EXHIBIT 10.23
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REGISTRATION RIGHTS AGREEMENT
AMONG
FRANCHISE MORTGAGE ACCEPTANCE COMPANY
AND
IMPERIAL CREDIT INDUSTRIES, INC.
AND
FLRT, INC.
DATED AS OF
August 26, 1997
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of August 26, 1997, by and among FRANCHISE MORTGAGE ACCEPTANCE COMPANY
(the "Company"), IMPERIAL CREDIT INDUSTRIES, INC. ("Imperial") and FLRT, INC.
("FLRT" and collectively, Imperial and FLRT are the "Selling Stockholders").
1. Consideration. The Selling Stockholders and the Company have agreed to
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enter into this Agreement to provide the registration rights set forth
herein and to otherwise perform their respective obligations hereunder in
consideration of the mutual covenants contained herein.
2. Definitions. The following definitions shall apply in addition to those
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terms defined elsewhere herein:
a. "Common Stock" means the Company's Common Stock, $0.001 par value per
share.
b. "Continuous Offering" means an Offering pursuant to Rule 415 under the
Securities Act, 17 C.F.R. 230.415, or any successor rule of the SEC, if
applicable.
c. "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
d. "FLRT Shares" means the shares of Common Stock, and any other
securities into which the Common Stock may be changed by virtue of any merger,
consolidation or recapitalization or otherwise, owned of record by FLRT as of
the date hereof.
e. "Imperial Shares" means the shares of Common Stock, and any other
securities into which the Common Stock may be changed by virtue of any merger,
consolidation or recapitalization or otherwise, owned of record by Imperial as
of the date hereof.
f. "Offering" means any public offering of the Common Stock of the
Company, whether or not subject to the registration requirements of the
Securities Act, and any other method of disposition of the Common Stock of the
Company that is subject to the registration requirements of the Securities Act
or any other applicable federal or state statute or regulation.
g. "Offering Documents" means all documents relating to an Offering which
are required to be filed with any governmental agency or authority or to be
delivered to any Person to whom securities of the Company are offered for sale
or sold, including, without limitation, Registration
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Statements, Prospectuses, and preliminary Prospectuses, and all material
incorporated by reference therein, and any schedule or exhibit to any of the
foregoing, in each case as such documents may be amended from time to time.
h. "Party" means Imperial, FLRT or the Company and "Parties" means all of
Imperial, FLRT and the Company.
i. "Person" means any individual, corporation, partnership, limited
liability company, association, trust or unincorporated association.
j. "Prospectus" means the prospectus included in a Registration Statement,
relating to an Offering in which Common Stock is included, as amended or
supplemented by a prospectus supplement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.
k. "Registration Expenses" means, with respect to an Offering, any and all
expenses incident to the Company's performance of or compliance with the
provisions of this Agreement, including without limitation (a) fees for any
filings required to be made with the National Association of Securities Dealers,
Inc., or the SEC in connection with such Offering, and any other registration
and filing fees, (b) all fees and expenses of complying with securities or blue
sky laws (including reasonable fees and disbursements of counsel in connection
with blue sky qualifications of the Common Stock to be included in such
Offering), (c) all printing, messenger, telephone, and delivery expenses, (d)
all fees and expenses incurred in connection with the listing of the Common
Stock to be included in such Offering on any securities exchange, (e) the
reasonable fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special audits
and/or "cold comfort" letters required by or incident to such performance and
compliance, and (f) the reasonable fees and disbursements of the Selling
Stockholders' outside counsel, outside accountants, investment bankers, and
financial consultants, if any, in connection with any Offering.
l. "Registration Statement" means a registration statement filed with the
SEC pursuant to the Securities Act, relating to an Offering in which Common
Stock is included, including any pre-or post-effective amendment thereto, the
Prospectus included therein, and all material incorporated by reference therein,
and any schedule or exhibit to any of the foregoing.
m. "Rule 144" means Rule 144 under the Securities Act, 17 C.F.R. 230.144,
or any successor rule of the SEC, if applicable.
n. "SEC" means the Securities and Exchange Commission.
o. "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
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p. "Securities Offering Regulations" means any regulations promulgated by
any agency or authority of the United States government, under the Securities
Act, or any statute hereafter enacted into law, relating to or governing an
Offering of securities by the Company.
