THIS WARRANT, AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF, HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAWS OR "BLUE SKY" LAWS, AND MAY NOT BE
TRANSFERRED UNLESS SO REGISTERED OR UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE AND THE TRANSFEROR PROVIDES AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT THE
TRANSFER OF THIS WARRANT, OR THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF, MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE APPLICABLE STATE SECURITIES OR "BLUE SKY"
LAWS.
IMC MORTGAGE COMPANY
STOCK PURCHASE WARRANT
Date of Issuance: October 12, 1998 Certificate No. W-001
FOR VALUE RECEIVED, IMC Mortgage Company, a Florida corporation (the
"Company"), hereby grants to German American Capital Corporation, a Maryland
corporation, or its registered assigns (the "Registered Holder"), the right to
purchase from the Company 868,960 shares (the "Initial Exercisable Amount") of
Common Stock at a price per share of $1.71875 (as adjusted from time to time
hereunder, the "Exercise Price"). This Warrant shall automatically become void
and of no force and effect in the event that (i) the Standstill Period (as
defined in the Intercreditor Agreement) shall have been terminated pursuant to
Section 1(b)(v), (vi) or (vii) of the Intercreditor Agreement or (ii) the
conditions precedent to the Intercreditor Agreement set forth in Section 6 of
the Intercreditor Agreement shall not have been satisfied. Certain capitalized
terms used herein are defined in Section 1 hereof. The amount and kind of
securities obtainable pursuant to the rights granted hereunder and the purchase
price for such securities are subject to adjustment pursuant to the provisions
contained in this Warrant.
This Warrant is subject to the following provisions:
Section 1. Definitions. The following terms have meanings set forth
below:
"Affiliate" means with respect to a Person, a Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with such Person. For purposes of this definition, the term
"control" of a Person means the possession, direct or indirect, of the power to
(i) vote 50% or more of the voting securities of such Person or (ii) direct or
cause the direction of the management and policies of such Person, whether by
contract or otherwise, and the terms and phrases "controlling," "controlled by"
and "under common control with" have correlative meanings.
"Adjusted Exercisable Amount" has the meaning ascribed to such term in
Section 3(e) hereof.
"Aggregate Exercise Price" has the meaning ascribed to such term in
Section 2(b)(i)(D) hereof.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.
"Common Stock" means, collectively, the Company's common stock, par
value $.01 per share, and any capital stock of any class of the Company
hereafter authorized which is not limited to a fixed sum or percentage of par or
stated value in respect to the rights of the holders thereof to participate in
dividends or in the distribution of assets upon any liquidation, dissolution or
winding up of the Company.
"Common Stock Deemed Outstanding" means, at any given time, the number
of shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock deemed to be outstanding pursuant to Sections 3(b)(i) and
3(b)(ii) hereof regardless of whether the Options or Convertible Securities are
actually exercisable at such time, including any shares of Warrant Stock
issuable upon exercise of the Warrants but excluding any shares of Common Stock
issuable upon a Greenwich Conversion until actually issued.
"Company" has the meaning ascribed to such term in the Preamble hereof.
"Convertible Securities" means any stock or securities (directly or
indirectly) convertible into or exchangeable for Common Stock.
"Exercise Period" has the meaning ascribed to such term in Section 2(a)
hereof.
"Exercise Price" has the meaning ascribed to such term in the Preamble
hereof.
"Exercise Time" has the meaning ascribed to such term in Section
2(b)(i) hereof.
"Greenwich" means collectively Greenwich Street Capital Partners II,
L.P., Greenwich Fund, L.P. and GSCP Offshore Fund, L.P.
"Greenwich Preferred Stock" means any preferred stock issued by the
Company to Greenwich upon any exercise of the Exchange Option by Greenwich
pursuant to Section 7.1 of the Loan Agreement.
"Greenwich Conversion" means any conversion of Greenwich Preferred
Stock into shares of Common Stock.
2
"Independent Third Party" means any Person who, immediately prior to
the contemplated transaction, does not own in excess of 25% of the Company's
Common Stock on a fully-diluted basis (a "25% Owner"), who is not an Affiliate
of any such 25% Owner and who is not a descendant (by birth or adoption) of any
grandparent of any such 25% Owner, a descendant (by birth or adoption) of any
grandparent of the spouse of any such 25% Owner or a trust for the benefit of
such 25% Owner or any such descendant.
"Initial Exercisable Amount" has the meaning ascribed to such term in
the Preamble hereof.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as
of October 12, 1998, between the Company, Greenwich, German American Capital
Corporation and Aspen Funding Corp.
"Liquidating Dividend" has the meaning ascribed to such term in Section
4 hereof.
"Loan Agreement" means the Loan Agreement, dated as of October 12,
1998, between the Company and Greenwich.
