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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1 TO
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from_______________________ to______________
Commission file number 001-14205
JWGENESIS FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
Florida 58-1545984
- ------------------------------ -------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
980 North Federal Highway - Suite 210
Boca Raton, Florida 33432
- -------------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (561) 338-2600
Securities registered pursuant to Section 12(b) of the Act:
Common Stock - Par Value $.001 per share
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(Title of class)
Securities registered pursuant to Section 12(g) of the Act: None
Name of Exchange on Which Registered: The American Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the last 90 days. Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
On March 27, 2000, the Registrant had 8,459,000 outstanding shares of
Common Stock, $.001 par value, and at such date, the aggregate market value of
the shares of Common Stock held by non-affiliates, was approximately
$139,573,000.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive Proxy Statement for the 2000
Annual Meeting of Stockholders, to be filed with the Commission, are
incorporated by reference into Part III.
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Portions Amended
Part IV, Item 14(3), of Company's Annual Report on Form 10-K is hereby amended
to reflect the addition or modification of the following exhibits:
10(j) Common Stock Purchase Warrant, fully vested issued to GE
Financial Assurance Holdings, Inc., dated September 15, 1999.
23(a) Consent of PricewaterhouseCoopers relating to Registration
Statements on Form S-8.
23(b) Consent of PricewaterhouseCoopers relating to Registration
Statements on Form S-3.
99(i) Amendment to the Leeds Nonsolicitation Agreement
99(j) Nonsolicitation Agreement between the Company and Joel E. Marks.
99(k)* Agreement to amend the Marks Nonsolicitation Agreement
99(l) Amendment to the Marks Nonsolicitation Agreement
* Previously filed. Amendment herein is only to revise description in the
Exhibit list.
The full list of Exhibits to the Form 10-K, as amended, is set forth below.
2
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(3) Exhibits included herein:
Exhibit Number Description of Exhibit
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2.1 Stock Purchase Agreement dated April 16, 1999, by and among
JWGenesis, Fiserv, Inc., Fiserv Clearing, Inc., JWGenesis
Financial Services, Inc., and JWGenesis Clearing Corp.
(incorporated by reference to Exhibit 2.1 to the Company's
Current Report on Form 8-K filed with the Commission on April
30, 1999).
3(a) Articles of Incorporation of JWGenesis (incorporated by
reference to Exhibit 3.1 to JWGenesis' Registration Statement on
Form S-4 (File No. 333-47693) filed with the Commission on April
22, 1998 (the "Combination S-4")).
3(b) By-Laws, as amended, of JWGenesis (incorporated by reference to
Exhibit 3(b) to the Company's Annual Report on Form 10-K for the
year ended December 31, 1998).
10(a) Agreement for Securities Clearance Services between Corporate
Securities Group, Inc. and Bear Stearns & Co., Inc.
(incorporated by reference to Exhibit 10(d) to the Amendment to
Application or Report on Form 8-K dated October 3, 1990) of
JWCharles Financial Services, Inc. then known as Corporate
Management Group, Inc., Commission No. 0-14772, the predecessor
in interest of the Company (the "Predecessor").
10(b) Promissory Note and Loan Agreement between the Predecessor and
Wilmington Trust Company dated January 19, 1996 (incorporated by
reference to Exhibit 10(i) to the Predecessor's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995).
10(c) Amended and Restated Common Stock Purchase Warrant issued to W T
Investments, Inc. dated February 27, 1998 (incorporated by
reference to Item 10(f) of the Predecessor's Annual Report on
Form 10-K for the year ended December 31, 1997).
10(d) Revolving Loan Agreement between the Predecessor and SunTrust
Bank, South Florida, N.A. dated December 18, 1996 (incorporated
by reference to Item 10(i) of the Predecessor's Annual Report on
Form 10-K for the year ended December 31, 1996).
10(e) Common Stock Purchase Warrant issued to SunTrust Banks, Inc.
dated August 26, 1996 (incorporated by reference to Item 10(m)
of the Predecessor's Annual Report on Form 10-K for the year
ended December 31, 1996).
3
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Exhibit Number Description of Exhibit
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10(f) Equity Exchange and Conciliation Agreement by and Among the
Company, Marshall T. Leeds, Joel E. Marks, JWGenesis Capital
Markets, LLC, The Will K. Weinstein Revocable trust, Philip C.
Stapleton, Will K. Weinstein, and other Members of the Stapleton
Group dated March 3, 1999 (incorporated by reference to Exhibit
2 to the Company's Current Report on Form 8-K filed with the
Commission on March 18, 1999).
10(g) Transition Services Agreement, dated April 16, 1999 by and among
the JWGenesis, Fiserv, Inc., Fiserv Clearing, Inc., JWGenesis
Financial Services, Inc., and JWGenesis Clearing Corp.
(incorporated by reference to Exhibit 2.1 to the Company's
Current Report on Form 8-K filed with the Commission on June 15,
1999).
10(h) Form of Fully Disclosed Correspondent Agreement dated June 1,
1999 (incorporated by reference to Exhibit 2.1 to the Company's
Current Report on Form 8-K filed with the Commission on June 15,
1999).
10(i) Stockholders Agreement among JWGenesis, Woody Springs LLC and
MVP.com, Inc., dated as of July 15, 1999 (incorporated by
reference to Exhibit 10(c) to the Company's Current Report on
Form 8-K filed with the Commission on August 13, 1999)..
10(j) Common Stock Purchase Warrant, fully vested, issued to GE
Financial Assurance Holdings, Inc., dated September 15, 1999.
21 Subsidiaries of the Registrant (incorporated by reference to
Exhibit 21 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1998).
23(a) Consent of PricewaterhouseCoopers relating to Registration
statements on Form S-8.
23(b) Consent of PricewaterhouseCoopers relating to Registration
statements on Form S-3.
99(a) Amended and Restated Agreement and Plan of Combination, dated as
March 9, 1998, among JWGFS, the Company, Genesis and the owners
of all of the equity interests in Genesis (incorporated by
reference to Exhibit 2.1 to the Combination S-4).
99(b) Employment Agreement between the Company and Marshall T. Leeds
(incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1998).
99(c) Employment Agreement between the Company and Joel E. Marks
(incorporated by reference to Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1998).
99(d) Employment Agreement between the Company and Gregg S. Glaser
(incorporated by reference to Exhibit 99(e) to the Company's
Registration Statement on Form S-4, Commission File No.
33-66751).
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Exhibit Number Description of Exhibit
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99(e) Employment Agreement between JWGenesis and John Elway, dated as
of July 15, 1999 (incorporated by reference to Exhibit 10(b) to
the Company's Current Report on Form 8-K filed with the
Commission on August 13, 1999).
99(f) Stock Option Agreement between JWGenesis and John Elway, dated
as of July 15, 1999 (incorporated by reference to Exhibit 10(c)
to the Company's Current Report on Form 8-K filed with the
Commission on August 13, 1999).
99(g) Nonsolicitation Agreement between the Company and Marshall T.
Leeds (replacing an incorrect version thereof inadvertently
filed as Exhibit 99(h) to the Company's 1998 Form 10-K; the
previous filing is hereby deleted in its entirety).
99(h) Agreement to amend the Leeds Nonsolicitation Agreement.
99(i) Amendment to the Leeds Nonsolicitation Agreement.
99(j) Nonsolicitation Agreement between the Company and Joel E. Marks.
99(k) Agreement to amend the Marks Nonsolicitation Agreement.
99(l) Amendment to the Marks Nonsolicitation Agreement.
5
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: April 13, 2000 JWGENESIS FINANCIAL CORP.
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(Registrant)
By: /s/ Joel E. Marks
--------------------------
Joel E. Marks
Chief Operating Officer,
Secretary, and Director
Pursuant to the requirements of the Securities Act of 1934, this report
has been signed by the following persons on behalf of the Registrant and in the
capacities indicated on the 13th day of April, 2000.
/s/ Marshall T. Leeds*
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Marshall T. Leeds, Chairman, President
and Chief Executive Officer
(Principal Executive Officer) and Director
/s/ Joel E. Marks
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Joel E. Marks, Chief Operating Officer,
Secretary, and Director
/s/ Gregg S. Glaser*
- ---------------------------------------
Gregg S. Glaser, Chief Financial
Officer (Principal Financial
and Accounting Officer) and Director
/s/ Jeffrey H. Lehman*
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Jeffrey Lehman, Director
/s/ Wm. Dennis Ferguson*
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Wm. Dennis Ferguson, Director
/s/ Sanford Cohen*
- ---------------------------------------
Sanford Cohen, Director
*By: /s/ Joel E. Marks
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Joel E. Marks, as Attorney-In-Fact
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EXHIBIT 10(j)
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SUCH ACT.