3. a. Incidental Registration Rights. If the Company proposes to make an
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Offering of its Common Stock and to prepare Offering Documents not
required pursuant to Paragraph 4 (other than any registration by the
Company on Form S-8 or a successor or substantially similar form of
(A) an employee stock option, stock purchase or compensation plan or
securities issued or to be issued pursuant to any such plan, or (B) a
dividend investment plan), the Company will give prompt written notice
to Imperial of its intention to do so and of Imperial's rights under
this Paragraph 3. Upon the written request of Imperial made within
thirty (30) days after the receipt of any such notice (which request
shall specify the number of Imperial Shares intended to be disposed of
by Imperial), the Company will include in the Offering Documents
relating to such Offering all Imperial Shares that the Company has
been requested to include by Imperial; provided, that if at any time
after giving written notice under this Paragraph 3 the Company shall
determine for any reason not to proceed with the proposed Offering,
the Company may, at its election, give written notice of such
determination to Imperial and thereupon shall be relieved of its
obligations to Imperial with respect to such proposed Offering under
this Paragraph 3. Imperial shall be entitled to withdraw its request
for the inclusion of Imperial Shares in an Offering and withdraw from
the Offering at any time before the time that the Offering Documents,
including any Registration Statement (if applicable), are declared
effective and the Offering has commenced.
b. Continuous Offering. If the Company intends to effect a Continuous
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Offering, the Company will give written notice thereof to Imperial and
include in such Offering all of the Imperial Shares which Imperial
elects to include in such Offering. During the period in which a
Registration Statement (if applicable) with respect to a Continuous
Offering is effective, if Imperial desires to sell Imperial Shares in
a transaction covered by such Registration Statement, it shall give
notice to the Company of the proposed date of such sale at least
thirty (30) days before such proposed date of sale, and the Company
shall take all actions necessary to permit such sale. Within fifteen
(15) days of receipt of notice of a proposed sale by Imperial, the
Company will advise Imperial either that it has no objection to such
sale or that such sale should be delayed for up to sixty (60) days, on
the basis that the Company is involved in a confidential proposed
transaction or negotiations therefor (which have been previously
disclosed to the Company's Board of Directors) which would not require
the Company to make or amend any public filings under the securities
laws at that time. If the Company has not objected to
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such proposed sale as permitted in this subparagraph (b) within such
fifteen (15) day period, the Company shall take all actions necessary
to permit such sale on the proposed date of sale pursuant to such
Registration Statement.
c. Underwritten Offerings. In the case of an underwritten Offering
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initiated by the Company under this Paragraph 3, including
underwritten Offerings effected as part of a Continuous Offering, the
underwriter(s) and the managing underwriter shall be selected by the
Company. If the managing underwriter advises the Company in writing
that, in its opinion, the number of Imperial Shares and securities of
the Company, if any, being sold exceeds the number that can be sold in
such Offering, so as to be likely to have an adverse effect on the
price at which the Company can sell securities for its own account,
then there shall be included in such Offering (and in the Offering
Documents) first, securities of the Company being sold for its own
account, and second, the maximum number of Imperial Shares requested
to be included in such Offering which, in the opinion of such managing
underwriter, can be sold without having such adverse effect on such
price. If Imperial Shares are so excluded from registration in an
Offering, the Company shall, upon the request of Imperial, use its
reasonable efforts to effect a registration with the SEC or take such
actions as shall be reasonably required to effect an Offering (in the
event the Imperial Shares are already registered with the SEC) in
respect of such excluded Imperial Shares as soon as practicable after
consummation of such Offering. Imperial may withdraw its Imperial
Shares from such subsequent Offering without costs or penalty at any
time before the effective date of the Registration Statement relating
to such Offering.
d. Expenses. In connection with any offering of Imperial Shares a new
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issuance of Common Stock by the Company, Imperial and the Company
shall each pay their pro rata share of Registration Expenses in
proportion to the number of shares of Common Stock to be offered by
each.
4. Demand Registration Rights. On or after one year from the effective date
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of the Company's initial public offering, Imperial, without limitation as
to any other method of disposition available to it, shall be entitled to
dispose of any or all of the Imperial Shares then held by it in accordance
with the provisions of this Paragraph 4.
