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COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT is made as of the date set forth on
the signature page attached hereto (the "Signature Page") between FINET
HOLDINGS CORPORATION, a Delaware corporation (the "Company"), and the
persons listed on Exhibit A who are signatories to this Agreement (the
"Purchaser"):
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of the Shares. Subject to the terms and conditions
of this Agreement, each of the Purchasers agrees to purchase at the
Closing, and the Company agrees to sell and issue to each of the Purchasers
at the Closing, severally and not jointly, against cash payment,
cancellation of indebtedness or cancellation of interest owed, the number
of shares of the Company's Common Stock (the "Shares") set forth opposite
each Purchaser's name in Exhibit A to this Agreement at a purchase price of
$1.00 per Share.
2. Closing Date; Delivery. The closing of the purchase and sale of the
Shares shall be held at the offices of the Company, 0000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx 00000 on April 15, 1997 or at such
other time and place as the parties may agree upon (the "Closing"). At the
Closing, subject to the terms of this Agreement, the Company will deliver
to each of the Purchasers a certificate representing the number of Shares
to be purchased by the Purchaser from the Company, against payment at the
Closing of the cash purchase price in immediately available funds or by
cancellation of the Company's indebtedness to the Purchaser in the amount
set forth on Exhibit A.
3. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Purchasers that:
(a) Organization and Standing; Articles and Bylaws. The Company is a
corporation duly organized and existing under, and by virtue of, the laws
of the state of Delaware and is in good standing under such laws. The
Company has the requisite corporate power to own and operate its properties
and assets, and to carry on it business as presently conducted and as
proposed to be conducted. The Company is qualified, licensed or
domesticated as a foreign corporation in all jurisdictions where the nature
of its activities or of its properties owned or leased makes such
qualification, licensing or domestication necessary at this time. The
Company has furnished you with copies of its Articles of Incorporation and
Bylaws. Said copies are true, correct and complete and contain all
amendments through the date of this Agreement.
(b) Corporate Power. The Company has now, or will have at the Closing
Date, all requisite legal and corporate power to enter into this Agreement,
to sell the Shares hereunder, and to carry out and perform its obligations
under the terms of this Agreement.
(c) Subsidiaries. The Company has no subsidiaries other than (i) Finet
Corporation, which is a wholly-owned subsidiary of the Company; (ii)
Monument Mortgage, Inc., a wholly-owned subsidiary of the Company; (iii)
PreferenceAmerica Mortgage Network, a wholly-owned subsidiary of the
Company; (iv) The Property Transaction Network, a wholly-owned subsidiary
of the Company; (v) FWC Shell Company ("FWC"), a wholly-owned subsidiary of
the Company; (vi) RPM Affiliates, which is a wholly-owned subsidiary of
FWC; (vii) RPM Mortgage, Inc., a wholly-owned subsidiary of FWC; and (viii)
Fremont Mortgage, Inc., a wholly-owned subsidiary of FWC (sometimes
hereinafter collectively referred to as the "Subsidiaries"). The Company
does not own, directly or indirectly,
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shares of stock or other interests in any other corporation, association,
joint venture, or business organization except as may be listed on a
Schedule of Exceptions filed as an exhibit hereto.
(d) Capitalization. The authorized capital stock of the Company is
30,000,000 shares of Common Stock. The Company's Board of Directors has
resolved to request shareholder approval for an increase in authorized
capital stock to 40,000,000 shares, with such approval informally assented
to by holders of a majority of shares outstanding. There are issued and
outstanding 23,596,150 shares of Common Stock. The issued and outstanding
shares of Common Stock have been duly authorized and validly issued, are
fully paid and nonassessable and were issued in compliance with all
applicable state and federal laws concerning the issuance of securities.
There are no outstanding rights, options, warrants, conversion rights, or
agreements for the purchase or acquisition from the Company of any shares
of its capital stock, except (i) that options for 511,876 shares of the
Company's Common Stock have been granted to directors, officers and
employees of the Company pursuant to the Company's 1989 Incentive Stock
Option Plan and are currently outstanding; (ii) warrants for 131,167 shares
have been granted to underwriters in connection with the May 1993 Unit
Offering, and are currently outstanding; (iii) warrants for 700,000 shares
have been granted to underwriters in connection with the December 1996
Private Placements, and are currently outstanding; and (iv) warrants for
4,104,750 Common shares have been granted to certain bridge lenders of the
Company.
(e) Authorization.