"Market Price" of any class of Common Stock on any date means the
average of the daily mean between the high and low sales prices regular way of
the shares of such class of Common Stock on the exchange or quotation system on
which such shares are listed as specified below for the 10 consecutive trading
days (as defined below) preceding such date (or, if earlier, the date on which
such class of Common Stock commences trading on an exdistribution basis). If
there shall not have been a sale regular way on any such trading day, the mean
of the last reported bid and asked quotations regular way on the specified
exchange on such day shall be deemed to be the only sale price. The quotation
system specified for purposes of this definition shall be the Nasdaq National
Market if the shares of the applicable class of Common Stock are listed thereon
or, if the shares of the applicable class of Common Stock shall not be listed on
such quotation system, then that national securities exchange or quotation
system on which the applicable class of Common Stock is listed having the
largest volume of trading in the applicable class of Common Stock during the
calendar year or portion thereof next preceding such computation. If the shares
of the applicable class of Common Stock shall not be listed on any such exchange
or quotation system on all such 10 trading days, the average of the closing high
bid and low asked prices for the applicable class of Common Stock in the
over-the counter market on each trading day on which such shares are not so
listed as reported by the National Association of Securities Dealers Automatic
Quotation System or, if not so reported, then as reported by the National
Quotation Bureau Incorporated, or if such organization is not in existence, by
an organization providing similar services (as determined by the Board of
Directors of the Company), shall be deemed to be the only sale price on such
trading day. If the shares of the applicable class of Common Stock shall not be
so reported on any of such trading days, then the Market Price of such shares of
Common Stock shall be the fair market value thereof as determined in the
reasonable judgment of the Board of Directors of the Company. For purposes
hereof, "trading day" means a day on which the securities
3
exchange or quotation system specified for purposes hereof shall be open for
business or, if the shares of the applicable class of Common Stock shall not be
listed on such exchange or quotation system for such period, a day with respect
to which quotations of the character specified for purposes hereof shall be
reported.
"Options" means any rights or options to subscribe for or purchase
Common Stock or Convertible Securities.
"Person" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.
"Purchaser" has the meaning ascribed to such term in Section 2(b)(i)(A)
hereof.
"Registered Holder" has the meaning ascribed to such term in the
Preamble hereof.
"Sale Notice" has the meaning ascribed to such term in Section 6
hereof.
"Sale of the Company" means the sale or transfer to an Independent
Third Party, or two or more Independent Third Parties that are Affiliates of
each other, pursuant to which such party or parties acquire (i) capital stock of
the Company possessing the voting power, under normal circumstances, to elect a
majority of the Board of Directors (whether such acquisition is accomplished by
merger, recapitalization, consolidation, reorganization, combination, or sale or
transfer of the capital stock of the Company) (provided, that the issuance of
preferred stock to Greenwich or the issuance of Common Stock upon conversion of
any preferred stock issued to Greenwich shall not constitute a Sale of the
Company for purposes hereof) or (ii) all or substantially all of the assets of
the Company determined on a consolidated basis (including an acquisition of all
or substantially all of the assets of the Company's Subsidiaries or the
acquisition of all of the capital stock of the Company's Subsidiaries (whether
by merger, recapitalization, consolidation, reorganization, combination, or
issuance or transfer of such capital stock)).
"Securities Act" means the Securities Act of 1933, any successor
statute, and the rules and regulations thereunder, as amended.
"Selling Person" has the meaning ascribed to such term in Section
5(b)(ii) hereof.
"Stockholders" has the meaning ascribed to such term in Section 5(a)
hereof.
"Subsidiary" means any entity of which the Company owns securities or
interests having a majority of the ordinary voting power, either directly or
through one or more Subsidiaries.
4
"Warrant" means collectively this Warrant and any other Warrant(s)
resulting from the transfer, in whole or in part, of this Warrant.
"Warrant Stock" means the Common Stock issued or issuable pursuant to
the Warrants.
Other capitalized terms used in this Warrant but not defined herein
shall have the meanings set forth in the Loan Agreement.
Section 2. Exercise of Warrant.
(a) Exercise Period. The Registered Holder may exercise all or any part
of the purchase rights represented by this Warrant at any time after the first
to occur of (i) the expiration of the Commitment Period, (ii) the entrance by
the Company or any Subsidiary into a Definitive Agreement and (iii) the
commencement of any tender offer, exchange offer, solicitation of proxies or
consents, or the entrance by the Company or any Subsidiary into any definitive
agreement, in each case referred to in clause (ii) or (iii) in connection with
any transaction which, upon consummation, would result in a Change of Control to
the Company and before the 5th anniversary of the Date of Issuance (the
"Exercise Period").
(b) Exercise Procedure.
(i) This Warrant shall be deemed to have been exercised when the
Company has received all of the following items (the "Exercise Time"):
(A) a completed Exercise Agreement, as described in Section
2(c) hereof, executed by the Person exercising the purchase
rights represented by this Warrant (the "Purchaser");
(B) this Warrant;
(C) if this Warrant is not registered in the name of the
Purchaser, an Assignment or Assignments in the form set forth in
Exhibit II hereto evidencing the assignment of this Warrant to
the Purchaser, in which case the Registered Holder shall have
complied with the provisions set forth in Section 11 hereof; and
(D) either (1) a check payable to the Company in an amount
equal to the product of the Exercise Price multiplied by the
number of shares of Warrant Stock being purchased upon such
exercise (the "Aggregate Exercise Price"), or (2) a written
notice to the Company that the Purchaser is exercising this
Warrant by authorizing the Company to withhold from issuance a
number of shares of Warrant Stock issuable upon such exercise of
the Warrant which when multiplied by the Market Price of the
Common Stock is equal to the Aggregate Exercise Price (and such
withheld shares shall no longer be issuable under this Warrant).