a. Requests by Imperial. Upon the receipt by the Company of written
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notice from Imperial of its intent to sell all or part of its Imperial
Shares in an Offering subject to this Paragraph 4 at least 30 days
before such proposed date of sale, and specifying both the number of
Imperial Shares to be sold and the intended method of disposition, the
Company will use its best efforts to register such Imperial Shares so
as to permit as soon as practicable the requested sale of Imperial
Shares. Within fifteen (15) days of receipt of notice of a proposed
sale by Imperial, the Company will advise Imperial either that it has
no objection of such sale or that
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such sale should be delayed for up to sixty (60) days, on the basis
that the Company is involved in a confidential proposed transaction or
negotiations therefor (which have been previously disclosed to the
Company's Board of Directors) which would not require the Company to
make or amend any public filings under the securities laws at that
time. If the Company has not objected to such proposed sale as
permitted in this subparagraph (a) within such fifteen (15) day
period, the Company shall take all actions necessary to permit such
sale on the proposed date of sale pursuant to such Registration
Statement. If, at any time after giving 30 days written notice under
this Paragraph 4, Imperial shall notify the Company in writing that it
has determined for any reason not to proceed with the proposed
Offering, then the Company shall terminate such Offering.
b. Limitation on Requests and Payment of Registration Expenses. Imperial
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shall be entitled to make a request to the Company to register
Imperial Shares pursuant to the provisions of Paragraph 3(b) or this
Paragraph 4 two times within each one year period commencing one year
from the effective date of the Company's initial public offering. The
Company shall not be required to register Imperial Shares in
accordance with the provisions of Paragraph 4(a) if there is
outstanding at the time of the request an effective Registration
Statement for a Continuous Offering and Imperial can dispose of
Imperial Shares in accordance with Paragraph 3(b). Imperial will pay
all Registration Expenses in connection with an Offering of Imperial
Shares requested by Imperial pursuant to the second sentence of
Paragraph 3(b) or this Paragraph 4. Any Offering abandoned or
terminated by Imperial after its filing in accordance with the
provisions of Paragraph 4(a) shall be deemed to be a request pursuant
to this Paragraph 4.
c. Selection of Underwriters. If Imperial specifies in the notice
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delivered to the Company pursuant to the second sentence of Paragraph
3(b) or Paragraph 4 that it intends to sell Imperial Shares in an
underwritten Offering pursuant to the second sentence of Paragraph
3(b) or Paragraph 4, Imperial shall be entitled to select the
underwriter(s) and managing underwriter. If the Company issues and
sells securities of the same class as the Imperial Shares
contemporaneously with any Offering pursuant to Paragraph 3(b) or this
Paragraph 4, the Company shall (i) sell such securities to the
underwriter(s) selected by Imperial pursuant to this Paragraph 4(c) on
the same terms and conditions as apply to Imperial and (ii) execute
and deliver a copy of the underwriting agreement relating to such
Offering. If the managing underwriter advises Imperial and the
Company in writing that, in its opinion, the number of securities
requested to be included in such Offering exceeds the number that can
be sold in such Offering, so as to be likely to have an adverse effect
on the price at which the Imperial Shares or securities being offered
by the Company can be sold, then there shall be included in such
Offering (and in the Offering Documents relating to such Offering)
first, the maximum number of Imperial Shares requested to be included
in such Offering by
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Imperial and second, the maximum number of securities, if any,
proposed to be sold by the Company for its own account or for the
account of any other holder of the Company's securities, which in the
opinion of the managing underwriter can be sold without having such
adverse effect.
d. Registration on Form S-3. The Company shall not be required to
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register Imperial Shares in any Continuous Offering under this
Paragraph 4 until the date which is one year after the date of the
Company's initial public offering. Thereafter, Imperial shall have the
right to require the Company to register any or all of its shares on
Form S-3 (or on Form S-1, if Form S-3 is not available).
e. (1) FLRT Incidental Registration Rights. During the period
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commencing upon the effective date of the Company's initial
public offering of Common Stock and ending upon the third
anniversary of such date, if Imperial demands the Company to make
an Offering of its Common Stock and causes the Company to prepare
Offering Documents pursuant to this Paragraph 4, the Company will
give prompt written notice to FLRT of its intention to do so and
of FLRT's rights under this Paragraph 4(e). Upon the written
request of FLRT made within thirty (30) days after the receipt of
any such notice (which request shall specify the number of FLRT
Shares intended to be disposed of by FLRT; provided, however,
that the amount actually sold by FLRT pursuant to any such
Offering may not at any time exceed the amount that FLRT would
otherwise be authorized to sell pursuant to the volume
limitations of Rule 144), the Company will include in the
Offering Documents relating to such Offering all FLRT Shares that
the Company has been requested to include by FLRT, subject to the
limitations of Paragraph 4(e)(2) herein; provided, that if at any
time after giving written notice under this Paragraph 4(e)
Imperial shall determine for any reason not to proceed with the
proposed Offering, the Company may, at its election, give written
notice of such determination to FLRT and thereupon shall be
relieved of its obligations to FLRT with respect to such proposed
Offering under this Paragraph 4. FLRT shall be entitled to
withdraw its request for the inclusion of FLRT Shares in an
Offering and withdraw from the Offering at any time before the
time that the Offering Documents, including any Registration
Statement (if applicable), are declared effective and the
Offering has commenced.
