Exhibit 10
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
as of March 23, 1999, is by and among MFN Financial Corporation, a Delaware
corporation (the "Company"), and the Persons identified on Schedule 1 hereto
(the " New Securities Holders").
RECITALS
A. Pursuant to the Company's Plan of Reorganization dated as
of December 29, 1998 (the "Plan") as part of the distribution to Class 4
claimholders under the Plan, the Company will issue 9.5 million of the then
outstanding shares of the New Common Stock of the Company (the "Shares") and
certain New Senior Secured Notes (both as defined in the Plan) to such
claimholders. In addition, the New Junior Subordinated Notes (as defined in the
Plan) shall be distributed to Class 5 claimholders under the Plan.
B. As a condition to the consummation of the transactions
contemplated by the Plan, the Company has agreed to grant certain securities
registration rights to the New Securities Holders as set forth herein.
AGREEMENTS
In consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. In addition to the capitalized terms defined
elsewhere in this Agreement and to the defined terms set forth in the Plan that
are not otherwise defined herein, the following capitalized terms shall have the
following meaning when used in this Agreement:
"Adverse Disclosure" means public disclosure of material
non-public information relating to a significant transaction, which disclosure
(i) would be required to be made in any registration statement filed with the
Commission by the Company so that such registration statement would not be
materially misleading; (ii) would not be required to be made at such time but
for the filing of such registration statement; and (iii) would, in the good
faith judgment of the Company's Board of Directors, have a material adverse
effect upon the Company's ability to complete such significant transaction or
upon the terms on which such significant transaction could be completed.
"Affiliate" means, as to any specified person, any other
Person which, directly or indirectly, controls, is controlled by or is under
common control with, such specified Person. For the purposes of this definition,
"control" means the possession of the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's New Common Stock issued
pursuant to the Plan.
"Expiration Time" means the earlier of (i) March 23, 2002 (the
3rd anniversary of Effective Date of the Plan), and (ii) the first time at which
no Holder holds more than 10% of the Shares.
"Holders" means the holders of Registrable Shares who are New
Securities Holders or successors or assigns or subsequent holders contemplated
by Section 15 hereof.
"Person" means a natural person, a partnership, a corporation,
a limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or other entity, or a governmental
entity or any department, agency or political subdivision thereof.
"Qualified Public Offering" means the first underwritten
offering of Common Stock made by the Company for its own account after the date
hereof and on or prior to March 23, 2002 (the 3rd anniversary of Effective Date
of the Plan) pursuant to an effective registration statement under the
Securities Act.
"Registrable Shares" means the Common Stock, the New Senior
Secured Notes, and the New Junior Subordinated Notes beneficially owned by the
Holders; provided, however, that Registrable Shares shall not include (a) any
share that has been sold under an effective registration statement pursuant to
the Securities Act, or (b) any share that has been otherwise transferred (other
than to a New Securities Holder or an Affiliate of a New Securities Holder) and
in the opinion of counsel to the Company, the subsequent disposition of such
share shall not require registration under the Securities Act.
"Registration Expenses" has the meaning ascribed to it in
Section 7 of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Shelf Period" has the meaning set forth in Section 2(b).
"Shelf Registration" means a registration effected pursuant to
Section 2.
"Shelf Registration Statement" means a registration statement
of the Company filed with the Commission on Form S-1 or, if available, Form S-3
(or any successors thereto) for an offering to be made on a continuous basis
pursuant to Rule 415 (or any similar rule that may be adopted by the Commission)
covering some or all of the Registrable Shares, as applicable.
"Subsidiary" means any corporation, association or other
entity of which securities or other ownership interests representing more than
fifty percent (50%) of the ordinary voting power are, at the time as of which
any determination is being made, owned or controlled by the Company or one or
more Subsidiaries of the Company or by the Company and one or more Subsidiaries
of the Company.
"Underwritten Offering" means a registration in which
securities of the Company are sold to an underwriter on a firm commitment basis
for reoffering to the public.
