Exhibit 10.12
MICROFINANCIAL INCORPORATED
ACORN/AMPAC REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made as of this
10th day of June, 2004 by and among MicroFinancial Incorporated (the "COMPANY"),
and each of the holders set forth on Schedule A attached hereto, along with
their successors and assigns (the "HOLDERS").
W I T N E S S E T H:
WHEREAS, the Company, TimePayment Corp. LLC and Acorn Capital Group,
LLC ("ACORN") are parties to that certain Credit Agreement dated as of the date
hereof pursuant to which the Company issued Acorn that certain warrant
certificate to purchase shares of Common Stock of the Company dated as of the
date hereof (the "ACORN WARRANT");
WHEREAS, the Company, TimePayment Corp. LLC and Ampac Capital
Solutions, LLC ("AMPAC") are parties to that certain Note Purchase Agreement
dated as of the date hereof pursuant to which the Company issued Ampac those
certain warrant certificates to purchase shares of Common Stock of the Company
dated as of the date hereof (the "AMPAC WARRANTS"); and
WHEREAS, the Company and the Holders wish to enter into a Registration
Rights Agreement as set forth herein to provide for registration of the shares
of Common Stock issuable upon exercise of the Acorn Warrant and Ampac Warrants.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Incidental Registration.
1.1. If the Company at any time proposes to register any of its
equity securities under the Securities Act (other than a Registration (i)
relating to shares of Common Stock issuable upon exercise of employee stock
options or in connection with any employee benefit or similar plan of the
Company or (ii) in connection with an acquisition by the Company of another
company), whether as a result of a primary or secondary offering or pursuant to
registration rights granted to holders of other securities of the Company, the
Company shall, each such time, subject to the provisions of Section 1.2, give
prompt written notice to the Holders of its intention to do so and of such
Holders' rights under this Section 1, at least 20 days prior to the anticipated
filing date of the Registration Statement relating to such Registration. Such
notice shall offer all of the Holders the opportunity to include in such
Registration Statement such number of Registrable Securities as each such Holder
may request. Upon the written request of any such Holder made within 10 days
after the receipt of the Company's notice (which request shall specify the
number of Registrable Securities intended to be disposed of by such Holder), the
Company shall use its best efforts to effect the Registration under the
Securities Act of all Registrable Securities which the Company has been so
requested to register by the Holders thereof; provided, that (x) if such
Registration involves an underwritten offering, all Holders requesting to be
included in the Company's Registration must sell their Registrable Securities to
the underwriters selected by the Company on the same terms and conditions as
apply to the Company; and (y) if, at any time after giving written notice of its
intention to register any securities pursuant to this Section 1.1 and prior to
the effective date of the Registration Statement filed in connection with such
Registration, the Company shall determine for any reason not to register such
securities, the Company shall give written notice to all Holders and shall
thereupon be relieved of its obligation to register any Registrable Securities
in connection with such Registration. If a Registration pursuant to this Section
1.1 involves an underwritten public offering, any Holder requesting to be
included in such Registration may elect, in writing prior to the effective date
of the Registration Statement filed in connection with such Registration, not to
register such Registrable Securities in connection with such Registration. The
Company shall pay all Registration Expenses in connection with each Registration
of Registrable Securities requested pursuant to this Section 1.
1.2. Priority in Incidental Registrations. If a Registration
pursuant to this Section 1 involves an underwritten offering and the managing
underwriter advises the Company that, in its good faith opinion, the number of
equity securities (including all Registrable Securities) which the Company, the
Holders and any other persons intend to include in such Registration exceeds the
largest number of securities which can be sold without having an adverse effect
on such offering, including the price at which such Registrable Securities can
be sold, the Company will include in such Registration (i) first, securities
(the "2003 REGISTRABLE SECURITIES") that the Company proposes to sell for the
account of other Persons holding certain warrants (the "2003 Warrants") having
registration rights pursuant to that certain Registration Rights Agreement,
dated April 14, 2003 (the "2003 REGISTRATION RIGHTS AGREEMENT") (ii) second,
Acorn Registrable Securities proposed to be registered by the Holders thereof,
pro rata based on the number of Acorn Registrable Securities proposed to be
registered by each such Holder, (iii) third, Ampac Registrable Securities
proposed to be registered by the Holders thereof, pro rata based on the number
of Ampac Registrable Securities proposed to be registered by each such Holder,
and (iv) fourth, securities that the Company proposes to issue and sell for its
own account.