(2) Underwritten Offerings. In the case of an underwritten Offering
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initiated by Imperial under this Paragraph 4, including
underwritten Offerings effected as part of a Continuous Offering,
the underwriter(s) and the managing underwriter shall be selected
by Imperial. If the Company issues and sells securities of the
same class as the Imperial Shares contemporaneously with any
Offering pursuant to Paragraph 3(b) or this
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Paragraph 4, the Company shall (i) sell such securities to the
underwriter(s) selected by Imperial pursuant to Paragraph 4(c) on
the same terms and conditions as apply to Imperial and (ii)
execute and deliver a copy of the underwriting agreement relating
to such Offering. If the managing underwriter advises Imperial
and the Company in writing that, in its opinion, the number of
Imperial Shares, shares offered by the Company, if any, and FLRT
Shares, if any, being sold exceeds the number that can be sold in
such Offering, so as to be likely to have an adverse effect on
the price at which Imperial can sell securities for its own
account, then there shall be included in such Offering (and in
the Offering Documents relating to such Offering) first, the
maximum number of Imperial Shares requested to be included in
such Offering by Imperial, second, the maximum number of
securities, if any, proposed to be sold by the Company for its
own account which in the opinion of the managing underwriter can
be sold with out having such adverse effect, third, the maximum
number of FLRT Shares requested to be included in such Offering
which, in the opinion of such managing underwriter, can be sold
without having such adverse effect and fourth, the maximum number
of securities, if any, proposed to be sold by the Company for the
account of any other holder of the Company's securities, which in
the opinion of the managing underwriter can be sold without
having such adverse effect.
(3) Expenses. FLRT shall pay its pro rata share of Registration
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Expenses in proportion to the number of FLRT Shares offered by it
as compared to all shares offered pursuant to the subject
Offering.
5. FLRT Registration Rights. On or after three years from the effective date
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of the Company's initial public offering, FLRT, without limitation as to
any other method of disposition available to it, shall be entitled to
dispose of any or all of the FLRT Shares then held by it in the same manner
as accorded Imperial under the provisions of Paragraphs 3 and 4 except,
that for so long as any Imperial Shares are outstanding, any disposition of
FLRT Shares shall be subject to the provisions of Paragraph 4 (e)(2).
Notwithstanding the foregoing, in the event that Xxxxx Xxxxx'x
employment is terminated by the Company pursuant to Sections 8B or 8F of
that Employment and Non-Competition Agreement dated November 8, 1997 to be
effective as of November 1, 1997 by and between the Company and Xx. Xxxxx,
then FLRT, without limitation as to any other method of disposition
available to it, shall be entitled to dispose of any or all of the FLRT
Shares then held by it in the same manner as accorded Imperial under the
provisions of Paragraphs 3 and 4.