5
(ii) Certificates for shares of Warrant Stock purchased upon
exercise of this Warrant shall be delivered by the Company to the
Purchaser within 5 Business Days after the date of the Exercise Time.
(iii) The Warrant Stock issuable upon the exercise of this
Warrant shall be deemed to have been issued to the Purchaser at the
Exercise Time, and the Purchaser shall be deemed for all purposes to
have become the record holder of such Warrant Stock at the Exercise
Time.
(iv) The issuance of certificates for shares of Warrant Stock
upon exercise of this Warrant shall be made without charge to the
Registered Holder or the Purchaser for any issuance tax in respect
thereof or other cost incurred by the Company in connection with such
exercise and the related issuance of shares of Warrant Stock. Each
share of Warrant Stock issuable upon exercise of this Warrant shall,
upon payment of the Exercise Price therefor, be fully paid and
nonassessable and free from all liens and charges with respect to the
issuance thereof.
(v) The Company shall not close its books against the transfer of
this Warrant or of any share of Warrant Stock issued or issuable upon
the exercise of this Warrant in any manner which interferes with the
timely exercise of this Warrant. The Company shall from time to time
take all such action as may be necessary to assure that the par value
per share of the unissued Warrant Stock acquirable upon exercise of
this Warrant is at all times equal to or less than the Exercise Price
then in effect.
(vi) The Company shall assist and cooperate with any Registered
Holder or Purchaser required to make any governmental filings or
obtain any governmental approvals prior to or in connection with any
exercise of this Warrant (including, without limitation, making any
filings required to be made by the Company).
(vii) Notwithstanding any other provision hereof, if an exercise
of this Warrant is to be made in connection with the Sale of the
Company, the exercise of this Warrant may, at the election of the
holder hereof, be conditioned upon the consummation of the Sale of the
Company, in which case such exercise shall not be deemed to be
effective until the consummation of such transaction.
(viii) 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 issuance upon the exercise of the Warrants, such number
of shares of Common Stock issuable upon the exercise of all
outstanding Warrants. The Company shall take all such actions as may
be necessary to assure that all such shares of Common Stock may be so
issued without violation of any applicable law or governmental
regulation or any requirements of any domestic securities exchange or
quotation system upon which shares of Common Stock may be listed
(except for official notice of issuance which shall be immediately
delivered by the Company upon each such issuance). The Company shall
not take any action which would cause the number of authorized but
unissued shares of Common Stock to be less than the number of such
shares required to be reserved hereunder for issuance upon exercise of
the Warrants.
6
(ix) Upon any exercise of this Warrant, the Company may require
customary investment representations from the Registered Holder and
the Purchaser to assure that the issuance of the Warrant Stock
hereunder shall not require registration or qualification under the
Securities Act or any state securities laws or "blue sky" laws.
(c) Exercise Agreement. Upon any exercise of this Warrant, the Exercise
Agreement shall be substantially in the form set forth in Exhibit I hereto,
except that if the shares of Warrant Stock are not to be issued in the name of
the Person in whose name this Warrant is registered, the Exercise Agreement
shall also state the name of the Person to whom the certificates for the shares
of Warrant Stock are to be issued. Such Exercise Agreement shall be dated the
actual date of execution thereof.
(d) Fractional Shares. If a fractional share of Warrant Stock would be
issuable upon exercise of the rights represented by this Warrant, the Company
shall, within 5 Business Days after the date of the Exercise Time, deliver to
the Purchaser a check payable to the Purchaser in lieu of such fractional share
in an amount equal to the difference between the Market Price of such fractional
share as of the date of the Exercise Time and the Exercise Price of such
fractional share.
Section 3. Adjustment of Exercise Price and Number of Shares. In order
to prevent dilution of the rights granted under this Warrant, the Exercise Price
shall be subject to adjustment from time to time as provided in this Section 3,
and the number of shares of Warrant Stock obtainable upon exercise of this
Warrant shall be subject to adjustment from time to time as provided in this
Section 3; provided, however, that in no event shall the number of shares of
Warrant Stock issued and issuable upon exercise of the Warrants exceed 2.5% of
the total number of shares of Common Stock Deemed Outstanding.
(a) Adjustment of Exercise Price and Number of Shares upon Issuance of
Common Stock.
(i) If and whenever during the Exercise Period the Company issues
or sells, or in accordance with Section 3(b) is deemed to have issued
or sold, any shares of Common Stock for a consideration per share less
than the Market Price of the Common Stock determined as of the date of
such issue or sale, then immediately upon such issue or sale the
Exercise Price shall be reduced to the Exercise Price determined by
multiplying the Exercise Price in effect immediately prior to such
issue or sale by a fraction, the numerator of which shall be the sum
of (A) the number of shares of Common Stock Deemed Outstanding
immediately prior to such issue or sale multiplied by the Market Price
of the Common Stock determined as of the date of such issuance of
sale, plus (B) the consideration, if any, received by the Company upon
such issue or sale, and the denominator of which shall be the product
derived by multiplying the Market Price of the Common Stock by the
number of shares of Common Stock Deemed Outstanding immediately after
such issue or sale.