JWGENESIS FINANCIAL CORP.
Common Stock Purchase Warrant
Class A Warrant
Warrant No. 1 New York, New York
September 15, 1999
JWGENESIS FINANCIAL CORP. (the "Company"), a Florida corporation, for
value received, hereby certifies that GE FINANCIAL ASSURANCE HOLDINGS, INC. or
its registered assigns is entitled to purchase from the Company 175,000 duly
authorized, validly issued, fully paid and nonassessable shares of the Company's
Original Common Stock at an initial exercise price per share of $13.8713 at any
time or from time to time after September 15, 1999 and prior to 5:00 p.m., New
York City time, on the Expiration Date (as hereinafter defined), all subject to
the terms, conditions and adjustments set forth below in this Warrant.
This Warrant is one of the Common Stock Purchase Warrants (of the
Class specified above) expiring on the Expiration Date (the "Warrants", such
term to include all Warrants issued in substitution therefor or upon transfer
thereof) originally issued in connection with the execution and delivery of the
Strategic Marketing Agreement dated as of September 15, 1999 between the Company
and GE Financial Assurance Holdings, Inc. ("GEFA"). Certain capitalized terms
used in this Warrant are defined in Section 13.
Section 1. Exercise of Warrant.
1A. Manner of Exercise. This Warrant may be exercised by the holder
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hereof, in whole or in part, during normal business hours on any Business Day on
or after the Initial Exercise Date to and including the Expiration Date, by
surrender of this Warrant, with the form of subscription at the end hereof (or a
reasonable facsimile thereof) duly executed by such holder, to the Company at
its principal office (or, if such exercise shall be in connection with an
underwritten public offering of shares of Common Stock (or Other Securities)
subject to this Warrant (the "Warrant Shares"), at the location at which the
underwriters shall have agreed to accept delivery thereof), accompanied by
payment (except as otherwise provided in Section IF), in cash by wire transfer
of immediately available funds or by certified or official bank check payable to
the order of the Company, in the amount obtained by multiplying (a) the number
of shares of Original Common Stock (without giving effect to any adjustment
therein) designated in such form of subscription by (b) $13.8713. The Company's
principal office is as specified in Section 15 hereof
1B. Adjustment to Number of Shares of Common Stock. The number of
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duly authorized, validly issued, fully paid and nonassessable shares of Common
Stock which the holder of this Warrant shall be entitled to receive upon each
exercise hereof shall be determined by multiplying the number of shares of
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Common Stock which would otherwise (but for the provisions of Section 2) be
issuable upon such exercise, as designated by the holder hereof pursuant to this
Section IB, by a fraction of which (x) the numerator is $13.8713 and (y) the
denominator is the Exercise Price in effect on the date of such exercise. The
"Exercise Price" shall initially be $13.8713 per share, shall be adjusted and
readjusted from time to time as provided in Section 2 and, as so adjusted and
readjusted, shall remain in effect until a further adjustment or readjustment
thereof is required by Section 2.
1C. When Exercise Effective. Each exercise of this Warrant shall be
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deemed to have been effected and the Exercise Price shall be determined
immediately prior to the close of business on the Business Day on which this
Warrant shall have been surrendered to the Company as provided in Section IA
(unless such exercise shall be in connection with underwritten public offering
of shares of Warrant Shares, in which event concurrently with such exercise) and
at such time the person or persons in whose name or names any certificate or
certificates for shares of Original Common Stock (or Other Securities) shall be
issuable upon such exercise as provided, in this Section shall be deemed to have
become the holder or holders of record thereof
1D. Delivery of Stock Certificates, etc. Promptly after the exercise
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of this Warrant, in whole or in part, and in any event within three Business
Days thereafter (unless such exercise shall be in connection with an
underwritten public offering of Warrant Shares, in which event concurrently with
such exercise), the Company at its expense will cause to be issued in the name
of and delivered to the holder hereof or, subject to Section 8, as such holder
may direct:
(1) a certificate or certificates for the number of duly authorized,
validly issued, fully paid and nonassessable shares of Common Stock (or Other
Securities) to which such holder shall be entitled upon such exercise; and
(2) in case such exercise is in part only, a new Warrant or Warrants
of like tenor, specifying the aggregate on the face or faces thereof the number
of shares of Common Stock equal to the number of such shares specified on the
face of this Warrant minus the number of such shares designated by the holder
upon such exercise as provided in Section IA.
1E. Fractional Shares. No fractional shares shall be issued upon
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exercise of this Warrant and no payment or adjustment shall be made upon any
exercise on account of any cash dividends (except as provided in Section 2B) on
the Common Stock or Other Securities issued upon such exercise. If any
fractional interest in a share of Common Stock would, except for the provisions
of the first sentence of this Section IE, be deliverable upon the exercise of
this Warrant, the Company shall, in lieu of delivering the fractional share
therefor, pay to the holder exercising this Warrant an amount in cash equal to
the Market Price of such fractional interest.
Section 2. Protection Against Dilution or Other Impairment of Rights;
Adjustment of Exercise Price; Further Adjustments.
2A. Issuance of Additional Shares of Common Stock. In case the
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Company, at any time or from time to time after September 15, 1999 (the "Initial
Date"), shall issue or sell Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to Section 2C or
213) without consideration or for a consideration per share (determined pursuant
to Section 2E) less than the greatest of (i) the Exercise Price and (ii) the
Market Price, in each case, on the date of and immediately prior to such issue
or sale, then, and in each such case, subject to Section 2H, the Exercise Price
shall be reduced,
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concurrently with such issue or sale, to a price (calculated to the nearest .001
of a cent) determined by multiplying such Exercise Price by a fraction,
(a) the numerator of which shall be (i) the number of shares of Common
Stock outstanding immediately prior to such issue or sale plus (ii) the
number of shares of Common Stock which the aggregate consideration received
by the Company for the total number of such Additional Shares of Common
Stock so issued or sold would purchase at the greatest of such Exercise
Price or Market Price, and
(b) the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such issue or sale, provided that, for
the purposes of this Section 2A, (x) immediately after any Additional
Shares of Common Stock are deemed to have been issued pursuant to Section
2C or 2D, such Additional Shares shall be deemed to be outstanding, and (y)
treasury shares shall not be deemed to be outstanding.
2B. Extraordinary Dividends and Distributions, Pro Rata Repurchases.
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In case the Company at any time or from time to time after the date hereof shall
declare, order, pay or make a dividend or other distribution to the holders of
the Common Stock (including, without limitation, any distribution of other or
additional stock or other securities or property or Options by way of dividend
or spin-off, reclassification, recapitalization or similar corporate
rearrangement and any redemption or acquisition of any such stock or Options on
the Common Stock), other than (a) a dividend payable in Additional Shares of
Common Stock or in Options for Common Stock or (b) a regular periodic dividend
payable in cash and not constituting an Extraordinary Cash Dividend, then, and
in each such case, the Company shall set aside on the date on which such
dividend or other distribution is paid to the holders of Common Stock, to be
paid over to the holder of this Warrant when, if and to the extent this Warrant
is exercised, the securities and property (including cash) which such holder
would have received if such holder had exercised this Warrant (to the extent
ultimately exercised) immediately prior to the record date fixed in connection
with such dividend or other distribution. In case the Company or any subsidiary
thereof shall make a Pro Rata Repurchase, the Exercise Price shall be adjusted
by dividing the Exercise Price in effect immediately prior to such action by a
fraction, the numerator of which shall be the product of (A) the number of
shares of Common Stock outstanding immediately before such Pro Rata Repurchase
minus the number shares of Common Stock repurchased in such Pro Rata Repurchase
and (B) the Market Price as of the date immediately preceding the first public
announcement by the Company of the intent to effect such Pro Rata Repurchase,
and the denominator of which shall be (A) the product of (x) the number of
shares of Common Stock outstanding immediately before such Pro Rata Repurchase
and (y) the Market Price as of the date immediately preceding the first public
announcement by the Company of the intent to effect such Pro Rata Repurchase
minus (B) the aggregate purchase price of the Pro Rata Repurchase.