6. The Company's Duties. If and whenever the Company is required to permit
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either or both of the Selling Stockholders to effect any Offering as
provided in Paragraphs 3 and
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4, the Company covenants and agrees that it will, as expeditiously as
possible (but not later than sixty (60) days after receipt of a request
from either or both of the Selling Stockholders to include its respective
Shares in a given Offering):
1. (1) prepare all Offering Documents in accordance with all applicable
requirements of the Securities Act, and the Securities Offering
Regulations, including, if requested by Imperial and if permitted by
the rules and regulations of the SEC, a Registration Statement
pursuant to Rule 415 of the Securities Act or any successor rule of
the SEC, with respect to such Offering to permit the disposition of
the Selling Stockholder's Shares by the Selling Stockholder in
accordance with the intended method of disposition (and, in the case
of an underwritten Offering, consistent in form, substance, and scope
with customary practice for the offering of securities of corporations
by nationally recognized investment banking firms), (2) file with the
SEC such Offering Documents and all other documents required to permit
the disposition thereof; provided, that before filing any such
Offering Documents (including any documents incorporated by reference
therein), the Company will furnish to counsel designated by the
subject Selling Stockholder and to the underwriter(s), if any, copies
of all such Offering Documents, which Offering Documents shall be
subject to the review of such counsel(s) and the underwriter(s), if
any, and, where feasible, the Company shall make such changes in such
Offering Documents as are reasonably requested by such counsel(s) or
underwriter(s), and (3) use its reasonable efforts to have such
Offering Documents declared effective by, and obtain all approvals
from the SEC to the extent necessary to permit the Offering; provided,
however, that the Company may discontinue any Offering that is being
effected pursuant to Paragraph 3 at any time before the effective date
of the related Offering Documents; and provided, further, that the
Company shall not file any Offering Document which shall be
disapproved by the subject Stockholder within a reasonable period
after the same has been provided for review;
2. thereafter, prepare and file with the SEC such amendments and post-
effective amendments to the Offering Documents as may be necessary to
keep the Offering Documents continuously effective and cause the
Offering Documents to be supplemented by any required supplement, and
as so supplemented to the filed, if required, with the SEC during the
period ending on the later of (i) such time as all of the Selling
Stockholder's Shares covered by such Offering Documents have been
disposed of in accordance with the intended method of disposition set
forth in such Offering Documents or, in the case of an Offering made
pursuant to Rule 415 under the Securities Act or any successor rule of
the SEC (if applicable), if securities remain unsold at the expiration
of the Offering, such time as the Company shall file, with the consent
of the subject Selling Stockholder, a post-effective amendment with
the SEC deregistering the securities which remain unsold at the
termination of the Offering or (ii) so long as a dealer is required to
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deliver a Prospectus in connection with the Offering; provided, that
before filing any such post-effective amendment, the Company will
furnish to counsel designated by the subject Selling Stockholder and
to the underwriter(s), if any, copies of the post-effective amendment
(including any other document proposed to the filed therewith), which
Offering Documents shall be subject to the review of such counsel(s)
and the underwriter(s), if any, and, where feasible, the Company shall
make such changes in such post-effective amendment as are reasonably
requested by such counsel(s) or underwriter(s);
3. furnish to the subject Selling Stockholder and to the underwriter(s),
if any, such number of copies of the Offering Documents (including
each amendment and supplement thereto) as they may reasonably request
in order to facilitate the disposition of the Selling Stockholder's
Shares included in such Offering;
4. register or qualify, or cooperate with the subject Selling
Stockholder, the underwriter(s), if any, and their respective counsel
in registering or qualifying, all Imperial Shares covered by the
Offering Documents for offer and sale under the applicable securities
or blue sky laws of such jurisdictions as Imperial and the
underwriter(s), if any, shall reasonably request in writing, and do
any and all other acts and things which may be reasonably necessary or
advisable to enable the subject Selling Stockholder and the
underwriter(s), if any, to consummate the disposition in such
jurisdictions of the Common Stock covered by the Offering Documents;
provided however that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so
qualified or to take any action that would subject it to general
service of process in any such jurisdiction where it is not then so
subject or subject the Company to any tax in any such jurisdiction
where it is not then so subject;
5. use its reasonable efforts to cause such Common Stock covered by the
Offering Documents to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
subject Selling Stockholder and the underwriter(s), if any, to
consummate the disposition of such Common Stock;
6. cooperate reasonably with any managing underwriter to effect the sale
of the subject Selling Stockholder's Shares, including but not limited
to attendance of the Company's executive officers at any planned "road
show" presentations';
7. notify the subject Selling Stockholder and the underwriter(s), if any,
at any time when the Offering Documents include an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and at the request of the
subject Selling Stockholder or any underwriter, prepare
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and furnish to such Person(s), such reasonable number of copies of any
amendment or supplement to the Offering Documents as may be necessary
so that, as thereafter delivered to the purchasers of such Common