7
(ii) Upon each such adjustment of the Exercise Price hereunder,
the number of shares of Warrant Stock acquirable upon exercise of this
Warrant shall be adjusted to the number of shares determined by
multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Warrant Stock acquirable upon
exercise of this Warrant immediately prior to such adjustment and
dividing the product thereof by the Exercise Price resulting from such
adjustment.
(iii) Notwithstanding the foregoing, there shall be no adjustment
to the Exercise Price or the number of shares of Warrant Stock
obtainable upon exercise of this Warrant with respect to (A) the
granting of stock options to employees, directors, consultants and
vendors of the Company and its Subsidiaries (other than Persons
employed by Greenwich) or the exercise thereof or (B) the exercise of
any Convertible Securities in existence on the date hereof.
(b) Effect on Exercise Price of Certain Events. For purposes of
determining the adjusted Exercise Price under Section 3(a), the following shall
be applicable:
(i) Issuance of Rights or Options. If the Company in any manner
grants or sells any Options and the price per share for which Common
Stock is issuable upon the exercise of such Options, or upon
conversion or exchange of any Convertible Securities issuable upon
exercise of such Options, is less than the Market Price determined as
of the date of such grant or sale of Options, then the total maximum
number of shares of Common Stock issuable upon the exercise of such
Options, or upon conversion or exchange of the total maximum amount of
such Convertible Securities issuable upon the exercise of such
Options, shall be deemed to be outstanding and to have been issued and
sold by the Company at such time for such price per share. For
purposes of this Section 3(b)(i), the "price per share for which
Common Stock is issuable upon exercise of such Options, or upon
conversion or exchange of such Convertible Securities" is determined
by dividing (A) the total amount, if any, received or receivable by
the Company as consideration for the granting or sale of such Options,
plus the minimum aggregate amount of additional consideration payable
to the Company upon the exercise of all such Options, plus in the case
of such Options which are exercisable for the acquisition of
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the issuance or
sale of such Convertible Securities and the conversion or exchange
thereof, by (B) the total maximum number of shares of Common Stock
issuable upon exercise of such Options or upon the conversion or
exchange of all such Convertible Securities issuable upon the exercise
of such Options. No further adjustment of the Exercise Price shall be
made upon the actual issuance of such Common Stock or of such
Convertible Securities upon the exercise of such Options or upon the
actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities.
8
(ii) Issuance of Convertible Securities. If the Company in any
manner issues or sells any Convertible Securities and the price per
share for which Common Stock is issuable upon conversion or exchange
thereof is less than the Market Price determined as of such time, then
the maximum number of shares of Common Stock issuable upon conversion
or exchange of such Convertible Securities shall be deemed to be
outstanding and to have been issued and sold by the Company for such
price per share. For the purposes of this Section 3(b)(ii), the "price
per share for which Common Stock is issuable upon conversion or
exchange thereof" is determined by dividing (A) the total amount
received or receivable by the Company as consideration for the issue
or sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Company
upon the conversion or exchange thereof, by (B) the total maximum
number of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities. No further adjustment of
the Exercise Price shall be made upon the actual issue of such Common
Stock upon conversion or exchange of such Convertible Securities, and
if any such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustments of the Exercise Price
had been or are to be made pursuant to other provisions of this
Section 3(b), no further adjustment of the Exercise Price shall be
made by reason of such issue or sale.
(iii) Change in Option Price or Conversion Rate. If the purchase
price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock changes at any time,
the Exercise Price in effect at the time of such change shall be
adjusted immediately to the Exercise Price which would have been in
effect at such time had such Options or Convertible Securities still
outstanding provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at the
time initially granted, issued or sold and the number of shares of
Common Stock shall be correspondingly adjusted.
(iv) Treatment of Expired Options and Unexercised Convertible
Securities. Upon the expiration of any Option or the termination of
any right to convert or exchange any Convertible Securities without
the exercise of such Option or right, the Exercise Price then in
effect and the number of shares of Warrant Stock acquirable hereunder
shall be adjusted immediately to the Exercise Price and the number of
shares which would have been in effect at the time of such expiration
or termination had such Option or Convertible Securities, to the
extent outstanding immediately prior to such expiration or
termination, never been issued. For purposes of this Section 3(b)(iv),
the expiration or termination of any Option or Convertible Security
which was outstanding as of the date of issuance of this Warrant shall
not cause the Exercise Price hereunder to be adjusted unless, and only
to the extent that, a change in the terms of such Option or
Convertible Security caused it to be deemed to have been issued after
the date of issuance of this Warrant.
9
(v) Calculation of Consideration Received. If any Common Stock,
Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor
shall be deemed to be the net amount received by the Company therefor.
In case any Common Stock, Options or Convertible Securities are issued
or sold for a consideration other than cash, the amount of the
consideration other than cash received by the Company shall be the
fair value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration
received by the Company shall be the Market Price thereof as of the
date of receipt. In case any Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in
connection with any merger in which the Company is the surviving
entity the amount of consideration therefor shall be deemed to be the
fair value of such portion of the net assets and business of the
non-surviving entity as is attributable to such Common Stock, Options
or Convertible Securities, as the case may be. The fair value of any
consideration other than cash or securities shall be determined
jointly by the Company and the Registered Holders of Warrants
representing a majority of the shares of Warrant Stock obtainable upon
exercise of such Warrants. If such parties are unable to reach
agreement within a reasonable period of time, such fair value shall be
determined by an appraiser jointly selected by the Company and the
Registered Holders of Warrants representing a majority of the shares
of Warrant Stock obtainable upon exercise of such Warrants. The
determination of such appraiser shall be final and binding on the
Company and the Registered Holders of the Warrants, and the fees and
expenses of such appraiser shall be paid by the Company.