2. Shelf Registration
(a) Filing. As soon as is practicable after the effective date
of the Company's Plan, the Company shall file with the Commission a Shelf
Registration Statement relating to the offer and sale of the Registrable Shares
by the Holders thereof from time to time in accordance with the methods of
distribution elected by such Holders and set forth in such Shelf Registration
Statement and, thereafter shall use its best efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act. If, on
the effective date of the Plan, the Company does not qualify to file a Shelf
Registration Statement, then the provisions of Section 3, below, shall apply,
but any time thereafter that the Company does so qualify, it shall, as promptly
as practicable, file a Shelf Registration Statement.
(b) Continued Effectiveness. The Company shall use its best
efforts to keep the Shelf Registration Statement continuously effective in order
to permit the Prospectus forming part thereof to be usable by Holders until the
third anniversary of the Effective Date of the Plan (but in no event prior to
the applicable period referred to in Section 4(3) of the Act and Rule 174
thereunder) (such period being the "Shelf Period"). Subject to Section 2(c), the
Company shall not be deemed to have used its best efforts to keep the Shelf
Registration Statement effective during the Shelf Period if the Company
voluntarily takes any action or omits to take any action that would result in
Holders of the Registrable Shares covered thereby not being able to offer and
sell any such Registrable Shares during the Shelf Period, unless such action or
omission is required by applicable law.
(c) Delay in Filing; Suspension of Registration. If the filing
of the Shelf Registration Statement or the continued effectiveness of the Shelf
Registration Statement at any time would require the Company to make an Adverse
Disclosure, the Company may, upon giving prompt written notice of such action to
the Holders, delay filing the Shelf Registration Statement or suspend use of the
Shelf Registration Statement (in either case, a "Shelf Suspension"); provided,
however, the Company shall not be permitted to exercise a Shelf Suspension (i)
more than twice during any twelve (12) month period, (ii) for a period exceeding
forty-five (45) days on any one occasion, or (iii) for an aggregate period
exceeding sixty (60) days in any twelve (12) month period. In the case of a
Shelf Suspension, the notice required above shall request the Holders to suspend
any sale or purchase, or offer to sell or purchase the Registrable Shares, and
to suspend use of the Prospectus related to the Shelf Registration in connection
with any such sale or purchase or offer to sell or purchase. The Company shall
immediately notify the holders upon the termination of any Shelf Suspension,
amend or supplement the Prospectus, if necessary, so it does not contain any
untrue statement or omission therein and furnish to the holder such numbers of
copies of the Prospectus as so amended or supplemented as the Holders may
reasonably request.
(d) Underwritten Offering. If the Holders of not less than 10%
of the Shares covered by the Shelf Registration Statement so elect, the offering
of Registrable Shares pursuant to such Shelf Registration Statement shall be in
the form of an Underwritten Offering and the Company shall amend or supplement
the Registration Statement, if appropriate. The Holders of not less than 50% of
the Registrable Shares included in such Shelf Registration shall have the right
to select the managing underwriter or underwriters to administer the offering,
subject to the consent of the Company, which consent shall not be unreasonably
withheld.
3. Demand Registrations.
(a) Requests for Registration. If, at any time six months
after the Effective Date of the Plan and prior to the Expiration Time, a Shelf
Registration Statement shall not be effective (other than as a result of the
operation of the provisions of Section 2(c) hereof), then at such time any
Holder or Holders of at least 10% of the Shares may request registration under
the Securities Act of all or part of their Registrable Shares; provided,
however, that such request shall relate to not less than 10% of the Shares.
Within 14 days after receipt of any request pursuant to this Section 3(a), the
Company will give written notice of such request to all other holders of
Registrable Shares and, subject to the terms hereof and applicable law, will use
its best efforts to effect such registration and will include in such
registration all Registrable Shares with respect to which the Company has
received written requests for inclusion therein within 14 days after the
Company's notice has been given. All registrations requested pursuant to this
Section 3(a) are referred to herein as "Demand Registrations." Subject to the
terms hereof, the Company shall have the right to include securities for its own
account in any Demand Registration, and holders of the Company's securities who
have the right to participate in any Demand Registration pursuant to an
agreement with the Company shall have the right to include securities (the
"Required Shares") in such Demand Registration.