1.3. Filing of Registration Statement. The Company shall file a
Registration Statement with the Commission within 60 days after the date hereof
registering (i) the shares of Common Stock issuable to the holders of the Ampac
Warrants upon exercise of the Ampac Warrants, (ii) the shares of Common Stock
issuable to the holders of the 2003 Warrants upon exercise of the 2003 Warrants
(if such holders desire such shares to be registered) and (iii) the shares of
Common Stock issuable to the holders of the Acorn Warrant upon exercise of the
Acorn Warrant (if such holders desire such shares to be registered), subject to
the provisions of Section 1.2. Such Registration (i) shall not be an
underwritten offering, unless the Company decides in its sole discretion to
engage an underwriter in connection with such Registration and (ii) shall be
subject to all provisions of this Agreement, including without limitation,
Sections 2.2 and 2.11. The Company shall use its best efforts to have such
Registration Statement declared Effective by the Commission within 180 days
after the date hereof.
2. Registration Procedures.
In connection with any offering of Registrable Securities registered
pursuant to this Agreement, the Company shall:
2.1. Prepare and file with the Commission as soon as practicable,
and in any event within 120 days after receipt of a request for Registration, a
Registration Statement on any form for which the Company then qualifies and
which counsel for the Company shall deem appropriate, and which form shall be
available for the sale of the Registrable Securities in accordance with the
intended methods of distribution thereof, and use commercially reasonable
efforts to cause such Registration Statement to become and remain Effective as
provided herein, provided that at least fifteen (15) days prior to filing with
the Commission a Registration Statement or disclosure document constituting part
of a Registration Statement or any amendments or supplements thereto, the
Company will (x) furnish to one counsel selected by the Holders of a Majority
covered by such Registration Statement copies of all such documents proposed to
be filed for said counsel's review and comment and (y) notify each Holder
covered by such Registration Statement of any stop order issued or threatened by
the Commission and take all reasonable actions required to prevent the entry of
such stop order or to remove it if entered.
2.2. Prepare and file with the Commission such amendments and
supplements to such Registration Statement and any disclosure document
constituting part of such Registration Statement used in connection therewith as
may be necessary to keep Effective such Registration Statement for a period of
not less than 180 days or such shorter period which will terminate when all
Registrable Securities covered by such Registration Statement have been sold
(but not before the expiration of the 90 day period, if applicable, referred to
in Section 4(3) of the Securities Act and Rule 174 under the Securities Act, or
any successor thereto, if applicable), and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such Registration
Statement.
2.3. Furnish to each Holder and each underwriter, if any, of
Registrable Securities covered by such Registration Statement such number of
copies of such Registration Statement, each amendment and supplement thereto (in
each case including all exhibits thereto), and the disclosure document included
in such Registration Statement (including each preliminary disclosure document),
in conformity with the requirements of the Securities Act, and such other
documents as any Holder may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Holder.
2.4. Use commercially reasonable efforts to register or qualify
such Registrable Securities under such other state securities or "blue sky" laws
of such jurisdictions as any Holder, and underwriter, if any, of Registrable
Securities covered by such Registration Statement reasonably requests and do any
and all other acts and things which may be reasonably necessary or advisable to
enable such Holder and each underwriter, if any, to consummate the disposition
in such jurisdictions of the Registrable Securities owned by such Holder;
provided that the Company will not be required to (x) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 2, (y) subject itself to taxation in any such jurisdiction
or (z) consent to general service of process in any such jurisdiction.
2.5. Immediately notify each Holder of such Registrable
Securities at any time when a disclosure document relating thereto is required
to be delivered under the Securities Act of the happening of any event which
comes to the Company's attention if as a result of such event the disclosure
document included in such Registration Statement contains an untrue statement of
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and promptly prepare
and furnish to such Holder a supplement or amendment to such disclosure document
so that, as thereafter delivered to the Holders of such Registrable Securities,
such disclosure document will not contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
2.6. Use commercially reasonable efforts to cause all such
Registrable Securities to be listed on a national securities exchange or the
NASDAQ national market and on each securities exchange upon which similar
securities issued by the Company may then be listed, and enter into such
customary agreements including a listing application and indemnification
agreement in customary form, and to provide a transfer agent and registrar for
such Registrable Securities covered by such Registration Statement no later than
the effective date of such Registration Statement.
