereunder) issuable after the action upon the exercise of the Warrant
would exceed the total number of shares of Common Stock then authorized by
the Company's articles of incorporation and available for the purpose of
issuance upon exercise.
5.2 The number of shares of Common Stock issuable upon exercise
of the Warrant may increase substantially in certain circumstances. The
Company acknowledges that its obligation to issue shares of Common Stock
issuable upon exercise of this Warrant is binding upon it and enforceable
regardless of the dilution that such issuance may have on the ownership
interests of other stockholders.
6. Chief Financial Officer's Report as to Adjustments. In the case
of any adjustment or re-adjustment in the shares of Common Stock or Other
Securities issuable upon the exercise of this Warrant in an amount greater
than 1% of such shares of Common Stock or Other Securities, the Company, at
its expense, will promptly compute the adjustment or re-adjustment in
accordance with the terms of this Warrant and cause its Chief Financial
Officer to certify the computation (other than any computation of the fair
value of property of the Company, as the case may be) and prepare a report
setting forth the adjustment or re-adjustment and showing in reasonable
detail the method of calculation thereof and the facts upon which the
adjustment or re-adjustment is based, including a statement of: (a) the
number of shares of Common Stock outstanding or deemed to be outstanding and
(b) the Exercise Price in effect immediately prior to the deemed issuance or
sale and as adjusted and re-adjusted (if required by Section 4 hereof) on
account thereof and the number of shares issuable upon exercise of the
Warrant. The Company will forthwith mail a copy of each report to the
Holder and will, upon the reasonable written request at any time of the
Holder, furnish to the Holder a like report setting forth the Exercise Price
at the time in effect and the number of shares issuable upon exercise of the
Warrant and showing in reasonable detail how it was calculated. The Company
will also keep copies of all reports at its office maintained pursuant to
Section 10.2(a) hereof and will cause them to be available for inspection at
the office during normal business hours upon reasonable notice by the Holder
or any prospective purchaser of the Warrant designated by the Holder
thereof.
7. Reservation of Shares. The Company shall, solely for the purpose
of effecting the exercise of this Warrant, at all times during the term of
this Warrant reserve and keep available out of its authorized shares of
Common Stock, free from all taxes, liens and charges with respect to the
issue thereof and not be subject to preemptive rights or other similar
rights of shareholders of the Company, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the exercise of
this Warrant. If at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the exercise of this
Warrant, in addition to such other remedies as shall be available to Holder,
the Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase the number of authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for
such purposes, including without limitation, using its Best Efforts to
obtain the requisite shareholder approval necessary to increase the number
of authorized shares of the Company's Common Stock. The Company hereby
represents and warrants that all shares of Common Stock issuable upon
exercise of this Warrant shall be duly authorized and, when issued and paid
for upon exercise, shall be validly issued and, in the case of shares, fully
paid and nonassessable.
8. Registration and Listing.
8.1 Definition of Registrable Securities; Majority. As used
herein, the term "Registrable Securities" means any shares of Common Stock
issuable upon the exercise of this Warrant, until three (3) years from the
Base Date or, if earlier, the date (if any) on which such shares shall have
been transferred or exchanged and new certificates for them not bearing a
legend restricting further transfer shall have been delivered by the Company
and subsequent disposition of them shall not require registration or
qualification of them under the Securities Act of 1933, as amended (together
with the rules and regulations promulgated thereunder from time to time, the
"Securities Act") or any similar state law then in force. For purposes of
this Agreement, the term "Majority" in reference to the holders of
Registrable Securities, shall mean in excess of fifty percent (50%) of the
then outstanding Warrant Shares (assuming the exercise of the entire
Warrant) that (i) are not held by the Company, an affiliate, officer,
creditor, employee or agent thereof or any of their respective affiliates,
members of their family, Persons acting as nominees or in conjunction
therewith and (ii) have not be resold to the public pursuant to a
registration statement filed under the Securities Act.