(b) Number of Demand Registrations. The Holders may request no
more than, and the Company will be obligated to effect no more than, three
Demand Registrations pursuant to Section 3(a). A registration will not count as
a Demand Registration hereunder until the related registration statement has
become effective.
(c) Payment of Expenses for Demand Registrations. The Company
will pay all Registration Expenses for any Demand Registration.
(d) Priority on Demand Registrations. The Holder or Holders
initiating the Demand Registration may elect whether the offering of such
Registrable Shares pursuant to such Demand Registration shall be in the form of
a Underwritten Offering or otherwise. In any case in which an offering is in the
form of a Underwritten Offering, if the managing underwriter or underwriters of
such offering advises the Company in writing that, in its or their opinion, it
is probable that inclusion of the number of Registrable Shares, Required Shares,
if any, and securities of the Company ("Company Shares"), if any, proposed to be
included in such offering would adversely affect the marketability of the Common
Stock, the Company will include in such registration the number of Registrable
Shares, Required Shares, if any, and Company Shares, if any, that in the opinion
of such managing underwriter or underwriters can be sold without adversely
affecting the market for the Common Stock. In such event, (a) first, the number
of Required Shares, if any, and Company Shares, if any, to be offered shall be
reduced to the extent necessary to reduce the total number of shares to be
included in such offering to the number recommended by such managing underwriter
or underwriters and (b) then, if necessary, the number of Registrable Shares to
be offered shall be reduced pro rata on the basis of the relative number of
Registrable Shares requested by each such Holder to be included in such
registration to the extent necessary to reduce the total number of shares to be
included in such offering to the number recommended by such managing underwriter
or underwriters.
(e) Restrictions on Registrations. (i) The Company may
postpone for a reasonable period not to exceed 120 days, the filing, amendment
or the effectiveness of a registration statement for a Demand Registration if
the board of directors of the Company determines reasonably and in good faith
that such filing would be significantly disadvantageous to the Company or its
stockholders.
(ii) A Holder shall not request the registration of
Registrable Shares pursuant to Section 3(a) hereof during the period commencing
on the seventh day prior to the effective date of an offering by the Company
that is registered under the Securities Act and ending on the ninetieth day
after such offering is completed.
(f) Short-Form Registrations. If an underwritten Demand
Registration is registered pursuant to Form S-3 (or any successor form thereto),
and if the managing underwriter reasonably requests the inclusion in the
Registration Statement of information which is not required under the Securities
Act to be included on Form S-3, the Company will provide such information for
inclusion by the managing underwriter.
4. Piggyback Registrations.
(a) Right to Initial Piggyback. In connection with a Qualified
Public Offering, if the registration form to be used may be used for the
registration of Registrable Shares (an "Initial Piggyback Registration"), the
Company will give written notice (the "Offering Notice") at least 21 days prior
to the anticipated filing date to all holders of Registrable Shares of its
intention to effect such a registration, and the Company will use its best
efforts to effect such registration and will include in such registration all
Registrable Shares with respect to which the Company has received written
requests for inclusion therein within 14 days after the Company's notice has
been given (the "Included Registrable Shares"). Notwithstanding the foregoing,
if, and to the extent, that the managing underwriter or underwriters of the
offering advise the Company that in its or their opinion it is probable that the
inclusion of the Included Registrable Shares in the Qualified Public Offering
would adversely affect the marketability of the shares to be sold in such
offering, then the total number of Included Registrable Shares may be reduced on
a pro rata basis on the basis of the relative number of Registrable Shares
requested by each such Holder to that number recommended by the underwriter or
underwriters.
(b) Right to Additional Piggyback. At any time after the
effective date of the Plan and prior to the Expiration Time, whenever Common
Stock is to be registered under the Securities Act (including pursuant to a
Demand Registration), and the registration form to be used may be used for the
registration of Registrable Shares (a "Piggyback Registration"), the Company
will give an Offering Notice at least 21 days prior to the anticipated filing
date to all holders of Registrable Shares of its intention to effect such a
registration, and the Company will use its best efforts to effect such
registration and will include in such registration all Registrable Shares with
respect to which the Company has received a written request for inclusion
therein within 14 days after the Offering Notice has been given.