(vi) Integrated Transactions. In case any Option is issued in
connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the
Options shall be deemed to have been issued without consideration.
(vii) Treasury Shares. The number of shares of Common Stock
outstanding at any given time does not include shares owned or held by
or for the account of the Company or any Subsidiary, and the
disposition of any shares so owned or held shall be considered an
issue or sale of Common Stock.
(viii) Record Date. If the Company takes a record of the holders
of Common Stock for the purpose of entitling them (A) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (B) to subscribe for or purchase Common
Stock, Options or Convertible Securities, then such record date shall
be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may
be.
10
(c) Subdivision or Combination of Common Stock. If the Company at any
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of shares of Warrant
Stock obtainable upon exercise of this Warrant shall be proportionately
increased. If the Company at any time combines (by reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased and the number of shares of
Warrant Stock obtainable upon exercise of this Warrant shall be proportionately
decreased.
(d) Reorganization, Reclassification, Consolidation, Merger or Sale.
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Company's assets or other transaction,
which in each case is effected in such a way that the holders of Common Stock
are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred
to herein as an "Organic Change." Prior to the consummation of any Organic
Change, the Company shall make appropriate provision to insure that each of the
Registered Holders of the Warrants shall thereafter have the right to acquire
and receive, in lieu of or in addition to (as the case may be) the shares of
Warrant Stock immediately theretofore acquirable and receivable upon the
exercise of such holder's Warrant, such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for the number of shares
of Warrant Stock immediately theretofore acquirable and receivable upon exercise
of such holder's Warrant had such Organic Change not taken place. After the
consummation of such Organic Change, this Warrant shall be exercisable solely
for, and holders of Warrants shall be entitled to receive upon exercise thereof,
only such shares of stock, securities or assets which holders of Common Stock
were entitled to receive by reason of such Organic Change (and, without
limitation, no other securities of the Company or any successor entity shall
thereafter be issuable upon exercise of any Warrant). In any such case, the
Company shall make appropriate provision (in form and substance reasonably
satisfactory to the Registered Holders of the Warrants representing a majority
of the Warrant Stock obtainable upon exercise of all Warrants then outstanding)
with respect to such holders' rights and interests to insure that the provisions
of this Section 3 and Section 4 hereof shall thereafter be applicable to the
Warrants. The Company shall not effect any such consolidation, merger or sale,
unless prior to the consummation thereof, the successor entity (if other than
the Company) resulting from consolidation or merger or the entity purchasing
such assets assumes by written instrument (in form and substance reasonably
satisfactory to the Registered Holders of Warrants representing a majority of
the Warrant Stock obtainable upon exercise of all of the Warrants then
outstanding), the obligation to deliver to each such holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to acquire.
(e) Adjustment of Initial Exercisable Amount. The Company hereby
represents and warrants that the Initial Exercisable Amount represents 2.5% of
the Common Stock Deemed Outstanding (after giving effect to the issuance of this
Warrant) as of the Date
11
of Issuance (the "Required Percentage"). To the extent the Initial Exercisable
Amount does not represent the Required Percentage, the Initial Exercisable
Amount shall be adjusted (the "Adjusted Exercisable Amount") so that it
represents the Required Percentage and all adjustments pursuant to this Section
3 shall be made as if the Initial Exercisable Amount had been the Adjusted
Exercisable Amount since the Date of Issuance.
(f) Greenwich Preferred Stock and Greenwich Conversion. Notwithstanding
any other provision contained herein, the provisions of Section 3(b) hereof
shall not apply to any issuance of Greenwich Preferred Stock. A Greenwich
Conversion shall be deemed to be an issuance and sale of shares of Common Stock
for no consideration for purposes of, and the Exercise Price and the number of
shares of Warrant Stock acquireable upon exercise of this Warrant shall be
adjusted pursuant to, Section 3(a) hereof. If shares of Warrant Stock are issued
and outstanding at the time of a Greenwich Conversion, then the Company shall
issue to each holder of Warrant Stock for no consideration the number of shares
of Common Stock equal to the total number of shares of Warrant Stock held by
such holder at the time of the applicable Greenwich Conversion divided by the
Common Stock Deemed Outstanding immediately prior to the applicable Greenwich
Conversion and multiplied by the number of shares of Common Stock issued
pursuant to the applicable Greenwich Conversion. The rights and obligations
contained in the immediately preceding sentence shall be of full force and
effect notwithstanding that this Warrant has been exercised in full and shall
extend to any transferee of Warrant Stock (provided that such transfer be made
in accordance with the terms hereof).
Section 4. Liquidating Dividends. If the Company declares or pays a
dividend upon the Common Stock payable otherwise than in cash out of earnings or
earned surplus (determined in accordance with generally accepted accounting
principles, consistently applied) except for a stock dividend payable in shares
of Common Stock (a "Liquidating Dividend"), then the Company shall give the
Registered Holder of this Warrant 5 Business Days notice before the record date
of such Liquidating Dividend, or if no record is taken, then 5 Business Days
notice before the actual distribution of such Liquidating Dividend.