Stock, such Offering Documents shall not include any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and to deliver
to purchasers of any other securities of the Company included in the
Offering copies of such Offering Documents as so amended or
supplemented;
8. keep the subject Selling Stockholder informed of the Company's best
estimates of the earliest date on which the Offering Documents will
become effective, and promptly notify the Selling Stockholder of (A)
the effectiveness of such Offering Documents, (B) a request by the SEC
for an amendment or supplement to such Offering Documents, (C) the
issuance by the SEC of an order suspending the effectiveness of the
Offering Documents, or of the threat of a proceeding for that purpose,
and (D) the suspension of the qualification of any securities included
in the Offering Documents for sale in any jurisdiction or the
initiation or threat of any proceeding for that purpose;
9. comply with the provisions of the Securities Offering Regulations and
the Securities Act with respect to the disposition of all securities
covered by the Offering Documents in accordance with the intended
method of distribution of the sellers thereof set forth in such
Offering Documents;
10. use its reasonable efforts to list the securities proposed to be sold
in such Offering on the Nasdaq National Market, or on such other
securities exchange or inter-dealer quotation system on which the
Common Stock is then listed, not later than the closing of the
Offering contemplated thereby;
11. enter into such customary agreements (including but not limited to an
underwriting agreement in customary form) and take such other
reasonable actions as Imperial or the underwriter(s), if any,
reasonably request in order to expedite or facilitate the disposition
of such Common Stock;
l2. obtain such "cold comfort" letter(s) from the Company's independent
public accountants, in customary form and covering matters of the type
customarily covered by "cold comfort" letter(s), as Imperial or the
underwriter(s), if any, shall reasonably request; and
13. upon prior notice, make available for reasonable inspection by any
underwriter(s) participating in any disposition to be effected
pursuant to the Offering Documents and by any attorney, accountant, or
other agent retained by any such Person(s), its financial and other
records, pertinent corporate documents
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and properties of the Company, and such opportunities to discuss the
business of the Company with its officers, directors, and employees
and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinions of such
underwriters' respective counsels, to conduct a reasonable
investigation; provided, that any records, information, or documents
that are designated by the Company in writing as confidential shall be
kept confidential by each such Person, unless disclosure of such
records, information, or documents is required by law, by judicial or
administrative order, or in order to defend a claim asserted against
such Person in connection with such Offering.
7. Information from Selling Stockholders.
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1. Information. The Company may require the Selling Stockholders to
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furnish it with such information regarding the Selling Stockholders
and regarding the method of distribution as is pertinent to the
disclosure requirements relating to the Offering of such Common Stock
as the Company may from time to time reasonably request in writing.
2. Use of Offering Documents Upon Notice of Defects. The Selling
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Stockholders each agree, and shall cause underwriter(s), if any,
acting on its behalf to agree, that upon receipt of any notice from
the Company of the happening of any event of the kind described in
Paragraph 6(f), it will immediately discontinue the use of the
Offering Documents covering such Common Stock until the receipt by any
Selling Stockholder and any such underwriter(s) of the copies of the
supplemented or amended Offering Documents contemplated by such clause
and, if so directed by the Company, any Selling Stockholder will
deliver and cause each underwriter, if any, to deliver to the Company
all copies, other than permanent file copies then in the possession of
the Selling Stockholder or any such underwriter, of the Offering
Documents covering such Common Stock at the time of receipt of such
notice. If the Company shall give any such notice, the period
mentioned in Paragraph 6(b) shall be extended by the number of days
during which offerings were suspended (i.e., the period from and
including the date of the receipt of such notice pursuant to Paragraph
6(f), to and including the date when the Selling Stockholder shall
have received the copies of the supplemented or amended Offering
Documents contemplated by such clause).
8. Resales; Reports Under Exchange Act. In order to permit the Selling
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Stockholders to sell their Shares, if they so desire, pursuant to any
applicable resale exemption under the Securities Offering Regulations or
the Securities Act, the Company will:
1. comply with all rules and regulations of the SEC in connection with
use of any such resale exemption;
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2. make and keep available adequate and current public information
regarding the Company;
3. file with the SEC in a timely manner, all reports and other documents
required to be filed under the Securities Act, the Exchange Act, or
the Securities Offering Regulations;
4. furnish to the Selling Stockholders copies of annual reports required
to be filed under the Exchange Act and the Securities Offering
Regulations; and
5. furnish to the Selling Stockholders, upon request, (1) a copy of the
most recent quarterly report of the Company and such other reports and
documents filed by the Company with the SEC and (2) such other
information as may be reasonably requested to permit the Selling
Stockholders pursuant to any applicable resale exemption under the
Securities Act or the Securities Offering Regulations, if any.
9. Indemnification. The obligations of indemnification of the Parties set
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forth in this Paragraph 9 shall be in addition to any liability which any
Party may otherwise have to any other party.
