THIS WARRANT AND THE SHARES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT") OR ANY
APPLICABLE STATE SECURITIES LAW. THIS WARRANT AND THE UNDERLYING SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR RESALE IN CONNECTION
WITH THE DISTRIBUTION THEREOF. NO DISPOSITION OF THE WARRANT OR THE UNDERLYING
SHARES MAY BE MADE IN THE ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAW OR (II) AN OPINION
OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH DISPOSITION WITHOUT
REGISTRATION IS IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAW.
WARRANT
TO PURCHASE COMMON STOCK OF AFFINITY FINANCIAL GROUP, INC.
FOR GOOD AND VALUABLE CONSIDERATION RECEIVED, Carolina First
Corporation, a South Carolina corporation ("Warrant Holder" or, with its
successors and assigns, "holder"), is hereby entitled to purchase from Affinity
Financial Group, Inc., a Delaware corporation (the "Company"), at any time and
from time to time (subject to Section 2.5 hereof), at a purchase price of $.01
per share, 62,890 shares of duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock (as defined below), subject to adjustment
as provided in Article IV.
ARTICLE I
CERTAIN DEFINITIONS
For all purposes of this Warrant, unless the context otherwise
requires, the following terms shall have the following respective meanings:
"Act": the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the Commission promulgated thereunder,
all as the same shall be in effect at the time.
"Beneficially Own": the term Beneficially Own shall have the meaning
ascribed to such term in Rule 13d-3 of the Securities Exchange Act of 1934, as
amended, or any successor rule.
"Commission": the Securities and Exchange Commission, or any other
federal agency then administering the Act.
"Common Stock": the Company's authorized Common Stock, no par value per
share, as such class existed on the date of issuance of this Warrant and any
other securities as to which this Warrant becomes
exercisable pursuant to Article IV.
"Company": Affinity Financial Group, Inc., a Delaware corporation, and
any other corporation assuming or required to assume the Warrant pursuant to
Section 4.3.
"Federal Reserve Board": the Board of Governors of the Federal Reserve
System.
"Person": any individual, corporation, partnership, trust,
unincorporated organization, government, or any political subdivision,
instrumentality or agency of any government.
"Warrant Office": see Section 3.1.
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"Warrant Shares": the shares of Common Stock purchasable from time to
time or purchased by the holder of the Warrant upon the exercise thereof
pursuant to Article II.
"Warrant": this warrant and all warrants issued in substitution,
combination or subdivision therefor.
ARTICLE II
EXERCISE OF WARRANT
2.1 Method of Exercise. To exercise this Warrant in whole or in part,
the holder hereof shall deliver to the Company, at the Warrant Office designated
pursuant to Section 3.1: (a) a written notice, in substantially the form of the
subscription notice attached hereto as Exhibit A, modified as appropriate to
reflect any conditional exercise or change in the terms of exercise hereinbelow
described, of such holder's election to exercise this warrant, which notice
shall specify the number of shares of Common Stock to be purchased, (b) this
Warrant and (c) a check payable to the order of the Company in an amount equal
to the aggregate Warrant price for the number of shares of Common Stock being
purchased. Such election may be conditional if the holder so desires, as in the
case of an election to exercise this Warrant contingent upon the occurrence of a
change of control or other event and, in such case, the holder may require such
exercise to be effected immediately before, simultaneous with, or immediately
after such event or at any other time, as requested by the holder, and the
holder may further change its instructions and withdraw or modify its election
to exercise the Warrant at any time prior to the requested date upon which such
exercise would otherwise be effected. The Company shall, as promptly as
practicable, and in any event within 14 days thereafter, execute and deliver or
cause to be executed and delivered, in accordance with said notice, a
certificate or certificates representing the aggregate number of shares of
Common Stock specified in said notice. The stock certificate or certificates so
delivered shall be in such denominations as may be specified in said notice and
shall be registered in the name of such holder or such other name or names as
shall be designated in said notice; provided, however, the Company shall have no
obligation to issue such shares in any manner which would result in a violation
of the registration requirements of the Act or any applicable Blue Sky Laws.