2.7. Enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other actions as the
Holders of a Majority covered by such Registration Statement or the underwriters
retained by such Holders, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities, including customary
representations, warranties, indemnities and agreements.
2.8. Make available for inspection by any Holder covered by such
Registration Statement, any underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney, accountant or other
agent retained by any such Holder or underwriter (collectively, the
"INSPECTORS"), all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's and its Affiliates'
officers, directors and employees to supply all information and respond to all
inquiries reasonably requested by any such Inspector in connection with such
Registration Statement.
2.9. Use commercially reasonable efforts to obtain (a) a "cold
comfort" letter from the Company's independent public accountants in customary
form and covering such matters of the type customarily covered by "cold comfort"
letters as the Holders of a Majority being sold reasonably request and (b) at
the time of any underwritten sale pursuant to a Registration Statement, a
"bring-down comfort letter", dated as of the date of such sale, from the
Company's independent certified public accountants covering such matters of the
type customarily covered by comfort letters as the Holders of a Majority covered
by such Registration Statement and the underwriters reasonably request.
2.10. Otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission, and make available
to the Holders, as soon as reasonably practicable, an earnings statement
covering a period of at least twelve months, beginning with the first month
after the Registration Statement is Effective, which earnings statement shall
satisfy the provisions of the Securities Act and Rule 158 thereunder.
2.11. In the event of the issuance of any stop order suspending
the effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Registrable Securities included in such Registration Statement for sale in
any jurisdiction, the Company will use its best efforts promptly to obtain the
withdrawal of such order.
It shall be a condition precedent to the obligation of the
Company to take any action with respect to securities of a Holder that such
Holder shall furnish to the Company such information regarding the securities
held by such Holder and the intended method of disposition thereof as the
Company shall reasonably request and as shall be required in connection with the
action taken by the Company.
Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 2.5, such
Holder will forthwith discontinue disposition of Registrable Securities until
such Holder's receipt of the copies of the supplemented or amended disclosure
document contemplated by Section 2.5 hereof, and, if so directed by the Company,
such Holder will deliver to the Company (at the Company's expense) all copies
(including, without limitation, any and all drafts), other than permanent file
copies, then in such Holder's possession, of the disclosure document covering
such Registrable Securities current at the time of receipt of such notice. In
the event the Company shall give any such notice, the period mentioned in
Section 2.2 shall be extended by the greater of (x) three months or (y) the
number of days during the period from and including the date of the giving of
such notice pursuant to Section 2.5 hereof to and including the date when each
Holder covered by such Registration Statement shall have received the copies of
the supplemented or amended disclosure document contemplated by Section 5.6.
3. Indemnification.
3.1. Indemnification by the Company. In the event of any
Registration of any securities of the Company under the Securities Act pursuant
to this Agreement, the Company will indemnify and hold harmless, to the full
extent permitted by law, each of the Holders of any Registrable Securities
covered by such Registration Statement, their respective directors and officers,
general partners, limited partners and managing directors, each person who
participates as an underwriter in the offering or sale of such securities and
each other person, if any, who controls, is controlled by or is under common
control with any such Holder or any such underwriter within the meaning of the
Securities Act (and directors, officers, controlling persons, partners and
managing directors of any of the foregoing), against any and all losses, claims,
damages or liabilities, joint or several, and expenses (including any amounts
paid in any settlement effected with the Company's consent, which consent will
not be unreasonably withheld) to which such Holder, any such director or officer
or general or limited partner or managing director or any such underwriter or
controlling person may become subject under the Securities Act, state securities
or "blue sky" laws, common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) or
expenses arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained, on the effective date thereof,
in any Registration Statement under which such securities were registered under
the Securities Act, any preliminary, final or summary disclosure document
contained therein, or any amendment or supplement thereto, (ii) 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 (iii) any
violation or alleged violation by the Company of any federal, state or common
law rule or regulation applicable to the Company and relating to action required
of or inaction by the Company in connection with any such Registration. The
Company shall reimburse each such Holder and each such director, officer,
general partner, limited partner, managing director or underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending such loss, claim, liability,
action or proceeding, provided, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement or amendment or supplement thereto or in any
such preliminary, final or summary disclosure document in reliance upon and in
conformity with written information furnished to the Company through an
instrument duly executed by such Holder in its capacity as a Holder in the
Company or any such director, officer, general or limited partner, managing
director or underwriter specifically stating that it is for use in the
preparation thereof. The indemnity provided for herein shall remain in full
force and effect regardless of any investigation made by or on behalf of such
Holder or any such director, officer, general partner, limited partner, managing
director, underwriter or controlling person and shall survive the transfer of
such securities by such Holder.