(c) Priority on Primary Registrations. If a Piggyback
Registration (including, without limitation, the Initial Piggyback Registration)
is a primary Underwritten Offering on behalf of the Company, and the managing
underwriter or underwriters advise the Company in writing that in its or their
opinion it is probable that the inclusion of the number of securities requested
to be included in the registration would adversely affect the marketability of
the shares to be sold in such offering, the Company will include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Shares requested to be included in such registration
which in the opinion of such underwriters can be sold without having such
effect, pro rata among the Holders of such Registrable Shares on the basis of
the number of Registrable Shares owned by such Holders with further successive
pro rata allocations among the Holders of Registrable Shares if any such Holder
has requested the registration of less than all the Registrable Shares it is
entitled to register, and (iii) third, other securities requested to be included
in such registration.
(d) Priority on Secondary Registrations. If a Piggyback
Registration is a secondary Underwritten Offering on behalf of holders of the
Company's securities, and the managing underwriter or underwriters advise the
Company in writing that in their opinion it is probable that the inclusion of
the number of securities requested to be included in such registration would
adversely affect the marketability of the shares to be sold in such offering,
the Company will include in such registration the Registrable Shares held by the
Holders requested to be included in such registration and the securities
requested to be included therein by the holders of the Company's securities
requesting such registration (all such Registrable Shares and other securities
requesting such registration being collectively referred to as the "Secondary
Shares") which in the opinion of such underwriters can be sold without having
such effect, pro rata among the holders of such Secondary Shares on the basis of
the number of Secondary Shares owned or deemed to be owned by such holders, with
further successive pro rata allocations among the holders of Secondary Shares if
any such holder of Secondary Shares has requested the registration of less than
all such Secondary Shares it is entitled to register.
5. Holdback Agreements.
(a) The Company agrees, if reasonably requested by the
managing underwriter or underwriters, not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to,
and during the 90-day period beginning on, the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such underwritten registration or pursuant to a registration
on Form S-4 or S-8 or any successor form or pursuant to any commitment to do so,
condition or otherwise, existing on the date hereof).
(b) Each Holder agrees, if reasonably requested by the
managing underwriter or underwriters, not to effect any public sale or
distribution (including pursuant to Rule 144) of any equity securities of the
Company or any securities convertible into or exchangeable or exercisable for
such securities, during the seven days prior to, and during the 90-day period
beginning on, the effective date of any underwritten Piggyback Registration
(which included such Holder's shares) or any underwritten Demand Registration or
Shelf Registration (regardless of whether such registration included such
Holder's Shares).
(c) Nothing herein shall prevent a Holder of Registrable
Shares that is a partnership from making a distribution of Registrable Shares to
its partners, a Holder of Registrable Shares that is a trust from making a
distribution of Registrable Shares to its beneficiaries or a Holder of
Registrable Shares that is a corporation from making a distribution of
Registrable Shares to its shareholders. The Holders agree that any such
distribution will be made in accordance with applicable law (including, without
limitation, applicable federal and state securities laws) and that any
distributees of Registrable Shares will take such shares subject to the terms of
this Agreement.