Such certificate or certificates shall be deemed to have been issued and such
holder or any other person so designated to be named therein shall be deemed for
all purposes to have become a holder of record of such shares as of the date the
notice and payment is received by the Company as aforesaid. If this Warrant
shall have been exercised only in part, the Company shall, at the time of
delivery of the certificate or certificates, deliver to the holder a new Warrant
evidencing the rights to purchase the remaining shares of Common Stock called
for by this Warrant, which new Warrant shall in all other respects be identical
with this Warrant, or, at the request of the holder, appropriate notation may be
made on this Warrant which shall then be returned to the holder. The Company
shall pay all expenses, transfer (but not income) taxes and other charges
payable in connection with the preparation, issuance and delivery of stock
certificates and new Warrants, except that, in case stock certificates or new
Warrants shall be registered in a name or names other than the name of the
holder of this Warrant, funds sufficient to pay all transfer taxes which shall
be payable upon the issuance of stock certificates or new Warrants shall be paid
by the holder hereof promptly upon receipt of a written request of the Company
for payment.
2.2 Warrant Shares to be Fully Paid and Nonassessable. All shares of
Common Stock issued upon the exercise of this Warrant shall be duly authorized,
validly issued, fully paid and nonassessable and, if the Common Stock is then
listed on one or more national securities exchanges or quoted on any automated
quotation system, shall be duly listed or quoted thereon.
2.3 Legend on Warrant Shares. The certificates or other instruments
which evidence any shares of Common Stock issued upon exercise hereof shall,
unless no longer required in the judgment of the Company or as set forth in an
opinion of counsel reasonably acceptable to the Company, bear a legend
substantially to the following effect in conspicuous print:
These Shares were issued pursuant to that certain Warrant dated
November 8, 1995 granted to Carolina First Corporation by Affinity
Financial Group, Inc. (the "Warrant") and are subject to the
2
terms thereof, including the provision that, notwithstanding anything
to the contrary therein, Warrant Holder (as defined therein) may not
transfer any shares of Common Stock to a third party if, after such
transfer, such third party transferee will beneficially own 5% or more
of the affinity financial group, inc. Common Stock. A copy of the
Warrant will be provided upon request made to the principal executive
offices of affinity financial group, inc., a Delaware corporation.
2.4 Acknowledgment of Continuing Obligation. The Company will, at the
time of any exercise of this Warrant in whole or in part, upon request of the
holder hereof, acknowledge in writing its continuing obligation to such holder
in respect of any rights to which the holder shall continue to be entitled after
exercise in accordance with this Warrant; provided, however, that the failure of
the holder to make any such request shall not affect the continuing obligation
of the Company to the holder in respect of such rights.
2.5 Limitations on Exercise. Notwithstanding anything to the contrary
herein, unless prior written approval of the Federal Reserve Board is received,
this Warrant may not be exercised in whole or in part if, after such exercise,
Warrant holder will beneficially own 5% or more of the Common Stock then
outstanding.
2.6 Limitations on Transfer of Common Stock. Notwithstanding anything
to the contrary herein, unless prior written approval of the Federal Reserve
Board is received, Warrant Holder may not transfer any shares of Common Stock to
any person (or persons in a series of transactions) if, after such transfer,
such persons will beneficially own 5% or more of the Common Stock.
ARTICLE III
WARRANT OFFICE; TRANSFER OF WARRANT
3.1 Warrant Office. The Company shall maintain an office for certain
purposes specified herein (the "Warrant Office"), which office shall initially
be the Company's office at 1333 main street, suite 101, Columbia, South Carolina
29201 and may subsequently be such other office of the Company or of any
transfer agent of the Common Stock as to which written notice has previously
been given to the holder.
3.2 Transfer of Warrant. This Warrant may not be transferred, in whole
or in part, to any person unless the Warrant Holder has received the approval of
the Federal Reserve Board. If such transfer is approved, the Warrant may be
transferred to any person by presentation to the Company of the Warrant and a
written assignment, in a form reasonably acceptable to the Company, duly
executed by the holder hereof along with written instructions for such transfer;
provided, however, the holder of this Warrant, by acceptance hereof, agrees not
to transfer the Warrant or the related Warrant shares in any manner which would
result in a violation of the registration provisions of the Act or any
applicable Blue Sky Laws, and the Company shall not be required to take any
action hereunder which would result in a violation of such provisions. Upon
presentation for transfer in compliance with the terms hereof, the Company shall
promptly execute and deliver a new Warrant or Warrants identical to this Warrant
in the name or names of the transferee or transferees and in the denominations
specified in such instructions. The Company shall pay all expenses, taxes (other
than income taxes) and other charges payable in connection with the preparation,
issuance and delivery of Warrants under this Section 3.2, except that funds
sufficient to pay all transfer taxes pertaining to the transfer which shall be
payable upon the issuance of such new Warrants shall be paid by the holder
hereof promptly upon receipt of written request of the Company for payment.