(i) All corporate action on the part of the Company, its officers,
directors, and stockholders necessary for the sale and issuance of the
Shares pursuant hereto and the performance of the Company's obligations
hereunder, has been taken or will be taken prior to the Closing. This
Agreement is a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws of general application affecting enforcement of creditors' rights, and
except as limited by application of legal principles affecting the
availability of equitable remedies.
(ii) The Shares, when issued in compliance with the provisions of this
Agreement, will be validly issued, fully paid and nonassessable, and will
be free of any liens or encumbrances; provided, however, that such shares
may be subject to restrictions on transfer under state and/or federal
securities laws as set forth herein, and as may be required by future
changes in such laws.
(iii) No shareholder of the Company has any right of first refusal or any
preemptive rights in connection with the issuance of the Shares or of
Common Stock by the Company.
(f) Financial Statements. The Company's audited balance sheet and
statement of income and expenses for the fiscal year ended 1995
(hereinafter collectively referred to as the Financial Statements) which
have been supplied to the Purchasers are true and correct, have been
prepared in accordance with generally accepted accounting principles
consistently applied (except as disclosed therein and except that the
Financial Statements do not contain the footnotes required by generally
accepted accounting principles), and fairly present the financial condition
of the Company and the results of the operations of the Company as of the
date thereof.
(g) The Company has delivered to the Purchaser a copy of its Private
Placement Memorandum dated March 1, 1997.
(h) Material Contracts and Commitments. All the material contracts,
commitments, agreements, and instruments to which the Company is a party
are legal, valid, binding, and in full force and effect in all material
respects and enforceable by the Company in accordance with their terms
except as limited by bankruptcy, insolvency, reorganization, moratorium, or
similar laws of general application affecting enforcement of creditors'
rights, and except as limited by application of legal principles affecting
the availability of equitable remedies. The Company is not in material
default under any of such contracts. A list of all such material
contracts, agreements and instruments is set forth in Exhibit B hereto.
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(i) Compliance with Other Instruments, None Burdensome, etc. Neither
the Company nor any Subsidiary is in violation of any term of its
respective Articles of Incorporation or Bylaws, or in any material respect
of any mortgage, indenture, contract, agreement, instrument, or, to the
best knowledge of the Company, any judgment, decree, order, statute, rule,
or regulation applicable to it. The execution, delivery, and performance
by the Company of this Agreement, and the issuance and sale of the Shares
pursuant hereto, will not result in any such violation or be in conflict
with or constitute a default under any such term, or cause the acceleration
of maturity of any loan or material obligation to which the Company or the
Subsidiaries are a party or by which any of them are bound or with respect
to which any of them is an obligor or guarantor, or result in the creation
or imposition of any material lien, claim, charge, restriction, equity or
encumbrance of any kind whatsoever upon, or, to the best knowledge of the
Company after due inquiry, give to any other person any interest or right
(including any right of termination or cancellation) in or with respect to
any of the material properties, assets, business or agreements of the
Company or the Subsidiaries. To the best knowledge of the Company after
due inquiry, no such term or condition materially adversely affects or in
the future (so far as can reasonably be foreseen by the Company at the date
of this Agreement) may materially adversely affect the business, property,
prospects, condition, affairs, or operations of the Company and the
Subsidiary.
(j) Litigation, etc. Other than as listed on Exhibit C hereto, there
are no actions, proceedings or investigations pending (or, to the best of
the Company's knowledge, any basis therefor or threat thereof), which,
either in any case or in the aggregate, might result in any adverse change
in the business, prospects, conditions, affairs, or operations of the
Company or in any of its properties or assets, or in any impairment of the
right or ability of the Company to carry on its business as proposed to be
conducted, or in any material liability on the part of the Company, or
which question the validity of this Agreement or any action taken or to be
taken in connection herewith.
(k) Governmental Consent, etc. No consent, approval, or authorization
of, or designation, declaration, or filing with, any governmental unit is
required on the part of the Company in connection with the valid execution
and delivery of this Agreement, or the offer, sale or issuance of the
Shares, or the consummation of any other transaction contemplated hereby
(except exemption notice filings under the Blue Sky securities laws of
those states in which offers or sales may be made in connection with this
Offering, which filings have been or will be timely made so as to comply
with such laws).
(l) Offering. The offer, sale and issuance of the Shares in conformity
with the terms of this Agreement will not violate the Securities Act.