3.2. Indemnification by the Holders and Underwriters. Any
Holder of the Registrable Securities of which are included in any Registration
Statement shall, severally (and not jointly with any other Holder), indemnify
and hold harmless (in the same manner and to the same extent as set forth in
paragraph (a) above) the Company and its directors, officers, controlling
persons from such Registration Statement, any preliminary, final or summary
disclosure document contained therein, or any amendment or supplement, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company or its representatives through an instrument duly executed by or on
behalf of such Holder specifically stating that it is for use in the
preparation of such Registration Statement, preliminary, final or summary
disclosure document or amendment or supplement, or a document incorporated by
reference into any of the foregoing. No Holders shall be liable in the
aggregate for any amounts exceeding the product of the sale price per
Registrable Security (after deduction of applicable underwriting discounts and
commissions and transfer taxes) and the number of Registrable Securities sold
pursuant to such Registration Statement or disclosure document by such Holder.
3.3. Notices of Claims, etc. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be, made
pursuant to this Section 3, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, promptly give written
notice to the indemnifying party of the commencement of such action, provided
that the failure of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations under the preceding
subsections of this Section, except to the extent that the indemnifying party
is actually materially prejudiced by such failure to give notice. In case any
such action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
will be entitled to participate in and, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, to the extent that it
may wish, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and parties arises in respect of such claim after the assumption of
the defense thereof, and the indemnifying party will not be subject to any
liability for any settlement made without its consent (which consent shall not
be unreasonably withheld). No indemnifying party will consent 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. 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 in any single jurisdiction 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, in which event the indemnifying party shall be obligated to pay the
fees and expenses of such additional counsel or counsels as may be reasonably
necessary. Notwithstanding anything to the contrary set forth herein, and
without limiting any of the rights set forth above, in any event any party will
have the right to retain, at its own expense, counsel with respect to the
defense of a claim.
3.4. Other Indemnification. Indemnification similar to that
specified in the preceding subsections of this Section 3 (with appropriate
modifications) shall be given by the Company and each Holder with respect to
any required Registration or other qualification of securities under any
federal or state law or regulation or governmental authority other than the
Securities Act.
3.5. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this Section is for any reason held to be unenforceable although applicable in
accordance with its terms, the Company, the Holders and the underwriters shall
contribute to the aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by such indemnity agreement incurred by the Company,
the Holders and the underwriters, in such proportions that the underwriters are
responsible for that portion represented by the percentage that the
underwriting discount appearing in the disclosure document bears to the public
offering price appearing therein and the Company and the Holders are
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. As between the Company and the
Holders, such parties shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement in such proportion as shall be appropriate to reflect (x) the
relative benefits received by the Company, on the one hand, and the Holders of
the Registrable Securities included in the offering on the other hand, from the
offering of the Registrable Securities and any other securities included such
offering, and (y) the relative fault of the Company, on the one hand, and the
Holders of the Registrable Securities included in the offering, on the other,
with respect to the statements or omissions which resulted in such loss,
liability, claim, damage or expense, or action in respect thereof as well as
any other relevant equitable considerations. The relative benefits received by
the Company, on the one hand, and the Holders of the Registrable Securities on
the other, with respect to such offering shall be deemed to be in the same
proportion as the sum of the total purchase price paid to the Company in
respect of the Registrable Securities plus the total net proceeds from the
offering of any securities included in such offering (before deducting
expenses) received by the Company bears to the amount by which the total net
proceeds from the offering of Registrable Securities (before deducting expenses
but after deducting applicable underwriting discounts and commissions and
transfer taxes) received by the Holders of the Registrable Securities with
respect to such offering exceeds the purchase price paid to the Company in
respect of the Registrable Securities, and in each case the net proceeds
received from such offering shall be determined as set forth in the disclosure
document. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Holders of the Registrable Securities, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Holders of the Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section were to be determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to herein. Notwithstanding
anything to the contrary contained herein, the Company and the Holders agree
that any contribution required to be made by such Holder pursuant to this
Section 3.5 shall not exceed the net proceeds from the offering of Registrable
Securities (before deducting expenses but after deducting applicable
underwriting discounts and commissions and transfer taxes) received by such
Holder with respect to such offering. For purposes of this Section, each
Person, if any, who controls a Holder or an underwriter within the meaning of
Section 15 of the Securities Act shall have the same rights to contribution as
such Holder or Underwriter, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as the Company.