2C. Treatment of Options and Convertible Securities. In case the
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Company, at any time or from time to time after the date hereof, shall issue,
sell, grant or assume, or shall fix a record date for the determination of
holders of any class of securities entitled to receive, any Options or
Convertible Securities, whether or not such Options or the right to convert or
exchange any such Convertible Securities are immediately exercisable, then, and
in each such case, the maximum number of Additional Shares of Common Stock (as
set forth in the instrument relating thereto, without regard to any provisions
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or, in the case of Convertible Securities and Options
therefor, issuable upon the conversion or exchange of such Convertible
Securities (or the exercise of such Options for Convertible Securities and
subsequent conversion or exchange of the Convertible Securities issued), shall
be deemed to be Additional Shares of Common Stock issued as of the time of such
<PAGE>
issue, sale, grant or assumption or, in case such a record date shall have been
fixed, as of the close of business on such record date, provided, that such
Additional Shares of Common Stock shall not be deemed to have been issued unless
the consideration per share (determined pursuant to Section 2E) of such shares
would be less than the greatest of the Exercise Price or Market Price then in
effect, in each case, on the date of and immediately prior to such issue, sale,
grant or assumption or immediately prior to the close of business on such record
date, as the case may be, and provided, further, that in any such case in which
Additional Shares of Common Stock are deemed to be issued,
(a) if an adjustment of the Exercise Price shall be made upon the
fixing of a record date as referred to in the first sentence of this
section 2C, no further adjustment of the Exercise Price shall be made as a
result of the subsequent issue or sale of any Options or Convertible
Securities for the purpose of which such record date was set;
(b) no further adjustment of the Exercise Price shall be made upon the
subsequent issue or sale of Additional Shares of Common Stock or
Convertible Securities upon the exercise of such Options or the conversion
or exchange of such Convertible Securities;
(c) if such Options or Convertible Securities by their terms provide,
with the passage of time or otherwise, for any change in the consideration
payable to the Company, or change in the number of Additional Shares of
Common Stock issuable, upon the exercise, conversion or exchange thereof
(by change of rate or otherwise), the Exercise Price computed upon the
original issue, sale, grant or assumption thereof (or upon the occurrence
of the record date with respect thereto), and any subsequent adjustments
based thereon, shall, upon any such change becoming effective, be
recomputed to reflect such change insofar as it affects such Options, or
the rights of conversion or exchange under such Convertible Securities,
which are outstanding at such time;
(d) upon the expiration of any such Options or of the rights of
conversion or exchange under any such Convertible Securities which shall
not have been exercised (or upon purchase by the Company and cancellation
or retirement of any such Options which shall not have been exercised or of
any such Convertible Securities the rights of conversion o I r exchange
under which shall not have been exercised), the Exercise Price computed
upon the original issue, sale, grant or assumption thereof (or upon the
occurrence of the record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon such expiration (or such
cancellation or retirement, as the case may be), be recomputed as if
(i) in the case of Options for Common Stock or in the case of
Convertible Securities, the only Additional Shares of Common Stock
issued or sold (or deemed issued or sold) were the Additional Shares
of Common Stock, if any, actually issued or sold upon the exercise of
such Options or the conversion or exchange of such Convertible
Securities and the consideration received therefor was (x) an amount
equal to (A) the consideration, if any, actually received by the
Company for the issue, sale, grant or assumption of all such Options,
whether or not exercised, plus (B) the additional consideration, if
any, actually received by the Company upon such exercise, minus (C)
the consideration paid by the Company for any purchase of such Options
which were not exercised, or (y) an amount equal to (A) the
consideration, if any, actually received by the Company for the issue,
sale, grant or assumption of all such Convertible Securities, whether
or not converted or exchanged, plus (B) the additional consideration,
if any, actually received by the Company upon such conversion or
exchange, minus (C) the excess, if
<PAGE>
any, of the consideration paid by the Company for any purchase of such
Convertible Securities, the rights of conversion or exchange under
which were not exercised, over an amount that would be equal to the
Fair Value of the Convertible Securities so purchased if such
Convertible Securities were not convertible into or exchangeable for
Additional Shares of Common Stock, and
(ii) in the case of Options for Convertible Securities, only the
Convertible Securities, if any, actually issued or sold upon the
exercise of such Options were issued at the time of the issue, sale,
grant or assumption of such Options, and the consideration received by
the Company for the Additional Shares of Common Stock deemed to have
then been issued was an amount equal to (x) the consideration actually
received by the Company for the issue, sale, grant or assumption of
all such Options, whether or not exercised, plus (Y) the consideration
deemed to have been received by the Company (pursuant to Section 2E)
upon the issue or sale of the Convertible Securities with respect to
which such Options were actually exercised, minus (z) the
consideration paid by the Company for any purchase of such Options
which were not exercised; and
(e) no recomputation pursuant to subsection (c) or (d) above shall
have the effect of increasing the Exercise Price then in effect by an
amount in excess of the amount of the adjustment thereof originally made in
respect of the issue, sale, grant or assumption of such Options or
Convertible Securities.
2D. Treatment of Stock Dividends, Stock Splits, Etc. In case the
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Company, at any time or from time to time after the date hereof, shall declare
or pay any dividend or other distribution on any class of securities of the
Company payable in shares of Common Stock, or ,shall effect a subdivision of the
outstanding shares of Common Stock into a greater number of shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in Common
Stock), then, and in each such case, Additional Shares of Common Stock shall be
deemed to have been issued (a) in the case of any such dividend or other
distribution, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend or other distribution, or (b) in the case of any such subdivision, at
the close of business on the day immediately prior to the day upon which such
corporate action becomes effective.
2E. Computation of Consideration. For the purposes of this Warrant:
----------------------------
(a) The consideration for the issue or sale of any Additional Shares
of Common Stock or for the issue, sale, grant or assumption of any Options
or Convertible Securities, irrespective of the accounting treatment of such
consideration,
(i) insofar as it consists of cash, shall be computed as the
amount of cash received by the Company, and insofar as it consists of
securities or other property, shall be computed as of the date
immediately preceding such issue, sale, grant or assumption as the
Fair Value of such consideration, in each case without deducting any
expenses paid or incurred by the Company, any commissions or
compensation paid or concessions or discounts allowed to underwriters,
dealers or other performing similar services and any accrued interest
or dividends in connection with such issue or sale, and
<PAGE>
(ii) in case Additional Shares of Common Stock are issued or sold
or Options or Convertible Securities are issued, sold, granted or
assumed together with other stock or securities or other assets of the
Company for a consideration which covers both, shall be the proportion
of such consideration so received, computed as provided in clause (i)
above, allocable to such Additional Shares of Common Stock or Options
or Convertible Securities, as the case may be, all as determined in
good faith by the Board of Directors of the Company.
(b) All Additional Shares of Common Stock, Options or Convertible
Securities issued in payment of any dividend or other distribution on any
class of stock of the Company and all Additional Shares of Common Stock
issued to effect a subdivision of the outstanding shares of Common Stock
into a greater number of shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in Common Stock) shall be deemed to
have been issued without consideration.
(c) Additional Shares of Common Stock deemed to have been issued for
consideration pursuant to Section 2C, relating to Options and Convertible
Securities, shall be deemed to have been issued for a consideration per
share determined by dividing
(i) the total amount, if any, received and receivable by the
Company as consideration for the issue, sale, grant or assumption of
the Options or Convertible Securities in question, plus the minimum
aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration)
payable to the Company upon the exercise in full of such Options or
the conversion or exchange of such Convertible Securities or, in the
case of Options for Convertible Securities, the exercise of such
Options for Convertible Securities and the conversion or exchange of
such Convertible Securities, in each case computing such consideration
as provided in the foregoing subsection (a), by
(ii) the maximum number of shares of Common Stock (as set forth
in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of
such Convertible Securities.
2F. Adjustments for Combinations, Etc. In case the outstanding shares
---------------------------------
of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Exercise Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
2G. Dilution in Case of Other Securities. In case any Other Securities
------------------------------------
shall be issued or sold or shall become subject to issue or sale upon the
conversion or exchange of any stock (or Other Securities) of the Company (or any
issuer of Other Securities or any other Person referred to in Section 21) or to
subscription, purchase or other acquisition pursuant to any Options issued or
granted by the Company (or any such other issuer or Person) for a consideration
such as to dilute, on a basis to which the standards established in the other
provisions of this Warrant do not apply, the exercise rights granted by this
Warrant, then, and in each such case, the computations, adjustments and
readjustments provided for in this Warrant with respect to the Exercise Price
shall be made as nearly as possible in the manner so provided and applied to
determine the amount of Other Securities from time to time receivable upon the
exercise of this Warrant, so as to protect the holder of this
<PAGE>
Warrant against the effect of such dilution. Notwithstanding the foregoing, this
Section 2G shall not apply to Options or Convertible Securities.