Section 5. Registration Rights.
(a) If the Company at any time proposes to register any of its Common
Stock under the Securities Act (other than pursuant to a registration on Form
S-8 or any successor form) for sale for the account of holders of Common Stock
(the "Stockholders") or for the account of such Stockholders and its own
account, it will each such time give written notice to the Registered Holder of
this Warrant or the Purchaser(s) of the shares of Warrant Stock of its intention
so to do. Upon the written request of any such Person, given within 10 Business
Days after receipt of any such notice, to register any of its Warrant Stock
issuable or previously issued, the Company will use its commercially reasonable
efforts to cause the Warrant Stock, as to which registration shall have been so
requested, to be included in the securities to be covered by the registration
statement proposed to be filed by the Company; provided, however, that if at any
time after giving written notice of its intention to register the Warrant Stock
and prior to the effective date of the registration statement filed in
connection
12
with such registration, the Company shall determine, in its sole discretion, for
any reason not to register such Common Stock, the Company may notify the
Registered Holder or Purchaser, who made a request as herein provided, and
thereupon shall be relieved of its obligation to register such Warrant Stock.
Further, if the managing underwriter of such offering shall be of the opinion
that the number of shares of Common Stock to be included in a registration
pursuant to this Section 5(a) shall be limited, then the Company will include in
such registration the Common Stock requested to be included in such registration
that in the opinion of such managing underwriter can be sold, such amount first
to be allocated to the Common Stock to be sold by the Company, and second to be
allocated pro rata among the Stockholders and such requesting Registered Holder
or Purchaser(s) on the basis of the relative number of shares of Common Stock
each such Person had requested to be included in such registration.
(b) The Company will:
(i) furnish to each Selling Person (as defined below) such copies
of each preliminary and final prospectus and such other documents as
such holder may reasonably request to facilitate the public offering
of its Common Stock;
(ii) use its commercially reasonable efforts to register or
qualify the Common Stock covered by said registration statement under
the securities or "blue sky" laws of such jurisdictions within the
United States of America as any holder selling under such registration
statement (the "Selling Person") may reasonably request; provided,
however, that the Company shall not be obligated to qualify to do
business in any jurisdiction where it is not then so qualified or to
take any action which would subject it to the service of process in
suits other than those arising out of the offer or sale of the
securities in jurisdiction where it is not now so subject;
(iii) furnish to each Selling Person a signed counter-part of an
opinion of counsel for the Company, dated the effective date of the
registration statement, and "comfort letters" signed by the Company's
independent public accountants who have examined and reported on the
Company's financial statements included in the registration statement,
to the extent permitted by the standards of the American Institute of
Certified Public Accountants, each covering substantially the same
matters with respect to the registration statement (and the prospectus
included therein) and (in the case of the accountants' comfort
letters) with respect to events subsequent to the date of the
financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' comfort letters delivered to the
underwriters in underwritten public offerings of securities, to the
extent that the Company is required to deliver or cause the delivery
of such opinion or comfort letters to the underwriters in an
underwritten public offering of securities;
(iv) permit a representative of the Selling Persons to inspect
and copy such corporate documents and records as may reasonably be
requested by such representative;
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(v) furnish to each Selling Person a copy of all documents filed
and all correspondence from or to the Securities and Exchange
Commission in connection with any such offering; and
(vi) use its commercially reasonable efforts to obtain all
necessary approvals from the National Association of Securities
Dealers, Inc. and appropriate exchanges or quotation systems.
(c) In the event of any registration under the Securities Act pursuant
to this Section 5 of any Warrant Stock, the Company will indemnify, to the
extent permitted by law, the holders of the Warrant Stock whose shares are
included therein and each Person, if any, who controls any such holder within
the meaning of Section 15 of the Securities Act against all claims, losses,
damages and liabilities (or actions in respect thereof), under the Securities
Act or otherwise, arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any registration statement
pursuant to which such shares were registered or in any amendment thereto or
prospectus or prospectus supplement or other document relating thereto or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse such holder for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such claim, loss, damage or
liability arises out of or is based on any untrue statement (or alleged untrue
statement) or omission (or alleged omission) made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such holder specifically for use therein. The holder(s) of Warrant Stock issued
upon the exercise of this Warrant will, if shares of such Warrant Stock are
included among the securities as to which such registration is being effected,
indemnify, to the extent permitted by law, the Company, each of its directors,
each of its officers who signs such a registration statement, each underwriter
and each Person, if any, who controls the Company or any underwriter within the
meaning of Section 15 of the Securities Act against all claims, losses, damages
and liabilities (or actions in respect thereof), under the Securities Act or
otherwise, arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any registration statement pursuant
to which such shares were registered or in any amendment thereto or prospectus
or any prospectus supplement or other document relating thereto or any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading and will
reimburse the Company and such underwriters, directors, officers or Persons for
any legal or any other expenses reasonably incurred in connection with
investigation or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) was made in such
registration statement, amendment, prospectus, prospectus supplement or other
document relating thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such holder specifically
for use therein.