6. Registration Procedures. Whenever the Holders of
Registrable Shares have requested that any Registrable Shares be registered
pursuant to the terms of this Agreement, the Company will use its best efforts
to effect the registration and the sale of such Registrable Shares in accordance
with the terms hereof and the intended method of disposition thereof, and
pursuant thereto the Company will as expeditiously as is practicable in
connection with such an offering:
(a) prepare and file with the Commission, on any registration
form for which the Company then qualifies and which the Company deems
appropriate, a registration statement with respect to such Registrable Shares
and use its best efforts to cause such registration statement to become
effective as soon as practicable after such filing;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement until such
time as the Registrable Shares registered thereunder have been disposed of in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement; provided, however, except as required by
the Securities Act and the rules and regulations promulgated thereunder, and
except pursuant to Shelf Registrations under Section 2 hereunder, the Company
shall not be obligated to keep any registration statement effective for a period
in excess of 45 days;
(c) furnish to each seller of such Registrable Shares and the
underwriters of the securities being registered such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus)
and such other documents as such seller or underwriters may reasonably request
in order to facilitate the disposition of the Registrable Shares owned by such
seller or the sale of such securities by such underwriters;
(d) register or qualify such Registrable Shares under such
other securities laws of such jurisdictions as any seller reasonably requests
and do any and all other acts and things which may be reasonably necessary or
desirable to enable such seller to consummate the public sale or other
disposition in such jurisdictions of the Registrable Shares owned by such
seller; provided, however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it is not then so qualified,
(ii) subject itself to taxation in any such jurisdiction, (iii) consent to
general service of process in any such jurisdiction, or (iv) provide any
undertaking required by such other securities or "blue sky" laws or make any
change in its charter or by-laws that the board of directors of the Company
determines in good faith to be contrary to the best interest of the Company and
its stockholders;
(e) cause all such Registrable Shares to be listed on each
securities exchange on which similar securities issued by the Company are then
listed, provided that all applicable listing requirements are satisfied;
(f) provide a transfer agent and registrar for all such
Registrable Shares not later than the effective date of such registration
statement;
(g) enter into such customary agreements (including
underwriting agreements) and take all such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Registrable
Shares in accordance with the Holders' intended methods of disposition;
(h) make available for inspection by any seller of such
Registrable Shares, any underwriter participating in any disposition pursuant to
such registration statement, and any attorney, accountant or other agent
designated by any such seller or underwriter (collectively, the "Inspectors"),
all financial and other records, pertinent corporate documents and properties of
the Company (collectively, the "Records") as shall be reasonably necessary to
exercise their due diligence responsibilities, and cause the Company's officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such Inspector in connection with such registration
statement (other than those documents subject to the attorney/client or attorney
work product privileges), provided that all such Inspectors be bound by or enter
into confidentiality agreements with the Company in the form reasonably approved
by the Company. Records that the Company determines, in good faith, to be
confidential and that it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless the contents of such Records become publicly
available or the release of such Records is ordered pursuant to a subpoena or
other order from a court or governmental agency of competent jurisdiction or
required pursuant to applicable state or federal law. Each seller of Registrable
Shares agrees that it will, upon learning that disclosure of such Records are
sought by a court or governmental agency, give notice to the Company and allow
the Company, at the Company's expense, to undertake appropriate action to
prevent disclosure of the Records deemed confidential;
(i) notify each seller of such Registrable Shares, promptly
after it shall receive notice thereof, of the time when such registration
statement has become effective or a supplement to any prospectus forming a part
of such registration statement has been filed;
(j) notify each seller of such Registrable Shares of any
request by the Commission for the amending or supplementing of such registration
statement or prospectus or for additional information;
(k) prepare and promptly file with the Commission and promptly
notify each seller of such Registrable Shares of the filing of such amendment or
supplement to such registration statement or prospectus as may be necessary to
correct any statements or omissions if, at the time when a prospectus relating
to such securities is required to be delivered under the Securities Act, any
event shall have occurred as the result of which any such prospectus or any
other prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading;
(l) advise each seller of such Registrable Shares, promptly
after it shall receive notice or obtain knowledge thereof, of the issuance of
any stop order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any proceeding for
such purpose and promptly use all reasonable efforts to prevent the issuance of
any stop order or to obtain its withdrawal if such stop order should be issued;
(m) prior to the filing of any registration statement or
prospectus or any amendment or supplement to such registration statement or
prospectus, furnish a copy thereof to each seller of such Registrable Shares and
refrain from filing any such registration statement, prospectus, amendment or
supplement to which counsel selected b the Holders of a majority of the
Registrable Shares being registered shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Securities Act or the rules and
regulations thereunder, unless, in the case of an amendment or supplement, in
the opinion of counsel for the Company the filing of such amendment or
supplement is reasonably necessary to protect the Company from any liabilities
under any applicable federal or state law and such filing will not violate
applicable laws; and
(n) at the request of the managing underwriter or underwriters
in connection with an underwritten offering, furnish on the date or dates
provided for in the underwriting agreement: (i) an opinion of counsel, addressed
to the underwriters, covering such customary matters as such underwriters may
reasonably request; and (ii) a letter or letters from the independent certified
public accountants of the Company addressed to the underwriters, covering such
customary matters as such underwriters may reasonably request.