(m) Use of Proceeds. The net proceeds from the sale of the Shares
shall be used to implement the Company's voluntary
reorganization/recapitalization plan as set forth in the Private Placement
Memorandum relating to the offer and sale of the Shares, dated March 1,
1997.
(n) Insurance. Neither the Company nor any of its Subsidiaries maintain
in force any insurance policies as of the date of this Agreement.
(o) Intellectual Property, etc. Neither the Company nor any of its
Subsidiaries own the rights to any trademarks, service marks, trade names,
copyrights, patents or other intellectual property. Neither the Company
nor any Subsidiary has received any notice or claim of infringement of any
patents, inventions, rights, trademarks, trade names or copyrights of
others with respect to any processes, methods, formulae or procedures used
by any of said corporations in the present or planned conduct of their
respective businesses.
(p) Title to and Condition of Properties. The Company and its
Subsidiaries have good and marketable title to all their respective
tangible and intangible property and assets, including those reflected in
the Financial Statements (except such property or assets as have since
September 30, 1995 been sold or otherwise disposed of in the ordinary
course of business), and such property and assets are subject to no
mortgage or security interests, conditional sales contract, charge, lien or
encumbrance (except for the lien of current taxes not yet due and payable
and such imperfections of title, easements
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and encumbrances, if any, as are not substantial in character, amount or
extent and do not materially detract from the value of, or interfere with
the present use of the properties subject thereto or affected thereby, or
otherwise materially impair the business operations of the Company and any
Subsidiary), and subsequent to September 30, 1995 neither the Company nor
any Subsidiary has sold or disposed of any of its property and assets or
obligated itself to do so except in the ordinary course of business.
Except for such minor defects as are not substantial in character and which
do not have a materially adverse effect upon the validity thereof, all
material real and personal property leases to which the Company or the
Subsidiaries are a party are in good standing, valid and effective, and
there is not under any such lease any existing material default or event
which with notice or lapse of time or both would constitute a material
default and in respect of which the Company or the Subsidiaries have not
taken reasonable steps to prevent such a default from occurring.
(q) Taxes. The Company and the Subsidiaries represent that upon
completion of the offering of the Shares they will file all tax returns
that are required to have been filed by them prior to the date of this
Agreement with appropriate federal, state, county and local governmental
agencies or instrumentalities.
(r) Disclosure. This Agreement, the exhibits hereto, the Financial
Statements, and all certificates delivered to you pursuant to this
Agreement, when read together, do not contain any untrue statement of a
material fact and do not omit to state a material fact necessary in order
to make the statements contained therein or herein not misleading, it being
understood that the Private Placement Memorandum contains estimates and
projections which have been made in good faith by the Company and no
warranty of such projections is expressed or implied hereby. There is, to
the best of the Company's knowledge, no fact which materially adversely
affects the business, prospects, condition, affairs or operations of the
Company or any of its properties or assets which has not been set forth in
this Agreement, the exhibits hereto, the Financial Statements or the
Private Placement Memorandum.
(s) The Shares:
(i) are free and clear of any security interests, liens, claims, or other
encumbrances;
(ii) have been duly and validly authorized and issued and are, and on the
Closing Date will be, fully paid and non-assessable;
(iii) will not have been, individually and collectively, issued or sold
in violation of any pre-emptive or other similar rights of the holders of
any securities of the Company;
(iv) will not subject the holders thereof to personal liability by reason
of being such holders; and
4. Representations and Warranties of the Purchasers. Each of the
Purchasers represents and warrants to, and agrees with, the Company as
follows:
(a) No consent, approval, authorization, or order of any court,
governmental agency or body, or arbitrator having jurisdiction over the
Purchaser is required for execution of this Agreement, including, without
limitation, the purchase of the Shares, or the performance of the
Purchaser's obligations hereunder.
(b) The Purchaser understands that no federal or state agency has passed on
or made any recommendation or endorsement of the Shares.
(c) The Company has given the Purchaser the opportunity to have answered
all of the Purchaser's questions concerning the Company and its business
and has made available to the Purchaser all information requested by the
Purchaser which is reasonably necessary to verify the accuracy of other
information furnished by the Company. The
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Purchaser has received and evaluated all information about the Company and
its business which the Purchaser deems necessary to formulate an investment
decision, and does not desire any further information.
(d) The Purchaser understands that the Shares are being offered and sold to
it in reliance on specific exemptions or non-application from the
registration requirements of federal and state securities laws and that the
Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments, and understandings of the
Purchaser set forth herein in order to determine the applicability of such
exemptions or non-applications and the suitability of the Purchaser to
acquire the Shares.