1. Indemnification by the Company. The Company agrees to indemnify and
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hold harmless, to the full extent permitted by law, any Selling
Stockholder, its officers, directors, employees and agents, each
Person who participates as an underwriter in an Offering, each
officer, director, employee, or agent of such an underwriter, and
each Person who controls (within the meaning of the Securities Act)
Imperial and such an underwriter against any and all losses, claims,
damages, liabilities, and expenses, joint or several, including
without limitation reasonable legal or other expenses incurred in
connection with investigating or defending against any loss, claim,
damage, or liability, or action or proceeding (whether commenced or
threatened) in respect thereof, caused by any untrue statement or
alleged untrue statement of a material fact contained in any of the
Offering Documents relating to such Offering 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 in light of the circumstances under which they were made,
except insofar as the same are (i) made in reliance on and in
conformity with any information about the Selling Stockholder or any
underwriter furnished in writing to the Company by the Selling
Stockholder or any underwriter specifically for inclusion in the
Offering Documents relating to such Offering or (ii) the result of the
fact that the Selling Stockholder or any underwriter sold Common Stock
subject to an Offering to a Person to whom there was not sent or
given, at or before the written configuration of such sale, a copy of
the final Offering
13
Documents, if the Company has previously furnished copies thereof to
Imperial or underwriter and such final Offering Documents corrected
such untrue statement or alleged untrue statement or omission or
alleged omission.
2. Indemnification by Imperial. Imperial agrees to indemnify and hold
---------------------------
harmless, to the full extent permitted by law, the Company, its
officers, directors, employees, and agents, each Person who
participates as an underwriter in an Offering, each officer, director,
employee or agent of such an underwriter, and each Person who controls
(within the meaning of the Securities Act) the Company and such
underwriter against any and all losses, claims, damages, liabilities,
and expenses, joint or several, including without limitation
reasonable legal or other expenses incurred in connection with
investigating or defending against any loss, claim, damage, or
liability, or action or proceeding (whether commenced or threatened)
in respect thereof, caused by any untrue statement or alleged untrue
statement of a material fact contained in any of the Offering
Documents relating to such Offering 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 in
light of the circumstances under which they were made, but only to the
extent that such untrue statement or omission is made in reliance on
and in conformity with any information furnished in writing by
Imperial concerning Imperial to the Company specifically for inclusion
in the Offering Documents relating to such Offering.
3. Indemnification by FLRT. FLRT agrees to indemnify and hold harmless,
-----------------------
to the full extent permitted by law, the Company, its officers,
directors, employees, and agents, each Person who participates as an
underwriter in an Offering, each officer, director, employee or agent
of such an underwriter, and each Person who controls (within the
meaning of the Securities Act) the Company and such underwriter
against any and all losses, claims, damages, liabilities, and
expenses, joint or several, including without limitation reasonable
legal or other expenses incurred in connection with investigating or
defending against any loss, claim, damage, or liability, or action or
proceeding (whether commenced or threatened) in respect thereof,
caused by any untrue statement or alleged untrue statement of a
material fact contained in any of the Offering Documents relating to
such Offering 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 in light of the circumstances under
which they were made, but only to the extent that such untrue
statement or omission is made in reliance on and in conformity with
any information furnished in writing by FLRT concerning FLRT to the
Company specifically for inclusion in the Offering Documents relating
to such Offering.
4. Notices of Claims; Procedures. Promptly after receipt by an
-----------------------------
indemnified
14
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 Paragraph 9, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party,
give written notice to the indemnifying party of the commencement of
such action; provided, that the failure of the indemnified party to
give notice as provided herein shall not relieve the indemnifying
party of its obligations under this Paragraph 9, except to the extent
that the indemnifying party is actually materially prejudiced by such
failure to give notice. If 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 to assume
the defense thereof, jointly with any other indemnifying party
similarly notified 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
so 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 other than reasonable costs of investigation; provided,
however, that, any Person entitled to indemnification hereunder shall
have the right to employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall
be at the expense of such Person unless (A) the indemnifying party has
agreed to pay such fees or expenses or (B) the indemnifying party
shall have failed to assume the defense of such claim and employ
counsel reasonably satisfactory to such Person or (C) in the
reasonable judgment of any such Person based upon advice of its
counsel, a conflict of interest may exist between such Person and the
indemnifying party with respect to such claims (in which case, if the
Person notifies the indemnifying party in writing that such Person
elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the
defense of such claim on behalf of such Person). If such defense is
not assumed by the indemnifying party, the indemnifying party will not
be subject to any liability for any settlement made without its
consent (but such consent will not be unreasonably withheld). No
indemnifying party will 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. 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 each 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
15
counsels.