8.2 Required Registration.
(a) At any time on or after the nine (9) month anniversary of the
Base Date and on or before the five (5) year anniversary of the Base Date,
but on not more than one (1) occasion, upon the written request of the
holders of the Registrable Securities representing a "Majority" of such
securities, the Company will use its Best Efforts to effect the registration
of the respective shares of such holders under the Securities Act to the
extent requisite to permit the disposition thereof as expeditiously as
reasonably possible, but in no event later than 120 days from the date of
such request.
(b) Registrations under this Section 8.2 shall be on such
appropriate registration form: (i) as shall be selected by the Company, and
(ii) as shall permit the disposition of such Registrable Securities in
accordance with this Section 8.2. The Company agrees to include in any such
registration statement all information which the requesting holders shall
reasonably request, which is required to be contained therein.
(c) A registration requested pursuant to this Section 8.2 shall
not be deemed to have been effected: (i) unless a registration statement
with respect thereto has become effective or (ii) if, after it has become
effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Securities and Exchange
Commission (the "SEC") or other governmental agency or court of competent
jurisdiction for any reason, other than by reason of some act or omission by
a holder of Registrable Securities.
8.3 Company Redemption Right. In connection with a request by a
Majority of the holders of Registrable Securities for registration of
Registrable Securities pursuant to Section 8.2 or 8.4, the Company may, at
its option, in lieu of effecting such registration, redeem for cash all, but
not less than all, of the Warrant Shares then outstanding and held by the
requesting holders of Registrable Securities, out of funds legally available
therefor by paying the Redemption Price. As used herein, the term
"Redemption Price" shall mean an amount equal to the sum of (A) an amount
derived by multiplying: (i) the number of Warrant Shares or Other Securities
subject to this Warrant at such time by (ii) the difference of (a) the Fair
Market Value on the date such registration was requested, less (b) the
Exercise Price then in effect on the date such registration was requested.
The Company may validly exercise its redemption right set forth in this
Section 8.3 only by providing written notice thereof to such holders within
five (5) business days of the Company's receipt of holders' written request
for registration and, if such right is validly exercised, the Company shall
pay the aggregate Redemption Price by check or wire transfer of immediately
available funds within fifteen (15) days of the exercise of its redemption
right.
8.4 Incidental Registration Rights.
(a) If the Company, at any time on or after the nine (9) month
anniversary of the Base Date and on or before the five (5) year anniversary
of the Base Date, proposes to register any of its securities under the
Securities Act (other than in connection with the Offering or by a
registration on Form S-4 or S-8 or any successor forms) whether for its own
account or for the account of the holder or holders of all shares other than
Registrable Securities (any shares of such holder (but not those of the
Company) with respect to any registration, "Other Shares"), the Company
shall each such time give prompt (but not less than thirty (30) days prior
to the anticipated effectiveness thereof) written notice to the holders of
Registrable Securities of its intention to do so; provided, however, that in
no event shall the Company have the obligation to send any such notice, and
the holders will not have any registration rights under this Section 8.4, if
registration rights have been exercised two (2) times pursuant to this
Section 8.4 (except if the Company elected not to proceed with any such
registrations, withdrew such registrations or otherwise failed to effect the
offerings covered by such registrations). Upon the written request of any
such holder made within twenty (20) days after the receipt of any such
notice (which request shall specify the Registrable Securities intended to
be disposed of by such holder), except as set forth in Section 8.4(b), the
Company will use its Best Efforts to effect the registration under the
Securities Act of all of the Registrable Securities which the Company has
been so requested to register by such holder, to the extent requisite to
permit the disposition of the Registrable Securities so to be registered, by
inclusion of such Registrable Securities in the registration statement which
covers the securities which the Company proposes to register; provided,
however, that if, at any time after giving written notice of its intention
to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the
Company shall determine for any reason in its sole discretion either to not
register, to delay or to withdraw registration of such securities, the
Company may, at its election, give written notice of such determination to
such holder and, thereupon, (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation
to pay the Registration Expenses in connection therewith), without
prejudice, however, to the rights of the holders entitled to do so to
request that such registration be effected as a registration under Section
8.2, (ii) in the case of a determination to delay registering, shall be
permitted to delay registering any Registrable Securities, for the same
period as the delay in registering such other securities, without prejudice,
however, to the rights of the holders entitled to do so to request that such
registration be effected as a registration under Section 8.2 and (iii) in
the case of a determination to withdraw registration, shall be permitted to
withdraw registration, without prejudice, however, to the rights of the
holders entitled to do so to request that such registration be effected as a
registration under Section 8.2. No registration effected under this Section
8.4 shall relieve the Company of its obligation to effect any registration
upon request under Section 8.2, nor shall any such registration hereunder be
deemed to have been effected pursuant to Section 8.2. The Company will pay
all Registration Expenses in connection with each registration of
Registrable Securities pursuant to this Section 8.4.