(e) The Purchaser is aware that the Shares have not been registered
under the Securities Act by reason of their issuance in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act pursuant to Section 4(2) and Regulation D thereof, and that
they must be held by the Purchaser for an indeterminate period and the
Purchaser must therefore bear the economic risk of such investment
indefinitely, unless a subsequent disposition thereof is registered under
the Securities Act or is exempt from registration. The Purchaser is aware
of the provisions of Rule 144 promulgated under the Securities Act which
permits limited resale of shares purchased in a private placement subject
to the satisfaction certain conditions, including, among other things the
existence of a public market for the Shares, the availability of certain
current public information about the Company, the resale occurring not less
than two years after a party has purchased and paid for the security to be
sold, the sale being through a "broker's transaction" or in transactions
directly with a "market maker" (as provided by Rule 144(f)) and the number
of shares being sold during any three-month period not exceeding specified
limitations. The Purchaser is also aware that, while many of the
restrictions of Rule 144 do not apply to the resale of shares by a person
who owned those shares for at least three years prior to their resale and
who is not an "affiliate" (within the meaning of Rule 144(a)) of the issuer
and has not been an affiliate of the issuer for at least three months prior
to the date of resale of the restricted securities, the Company does not
warrant or represent that you are not an affiliate as of the date of this
Agreement or that you will not be an affiliate at any relevant times in the
future.
(f) Each instrument representing the Shares may be endorsed with the
following legends:
(i) THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS
MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
SATISFACTORY TO THE COMPANY, STATING THAT SUCHSALE, TRANSFER, ASSINGMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT.
(ii) Any other legend required by California or other state securities
laws.
The Company need not register a transfer of legended Shares, and may
instruct its transfer agent not to register the transfer of the Shares,
unless one of the conditions specified in the foregoing legends is
satisfied.
(g) Any legend endorsed on an instrument pursuant to Section 4(f) hereof
and the stop transfer instructions with respect to such Shares shall be
removed, and the Company shall issue an instrument without such legend to
the holder of such Shares if such Shares are registered under the
Securities Act and a prospectus meeting the requirements of Section 10 of
the Securities Act is available or if such holder provides the Company with
an opinion of counsel for such holder of the Shares, reasonably
satisfactory to the Company, to the effect that a public sale, transfer or
assignment of such Shares may be made without registration.
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(h) The Purchaser is either (i) acquiring the Shares for the Purchaser's
own account; or (ii) for the account of another for which the Purchaser
acts as a fiduciary, in which case the Purchaser will so advise the
Company. If acting as a fiduciary, the Purchaser makes the
representations, warranties, and covenants as set forth herein on its own
behalf and as agent for and on behalf of such other party. The Purchaser is
acquiring the Shares for investment and without any present intention to
engage in a distribution thereof.
(i) The Purchaser has the knowledge and experience in financial and
business matters to evaluate the merits and risks of the proposed
investment.
(j) The Purchaser is an "Accredited Investor" as that term is
defined under Rule 501 adopted pursuant to the Securities Act. "Accredited
Investors" are defined in Rule 501 to include among others: (1) Various
specified institutional investors (such as banks, savings and loan
associations, licensed brokers or dealers, insurance companies, investment
companies, small business investment companies, employee benefit plans
having assets in excess of $5,000,000, and self-directed plans having
investment decisions made solely by persons that are Accredited Investors);
(2) Any entity with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered; (3) Any person
who had individual income in excess of $200,000 in each of the two most
recent years or joint income with that person's spouse in excess of
$300,000 in each of those years and has a reasonable expectation of
reaching the same income level this year; (4) Any person whose individual
net worth (or joint net worth with the person's spouse) at the time of
purchase exceeds $1,000,000; (5) Directors and executive officers of Finet;
(6) Trusts with total assets in excess of $5,000,000 not formed for the
specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person prescribed in Rule 506(b)(2)(ii); and
(7) Any entity in which all the equity owners are deemed accredited.
5. Negative Covenants of the Company. The Company further covenants
and agrees that without the prior written approval of the Purchaser, it
will not:
(a) Engage in any business other than the business engaged in or
proposed to be engaged in by the Company or any subsidiary on the date
hereof and any businesses or activities substantially similar or related
thereto.
(b) Issue and sell any options to purchase more than an aggregate of
1,000,000 shares of the Company's Common Stock to employees, officers and
directors of, and consultants and franchisees to the Company, pursuant to
any incentive program approved by the Board of Directors of the Company.