14
(d) Any Person entitled to indemnification hereunder will: (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification; and (ii) unless, in such indemnified party's
reasonable judgment, a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim which makes such
representation inappropriate, permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the indemnified
party. The failure to give timely notice will not relieve the indemnifying party
of any obligation unless such delay unduly prejudices such party's ability to
defend such claim. If such defense is assumed, the indemnifying party will not
be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel (and one local counsel) for all parties indemnified by such indemnifying
party with respect to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such claim.
(e) The rights and obligations contained in this Section 5 shall extend
to any transferee of this Warrant and of the Warrant Stock (provided that such
transfer be made in accordance with the terms hereof).
Section 6. Tag Along. At least 10 Business Days prior to any Sale of
the Company, Greenwich shall give the Registered Holder or Purchaser(s) a
written notice (the "Sale Notice") to the Registered Holder or Purchaser(s),
specifying in reasonable detail the identity of such Independent Third Party,
the number of shares of Common Stock to be transferred and the terms and
conditions of such Sale of the Company. The Registered Holder may elect to
participate in such contemplated Sale of the Company by exercising this Warrant
prior to the consummation of such Sale of the Company and receiving in exchange
for the Warrant Stock the same price per share and same terms as Greenwich
receives for its Common Stock or Convertible Securities convertible into Common
Stock as if such Convertible Securities were converted into Common Stock by
giving Greenwich written notice within 10 Business Days after receipt of the
Sale Notice, and the Purchaser may elect to participate in such contemplated
Sale of the Company at the same price per share and same terms as Greenwich
receives (including the execution of the same document as Greenwich executes in
connection with such Sale of the Company) by giving Greenwich written notice
within 10 Business Days after receipt of the Sale Notice. Greenwich shall use
commercially reasonable efforts to include all such requested shares in such
Sale of the Company. If the prospective buyer refuses to buy all shares at the
contemplated price, the number of shares to be sold to such buyer shall be
allocated pro rata between Greenwich and such requesting Registered Holder or
Purchaser on the basis of the relative number of shares of Common Stock held by
each Person who desired to include stock in such Sale of the Company.
15
Section 7. Transfer and Registration.
(a) Restrictions on Transfer Generally. Transfers of this Warrant (and
the related Warrant Stock) shall be conditional upon satisfaction of the
conditions specified in this Section 7. Such conditions are intended, among
other things, to insure compliance with the provisions of the Securities Act in
respect of the exercise of this Warrant or transfer of this Warrant. The holder
of this Warrant (or the related Warrant Stock) agrees that it will not transfer
this Warrant (or the related Warrant Stock) prior to delivery to the Company of
the opinion of counsel referred to in Section 7(b) hereof.
(b) Opinion of Counsel. So long as this Warrant (or the related Warrant
Stock) bears a legend required by Section 8 hereof, the holder agrees that
subject to Section 7(a), prior to any transfer or attempted transfer it shall
give written notice to the Company of its intention to effect such transfer.
Each such notice shall describe the manner and circumstances of the proposed
transfer in sufficient detail, and, if the Company so requests, shall be
accompanied by an opinion of the holder's counsel reasonably satisfactory in
form and substance to the Company that such proposed transfer may be effected
without registration under the Securities Act or the applicable state securities
or "blue sky" laws. Subject to Section 7(a) hereof, upon delivery of such notice
and opinion to the Company, such holder shall be entitled to consummate such
transfer in accordance with the terms of the notice delivered to the Company.
Each Warrant issued to a transferee in such Transfer shall bear the legend set
forth in Section 8(a) hereof if required by such Section, unless in the opinion
of counsel referred to above such legend is not required or appropriate in order
to insure compliance with the Securities Act.
Section 8. Legend.
(a) Each Warrant issued in exchange, transfer, or replacement of this
Warrant shall (unless otherwise permitted by Section 7(b) hereof or unless such
Warrant shall be subject to an effective registration statement under the
Securities Act or unless such Warrant does not constitute "restricted
securities" pursuant to Rule 144 promulgated under the Securities Act or any
successor rule) be stamped or otherwise imprinted with a legend substantially in
the following form:
THIS WARRANT, AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF, HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAWS OR "BLUE SKY" LAWS, AND MAY NOT
BE TRANSFERRED UNLESS SO REGISTERED OR UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE AND THE TRANSFEROR PROVIDES AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT THE
TRANSFER OF THIS WARRANT, OR THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF, MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE APPLICABLE STATE SECURITIES OR "BLUE SKY"
LAWS.
16
(b) Each certificate for Warrant Stock shall (unless such Warrant Stock
shall be subject to an effective registration statement under the Securities Act
or unless such Warrant Stock does not constitute "restricted securities"
pursuant to Rule 144 promulgated under the Securities Act or any successor rule)
be stamped or otherwise imprinted with a legend in substantially the following
form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAWS OR "BLUE SKY" LAWS, AND MAY NOT BE TRANSFERRED UNLESS SO
REGISTERED OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE
AND THE TRANSFEROR PROVIDES AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT THE TRANSFER OF THE
SHARES REPRESENTED HEREBY MAY BE EFFECTED WITHOUT REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE APPLICABLE STATE
SECURITIES OR "BLUE SKY" LAWS. MOREOVER, THE SECURITIES REPRESENTED
HEREBY ARE SUBJECT TO THE RESTRICTIONS SET FORTH IN THAT CERTAIN STOCK
PURCHASE WARRANT DATED OCTOBER, 12, 1998, A COPY OF WHICH IS ON FILE
WITH THE COMPANY'S SECRETARY.