ARTICLE IV
ANTI-DILUTION PROVISIONS
4.1 Number of Shares Subject to Adjustment. The number of shares of
Common Stock purchasable at any time hereunder (and/or other securities and
property which may become issuable hereunder) shall be subject to adjustment
from time to time as provided in this article iv.
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4.2 Effect of "Split-ups", "Split-downs" and Stock Dividends. In case
at any time or from time to time while the Warrant remains outstanding the
Company shall subdivide as a whole, by reclassification, by the issuance of a
stock dividend on the Common Stock payable in Common Stock, or otherwise, the
number of shares of Common Stock then outstanding into a greater number of
shares of Common Stock, with or without par value, the number of shares of
Common Stock which may be purchased hereunder shall be increased
proportionately. In case at any time or from time to time while the Warrant
remains outstanding the Company shall consolidate as a whole, by
reclassification or otherwise, the number of shares of Common Stock then
outstanding into a lesser number of shares of Common Stock, with or without par
value, the number of shares of Common Stock which may be purchased hereunder
shall be reduced proportionately.
4.3 Effect of Merger or Consolidation. In case the Company shall, while
this Warrant remains outstanding, enter into any consolidation with or merge
into any other corporation wherein the Company is not the surviving corporation,
or wherein securities of a corporation other than the Company are distributable
to holders of Common Stock, or sell or convey 50% or more of its assets, and in
connection with such consolidation, merger, sale or conveyance, shares of stock
or other securities shall be issuable or deliverable in exchange for the Common
Stock, then, as a condition of such consolidation, merger, sale or conveyance,
lawful and adequate provision shall be made whereby the holder of this Warrant
shall thereafter be entitled to purchase pursuant to this Warrant (in lieu of
the number of shares of Common Stock which such holder would have been entitled
to purchase immediately prior to such consolidation, merger, sale or conveyance)
the shares of stock or other securities to which such number of shares of Common
Stock would have been entitled at the time of such consolidation, merger, sale
or conveyance, at an aggregate purchase price equal to that which would have
been payable if such number of shares of Common Stock had been purchased by
exercise of this Warrant immediately prior thereto. In case of any such
consolidation, merger, sale or conveyance, appropriate provision shall be made
with respect to the rights and interests thereafter of the holder of this
Warrant, to the end that all the provisions of this Warrant (including the
provisions of this article iv) shall thereafter be applicable, as nearly as
practicable, to such stock or other securities thereafter deliverable upon the
exercise of this Warrant. The Company shall not effect any such consolidation,
merger, sale or conveyance unless prior to or simultaneously with the
consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger or purchasing or acquiring such
assets shall assume by written instrument, executed and mailed or delivered to
the holder of this Warrant, the obligation to deliver to such holder such shares
of stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to receive, which instrument shall contain the
express assumption by such successor corporation of the due and punctual
performance and observance of every provision of this Warrant to be performed
and observed by the Company and of all liabilities and obligations of the
Company hereunder.
4.4 Reorganization or Reclassification. In case of any capital
reorganization or any reclassification of the capital stock of the Company
(except as provided in Section 4.2) while this Warrant remains outstanding, then
as a condition of such capital reorganization or reclassification, lawful and
adequate provision shall be made whereby the holder of this Warrant shall
thereafter be entitled to purchase pursuant to this Warrant (in lieu of the
number of shares of Common Stock specified in the first paragraph of this
Warrant which such holder would have been entitled to purchase immediately prior
to such reorganization or reclassification) the shares of stock of any class or
other securities or property to which such number of shares of Common Stock
would have been entitled at the time of such reorganization or reclassification,
at an aggregate purchase price equal to that which would have been payable if
such number of shares of Common Stock specified in the first paragraph of this
Warrant had been purchased immediately prior to such reorganization or
reclassification. In case of any such capital reorganization or
reclassification, appropriate provision shall be made with respect to the rights
and interests thereafter of the holder of this Warrant, to the end that all the
provisions of this Warrant (including the provisions of this article iv) shall
thereafter be applicable, as nearly as practicable, to such stock or other
securities or property thereafter deliverable upon the exercise of this Warrant.