(c) Liquidate or dissolve, merge, consolidate or sell substantially all
of its assets.
(d) Declare or pay any dividends; or purchase, redeem or otherwise
acquire for value or make any other distribution with respect to any of the
Company's capital stock, other than the repurchase of shares of capital
stock from terminating or terminated employees at a price no greater
than fair market value.
(e) Invest, directly or indirectly, in any business or enterprise other
than in connection with the operation of its business; provided however,
pending the use of the net proceeds of this offering in its businesses the
Company may invest such net proceeds in short term interest bearing
deposits and securities.
(f) By amendment of its articles of incorporation, through the
voluntary reorganization or recapitalization, or through any transfer of
its 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.
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6. Conditions Precedent to the Purchasers' Obligations. The obligations
of each of the Purchasers hereunder are subject to the performance by the
Company of its obligations hereunder and to the satisfaction of the
following additional conditions precedent on or before the Closing Date:
(a) The representations and warranties made by the Company in this
Agreement shall, unless waived by the Purchaser, be true and correct as of
the date hereof and at the Closing Date, with the same force and effect as
if they had been made on and as of the Closing Date.
(b) After the date hereof until the Closing Date there shall not have
occurred:
(v) any change, or any development involving a prospective change, in
either (A) the condition, financial or otherwise, or in the earnings,
business or operations, or in or affecting the properties of the Company or
(B) the financial or market conditions or circumstances in the United
States, in either case which, in the Purchaser's judgment, is material and
adverse and makes it impractical or inadvisable to proceed with the
offering, sale, or delivery of the Shares;
(vi) an imposition of a new legal or regulatory restriction not in effect
on the date hereof, or any change in the interpretation of existing legal
or regulatory restrictions, that materially and adversely affects the
offering, sale, or delivery of the Shares; or
(vii) a suspension, or material limitation of, trading (A) generally on
or by the New York Stock Exchange or NASDAQ, or (B) of any securities of
the Company on any exchange or in any over-the-counter market.
7. Conditions Precedent to the Company's Obligations. The obligations
of the Company hereunder are subject to the performance by each of the
Purchasers of its obligations hereunder and to the satisfaction of the
following additional condition precedent:
The representations and warranties made by the Purchaser in this Agreement
shall, unless waived by the Company, be true and correct at the Closing
Date, with the same force and effect as if they had been made on, and as
of, the Closing Date.
8. Registration Rights
(a) Request for Registration. In case the Company shall receive from
the Purchaser a written request that the Company effect any registration,
qualification, or compliance with respect to all or a part of the Shares
the Company will: (i) as soon as practicable, use its diligent best
efforts to effect all such registrations, qualifications and compliances
(including, without limitations, the execution of an undertaking to file
post-effective amendments, appropriate qualifications under the applicable
blue sky or other state securities laws and appropriate compliance with
exemptive regulations issued under the Securities Act and any other
governmental requirements or regulations) as may be so requested and as
would permit or facilitate the sale and distribution of all or such portion
of the Purchaser's Shares as are specified in such request, together with
all or such portion of the Shares of any Holder or Holders joining in such
request as are specified in a written request given within thirty days
after receipt of such written notice from the Company; provided that the
Company shall not be obligated to take any action to effect such
registration, qualification or compliance pursuant to this clause (i): (A)
After the Company has effected two such registrations pursuant to this
subparagraph (i) and such registrations have been declared or ordered
effective; or (B) If the amount of securities being offered for sale is
less than 25 percent of the Shares.
Subject to the foregoing clauses (A) through (B), the Company shall file a
registration statement covering the Shares so requested to be registered as
soon as practical, but in any event within ninety days, after receipt of
the request or requests of the Purchaser; provided, however, that if the
Company shall furnish to such Purchaser a certificate signed by the
President
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of the Company stating that in the good faith judgment of the Board of
Directors it would be seriously detrimental to the Company and it
stockholders for such registration statement to be filed at the date filing
would be required and it is therefore essential to defer the filing of such
registration statement, the Company shall have an additional period of not
more than ninety days within which to file such registration statement.
(b) In any event, the Company shall use its best efforts to cause such
registration statement to become effective within 150 days of the closing
date, and to keep such registration statement effective for up to three
years.
(c) Expenses of Registration. All expenses incurred in connection with
any registration, qualification or compliance pursuant to this Agreement,
including without limitation, all registration, filing, and qualification
fees, printing expenses, fees and disbursements of counsel for the Company,
and expenses of any special audits incidental to or required by such
registration, shall be borne by the Company.