(b) If the Company at any time proposes to register any of its
securities under the Securities Act as contemplated by this Section 8.4 and
such securities are to be distributed by or through one or more
underwriters, the Company will, if requested by a holder of Registrable
Securities, use its Best Efforts to arrange for such underwriters to include
all the Registrable Securities to be offered and sold by such holder among
the securities to be distributed by such underwriters, provided that if the
managing underwriter of such underwritten offering shall inform the Company
by letter of its belief that inclusion in such distribution of all or a
specified number of such securities proposed to be distributed by such
underwriters would interfere with the successful marketing of the securities
being distributed by such underwriters (such letter to state the basis of
such belief and the approximate number of such Registrable Securities, such
Other Shares and shares held by the Company proposed so to be registered
which may be distributed without such effect), then the Company may, upon
written notice to such holder and holders of such Other Shares, reduce pro
rata in accordance with the number of shares of Common Stock desired to be
included in such registration (if and to the extent stated by such managing
underwriter to be necessary to eliminate such effect) the number of such
Registrable Securities and Other Shares the registration of which shall have
been requested by each holder thereof so that the resulting aggregate number
of such Registrable Securities and Other Shares so included in such
registration, together with the number of securities to be included in such
registration for the account of the Company, shall be equal to the number of
shares stated in such managing underwriter's letter.
8.5 Registration Procedures. Whenever the holders of Registrable
Securities have properly requested that any Registrable Securities be
registered pursuant to the terms of this Warrant, the Company shall use its
Best Efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof,
and pursuant thereto the Company shall as expeditiously as possible:
(a) prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its Best Efforts to cause
such registration statement to become effective;
(b) notify such holders of the effectiveness of each registration
statement filed hereunder and prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and the prospectus included therein usable for a period commencing
on the date that such registration statement is initially declared effective
by the SEC and ending on the date when all Registrable Securities covered by
such registration statement have been sold pursuant to the registration
statement or cease to be Registrable Securities, and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof
set forth in such registration statement;
(c) furnish to such holders such number of copies of such
registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such holders;
(d) use its Best Efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such
jurisdictions as the such holders reasonably requests and do any and all
other acts and things which may be reasonably necessary or advisable to
enable such holders to consummate the disposition in such jurisdictions of
the Registrable Securities owned by such holders; provided, however, that
the Company shall not be required to: (i) qualify generally to do business
in any jurisdiction where it would not otherwise be required to qualify but
for this subparagraph; (ii) subject itself to taxation in any such
jurisdiction; or (iii) consent to general service of process in any such
jurisdiction;
(e) notify such holders, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact or
omits any material fact necessary to make the statements therein, in light
of the circumstances in which they are made, not materially misleading, and,
at the reasonable request of such holders, the Company shall prepare a
supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus shall not
contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
in which they are made, not materially misleading;
(f) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
registration statement;
(g) make available for inspection by any underwriter
participating in any disposition pursuant to such registration statement,
and any attorney, accountant or other agent retained by any such
underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors,
managers, employees and independent accountants to supply all information
reasonably requested by any such underwriter, attorney, accountant or agent
in connection with such registration statement;
(h) otherwise use its Best Efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement of the
Company, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and, at the option of the Company, Rule 158
thereunder;
(i) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification
of any Registrable Securities included in such registration statement for
sale in any jurisdiction, the Company shall use its Best Efforts promptly to
obtain the withdrawal of such order;
(j) use its Best Efforts to cause any Registrable Securities
covered by such registration statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
enable the sellers thereof to consummate the disposition of such Registrable
Securities; and
(k) if the offering is underwritten, use its Best Efforts to
furnish on the date that Registrable Securities are delivered to the
underwriters for sale pursuant to such registration, an opinion dated such
date of counsel representing the Company for the purposes of such
registration, addressed to the underwriters covering such issues as are
reasonably required by such underwriters.