2H. Minimum Adjustment of Exercise Price. If the amount of any
------------------------------------
adjustment of the Exercise Price required hereunder would be less than one
percent of the Exercise Price in effect at the time such adjustment is otherwise
so required to be made, such amount shall be carried forward and adjustment with
respect thereto made at the time of and together with any subsequent adjustment
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate at least one percent of such Exercise Price; provided,
that upon the exercise of this Warrant, all adjustments carried forward and not
theretofore made up to and including the date of such exercise shall be made to
the nearest .0001 of a cent.
2I. Changes in Common Stock. At any time while this Warrant remains
-----------------------
outstanding and unexpired, in case of any reclassification or change of
outstanding securities of the class issuable upon exercise of this Warrant
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination of
outstanding securities issuable upon the exercise of this Warrant) or in case of
any consolidation or merger of the Company with or into another corporation
(herein called- a "Transaction") (other than a merger with another corporation
in which the Company is a continuing corporation and which does not result in
any reclassification or change, other than a change in par value, or from par
value to no par value, or from no value to par value, or as a result of a
subdivision or combination of outstanding securities issuable upon the exercise
of this Warrant), the Company, or such successor corporation, as the case may
be, shall, without payment of any additional consideration therefor, execute and
deliver to the holder of this Warrant (upon surrender of this Warrant) a new
Warrant providing that the holder of this Warrant shall have the right to
exercise such new Warrant (upon terms not less favorable to the holder of this
Warrant than those then applicable to this Warrant) and to receive upon such
exercise, in lieu of each shares of Common Stock theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock other
securities, money or property receivable upon such reclassification, change,
consolidation or merger, by the holder of one Common Share issuable upon
exercise of this Warrant had it been exercised immediately prior to such
reclassification, change, consolidation or merger. Such new Warrant shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 2. Notwithstanding
the foregoing, in the case of any Transaction which pursuant to this Section 21
would result in the execution and delivery by the Company or any successor of a
new Warrant to the holder of this Warrant and in which the holders of shares of
Common Stock are entitled only to receive money or other property exclusive of
common equity securities, then in lieu of such new Warrant being exercisable as
provided above, the holder of this Warrant shall have the right, at its sole
option, to require the Company to purchase this Warrant (without prior exercise
by the holder of this Warrant) at its fair market value as of the day before
such Transaction became publicly known, as determined by an unaffiliated
internationally recognized accounting firm or investment bank selected by the
holder of this Warrant and reasonably acceptable to the Company. The fees and
expenses of any such firm or bank shall be paid by the Company. The provisions
of this Section 21 shall similarly apply to successive reclassifications,
changes, consolidations, mergers, sales and transfers.
Notwithstanding anything contained herein to the contrary, the Company
shall not effect any Transaction unless prior to the consummation thereof each
corporation or entity (other than the Company) which may be required to deliver
any securities or other property upon the exercise of Warrants shall assume, by
written instrument delivered to each holder of Warrants, the obligation to
deliver to such holder such securities or other property as to which, in
accordance with the foregoing provisions, such holder may be entitled, and such
corporation or entity shall have similarly delivered to each holder of Warrants
an opinion of counsel for such corporation or entity, satisfactory to each
holder of Warrants, which opinion shall state that all the outstanding
<PAGE>
Warrants, shall thereafter continue in full force and effect and shall be
enforceable against such corporation or entity in accordance with the terms
hereof and thereof, together with such other matters as such holders may
reasonably request.
2J. Certain Issues Excepted. Anything herein to the contrary
-----------------------
notwithstanding, the Company shall not be required to make any adjustment of the
Exercise Price in the case of (i) the issuance of the other warrants issued to
GEFA (the "Other Warrants") pursuant to the Credit Agreement dated September 15,
1999 between GEFA and the Company, the shares of Common Stock or other
securities issuable under the Other Warrants or the issuance of any Common Stock
or other securities upon the exercise of any Other Warrants or any of the
Excluded Items or (ii) any adjustment in the number of shares of Common Stock
issuable upon exercise or conversion of the Other Warrants or any Excluded Items
(any adjustment or issuance referred to in clause (i) or (ii) above, a
"Permitted Event").
2K. Notice of Adjustment. Upon the occurrence of any event requiring
--------------------
an adjustment of the Exercise Price, then and in each such case the Company
shall promptly deliver to the holder of this Warrant an Officer's Certificate
stating the Exercise Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares of Common Stock issuable upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. Within 90 days
after each fiscal year in which any such adjustment shall have occurred, or
within 30 days after any request therefor by the holder of this Warrant stating
that such holder contemplates the exercise of such Warrant, the Company will
obtain and deliver to the holder of this Warrant the opinion of its regular
independent auditors or another firm of independent public accountants of
recognized national standing selected by the Company's Board of Directors, which
opinion shall confirm the statements in the most recent Officer's Certificate
delivered under this Section 2K.
2L. Other Notices. In case at any time:
-------------
(a) the Company shall declare to the holders of Common Stock any cash
dividend;
(b) the Company shall declare or pay any dividend upon Common Stock
payable in stock or make any special dividend or other distribution (other than
cash dividends) to the holders of Common Stock;
(c) the Company shall offer for subscription pro rata to the holders
of Common Stock any additional shares of stock of any class or other rights;
(d) there shall be any capital reorganization, or reclassification of
the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another corporation
or other entity;
(e) there shall be a voluntary or involuntary dissolution, liquidation
or windingup of the Company;
(f) there shall be made any tender offer for any shares of capital
stock of the Company; or
(g) there shall be any other Transaction;
then, in any one or more of such cases, the Company shall give to the holder of
this Warrant (i) at least 60 days prior to any event referred to in
<PAGE>
subsection (a) or (b) above, at least 60 days prior to any event referred to in
subsection (c), (d) or (e) above, and within five days after it has knowledge of
any pending tender offer or other Transaction, 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, winding-up or Transaction or the date by which
shareholders must tender shares in any tender offer and (ii) in the case of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, windingup or tender offer or Transaction known to the Company, at
least 60 days prior written notice of the date (or, if not then known, a
reasonable approximation thereof by the Company) when the closing thereof shall
take place. Such notice in accordance with the foregoing clause (i) 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 (ii) shall also specify the
date (or if not then known, a reasonable approximation thereof by the Company)
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,
winding-up, tender offer or Transaction, as the case may be. Such notice shall
also state that the action in question or the record date is subject to the
effectiveness of a registration statement under the Securities Act or to a
favorable vote of security holders, if either is required.
2M. Certain Events. The Company may make such reductions in the
--------------
Exercise Price as it deems advisable, including any reductions necessary to
ensure that any event treated for Federal income tax purposes as a distribution
of stock or stock rights not be taxable to recipients.
2N. Prohibition of Certain Actions. The Company will not, by amendment
------------------------------
of its certificate of incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Company, but will
at all times in good faith assist in the carrying out of all the provisions of
this Warrant and in the taking of all such action as may reasonably be requested
by the holder of this Warrant in order to protect the exercise privilege of the
holder of this Warrant against dilution or other impairment, consistent with the
tenor and purpose of this Warrant. Without limiting the generality of the
foregoing, the Company (a) will not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the Exercise
Price then in effect, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock upon the exercise of all Warrants from
time to time outstanding, (c) will not take any action which results in any
adjustment of the Exercise Price if the total number of shares of Common Stock
or Other Securities issuable after the action upon the exercise of all of the
Warrants would exceed the total number of shares of Common Stock or Other
Securities then authorized by the Company's certificate of incorporation and
available for the purpose of issue upon such conversion, and (d) will not issue
any capital stock of any class which has the right to more than one vote per
share or any capital stock of any class which is preferred as to dividends or as
to the distribution of assets upon voluntary or involuntary dissolution,
liquidation or winding-up, unless the rights of the holders thereof shall be
limited to a fixed sum or percentage (or floating rate related to market yields)
of par value or stated value in respect of participation in dividends and a
fixed sum or percentage of par value or stated value in any such distribution of
assets.
Section 3. Stock to be Reserved. The Company will at all times reserve and
keep available out of the authorized Common Stock, solely for the purpose of
issue upon the exercise of the Warrants as herein provided, such number of
shares of Common Stock as shall then be issuable upon the exercise of all
outstanding Warrants and the Company will maintain at all times all other rights
and privileges sufficient to enable it to fulfill all its obligations hereunder.