(d) Indemnification.
(i) The Company will indemnify the Purchaser with respect to such
registration, qualification, or compliance effected pursuant to this
paragraph, and each underwriter, if any, and each person who controls any
underwriter of the Shares held by or issuable to the Purchaser, against all
claims, losses, damages, and liabilities (or actions in respect thereto)
arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification,
or compliance, or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by the Company of
any rule or regulation promulgated under the Securities Act applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and
will reimburse the Purchaser, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, provided that the Company will
not be liable in any such case to the extent that any such claim, loss,
damage or liability arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company by an
instrument duly executed by such Purchaser or underwriter specifically for
use therein.
(ii) The Purchaser will, if Shares held by or issuable to such Purchaser
are included in the securities as to which such registration,
qualification, or compliance is being effected, indemnify the Company, each
of its directors and officers who sign such registration statement, each
underwriter, if any, of the Company's securities covered by such a
registration statement, and each person who controls the Company within the
meaning of the Securities Act, against all claims, losses, damages, and
liabilities (or actions in respect thereto) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in any such registration statement, prospectus, offering circular, or other
document, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company, such directors,
officers, persons, or underwriters for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability, or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular, or other document in reliance
upon and in conformity with written information furnished to the Company by
an instrument duly executed by such Purchaser specifically for use therein.
(iii) Each party entitled to indemnification under this paragraph (d)
(the Indemnified Party) shall give notice to the party required to provide
indemnification (the Indemnifying Party) promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel
for the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval
shall not
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be unreasonably withheld), and the Indemnified Party may participate in
such defense at such party's expense, and provided further that the failure
of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this paragraph. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim
or litigation.
(e) Transfer of Registration Rights. The rights to cause the Company to
register the securities granted to the Purchaser by the Company under
Section 8 may be assigned by the Purchaser to a transferee or assignee of
any of the Purchaser's Shares, provided, that the Company is given written
notice by the Purchaser at the time of or within a reasonable time after
said transfer, stating the name and address of said transferee or assignee
and identifying the securities with respect to which such registration
rights are being assigned.
9. Fees and Expenses. The Purchaser and the Company each agrees to pay
its own expenses incident to the performance of its obligations hereunder,
except that the Company agrees to pay the fees, expenses and disbursements
of the Purchaser's counsel.
10. Survival of the Representations, Warranties, etc. The respective
agreements, representations, warranties, indemnities, and other statements
made by or on behalf of the Company and Purchaser, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation made by or on behalf of the other party to this Agreement or
any officer, director, or employee of, or person controlling or under
common control with, such party, and will survive delivery of any payment
of the Shares.
11. Notices. All communications hereunder shall be in writing, and, if
sent to the Purchasers shall be sufficient in all respects if delivered,
sent by registered mail, or by telecopy and confirmed to the Purchasers at:
Xxxx Xxxxx Xxxxxx Garcao
Lote CT-14
Xxxxxx Xx Xxxxxxx
0000 Xxxxxxx, Xxxxxxxx
with a copy sent to:
Xxxxx X. Xxxxx, Esq.
Xxxxxxxx & Xxxxxx
Xxx Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
or, if sent to the Company, shall be delivered, sent by registered mail, or
by telecopy and confirmed to the Company at:
Finet Holdings Corporation
000 Xxxxxxxxxx Xxxxxx, #000
Xxx Xxxxxxxxx, XX 00000
165
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy sent to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxxx, Xxxxxxxxx & Xxxxxx, LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
12. Miscellaneous.
(a) This Agreement may be executed in one or more counterparts and it is
not necessary that signature of all parties appear on the same counterpart,
but such counterparts together shall constitute but one and the same
agreement.
(b) This Agreement shall inure to the benefit of and be binding upon the
parties hereto, their respective successors and, with respect to Section 9
hereof, the officers, directors, and controlling persons thereof and each
person under common control therewith, and no other person shall have any
right or obligation hereunder.
(c) This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California.
(d) The headings of the sections of this document have been inserted for
convenience of reference only and shall not be deemed to be a part of this
Agreement.
IN WITNESS HEREOF, the parties hereto have duly executed and delivered this
Agreement, all as of the day and year first above written.
COMPANY:
FINET HOLDINGS CORPORATION
By:
President
PURCHASER:
By:
Xxxx Xxxxx Xxxxxx Garcao