8.6 Listing. The Company shall secure the listing of the Common
Stock underlying this Warrant upon each national securities exchange or
automated quotation system upon which shares of Common Stock are then listed
(subject to official notice of issuance) and shall maintain such listing of
shares of Common Stock. The Company shall at all times comply in all
material respects with the Company's reporting, filing and other obligations
under the by-laws or rules of the American Stock Exchange (or such other
national securities exchange or market on which the Common Stock may then be
listed, as applicable).
8.7 Expenses. The Company shall pay all Registration Expenses
relating to the registration and listing obligations set forth in this
Section 8. For purposes of this Warrant, the term "Registration Expenses"
means: (a) all registration, filing and NASD fees, (b) all reasonable fees
and expenses of complying with securities or blue sky laws, (c) all word
processing, duplicating and printing expenses, (d) the fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, and (e)
premiums and other costs of policies of insurance (if any) against
liabilities arising out of the public offering of the Registrable Securities
being registered if the Company desires such insurance, if any; provided
however, that, in any case where Registration Expenses are not to be borne
by the Company, such expenses shall not include: (i) salaries of Company
personnel or general overhead expenses of the Company, (ii) auditing fees,
(iii) premiums or other expenses relating to liability insurance required by
underwriters of the Company, or (iv) other expenses for the preparation of
financial statements or other data, to the extent that any of the foregoing
either is normally prepared by the Company in the ordinary course of its
business or would have been incurred by the Company had no public offering
taken place. Registration Expenses shall not include any underwriting
discounts and commissions which may be incurred in the sale of any
Registrable Securities, fees and disbursements of counsel and accountants
for the selling holders of Registrable Securities and transfer taxes of the
selling holders of Registrable Securities.
8.8 Restrictions. The Company shall not be obligated to effect a
registration pursuant to Section 8.2 during the period beginning on the date
sixty (60) days prior to the Company's good faith estimate of the date of
filing of, and ending on a date one hundred twenty (120) days after the
effective date of, a Company-initiated registration (other than a
registration pursuant to Form S-8), provided that: (i) if the holder of
Registrable Securities elects to have all or some of its Registrable
Securities included in the registration pursuant to Section 8.4 hereof, such
Registrable Securities are included in the Company-initiated registration
statement only to the extent required hereunder and (ii) the Company is
actively employing in Best Efforts to cause such registration to become
effective.
8.9 Information Provided by Holders. Any holder of Registrable
Securities included in any registration shall furnish to the Company such
information as the Company may reasonably request in writing to enable the
Company to comply with the provisions hereof in connection with any
registration referred to in this Agreement. In the event that a holder of
Registrable Securities fails to provide such information on a timely basis,
and in any event within seven (7) business days of the Company's written
request, then the Company shall be entitled to exclude the Registrable
Securities of such holder from such registration and the Company shall
nevertheless be deemed to have satisfied its obligations hereunder with
respect to such registration.
8.10 Indemnification. Any holder of Registrable Securities to be
sold pursuant to a registration statement under this Section 8, 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 Securities Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended (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 Securities Act, the Exchange Act or otherwise, arising from: (i)
information furnished in writing by or on behalf of such holder, or its
successors or assigns, for specific inclusion in such registration statement
or (ii) any action taken, or failure to take action, by such holder, or its
successors or assigns, which would be considered unlawful under Section 12
of the Securities Act or Rule 10b-5 of the Exchange Act.
