EX-10.21
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-5 January 30, 1998
FIRST MORTGAGE NETWORK, INC.
COMMON STOCK PURCHASE WARRANT
16,667 shares of Common Stock, $.01 par value per share, subject to
adjustments as set forth herein.
This Common Stock Purchase Warrant certifies that Dominion Fund III
[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 First Mortgage Network, Inc. (the "Company"), up to an
aggregate of 16,667 fully paid and nonassessable shares of Common Stock, $.01
par value, of the Company (the "Common Stock"), at a purchase price of $7.50 per
share of Common Stock (the "Exercise Price"). 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
$2,000,000 Note Purchase Agreement, dated as of January 29, 1998, 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.
1. EXERCISE OF WARRANTS; EXERCISE PRICE
1.01. Exercise of Warrants. At any time on or after the Closing Date 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 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
2
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 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
3
(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.
(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
4
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 at any time on or prior to September 30, 1998,
the Company shall consummate a single transaction or series of transactions in
which it issues or sells 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 and the net proceeds to the Company are at least
$2,000,000, the Exercise Price shall be adjusted to equal the "price per share"
of Common Stock (as determined in accordance with Section 3.01(c)(iii)) received
by the Company in such transaction or series of transactions.
(ii) In the event at any time after September 30, 1998, 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).
(iii) In the case of rights, options, warrants or convertible or
exchangeable securities, the "price per share" of Common Stock referred to above
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.
5
(iv) "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.
(v) 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 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
6
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, 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 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
7
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 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.
8
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) up
to 760,000 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 as a dividend to holders of Series B Preferred Stock or
upon any subdivision or combination of Series B Preferred Stock; (d) Series C
Preferred Stock issued as a dividend to holders of Series C Preferred Stock or
upon any subdivision or combination of shares of Series C Preferred Stock; (e)
Special Preferred Stock (Northern California Division) issued upon any
subdivision or combination of shares of Special Preferred Stock (Northern
California Division); (f) shares of Common Stock issued upon conversion of the
Series B Preferred Stock or Series C Preferred Stock; (g) shares of Series C
Preferred Stock issued upon conversion of the Notes; (h) 252,500 shares of
Common Stock issuable upon the 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 the exercise of
the warrants held or which may be obtained by Superior Bank FSB and any
additional shares required to be issued thereunder to adjust for any stock
split,
9
stock dividend or combination of Common Stock; (j) 33,333 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) 121,468 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; (m) 25,000 shares of Common Stock
issuable upon the exercise of the Xxxxxxxxx Options and any additional shares
required to be issued thereunder to adjust for any stock split, stock dividend
or combination of Common Stock; (n) 71,436 shares of Common Stock issuable upon
the exercise of the Xxxxxxx Xxxxx Warrants and any additional shares required to
be issued thereunder to adjust for any stock split, stock dividend or
combination of Common Stock; (o) 35,844 shares of Common Stock issued or
issuable to Xxxx Xxxxx pursuant to the Agreement and Plan of Merger between the
Company and OnLine Capital, dated July 1, 1997, and any additional shares issued
to Xxxx Xxxxx pursuant to the Operating Agreement entered into in connection
therewith; (p) up to 100,000 shares of Common Stock and warrants to purchase up
to an additional 100,000 shares of Common Stock (and such shares of Common Stock
issued upon the exercise thereof) issued pursuant to the terms of the RMF Merger
Documents; and (q) shares of Common Stock issued upon the exercise of the
warrants issued as of August 31, 1997.
4. DEFINITIONS AND ACCOUNTING TERMS
As used herein, the following terms shall have the following meanings:
"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.
"Expiration Date" shall mean January 31, 2008.
"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.
"Purchaser" shall have the meaning assigned to such term in the
introductory sentence hereof.
10
"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.
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: First Mortgage Network, Inc.
0000 Xxxxxxx Xxxx., 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx
11
With a copy to: Xxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
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
12
and to enforce specificaliy 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.
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.
13
WITNESS the signature of the proper officer of the Company as of the date
first above written.
FIRST MORTGAGE NETWORK, INC.
By /s/ Xxxxx Xxxxxx
--------------------------------------------
Xxxxx Xxxxxx
President
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 FIRST MORTGAGE NETWORK, 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.