The Company covenants that all shares of Common Stock which shall be so issuable
<PAGE>
shall, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable, free from preemptive or similar rights on the part of the holders
of any shares of capital stock or securities of the Company or any other Person,
and free from all taxes, liens and charges with respect to the issue thereof
(not including any income taxes payable by the holders of Warrants being
exercised in respect of gains thereon), and the Exercise Price will be credited
to the capital and surplus of the Company. The Company will take all such action
as may be necessary to assure that such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any applicable
requirements of the National Association of Securities Dealers, Inc. and of any
domestic securities exchange upon which the Common Stock may be listed.
Section 4. Registration of Common Stock. If any shares of Common Stock
required to be reserved for purposes of the exercise of Warrants require
registration with or approval of any governmental authority under any Federal or
State law (other than the Securities Act, registration under which is governed
by the Registration Rights Agreement), before such shares may be issued upon the
exercise thereof, the Company will, at its expense and as expeditiously as
possible, use its best efforts to cause such shares to be duly registered or
approved, as the case may be. Shares of Common Stock issuable upon exercise of
the Warrants shall be registered by the Company under the Securities Act or
similar statute then in force if required by the Registration Rights Agreement
and subject to the conditions stated in such agreement. At any such time as the
Common Stock is listed on any national securities exchange or quoted by the
NASDAQ National Market or any successor thereto or any comparable system, the
Company will, at its expense, obtain promptly and maintain the approval for
listing on each such exchange or quoting by the NASDAQ National Market or such
successor thereto or comparable system, upon official notice of issuance, the
shares of Common Stock issuable upon exercise of the then outstanding Warrants
and maintain the listing or quoting of such shares after their issuance so long
as the Common Stock is so listed or quoted; and the Company will also cause to
be so listed or quoted, will register under the Exchange Act and will maintain
such listing or quoting of, any Other Securities that at any time are issuable
upon exercise of the Warrants, if and at the time that any securities of the
same class shall be listed on such national securities exchange by the Company.
Section 5. Issue Tax. The issuance of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the holders
hereof for any issuance tax in respect thereto.
Section 6. Closing of Books. The Company will at no time close its transfer
books against the transfer of any Warrant or of any share of Common Stock issued
or issuable upon the exercise of any Warrant in any manner which interferes with
the timely exercise of such Warrant.
Section 7. No Rights or Liabilities as Stockholders. This Warrant shall not
entitle the holder thereof to any of the rights of a stockholder of the Company,
except as expressly contemplated herein. No provision of this Warrant, in the
absence of the actual exercise of such Warrant and receipt by the holder thereof
of Common Stock issuable upon such exercise, shall give rise to any liability on
the part of such holder as a stockholder of the Company, whether such liability
shall be asserted by the Company or by creditors of the Company.
Section 8. Restrictive Legends; No Transfer to Certain Persons. Except as
otherwise permitted by this Section 8, each Warrant originally issued and each
Warrant issued upon direct or indirect transfer or in substitution for any
Warrant pursuant to this Section 8 or otherwise shall be stamped or otherwise
imprinted with a legend in substantially the following form:
<PAGE>
"This Warrant and any shares acquired upon the exercise of this Warrant
have not been registered under the Securities Act of 1933, as amended, and
may not be transferred in the absence of such registration or an exemption
therefrom under such Act."
Except as otherwise permitted by this Section 8. (a) each certificate for Common
Stock (or Other Securities) issued upon the exercise of any Warrant, and (b)
each certificate issued upon the direct or indirect transfer of any such Common
Stock (or Other Securities) shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933 and may not be transferred in the absence of
such registration or an exemption therefrom under such Act."
The holder of any Restricted Securities shall be entitled to receive from the
Company, without expense, new securities of like tenor not bearing the
applicable legend set forth above in this Section 8 when such securities shall
have been (a) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering such Restricted Securities,
(b) distributed to the public pursuant to Rule 144 or any comparable rule under
the Securities Act, or (c) when, in the opinion of independent counsel for the
holder thereof experienced in Securities Act matters, such restrictions are no
longer required in order to insure compliance with the Securities Act.
Section 9. Availability of Information. The Company will cooperate with
each holder of any Restricted Securities in supplying such information as may be
necessary for such holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale of any
Restricted Securities. The Company will furnish to each holder of any Warrants,
promptly upon their becoming available, copies of all financial statements,
reports, notices and proxy statements sent or made available generally by the
Company to its stockholders, and copies of all regular and periodic reports and
all registration statements and prospectuses filed by the Company with any
securities exchange or with the Commission.
Section 10. Information Required By Rule 144A. The Company will, upon the
request of the holder of this Warrant, provide such holder, and any qualified
institutional buyer designated by such holder, such financial and other
information as such holder may reasonably determine to be necessary in order to
permit compliance with the information requirements of Rule 144A under the
Securities Act in connection with the resale of Warrants, except at such times
as the Company is subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act. For the purpose of this Section 10, the term "qualified
institutional buyer" shall have the meaning specified in Rule 144A under the
Securities Act.
Section 11. Registration Rights Agreement. The holder of this Warrant and
each holder of any Warrant Shares are each entitled to the benefits of the
Registration Rights Agreement. By accepting this Warrant, the holder hereof
agrees to the provisions of the Registration Rights Agreement.
Section 12. Ownership, Transfer and Substitution of Warrants.
12A. Ownership of Warrants. Except as otherwise required by law, the
---------------------
Company may treat the Person in whose name any Warrant is registered on the
register kept at the principal office of the Company as the owner and holder
thereof for all purposes, notwithstanding any notice to the contrary except
that, if and
<PAGE>
when any Warrant is properly assigned in blank, the Company, in its discretion,
may (but shall not be obligated to) treat the bearer thereof as the owner of
such Warrant for all purposes, notwithstanding any notice to the Company to the
contrary. Subject to Section 8, a Warrant, if properly assigned, may be
exercised by a new holder without first having a new Warrant issued.
12B. Transfer and Exchange of Warrants. Upon the surrender of any
---------------------------------
Warrant, properly endorsed, for registration of transfer or for exchange at the
principal office of the Company, the Company at its expense will (subject to
compliance with Section 8, if applicable) execute and deliver to or upon the
order of the holder thereof a new Warrant or Warrants of like tenor, in the name
of such holder or as such holder (upon payment by such holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Original Common Stock called for on the face
or faces of the Warrant or Warrants so surrendered.
12C. Replacement of Warrants. Upon receipt of evidence reasonably
-----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant
held by a Person upon delivery of its indemnity reasonably satisfactory to the
Company in form and amount or, in the case of any such mutilation, upon
surrender of such Warrant for cancellation at the principal office of the
Company, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
Section 13. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"Additional Shares of Common Stock" shall mean all shares (including
treasury shares) of Common Stock issued or sold (or, pursuant to Section 2C or
2D deemed to be issued) by the Company after the date hereof, whether or not
subsequently reacquired or retired by the Company, other than shares of Common
Stock issued or deemed to be issued upon the occurrence of a Permitted Event.
"Affiliate" shall have the meaning specified in the Credit Agreement,
whether or not such Credit Agreement remains in effect.
"Announcement Date" shall have the meaning specified in Section 21.
"Business Day" shall mean any day on which banks are open for business
in New York City (other than a Saturday, Sunday or legal holiday in the State of
New York or the State of Florida), provided, that any reference to "days"
(unless Business Days are specified) shall mean calendar days.
"Commission" shall mean the Securities and Exchange Commission or any
successor federal agency having similar powers.
"Common Stock" shall mean the Original Common Stock, any stock into
which such stock shall have been converted or changed or any stock resulting
from any reclassification of such stock and all other stock of any class or
classes (however designated) of the Company the holders of which have the right,
without limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference.
"Company" shall mean JWGenesis Financial Corp., a Florida corporation.
<PAGE>
"Convertible Securities" shall mean any evidences of indebtedness,
shares of stock (other than Common Stock) or other securities directly or
indirectly convertible into or exchangeable for Additional Shares of Common
Stock.
"Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended.
"Excluded Items" shall have the meaning specified on Schedule I
hereto.
"Exercise Price" shall have the meaning specified in Section 113.