9. Restrictions on Transfer.
9.1 Restrictive Legends. This Warrant and each Warrant issued
upon transfer or in substitution for this Warrant pursuant to Section 10
hereof, each certificate for Common Stock issued upon the exercise of the
Warrant and each certificate issued upon the transfer of any such Common
Stock shall be transferable only upon satisfaction of the conditions
specified in this Section 9. Each of the foregoing securities shall be
stamped or otherwise imprinted with a legend reflecting the restrictions on
transfer set forth herein and any restrictions required under the Securities
Act or other applicable securities laws.
9.2 Notice of Proposed Transfer. Prior to any transfer of any
securities which are not registered under an effective registration
statement under the Securities Act ("Restricted Securities"), which transfer
may only occur if there is an exemption from the registration provisions of
the Securities Act and all other applicable securities laws, the Holder will
give written notice to the Company of the Holder's intention to affect a
transfer and to comply in all other respects with this Section 9.2. Each
notice: (a) shall describe the manner and circumstances of the proposed
transfer, and (b) shall designate special counsel for the Holder giving the
notice. The Holder giving notice will submit a copy thereof to the counsel
designated in the notice. The following provisions shall then apply:
(i) If in the opinion of counsel for the Holder satisfactory
to the Company the proposed transfer may be effected without registration of
the Restricted Securities under the Securities Act (which opinion shall
state in detail the basis of the legal conclusions reached therein) and with
satisfaction of all other applicable securities laws, the Holder shall
thereupon be entitled to transfer the Restricted Securities in accordance
with the terms of the notice delivered by the Holder to the Company. Each
certificate representing the Restricted Securities issued upon or in
connection with any transfer shall bear the restrictive legends required by
Section 9.1 hereof.
(ii) If the opinion called for in (i) above is not delivered,
the Holder shall not be entitled to transfer the Restricted Securities until
either (x) receipt by the Company of a further notice from such Holder
pursuant to the foregoing provisions of this Section 9.2 and fulfillment of
the provisions of clause (i) above, or (y) such Restricted Securities have
been effectively registered under the Securities Act.
9.3 Certain Other Transfer Restrictions. Notwithstanding any
other provision of this Section 9: (i) this Warrant may only be transferred
or assigned in 10,000 share increments, (ii) prior to the Vesting Date, this
Warrant or the Restricted Securities thereunder may only be transferred or
assigned to the persons permitted under NASD Rule 2710(c)(7), (iii) on or
after the Vesting Date, this Warrant or the Restricted Securities thereunder
may only be transferred or assigned (whether by the Holder or any subsequent
permitted Holder of all or any portion of this Warrant) to: (A) employees,
partners and officers of the Underwriter (or by any of those persons for
Estate Planning Transfers (as defined below)), and (iv) no opinion of
counsel shall be necessary for a transfer of Restricted Securities by the
holder thereof to any Person employed by or owning equity in the Holder, if
the transferee agrees in writing to be subject to the terms hereof to the
same extent as if the transferee were the original purchaser hereof and such
transfer is permitted under applicable securities laws. For purposes of
this Section 9.3, the term "Estate Planning Transfers" means a transfer or
assignment by the Holder of this Warrant made solely for estate planning or
matrimonial purposes (including, without limitation, by will, by the laws of
descent and distribution or by inter vivos transfer).
9.4 Termination of Restrictions. Except as set forth in Section
9.3 hereof, the restrictions imposed by this Section 9 upon the
transferability of Restricted Securities shall cease and terminate as to any
particular Restricted Securities: (a) which Restricted Securities shall have
been effectively registered under the Securities Act, or (b) when, in the
opinions of both counsel for the holder thereof and counsel for the Company,
such restrictions are no longer required in order to insure compliance with
the Securities Act or Section 10 hereof. Whenever such restrictions shall
cease and terminate as to any Restricted Securities, the Holder thereof
shall be entitled to receive from the Company, without expense (other than
applicable transfer taxes, if any), new securities of like tenor not bearing
the applicable legends required by Section 9.1 hereof.