4
4.5 Statement of Adjustment: Accountants' Opinion. Upon each adjustment
of the number of shares of Common Stock, and in the event of any change in the
rights of the holder of this Warrant by reason of other events herein set forth,
then and in each case, the Company will promptly (a) prepare a schedule setting
forth the adjusted number of shares entitled to be purchased hereunder, or
specifying the other shares of stock, securities or assets and the amount
thereof receivable as a result of such change in rights, and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based, and (b) if requested by a holder of the Warrant, obtain an
opinion of a firm of independent certified public accountants of recognized
national or regional standing selected by the Company's board of directors (who
may be the regular auditors of the Company) that, based upon the Warrant and a
review of the aforementioned schedules prepared by the Company, such
computations were made in accordance with the provisions of the Warrant. The
Company will promptly mail a copy of such schedule and of such accountants'
opinion to the registered holder of this Warrant.
4.6 Determinations by the Company. All determinations by the Company
under the provisions of this Warrant shall be made in good faith with due regard
to the interests of the holder of this Warrant and in accordance with good
financial practice.
4.7 Notification by the Company. If the Company proposes:
(a) to declare any dividend upon its Common Stock
payable in cash or stock or make any other distribution to the
holders of its Common Stock;
(b) to make an offer for subscription pro rata to the
holders of its Common Stock of any additional shares of stock
of any class or other rights;
(c) to effect any capital reorganization or
reclassification of the capital stock of the Company, or
consolidation or merger of the Company with, or sale or
transfer of all or substantially all its assets to, another
corporation; or
(d) to effect a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the holder at the address of such holder as
shown on the books of the Company, (a) at least ten (10) days' prior written
notice of the date on which the books of the Company shall close or a record
shall be taken for such dividend, distribution or subscription rights or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, or (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at least
ten (10) days' prior written notice of the date when the same shall take place.
Such notice in accordance with the foregoing clause (a) shall also specify, in
the case of any such dividend, distribution or subscription rights, the date on
which the holders of Common Stock shall be entitled thereto, and such notice in
accordance with the foregoing clause (b) shall also specify the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be. In each case ten (10) days' prior written notice
shall mean notice received by the holders at least ten (10) days before the
applicable event or circumstance.
ARTICLE V
CERTAIN COVENANTS OF THE COMPANY
The Company covenants and agrees that:
5
(a) it will authorize, reserve and set apart and have at all times,
free from preemptive rights, a number of shares of authorized but unissued
Common Stock or other securities or property deliverable upon the exercise of
this Warrant sufficient to enable it at any time to fulfill all its obligations
hereunder;
(b) this Warrant shall be binding upon any corporation succeeding to
the Company by merger or consolidation;
(c) the Company will from time to time take all such action as may be
requisite to assure that the par value per share of the Common Stock is at all
times equal to or less than the per share exercise price provided hereunder;
(d) if any shares of Common Stock to be reserved for the purpose of
exercise of this Warrant require registration or listing with, or approval of,
any governmental authority, stock exchange or other regulatory body under any
federal or state law or regulation or otherwise (except that no registration
under the securities Act of 1933 shall be required) in order for such shares to
be validly issued and delivered upon exercise of this Warrant, the Company will
in good faith and as expeditiously as possible endeavor to secure such
registration, listing or approval, as the case may be; and
(e) it will not repurchase outstanding shares or otherwise take any
action which would cause Warrant holders to beneficially own 5% or more of the
Common Stock then outstanding; and
(f) the capitalization of the Company on october 27, 1994 and on
november 1, 1995 was and is as set forth in exhibit b attached hereto.
ARTICLE VI
MISCELLANEOUS
6.1 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the state of Delaware.
6.2 Waiver and Amendment. Any term or provision of this Warrant may be
waived at any time by the party which is entitled to the benefits thereof and
any term or provision of this Warrant may be amended or supplemented at any time
by agreement of the holder and the Company, except that any waiver of any term
or condition, or any amendment or supplementation, of this Warrant must be in
writing. A waiver of any breach or failure to enforce any of the terms or
conditions of this Warrant shall not in any way affect, limit or waive a party's
rights hereunder at any time to enforce strict compliance thereafter with any
term or condition of this Warrant.
6.3 Illegality. In the event that any one or more of the provisions
contained in this Warrant shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of this Warrant shall not, at the election of the party for whom the
benefit of the provision exists, be in any way impaired.
6.4 Filing of Warrant. A copy of this Warrant shall be filed in the
records of the Company.
6.5 Notice. Any notice or other document required or permitted to be
given or delivered to the holder shall be delivered personally, or sent by
certified or registered mail, to such holder at the last address shown on the
books of the Company maintained at the Warrant office for the registration of,
and the registration of transfer of, the Warrant or at any more recent address
of which the holder shall have notified the Company in writing. Any notice or
other document required or permitted to be given or delivered to the Company,
other than such notice or documents required to be delivered to the Warrant
office, shall be delivered at, or sent by certified or registered mail to, the
office of the Company described above or such other
6
address within the united states of america as shall have been furnished by the
Company to the holder in accordance herewith.