(c) The provisions of this Section 8 shall be binding upon all
subsequent holders of this Warrant or certificates for Warrant Stock bearing a
legend set forth in this Section 8.
Section 9. Representations and Warranties of the Holder. The Registered
Holder hereby represents and warrants to the Company as set forth in this
Section 9 and each holder shall, upon its acquisition of this Warrant, be deemed
to represent and warrant to the Company (severally and not jointly) as set forth
in this Section 9. The representations and warranties set forth in this Section
9 shall be deemed to be remade by a holder from time to time to the Company when
a Warrant is exercised by such holder.
(a) This Agreement is made with each holder of this Warrant in reliance
upon such holder's representations to the Company, which by its acceptance
hereof such holder hereby confirms, that this Warrant and the Warrant Stock to
be received will be acquired for investment for its own account, and not with a
view to the sale or distribution of any part thereof, but subject nevertheless
to any requirement of law that the disposition of its property shall at all
times be within its control.
(b) Each holder of this Warrant understands that this Warrant currently
is not registered under the Securities Act on the ground that the issuance
hereof is exempt
17
pursuant to Section 4(2) thereof, and that the Warrant Stock may not be issued
unless they are either registered under the Securities Act or an exemption from
registration is available and such Holder provides an opinion of counsel
reasonably satisfactory to the Company to the effect that the issuance of the
Warrant Stock may be effected without registration under the Securities Act or
the applicable state securities or "blue sky" laws.
(c) Each holder of this Warrant is an "accredited investor" as defined
in Regulation D under the Securities Act.
Section 10. No Voting Rights; Limitations of Liability. This Warrant
shall not entitle the holder hereof to any voting rights or other rights as a
stockholder of the Company. No provision hereof, in the absence of affirmative
action by the Registered Holder to purchase Warrant Stock, and no enumeration
herein of the rights or privileges of the Registered Holder shall give rise to
any liability of such holder for the Exercise Price of Warrant Stock acquirable
by exercise hereof or as a stockholder of the Company.
Section 11. Warrant Transferable. Subject to the transfer conditions
referred to in the legend endorsed hereon and the provisions of Section 7
hereof, this Warrant and all rights hereunder are transferable, in whole or in
part, without charge to the Registered Holder, upon surrender of this Warrant
with a properly executed Assignment (in the form of Exhibit II hereto) at the
principal office of the Company.
Section 12. Notices. Unless otherwise provided herein, any notice,
request, instruction, or other document to be given hereunder by any party to
the other parties shall be in writing and delivered in person or by courier or
by facsimile transmission as follows (or at such address or facsimile number of
which notice shall have been duly given in accordance with this Section 12):
If to the Registered Holder, to:
German American Capital Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx Xxxxxxxxxxx
18
with copies to:
Deutsche Bank A.G.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxx Xxxxxxx
and
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxx Xxxxx
and
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx Xxxx, Esq.
If to the Company, to:
IMC Mortgage Company
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: President
with a copy to:
Xxxxxxxx X. Xxxxxx, Esq.
000 X Xxxxxxxxx Xxx
Xxxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 904-346-3299
Section 13. Replacement. Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of the Registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing this Warrant, and in the case of any such loss, theft
or destruction, upon receipt of indemnity reasonably satisfactory to the Company
(provided that if the holder is a financial institution or other institutional
investor its own agreement shall be satisfactory), or, in the case of any such
mutilation upon surrender of such certificate, the Company shall (at its
expense) execute and deliver in lieu of such
19
certificate a new certificate of like kind representing the same rights
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate.
Section 14. Amendment and Waiver. Except as otherwise provided herein,
the provisions of this Warrant may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Registered Holders of Warrants representing a majority of the shares of Warrant
Stock obtainable upon exercise of the Warrants.
Section 15. Descriptive Headings; Governing Law. The descriptive
headings of the several sections of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to the conflicts of law principles thereof.
[SIGNATURE ON THE FOLLOWING PAGE]
20
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
and attested by its duly authorized officers under its corporate seal as of the
Date of Issuance hereof.
IMC MORTGAGE COMPANY
By:
-------------------------
Name:
Title:
ATTEST:
By:
-------------------------
Name:
Title:
EXHIBIT I
EXERCISE AGREEMENT
To: Dated:
--------------------------- --------------------------
--------------------------- --------------------------
--------------------------- --------------------------
The undersigned, pursuant to the provisions set forth in the attached
Warrant (Certificate No. W-_____), hereby agrees to subscribe for the purchase
of __________ shares of the Warrant Stock covered by such Warrant and makes
payment herewith in full therefor at the price per share provided by such
Warrant.
Signature
------------------------
Address:
------------------------
------------------------
------------------------
I-1
EXHIBIT II
ASSIGNMENT
FOR VALUE RECEIVED,_________________________________________ hereby
sells, assigns and transfers all of the rights of the undersigned under the
attached Warrant (Certificate No. W-_____) with respect to the number of shares
of the Warrant Stock covered thereby set forth below, unto:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
---------------- ------- -------------
Dated:
--------------------- ------------------------
Signature
Witness:
------------------------
Signature
II-1