10. Ownership, Transfer and Substitution of Warrant.
10.1 Ownership of Warrant. The Company may treat any Person in
whose name this Warrant is registered in the Warrant Register maintained
pursuant to Section 10.2(b) hereof as the owner and holder thereof for all
purposes, notwithstanding any notice to the contrary, except that, if and
when any Warrant is properly assigned in blank, the Company may (but shall
not be obligated to) treat the bearer thereof as the owner of such Warrant
for all purposes, notwithstanding any notice to the contrary. Subject to
Sections 9 and 10 hereof, this Warrant, if properly assigned, may be
exercised by a new holder without a new Warrant first having been issued.
10.2 Office; Exchange of Warrant.
(a) The Company will maintain its principal office at the
location identified in the prospectus relating to the Offering or at such
other offices as set forth in the Company's most current filing (as of the
date notice is to be given) under the Exchange Act or as the Company
notifies the Holders.
(b) The Company shall cause to be kept at its office maintained
pursuant to Section 10.2(a) hereof a Warrant Register for the registration
and transfer of the Warrant. The name and address of the holder of the
Warrant, the transfers thereof and the name and address of the transferee of
the Warrant shall be registered in such Warrant Register. The Person in
whose name the Warrant shall be so registered shall be deemed and treated as
the owner and holder thereof for all purposes of this Warrant, and the
Company shall not be affected by any notice or knowledge to the contrary.
(c) Upon the surrender of this Warrant, properly endorsed, for
registration of transfer or for exchange at the office of the Company
maintained pursuant to Section 10.2(a) hereof, the Company at its expense
will (subject to compliance with Section 9 hereof, if applicable) execute
and deliver to or upon the order of the Holder thereof a new Warrant of like
tenor, in the name of such holder or as such holder (upon payment by such
holder of any applicable transfer taxes) may direct, calling in the
aggregate on the face thereof for the number of shares of Common Stock
called for on the face of the Warrant so surrendered.
10.3 Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, upon delivery of indemnity reasonably
satisfactory to the Company in form and amount or, in the case of any
mutilation, upon surrender of this Warrant for cancellation at the office of
the Company maintained pursuant to Section 10.2(a) hereof, the Company, at
its expense, will execute and deliver, in lieu thereof, a new Warrant of
like tenor and dated the date hereof.
11. No Rights or Liabilities as Stockholder. No Holder shall be
entitled to vote or receive dividends or be deemed the holder of any shares
of Common Stock, Other Securities or any other securities of the Company
which may at any time be issuable on the exercise hereof for any purpose,
nor shall anything contained herein be construed to confer upon the Holder,
as such, any of the rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant shall have
been exercised and the shares of Common Stock purchasable upon the exercise
hereof shall have become deliverable, as provided herein. The Holder will
not be entitled to share in the assets of the Company in the event of a
liquidation, dissolution or the winding up of the Company.
12. Notices. Any notice or other communication in connection with
this Warrant shall be given in writing and directed to the parties hereto as
follows: (a) if to the Holder, c/o Maxim Group LLC, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, XX 00000, Attn: Xxxxxxx Xxxxxx, Fax No: (000) 000-0000; or (b) if
to the Company, to the attention of its Chief Executive Officer at its
office maintained pursuant to Section 10.2(a) hereof; provided, that the
exercise of the Warrant shall also be effected in the manner provided in
Section 3 hereof. Notices shall be deemed properly delivered and received
when delivered to the notice party (i) if personally delivered, upon receipt
or refusal to accept delivery, (ii) if sent via facsimile, upon mechanical
confirmation of successful transmission thereof generated by the sending
telecopy machine, (iii) if sent by a commercial overnight courier for
delivery on the next Business Day, on the first Business Day after deposit
with such courier service, or (iv) if sent by registered or certified mail,
five (5) Business Days after deposit thereof in the U.S. mail.
13. Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the issuance of shares of Common Stock underlying this
Warrant upon exercise of this Warrant; 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 transfer or registration of this Warrant or any
certificate for shares of Common Stock underlying this Warrant in a name
other that of the Holder. The Holder is responsible for all other tax
liability that may arise as a result of holding or transferring this Warrant
or receiving shares of Common Stock underlying this Warrant upon exercise
hereof.
14. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought. This Warrant shall be construed and enforced in
accordance with and governed by the laws of the State of Illinois. The
section headings in this Warrant are for purposes of convenience only and
shall not constitute a part hereof. When used herein, the term "Best
Efforts" means, with respect to the applicable obligation of the Company,
the highest standard of diligence recognized under Illinois law for
similarly situated, publicly-traded companies.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the date first above written.
UNITED FINANCIAL MORTGAGE CORP.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
[Signature Page to Underwriter's Warrant]
EXHIBIT A
FORM OF EXERCISE NOTICE
[To be executed only upon exercise of Warrant]
To UNITED FINANCIAL MORTGAGE CORP.:
The undersigned registered holder of the within Warrant hereby
irrevocably exercises the Warrant pursuant to Section 3.1 of the Warrant
with respect to __________(1) Warrant Shares, at an exercise price per share
of $____, and requests that the certificates for such Warrant Shares be
issued, subject to Sections 9 and 10, in the name of, and delivered to:
______________________________________
______________________________________
______________________________________
______________________________________
The undersigned is hereby making payment for the Warrant Shares in
the following manner: _______________________ [describe desired payment
method as provided for in 3.1 of the Warrant].
The undersigned hereby represents and warrants that it is, and has
been since its acquisition of the Warrant, the record and beneficial owner
of the Warrant.
Dated: _______________
________________________________________
Print or Type Name
________________________________________
(Signature must conform in all respects to name
of holder as specified on the face of Warrant)
________________________________________
(Street Address)
________________________________________
(City) (State) (Zip Code)
_______________________
(1) Insert here the number whole shares of Common Stock on the face of
this Warrant (or, in the case of a partial exercise, which shall be in no
less than 10,000 share increments, the portion thereof as to which this
Warrant is being exercised), in either case without making any adjustment of
shares of Common Stock or any other stock or other securities or property or
cash which, pursuant to the adjustment provisions of this Warrant, may be
delivered upon exercise. In the case of a partial exercise, a new Warrant
will be issued and delivered, representing the unexercised portion of the
Warrant, to the holder surrendering the Warrant.
EXHIBIT B
FORM OF ASSIGNMENT
[To be executed only upon transfer of Warrant]
For value received, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto _____________________
[include name and addresses] the rights represented by the Warrant to
purchase ____________(1) shares of Common Stock of UNITED FINANCIAL MORTGAGE
CORP. to which the Warrant relates, and appoints ___________________________
Attorney to make such transfer on the books of UNITED FINANCIAL MORTGAGE
CORP. maintained for the purpose, with full power of substitution in the
premises.
Dated: ________________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of Warrant)
________________________________________
(Street Address)
________________________________________
(City) (State) (Zip Code)
Signed in the presence of:
________________________________________
(Signature of Transferee)
________________________________________
(Xxxxxx Xxxxxxx)
________________________________________
(City) (State) (Zip Code)
Signed in the presence of:
_______________________
(1) Insert here the number shares of Common Stock on the face of this
Warrant (or, in the case of a partial assignment, which shall be in no less
than 10,000 share increments, the portion thereof as to which this Warrant
is being assigned), in either case without making any adjustment of shares
of Common Stock or any other stock or other securities or property or
cash which, pursuant to the adjustment provisions of this Warrant, may be
delivered upon exercise. In the case of a partial assignment, a new Warrant
will be issued and delivered, representing the unconverted portion of the
Warrant, to the holder surrendering the Warrant.