6.6 Loss, Destruction, Etc. of Warrant. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of the
Warrant, and in the case of any such loss, theft or destruction, upon delivery
of a bond of indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation, upon surrender
and cancellation of the Warrant, the Company will make and deliver a new
Warrant, of like tenor, in lieu of such lost, stolen, destroyed or mutilated
Warrant. Any Warrant issued under the provisions of this Section 6.6 in lieu of
any Warrant alleged to be lost, destroyed or stolen, or in lieu of any mutilated
Warrant, shall constitute an original contractual obligation on the part of the
Company.
6.7 Limitation of Liability; Not Stockholders. No provision of this
Warrant shall be construed as conferring upon the holder hereof the right to
vote, consent, receive dividends or receive notice, other than as herein
expressly provided, in respect of meetings of stockholders for the election of
directors of the Company or any other matter whatsoever as a stockholder of the
Company. No provision hereof, in the absence of affirmative action by the holder
hereof to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof, shall give rise to any liability of
such holder for the purchase price of any Warrant shares or as a stockholder of
the Company, whether such liability is asserted by the Company or by creditors
of the Company.
6.8 Termination of Warrant. This Warrant will terminate (to the extent
not exercised) on december 31, 2015.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name by its President and its corporate seal to be impressed hereon and
attested by its Secretary.
AFFINITY FINANCIAL GROUP, INC.
November 8, 1995 By:
Jeff A. Norris, Chief Executive Officer
[CORPORATE SEAL]
Attest:
Secretary
7
EXHIBIT A
FORM OF SUBSCRIPTION NOTICE
Affinity Financial Group, Inc.
The undersigned, the holder of the foregoing Warrant, hereby elects to
exercise purchase rights represented by said Warrant for, and to purchase
thereunder, shares of the Common Stock covered by said Warrant and herewith
makes payment in full therefor of $ by check payable to the order of the
Company, and requests (a) that certificates for such shares (and any securities
or other property issuable upon such exercise) be issued in the name of and
delivered to whose address is and whose taxpayer identification number is and
(b) if such shares shall not include all of the shares issuable as provided in
said Warrant, that a new Warrant of like tenor and date for the balance of the
shares issuable thereunder be delivered to the undersigned.
Warrant Holder
By:
, President
Dated:
8
EXHIBIT B
Capitalization at October 27, 1994 and Capitalization at November 1, 1995
9
AMENDMENT NO. 1
with respect to
WARRANT
TO PURCHASE COMMON STOCK OF AFFINITY FINANCIAL GROUP, INC.
This Amendment No. 1 is executed with respect to that certain Warrant
to Purchase Common Stock of Affinity Financial Group, Inc. (now known as
Affinity Technology Group, Inc.) (the "Warrant") held by Carolina First
Corporation, a South Carolina corporation ("Warrant Holder" or, with its
successors and assigns, "Holder"), which Warrant entitled Warrant Holder
to purchase 62,890 shares of Common Stock of Affinity Technology Group, Inc.,
a Delaware corporation (the "Company") in accordance with the terms thereof.
WHEREAS, Warrant Holder has exercised its rights to receive 7,500
shares of the total 62,890 shares issuable pursuant to the Warrant;
WHEREAS the Company has issued to Warrant Holder such 7,500 shares;
WHEREAS the Company and Warrant Holder desire to amend the Warrant as
reflect that it currently represents the right to receive 55,390 shares of
Company Common Stock;
NOW, THEREFORE, the Warrant Holder hereby amends the Warrant as
follows:
As a result of the partial exercise of the Warrant with respect to
7,500 shares, the Warrant is hereby amended to state that the shares of
Company Common Stock issuable thereunder is changed from 62,890 shares
to 55,390 shares. The Warrant is otherwise unchanged and remains in full
force and effect.
IN WITNESS WHEREOF, the Company has caused this Amendment No. 1 to
be signed in its name by its President and its corporate seal to be impressed
hereon and attested by it Secretary.
AFFINITY TECHNOLOGY GROUP, INC.
December 28, 1995 By:
Jeff A. Norris, Chief Executive Officer
[CORPORATE SEAL]
Attest:
Secretary
CONSENT AND AGREE:
Carolina First Corporation
William S. Hummers III