"Expiration Date" shall mean May 14, 2004 (the "Determination Date");
provided, however, that if on the Determination Date, the Company is then
required, pursuant to an effective request therefor under the Registration
Rights Agreement or is in the process of effecting a registration under the
Securities Act for a public offering in which Warrant Shares are entitled to be
included as provided in the Registration Rights Agreement, or if the Company is
in default of any of such obligations to register the sale of such shares, the
Expiration Date shall be extended to, and the right to exercise this Warrant
shall continue until 5:00 p.m. (United States Eastern Time) on, the 30th day
following the date on which such registration shall have become effective or the
30th day following the date all such defaults shall have been cured, whichever
is the later date.
"Extraordinary Cash Dividend" shall mean, with respect to any
consecutive 12month period, the amount, if any, by which the aggregate amount of
all cash and non-cash dividends or distributions on any shares of Common Stock
occurring in such 12-month period (or, if such Common Stock was not outstanding
at the commencement of such 12-month period, occurring in such shorter period
during which such Capital Stock was outstanding) exceeds on a per share basis 5%
of the average of the daily Market Prices per share of such Common Stock over
such 12-month period (or such shorter period during which such Common Stock was
outstanding); provided that, for purposes of the foregoing definition, the
---------
amount of cash and noncash dividends paid on a per share basis will be
appropriately adjusted to reflect the occurrence during such period of any stock
dividend or distribution of shares of capital stock of the Company or any
subdivision, split, combination or reclassification of shares of such Common
Stock.
"Fair Value" shall mean with respect to any securities or other
property, the fair value thereof as of a date which is within 15 days of the
date as of which the determination is to be made as determined by the Board of
Directors of the Company in good faith, unless such determination is to be made
in connection with a transaction with an Affiliate in which case such fair value
shall be (a) determined by agreement between the Company and the Required
Holders, or (b) if the Company and the Required Holders fail to agree,
determined jointly by an independent investment banking firm retained by the
Company and by an independent investment banking firm retained by the Required
Holders, either of which firms may be an independent investment banking firm
regularly retained by the Company, or (c) if the Company or the Required Holders
shall fail so to retain an independent investment banking firm within 10
Business Days of the retention of such a firm by the Required Holders or the
Company, as the case may be, determined solely by the firm so retained, or (d)
if the firms so retained by the Company and by such holders shall be unable to
reach a joint determination within 15 Business Days of the retention of the last
firm so retained, determined by another independent investment banking firm
which is not a regular investment banking firm of the Company chosen by the
first two such firms.
"GEFA" shall have the meaning specified in the opening paragraphs of
this Warrant.
<PAGE>
"Initial Date" shall have the meaning specified in Section 2A.
"Market Price" shall mean on any date specified herein, (a) with
respect to Common Stock, the amount per share equal to (i) the last sale price
of shares of Common Stock, regular way, or of shares of such common stock (or
equivalent equity interests) on such date or, if no such sale takes place on
such date, the average of the closing bid and asked prices thereof on such date,
in each case as officially reported on the principal national securities
exchange on which the same are then listed or admitted to trading, or (ii) if no
shares of Common Stock are then listed or admitted to trading on any national
securities exchange, the last sale price of shares of Common Stock, regular way,
or, if no such sale takes place on such date, the average of the reported
closing bid and asked prices thereof on such date as quoted in the NASDAQ
National Market or, if no shares of Common Stock are then quoted in the NASDAQ
National Market, as published by the National Quotation Bureau, Incorporated or
any similar successor organization, and in either case as reported by any member
firm of the New York Stock Exchange selected by the Company, or (iii) if no
shares of Common Stock are then fisted or admitted to trading on any national
securities exchange or quoted or published in the over-the-counter market, the
higher of (x) the book value thereof as determined by any firm of independent
public accountants of recognized standing selected by the Board of Directors of
the Company, as of the last day of any month (or if there is more than one such
month for which book value has been determined, the most recent such month)
ending within 60 days preceding the date as of which the determination is to be
made or (y) the Fair Value thereof, and (b) with respect to any other
securities, the Fair Value thereof
"Notes" shall have the meaning specified in the opening paragraphs of
this Warrant.
"Officer's Certificate" shall mean a certificate signed in the name of
the Company by its Chief Executive Officer, President, Chief Financial Officer,
one of its Vice Presidents or its Treasurer.
"Options" shall mean rights, options or warrants to subscribe for,
purchase or otherwise acquire either Additional Shares of Common Stock or
Convertible Securities.
"Original Common Stock" shall mean the Company's common stock, par
value $0.01 per share, as constituted as of September 15, 1999.
"Other Securities" shall mean any stock (other than Common Stock) and
any other equity or equity-equivalent securities of the Company or any other
Person (corporate or otherwise) which the holders of the Warrants at any time
shall be entitled to receive, or shall have received, upon the exercise of the
Warrants, in lieu of or in addition to Common Stock, or which at any time shall
be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 21 or otherwise.
"Person" shall mean and include an individual, a partnership, an
association, a joint venture, a corporation, a trust, a limited liability
company, an unincorporated organization and a government or any department or
agency thereof.
"Pro Rata Repurchase" shall mean any purchase of shares of Common
Stock by the Company or by any of its subsidiaries whether for cash, shares of
Common Stock of the Company, other securities of the Company, evidences of
indebtedness of the Company or any other Person or any other property
(including, without limitation, shares of capital stock, other securities or
evidences of indebtedness of a subsidiary of the Company), or any combination
thereof, which purchase is subject to Section 13(e) of the Securities Exchange
<PAGE>
Act of 1934, as amended, or is made pursuant to an offer made available to all
holders of shares of Common Stock.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated September 15, 1999, between the Company and GEFA.
"Required Holders" shall mean the holders of a majority of all the
Warrants at the time outstanding, determined on the basis of the number of
shares of Common Stock then purchasable upon the exercise of all Warrants then
outstanding.
"Restricted Securities" shall mean (a) any Warrants bearing the
applicable legend set forth in Section 8 and (b) any shares of Common Stock (or
Other Securities) which have been issued upon the exercise of Warrants and which
are evidenced by a certificate or certificates bearing the applicable legend set
forth in such section, and (c) unless the context otherwise requires, any shares
of Common Stock (or Other Securities) which are at the time issuable upon the
exercise of Warrants and which, when so issued, will be evidenced by a
certificate or certificates bearing the applicable legend set forth in such
section.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Transaction" shall have the meaning specified in Section 2L.
"Warrant" shall have the meaning specified in the opening paragraphs
of this Warrant.
"Warrant Shares" shall have the meaning specified in Section IA.
Section 14. Remedies. The Company stipulates that the remedies at law of
the holder of this Warrant in the event of any default or threatened default by
the Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate and that, to the fullest extent
permitted by law, such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.
Section 15. Notices. All notices and other communications under this
Warrant shall be in writing and shall be sent (a) by registered or certified
mail, return receipt requested, or (b) by a recognized overnight delivery
service, addressed (i) if to any holder of any Warrant or any holder of any
Common stock (or Other Securities), at the registered address of such holder as
set forth in the applicable register kept at the principal office of the
Company, or (ii) if to the Company, to the attention of its Chief Executive
Officer at its principal office, provided that the exercise of any Warrant shall
be effected in the manner provided in Section 1. The Company will at all times
maintain its principal office in the United States where notices and demands
relating to this Warrant may be given to the Company by the holder hereof. Until
further notice, such principal office shall be located at 980 North Federal
Highway, Boca Raton, FL 33432.
Section 16. Miscellaneous.
(a) This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
<PAGE>
(b) The agreements of the Company contained in this Warrant other than
those, applicable solely to the Warrants and the holders thereof shall inure to
the benefit of and be enforceable by any holder or holders at the time of any
Warrant Shares, whether so expressed or not.
(c) This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of New York.
(d) The section headings in this Warrant are for purposes of convenience
only and shall not constitute a part hereof
[Balance of page is intentionally left blank. Next page is the signature page.]
<PAGE>
IN WITNESS WHEREOF, this Warrant has been executed and delivered on
behalf of JWGenesis Financial Corp. by one of its duly authorized officers as of
the date first above written
JWGENESIS FINANCIAL CORP.
By: /s/ Joel E. Marks
-----------------------
Name: Joel E. Marks
Title: Chief Operating Officer
<PAGE>
SCHEDULE I
(Excluded Items)
(i) Any exercise of any option, warrant, or other right to purchase Common
Stock, or the conversion into or exchange for Common Stock of any
security of the Company, that is outstanding on September 15, 1999.
(ii) Any grant or exercise of options for Common Stock under any stock option
plan or stock-based compensation plan of the Company, or any issuance of
stock to employees of the Company or its subsidiaries pursuant to any
employee stock purchase plan of the Company, in either case which plan
has been approved by the shareholders of the Company.