5. Contribution. If the indemnification provided for this in this
------------
Paragraph 9 from the indemnifying party is unavailable to an
indemnified party hereunder (other than pursuant to the terms hereof)
in respect of any losses, claims, damages, liabilities, or expenses
referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities, or expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party
and indemnified parties in connection with the actions that resulted
in such losses, claims, damages, liabilities, or expenses, as well as
any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any action in question,
including any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information, and opportunity to correct
or prevent such action. The amount paid or payable by a Party as a
result of the losses, claims, damages, liabilities, and expense
referred to above shall be deemed to include, subject to the
limitations set forth in this Paragraph 9(e) any legal or other fees
or expenses reasonably incurred by such party in connection with any
investigation or proceeding. The Parties agree that it would not be
just and equitable if contributions pursuant to this Paragraph 9(e)
were datelined by a pro rata allocation or by any other method of
allocation that does not take into account the equitable
considerations referred to above. No Person guilty of fraudulent
misrepresentation shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
6. This Paragraph 9 shall apply to each Registration Statement filed by
the Company pursuant to this Agreement that includes Imperial Shares.
10. Miscellaneous.
-------------
1. Amendments and Waivers. This Agreement may be amended, and the
----------------------
Company may take any action herein prohibited or omit to perform any
act herein required to be performed by it, only if the Company shall
have obtained the written consent of Imperial to such amendment,
action or omission to act.
2. Successors, Assigns and Transferees. This Agreement shall be binding
-----------------------------------
upon the parties hereto and their respective successors and assigns.
3. Notices. Any notice, request, demand, consent, approval or other
-------
16
communication permitted or required to be given to any of the parties
hereunder shall be deemed given when received, shall be in writing,
and shall be delivered in person or sent by certified mail, postage
prepaid, or by private courier service or by telecopy or telex, to
such party at its address set forth below or at such other address as
such party may hereunder furnish in writing to the other parties.
(i) if to the Company, to:
Franchise Mortgage Acceptance Company
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Secretary and Chief Financial Officer
(ii) if to Imperial:
Imperial Credit Industries, Inc.
00000 Xxxxxxxxx Xxxx.
Xxxxxxxx 0, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
with a copy to:
Freshman, Marantz, Orlanski, Xxxxxx & Xxxxx
0000 Xxxxxxxx Xxxx., Xxxx Tower, 8th Floor
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(iii) if to FLRT:
FLRT, Inc.
00000 Xxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
4. Headings. The headings in this Agreement are for the convenience of
--------
reference only and shall not limit or otherwise affect the meaning of
the interpretation of this Agreement or any provision hereof.
5. Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason,
the validity, legality and enforceability of such provision in every
other respect and of the remaining provisions hereof
17
shall not be in any way impaired, it being intended that all rights,
powers and privileges of the parties hereto shall be enforceable to
the fullest extent permitted by law.
6. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which when so executed shall be deemed an
original, and all such counterparts shall together constitute one and
the same instrument.
7. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the United States of America and, in the
absence of controlling federal law, in accordance with the laws of the
State of Delaware. Any legal action or proceedings with respect to
this Agreement shall be brought in the federal courts of the United
States located in California and each of the parties hereto submits to
the exclusive jurisdiction of such courts and hereby waives any
objections on the grounds of venue, forum non conveniens or any
similar grounds.
8. Entire Agreement. This Agreement embodies the entire Agreement of the
----------------
parties hereto in relation to the subject matter hereof and supersedes
all prior understandings or agreements, oral or written, with respect
thereto among the parties hereto.
9. Certain Remedies. Without in any way limited the remedies otherwise
----------------
available under this Agreement, the parties hereto acknowledge that,
in the event of any breach or nonperformance by any party of the
agreements or covenants required by this Agreement to be performed or
observed by it, the other parties shall be entitled to such equitable
remedies as may be appropriate, including, without limitation specific
performance.
18
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or
caused this Agreement to be executed on its behalf as of the date first written
above.
FRANCHISE MORTGAGE ACCEPTANCE COMPANY
By:_________________________________________
Name: Xxxxx X. Xxxxx
---------------------------------------
Title: Chief Executive Officer and President
--------------------------------------
IMPERIAL CREDIT INDUSTRIES, INC.
By:_________________________________________
Name: Xxxxx X. Xxxxxx
---------------------------------------
Title: General Counsel
--------------------------------------
FLRT, INC.
By:_________________________________________
Name: Xxxxx X. Knayl
---------------------------------------
Title: Chairman
--------------------------------------
19