Each Holder of Registrable Shares agrees that, upon receipt of
any notice from the Company of the happening of any event of the kind described
in paragraph (k) of this Section 6, such Holder shall forthwith discontinue
disposition of Registrable Shares pursuant to the registration statement
covering such Registrable Shares until such Holder's receipt of the copies of
the supplemented or amended prospectus contemplated by paragraph (k) of this
Section 6 and, if so directed by the Company, such Holder shall deliver to the
Company (at the Company's expense) all copies of the prospectus covering such
Registrable Shares current at the time of receipt of such notice.
7. Registration Expenses. All expenses incident to the
Company's performance of or compliance with this Agreement, including, but not
limited to, all registration and filing fees, fees and expenses of compliance
with federal, state and foreign securities laws, printing expenses, messenger
and delivery expenses, and fees and disbursements of counsel for the Company and
its independent certified public accountants, underwriters (excluding discounts
and commissions attributable to the Registrable Shares included in such
registration which shall be borne by the holder of such Registrable Shares) and
other Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), will be borne by the Company. In addition, the Company
will pay its internal expenses (including, but not limited to, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit or quarterly review and the expense of any
liability insurance obtained by the Company and the expenses and fees for
listing the securities to be registered on each securities exchange.
Registration Expenses shall not include expenses incurred by the Holders (such
expenses of the Holders shall include, but not be limited to, underwriting
discounts and commissions relating to the Registrable Shares, brokerage fees,
transfer taxes, and the fees and expenses of any counsel, accountants or other
representatives retained by the Holders) which expenses shall be borne by the
Holders.
8. Indemnification.
(a) The Company agrees to indemnify, to the fullest extent
permitted by law, each seller of Registrable Shares, its partners, officers,
directors, trustees and beneficiaries and each Person who controls such seller
(within the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses including, but not limited to, reasonable attorneys'
fees except as limited by Section 8(c) caused by any untrue or alleged untrue
statement of a material fact contained in any registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein, in the case of a prospectus, in light
of the circumstances in which they were made, not misleading, except insofar as
the same are caused by or contained in any information furnished in writing to
the Company by such seller expressly for use therein or by such seller's failure
to deliver a copy of the prospectus or any amendments or supplements thereto
after the Company has furnished such seller with a sufficient number of copies
of the same or by the seller's delivery of a prospectus after the Company
notified such seller to discontinue delivery of prospectuses. In connection with
an underwritten offering, the Company, if requested, will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the sellers of Registrable
Shares.
(b) In connection with any registration statement in which a
seller of Registrable Shares is participating, each such seller will furnish to
the Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the fullest extent permitted by law, will indemnify the
Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses (including, but not limited to, reasonable attorneys'
fees except as limited by Section 8(c)) resulting from any untrue statement of a
material fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission of a
material fact required to be stated therein or necessary to make the statements
therein, in the case of a prospectus, in light of the circumstances in which
they were made, not misleading, but only to the extent that such untrue
statement or omission is contained in or improperly omitted from, as the case
may be, any information or affidavit so furnished in writing by such seller;
provided that the obligation to indemnify will be several, not joint and
several, among such sellers of Registrable Shares, and the liability of each
such seller of Registrable Shares will be in proportion to, and provided further
that such liability will be limited to, in any event, the net amount received by
such seller from the sale of Registrable Shares pursuant to such registration
statement. In connection with an underwritten offering, each seller of
Registrable Shares will, if requested, agree to indemnify such underwriters,
their officers and directors and each Person who controls such underwriters
(within the meaning of the Securities Act) to the same extent as provided in
this Section 8(b) with respect to the Company.