(iii) Options issued to John Elway in connection with his agreement with the
Company to act as spokesperson for the Company and in connection with
MVP.com.
(iv) Any issuance of Common Stock as the payment of all or part of the
purchase price in connection with the Company's acquisition of the
business and operations of another party.
(v) Any issuance of Common Stock (or the grant of options or warrants for the
purchase of Common Stock), other than issuance or grants of options or
warrants to directors, officers and employees of the Company or its
subsidiaries, for a consideration per share equal to or greater than
eighty-five percent (85%) of the Market Price per share of Common Stock.
<PAGE>
FORM OF SUBSCRIPTION
--------------------
(To be executed only upon exercise of Warrant)
To: JWGenesis Financial Corp.
The undersigned registered holder of the within Warrant hereby irrevocably
exercises such Warrant for, and purchases thereunder, _____________________ /1/
shares of Original Common Stock of JWGenesis Financial Corp. and herewith makes
payment of $___________________ therefor and requests that the certificates
for such shares be issued in the name of, and delivered to whose address is
____________________________.
Dated:
--------------------------------------------------
(Signature must conform in all respects to name of
holder as specified on the face of this Warrant)
(Street Address)
(City) (State) (Zip Code)
- ------------
/1/ Insert here the number of shares called for on the face of this Warrant
(or, in the case of a partial exercise, the portion thereof as to which this
warrant is being exercised), in either case without making any adjustment for
additional Common Stock or any other stock or other securities or property or
cash which, pursuant to the adjustment provisions of this Warrant, may be
delivered upon exercise. In the case of a partial exercise, a new Warrant or
Warrants will be issued and delivered, representing the unexercised portion of
this Warrant, to the holder surrendering the same.
<PAGE>
FORM OF ASSIGNMENT
------------------
(To be executed only upon transfer of Warrant)
For value received, the undersigned registered holder of the within Warrant
hereby sells, assigns and transfers unto _______________________ the right
represented by such Warrant to purchase ______________________ /2/ shares of
Common Stock of JWGenesis Financial Corp. to which such Warrant relates, and
appoints __________________________ Attorney to make such transfer on the books
of JWGenesis Financial Corp., maintained for such purpose, with full power of
substitution in the premises.
Dated:
--------------------------------------------------
(Signature must conform in all respects to name of
holder as specified on the face of this Warrant)
(Street Address)
(City) (State) (Zip Code)
Signed in the presence of:
- -------------
/2/ Insert here the number of shares called for on the face of the within
Warrant (or, in the case of a partial assignment, the portion thereof as to
which this Warrant is being assigned), in either case without making any
adjustment for additional Common Stock or any other stock or other securities or
property or cash which, pursuant to the adjustment provisions of the within
Warrant, may be delivered upon exercise. In the case of a partial assignment, a
new Warrant or Warrants will be issued and delivered, representing the portion
of the within Warrant not being assigned, to the holder assigning the same.
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (No. 333-57385, 333-57387 and 333-70457) of JWGenesis
Financial Corp. of our report dated March 24, 2000 relating to the financial
statements, which appear in this Form 10-K.
Tampa, Florida
April 3, 2000
<PAGE>
EXHIBIT 23(b)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (No. 333-75447 and 333-89287) of JWGenesis Financial
Corp. of our report dated March 24, 2000 relating to the financial statements,
which appear in this Form
10-K.
Tampa, Florida
April 3, 2000
<PAGE>
Exhibit 99(i)
AMENDMENT TO
NONSOLICITATION AGREEMENT
This Amendment dated as of the 15th day of June, 1999, by and between
JWGENESIS FINANCIAL CORP. ("Company"), and MARSHALL T. LEEDS ("Employee");
W I T N E S S E T H:
-------------------
WHEREAS, Employee entered into a Nonsolicitation Agreement ("Agreement")
with the Company, effective June 12, 1998, pursuant to which the Employee
agreed, among other things, to avoid soliciting Company clients and Company
personnel for a period of seven years; and
WHEREAS, the Company desires additional protection to ensure the Employee
will comply with the terms of the Agreement; and
WHEREAS, in exchange for other valuable consideration, the receipt of which
is hereby acknowledged, Employee has agreed to this amendment of the Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Plan, the parties hereby agree as
follows:
1.
Section 10 of the Agreement is hereby amended by deleting the existing
section in its entirety and substituting the following therefor:
"10. Relief. If Employee breaches any term of this Agreement, Employee
------
will pay to Company the sum of one million dollars ($1,000,000.00) as
liquidated damages. In addition to and in no way limited by the liquidated
damages provision in the prior sentence, the parties acknowledge that a
breach or threatened breach of any term of this Agreement by Employee would
result in material and irreparable damage and injury to Company, and that
it would be difficult or impossible to establish the full monetary value of
such damage. Therefore, Company shall also be entitled to injunctive
relief by a court of appropriate jurisdiction in the event of Employee's
breach or threatened breach of this Agreement."
2.
Except as hereby modified, the terms and conditions of the Plan shall
remain in full force and effect. This Amendment shall be effective as of
January 1, 1999.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first above written.
EMPLOYEE
/s/ Marshall T. Leeds
-------------------------
MARSHALL T. LEEDS
JWGENESIS FINANCIAL CORP.
By: /s/ Gregg S. Glaser
---------------------
<PAGE>
Exhibit 99(j)
NONSOLICITATION AGREEMENT
-------------------------
THIS AGREEMENT is made and entered into this 12th day of June, 1998, by and
among JWGenesis Financial Corp., a Florida corporation ("Company"), JW Charles
Financial Services, Inc., a Florida corporation ("JWCFS"), and Joel E. Marks
("Employee"):
W I T N E S S E T H:
WHEREAS, Company, JWCFS, and others have entered into that certain Amended
and Restated Agreement and Plan of Combination dated as of March 9, 1998 (the
"Combination Agreement"), pursuant to which, among other things, JWCFS became a
wholly-owned subsidiary of Company;
WHEREAS, during the course of Employee's prior relationship with JWCFS and
current and contemplated relationship with Company, Employee has learned or will
learn important Confidential Information (as defined below) related to Company's
Business (as defined below). Employee acknowledges that the Confidential
Information (i) has been or will be developed through JWCFS' or Company's
expenditure of substantial effort, time and money; and (ii) together with
relationships developed with clients and personnel, could be used to compete
unfairly with Company during the post-employment period. Because Company's
ability to engage in the Business (as defined below) on a competitive basis
depends, in part, on its Confidential Information and client relationships,
Company would not share such information and promote Employee's relationship
with clients if Company believed that such information or relationships would be
disclosed or used in competition with Company, or if Company believed that
Employee's relationship with Company's personnel or clients would be used to the
detriment of Company, and Employee's performance and opportunities would suffer;
and
WHEREAS, pursuant to Article 8 of the Combination Agreement, Employee and
JWCFS agreed to terminate Employee's existing employment agreement with JWCFS,
and Employee and Company agreed to enter into an employment agreement and a
nonsolicitation agreement.
NOW, THEREFORE, in consideration of the premises and mutual agreements set
forth and contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Termination of Existing Employment Arrangements. Employee and JWCFS
-----------------------------------------------
hereby agree to the termination of the existing employment arrangements between
Employee and JWCFS, and hereby terminate such arrangements (the "Prior
Arrangements").
2. Consideration. As consideration for terminating the Prior
-------------
Arrangements and for entering into this Agreement, Company shall pay to Employee
an aggregate amount of $1,720,000, payable as follows, (i) within 30 days of the
date hereof, cash of $215,000; (ii) within 30 days of the date hereof, a number
of shares of Company common stock, par value $.001 per share, subject to resale
restrictions and forfeiture provisions as described below, with a value (based
on 80% of the
<PAGE>
average closing price on the American Stock Exchange of the JWCFS common stock
for the 10 consecutive trading days immediately preceding the date hereof) of
$860,000 (the "Restricted Stock"), provided, however, that if Employee has sold
Company common stock or JWCFS Common Stock within the six-month period prior to
the date otherwise scheduled for such payment and delivery, then the Restricted
Stock will not be issued until the date that is six months after such prior
sale; and (iii) on each of January 15, 1999, 2000, and 2001, an additional cash
payment of $215,000. Twenty-five percent of the Restricted Stock will vest on
January 15, 2002 and an additional twenty-five percent on each January 15 in
2003 through 2005. Notwithstanding the foregoing, if the employment of Employee
with Company is terminated or deemed to be terminated by Company for any reason
other than cause (as defined in the employment agreement then in effect between
Employee and Company, a "Discharge"), any unpaid cash installment hereunder
shall become immediately due and payable to him within 30 days of such
termination, all of the Restricted Stock shall become immediately vested, and
the forfeiture provisions with respect to such shares will no longer be in
force. All unvested shares of the Restricted Stock will be subject to forfeiture
at any time there is a violation of this Agreement by Employee. If a change in
control of Company (as defined below) occurs that is not approved by Employee,
then all of the Restricted Stock shall become immediately vested, and the
forfeiture provisions with respect to such shares will no longer be in force.