3.6. Rule 144. The Company will furnish to any Holder, upon
request made by such Holder at any time, a written statement signed by the
Company, addressed to such Holder, describing briefly the action the Company
has taken or proposes to take to comply with the current public information
requirements of Rule 144 or Rule 144A. The Company will, at the request of any
Holder, remove from the stock certificates representing such Registrable
Securities that portion of any restrictive legend which relates to the
registration provisions of the Securities Act on the second anniversary date of
this Agreement, provided that the Holder is not at this time (or within the
previous 90 days) and affiliate of the Company.
4. DEFERRAL; BLACK-OUT. Notwithstanding anything in this Agreement to
the contrary, if the Company shall furnish to the Holders named in any
registration statement filed hereunder a certificate signed by the President or
Chief Executive Officer of the Company stating that the Board of Directors of
the Company has made the good faith determination (after consultation with
counsel) (i) that continued use by the Holders of the Registration Statement for
purposes of effecting offers or sales of Registrable Securities pursuant thereto
would require, under the Securities Act, premature disclosure in such
registration statement (or the prospectus relating thereto) of material,
nonpublic information (the "NON-PUBLIC INFORMATION") concerning the Company, its
business or prospects or any proposed material transaction involving the
Company, (ii) that such premature disclosure would be materially adverse to the
Company or any such proposed material transaction or would make the successful
consummation by the Company of any such material transaction significantly less
likely and (iii) that it is therefore essential to suspend the use by the
Holders of such registration statement (and the prospectus relating thereto) for
purposes of effecting offers or sales of Registrable Securities pursuant
thereto, then the right of the Holders to use the registration statement (and
the prospectus relating thereto) for purposes of effecting offers or sales of
Registrable Shares pursuant thereto shall be suspended for a period (the
"SUSPENSION PERIOD") of not more than 120 days after delivery by the Company of
the certificate referred to above in this Section 4. During the Suspension
Period, none of the Holders shall offer or sell any Registrable Securities
pursuant to or in reliance upon the registration statement (or the prospectus
relating thereto). Notwithstanding the foregoing (a) if disclosure of the
Non-Public Information is made during a Suspension Period, then the Company
shall promptly terminate the Suspension Period and immediately notify the
Holders of such termination and (b) the Company may not implement the right to
initiate a Suspension Period more than twice in any twelve month period. To the
extent that the Company initiates one or more Suspension Periods hereunder, the
Company shall maintain the effectiveness of the Registration Statement for an
additional number of days equal to the aggregate amount of days that the Company
implemented such Suspension Periods.
5. Miscellaneous.
5.1 No Waiver; Cumulative Remedies. No failure or delay on the
part of any party to this Agreement in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other further exercise
thereof or the exercise of any other right, power or remedy hereunder.
5.2 Notices. All notices and other communications from the
Company to the Holders shall be mailed by recognized overnight courier first
class registered or certified air mail, postage prepaid, at such address as may
have been furnished to the Company in writing by such Holder, or, until an
address is so furnished, to and at the address of the last Holders who has so
furnished an address to the Company.
5.3 Modification, etc. This Agreement and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the Holders of a majority of the Ampac Registrable Securities, the
Holders of a Majority of the Acorn Registrable Securities, and the Company. This
Agreement is being delivered in The Commonwealth of Massachusetts and shall be
construed and enforced in accordance with and governed by the laws of such
commonwealth without regard to its conflict of laws principles. All section
headings herein are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof.