(c) Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and will survive the transfer of securities. Each
indemnifying party also agrees to make such provisions as are reasonably
requested by any indemnified party for contribution to such party in the event
such indemnifying party's indemnification is unavailable for any reason.
9. Compliance with Rule 144. The Company covenants that it
shall file the reports required to be filed by it under the Securities Exchange
Act, and the rules and regulations thereunder so long as the Company is
obligated to file such reports, and it shall take such further action as any
Holder may reasonably request, all to the extent required from time to time to
enable such Holder to sell Registrable Shares without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such Rule may be amended from time to time or (b)
any similar rules or regulations hereafter adopted by the Commission. Upon the
written request of any Holder, the Company shall delivery to such Holder a
written statement as to whether it has complied with such requirements.
10. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (A) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
11. Reductions of Registrable Shares in an Offering. In the
event the aggregate number of Registrable Shares to be included in a Demand
Registration or Piggyback Registration is reduced by operation of the terms
hereof to a number less than the number requested by the Holders to be included
in such registration, such aggregate reduction may be allocated among, and borne
by, the Holders in any manner agreed upon by the Holders notwithstanding any
provision herein regarding the manner in which such reduction shall be allocated
among, and borne by, the Holders.
12. Intentionally Omitted.
13. Remedies. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law.
14. Amendments and Waivers. The provisions of this Agreement
may be amended or waived at any time only by the written agreement of the
Company and the Holders of a majority of the Registrable Shares. Any waiver,
permit, consent or approval of any kind or character on the part of any such
holders of any provision or condition of this Agreement must be made in writing
and shall be effective only to the extent specifically set forth in writing. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each Holder of Registrable Shares and the Company. Each Holder acknowledges
that by operation of this paragraph the Holders of a majority of the Registrable
Shares, acting in conjunction with the Company, will have the right and power to
diminish or eliminate all rights pursuant to this Agreement.
15. Successors and Assigns. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto, whether so expressed or
not. In addition and whether or not any express assignment has been made, the
provisions of this Agreement which are for the benefit of purchasers or holders
of Registrable Shares are also for the benefit of, and enforceable by, any
subsequent holder of Registrable Shares, provided that (a) the Company shall be
notified in writing of the assignment and (b) such subsequent holder shall not
have any rights to a Piggyback Registration unless such subsequent holder owns
no less than 10% of the Shares.
16. Final Agreement. This Agreement constitutes the final
agreement of the parties concerning the matters referred to herein, and
supersedes all prior agreements and understandings.
17. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
18. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience of reference only and do not constitute a
part of and shall not be utilized in interpreting this Agreement.
19. Notices. any notices required or permitted to be sent
hereunder shall be delivered personally, telecopied (and confirmed) or mailed,
certified mail, return receipt requested, or delivered by overnight courier
service to the following addresses, or such other addresses as shall be given by
notice delivered hereunder, and shall be deemed to have been given upon
delivery, if delivered personally or telecopied, three business days after
mailing, if mailed, or one business day after delivery to the courier, if
delivered by overnight courier service:
If to the initial Holders of the Registrable Shares, to the
addresses set forth on Schedule 1 hereto.
If to the Holders of Registrable Shares other than the initial
Holders of the Registrable Shares, to the addresses set forth on the stock
record books of the Company.
If to the Company, to:
Mercury Finance Company
000 Xxxxx Xxxxx - Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxx Xxxxxx, General Counsel
20. Governing Law. The validity, meaning and effect of this
Agreement shall be determined in accordance with the laws of the State of
Illinois applicable to contracts made and to be performed in that state.
21. Counterparts and Facsimile Execution. This Agreement may
be executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original, and such counterparts together shall
constitute one instrument. This agreement may be executed by the exchange of
signatures by facsimile transmission. Each party shall receive a duplicate
original of the counterpart copy or copies executed by it and the Company.
[Remainder of page intentionally left blank.
Signature pages follow.]
IN WITNESS WHEREOF, MFN FINANCIAL CORPORATION has caused this
Registration Statement to be duly executed.
MFN FINANCIAL CORPORATION
By:
Title:
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