For purposes hereof, "change of control" shall mean (a) the acquisition by a
person or entity other than Employee or a now existing shareholder of Company
(or any affiliate of Employee or such a shareholder of Company), whether in one
or several transactions, by exchange, merger, consolidation, assignment, stock
spin-off, stock split-up, or other transaction, of more than thirty-five percent
(35%) of the voting stock of Company, or of the right to vote or to direct the
voting of such percentage of voting stock; or (b) a change in the membership of
the Board of Directors of Company such that a majority of the members are
persons who are not Continuing Directors. For purposes of this Agreement, a
"Continuing Director" is a person who is a member of the Board of Directors of
Company on the date hereof or a person who is elected as a director of Company
upon the nomination by or approval of a majority of the Continuing Directors in
office.
3. Certain Other Definitions. For purposes of this Agreement, the
-------------------------
following terms shall have the meaning specified below:
(a) "Business" means securities brokerage, corporate finance, asset
management, capital formation, investment banking, financial advisory and other
financial services as being provided by Company on the date hereof and, with the
knowledge of Employee thereof, from time to time in the future during the term
of this Agreement.
(b) "Client" means any Person (except broker-dealers and nationally
recognized institutional accounts) receiving (or who has arranged to receive)
Business services from Company that Employee, during the year prior to the
Termination Date, (i) provided Business services or solicited for Business
services on behalf of Company; (ii) supervised others providing or soliciting
Business services on behalf of Company; or (iii) about whom Employee had
Confidential Information.
(c) "Confidential Information" means information relating to Company,
Clients or the Business that derives value from not being generally known to
other Persons, including, but not limited to, technical or nontechnical data,
formulas (including criteria for weighing stock selection factors), patterns
(including investment patterns), compilations (including stock selection and buy
lists),
2
<PAGE>
programs, devices, methods (including stock selection and portfolio design and
monitoring methods), techniques, drawings, processes, financial data, or lists
of actual or potential clients, whether or not reduced to writing. Confidential
Information includes information disclosed to Company by third parties that
Company is obligated to maintain as confidential. Confidential Information
subject to this Agreement may include information that is not a trade secret
under applicable law, but information that is not also a trade secret shall
constitute Confidential Information only for two years after the Termination
Date; provided, however, Confidential Information shall not include information
-------- -------
of which Employee had knowledge of prior to his employment by JWCFS, Company, or
its predecessors.
(d) "Person" includes any individual, corporation, limited liability
company, partnership, association, unincorporated organization or other entity.
(e) "Termination Date" means the last day Employee is employed by Company,
whether the termination is voluntary or involuntary, with or without cause.
4. Treatment of Confidential Information. Employee shall protect
-------------------------------------
Confidential Information. Employee will not use, except in connection with work
for Company, and will not disclose to third parties during or after Employee's
employment, Confidential Information.
5. Solicitation of Clients. For a period of seven (7) years from the
-----------------------
date hereof, whether or not Employee is employed by Company, Employee will not
solicit for the benefit of any Person other than Company, Clients for the
purpose of providing services identical to or competitive with the Business.
6. Solicitation of Company Personnel. For a period of seven (7) years
---------------------------------
from the date hereof, whether or not Employee is employed by Company, Employee
will not solicit for employment with another Person anyone who is or was, at any
time during the year prior to the Termination Date, a Company employee or a
registered representative licensed with or through Company.
7. Return of Materials. On the Termination Date or at any time
-------------------
thereafter at Company's request, Employee will deliver promptly to Company all
materials, documents, plans, records, notes, or other papers and any copies in
Employee's possession or control relating in any way to the Business, which at
all times shall be the property of Company.
8. Earlier Termination of Agreement. If Company effects a Discharge of
--------------------------------
Employee, Employee may terminate this Agreement and the nonsolicitation
provisions contained herein shall have no further effect.
9. Interpretation; Severability. Rights and restrictions in this
----------------------------
Agreement may be exercised and shall be applicable only to the extent they do
not violate any applicable laws, and are intended to be limited to the extent
necessary so they will not render this Agreement illegal, invalid or
unenforceable. If any term shall be held illegal, invalid or unenforceable by a
court of competent jurisdiction, the remaining terms shall remain in full force
and effect. This Agreement does not in any way limit Company's rights under the
laws of unfair competition, trade secret, copyright, patent, trademark or any
other applicable law(s), which are in addition to and cumulative of rights under
this Agreement.
3
<PAGE>
10. Relief. The parties acknowledge that a breach or threatened breach of
------
any term of this Agreement by Employee would result in material and irreparable
damage and injury to Company, and that it would be difficult or impossible to
establish the full monetary value of such damage. Therefore, Company shall be
entitled to injunctive relief by a court of appropriate jurisdiction in the
event of Employee's breach or threatened breach of this Agreement.
11. General and Miscellaneous. (a) Notices given under this Agreement
-------------------------
shall be deemed made if hand-delivered or mailed by registered or certified mail
to the addresses appearing at the end of this Agreement.
(b) This Agreement shall inure to the benefit of Company and its successors
and assignees, and shall be binding upon Employee and Employee's heirs,
administrators, executors, and personal representatives.
(c) Company's failure to insist upon strict performance of any term or to
exercise any right shall not be construed as a waiver or a relinquishment for
the future of such term or right, which shall continue in full force and effect.
(d) This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Florida.
Signatures begin on next page.
4
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement, as of the
date first written above.
"Company" "Employee"
JWGENESIS FINANCIAL CORP.
By: /s/ Marshall T. Leeds /s/ Joel E. Marks
--------------------- -----------------------------
Marshall T. Leeds JOEL E. MARKS
President
Employee Address:
195 Sheridan Pointe Ln.
Atlanta, Georgia 30342
"JWCFS"
JW CHARLES FINANCIAL SERVICES, INC.
By: /s/ Marshall T. Leeds
------------------------
Marshall T. Leeds
President
Company and JWCFS Address:
980 North Federal Highway Suite 210
Boca Raton, Florida 33432
Attention: Marshall T. Leeds
5
<PAGE>
Exhibit 99(l)
AMENDMENT TO
NONSOLICITATION AGREEMENT
This Amendment dated as of the 15th day of June, 1999, by and between
JWGENESIS FINANCIAL CORP. ("Company"), and JOEL E. MARKS ("Employee");
W I T N E S S E T H:
-------------------
WHEREAS, Employee entered into a Nonsolicitation Agreement ("Agreement")
with the Company, effective June 12, 1998, pursuant to which the Employee
agreed, among other things, to avoid soliciting Company clients and Company
personnel for a period of seven years; and
WHEREAS, the Company desires additional protection to ensure the Employee
will comply with the terms of the Agreement; and
WHEREAS, in exchange for other valuable consideration, the receipt of which
is hereby acknowledged, Employee has agreed to this amendment of the Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Plan, the parties hereby agree as
follows:
1.
Section 10 of the Agreement is hereby amended by deleting the existing
section in its entirety and substituting the following therefor:
"10. Relief. If Employee breaches any term of this Agreement, Employee
------
will pay to Company the sum of three hundred fifty thousand dollars
($350,000.00) as liquidated damages. In addition to and in no way limited
by the liquidated damages provision in the prior sentence, the parties
acknowledge that a breach or threatened breach of any term of this
Agreement by Employee would result in material and irreparable damage and
injury to Company, and that it would be difficult or impossible to
establish the full monetary value of such damage. Therefore, Company shall
also be entitled to injunctive relief by a court of appropriate
jurisdiction in the event of Employee's breach or threatened breach of this
Agreement."
2.
Except as hereby modified, the terms and conditions of the Plan shall
remain in full force and effect. This Amendment shall be effective as of
January 1, 1999.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first above written.
EMPLOYEE
/s/ Joel E. Marks
------------------------
JOEL E. MARKS
JWGENESIS FINANCIAL CORP.
By: /s/ Gregg S. Glaser
--------------------