5.4 No Inconsistent Agreements. The Company will not, at any time
after the effective date of this Agreement, enter into any agreement or contract
(whether written or oral) with respect to any of its securities which is
inconsistent in any respect with the registration rights granted by the Company
to the Holders pursuant to this Agreement or otherwise conflicts with the
provisions hereof.
5.5 Assignment. This Agreement shall inure to the benefit and be
binding upon each Holder and its heirs, successors and assigns. The Company's
obligations under this Agreement shall not be assigned, and its duties under
this Agreement shall not be delegated.
5.6 Legend. Any shares issued in connection with the exercise of
the Warrants shall bear the following legend:
THE SECURITIES EVIDENCED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE
BEEN TAKEN FOR INVESTMENT PURPOSES ONLY, AND NOT WITH A VIEW TO THE DISTRIBUTION
THEREOF, AND SUCH SECURITIES MAY NOT BE SOLD, PLEDGED OR TRANSFERRED UNLESS
THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING SUCH
SECURITIES OR THE COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL
FOR THE COMPANY), REASONABLY SATISFACTORY IN FORM AND CONTENT TO THE COMPANY,
STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.
6. Certain Definitions.
"ACORN REGISTRABLE SECURITIES" shall mean (i) all shares of Common
Stock and other securities issued or issuable upon exercise of the Acorn
Warrant, and (ii) all shares of Common Stock and other securities directly or
indirectly issued or issuable with respect to such Common Stock or other
securities by way of stock dividend, or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation, or other
reorganization. As to any particular Acorn Registrable Securities, such
securities shall cease to be Acorn Registrable Securities when they have been
(a) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them or (b) distributed to
the public through a broker, dealer or market maker pursuant to Rule 144 under
the Securities Act.
"AFFILIATES" shall have the meaning defined to such term under Rule 501
of Regulation D of the Securities Act.
"AMPAC REGISTRABLE SECURITIES" shall mean (i) all shares of Common
Stock and other securities issued or issuable upon exercise of the Ampac
Warrants, and (ii) all shares of Common Stock and other securities directly or
indirectly issued or issuable with respect to such Common Stock or other
securities by way of stock dividend, or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation, or other
reorganization. As to any particular Ampac Registrable Securities, such
securities shall cease to be Ampac Registrable Securities when they have been
(a) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them or (b) distributed to
the public through a broker, dealer or market maker pursuant to Rule 144 under
the Securities Act.
"COMMISSION" shall mean the Securities and Exchange Commission or any
other federal agency then administering the Securities Act of the Exchange Act.
"COMMON STOCK" shall mean the Company's common stock, $0.01 par value
per share.
"EFFECTIVE" shall mean that all requirements under the Securities Act
with respect to a Registration Statement have been satisfied and that the
Commission has declared the Registration Statement effective.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"HOLDERS OF A MAJORITY" shall mean Persons holding a majority of the
registrable securities (as defined in the 2003 Registration Rights Agreement)
party to the 2003 Registration Rights Agreement, and if there are no such
Persons, the holders of a majority of the Registrable Securities.
"PERSON" shall mean any individual, partnership, corporation, limited
liability company, association, trust, joint venture, unincorporated
organization or other entity and any government, governmental department or
agency or political subdivision thereof.
"REGISTRABLE SECURITIES" shall mean the Acorn Registrable Securities
and the Ampac Registrable Securities.
"REGISTRATION" shall mean registration of the Company's Common Stock
pursuant to an Effective Registration Statement.
"REGISTRATION STATEMENT" shall mean any disclosure document that the
Company is required to file under the Securities Act in connection with a public
offering of Registrable Securities.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended from
time to time or any other federal act, rule or regulation requiring Registration
with any federal agency in connection with a public offering of Registrable
Securities.
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IN WITNESS WHEREOF, MICROFINANCIAL INCORPORATED has caused this
Acorn/Ampac Registration Rights Agreement to be duly executed as a document
under seal by its duly authorized officer this ____ day of June, 2004.
MICROFINANCIAL INCORPORATED
By: ________________________________
Name:
Title:
HOLDERS:
ACORN CAPITAL GROUP, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
AMPAC CAPITAL SOLUTIONS, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SCHEDULE A HOLDERS
Acorn Capital Group, LLC
Ampac Capital Solutions, LLC
