REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
__________, 1998, is by and among Mercury Finance Company, a Delaware
corporation (the "Company"), and the Persons identified on Schedule 1 hereto
[those senior creditors which will own 10% or more of the New Common Stock]
(the "Securities Holders").
RECITALS
A. Pursuant to the Company's Plan of Reorganization dated as of
__________,1998, (the "Plan") as part of the distribution to Class 4
claimholders under the Plan, the Company will issue all of the then
outstanding shares of the New Common Stock of the Company (the "Shares") and
certain New Senior Secured Notes (both as defined in the Plan) to such
claimholders. In addition, the New Junior Subordinated Notes (as defined in
the Plan ) shall be distributed to Class 5 claimholders under the Plan.
B. As a condition to the consummation of the transactions
contemplated by the Plan, the Company has agreed to grant certain securities
registration rights to the New Securities Holders as set forth herein.
AGREEMENTS
In consideration of the premises and the mutual covenants herein
contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1. DEFINITIONS. In addition to the capitalized terms defined
elsewhere in this Agreement and to the defined terms set forth in the Plan
that are not otherwise defined herein, the following capitalized terms shall
have the following meaning when used in this Agreement:
"Adverse Disclosure" means public disclosure of material non-public
information relating to a significant transaction, which disclosure (i) would
be required to be made in any registration statement filed with the
Commission by the Company so that such registration statement would not be
materially misleading; (ii) would not be required to be made at such time but
for the filing of such registration statement; and (iii) would, in the good
faith judgment of the Company's Board of Directors, have a material adverse
effect upon the Company's ability to complete such significant transaction or
upon the terms on which such significant transaction could be completed.
"Affiliate" means, as to any specified person, any other Person
which, directly or indirectly, controls, is controlled by or is under common
control with, such specified Person. For the purposes of this definition,
"control" means the possession of the power to direct or cause the direction
of the management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise.
"Commission" means the Securities and Exchange Commission.
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"Common Stock" means the Company's New Common Stock issued pursuant
to the Plan.
"Expiration Time" means the earlier of (i) __________, 2001
[3rd anniversary of Effective Date of the Plan], and (ii) the first time at
which no Holder holds more than 10% of the Shares.
"Holders" means the holders of Registrable Shares who are New
Securities Holders or successors or assigns or subsequent holders
contemplated by Section 15 hereof.
"Person" means a natural person, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or other entity, or a
governmental entity or any department, agency or political subdivision
thereof.
"Qualified Public Offering" means the first underwritten offering
of Common Stock made by the Company for its own account after the date hereof
and on or prior to __________, 2001
[3rd anniversary of Effective Date of the Plan]pursuant to an effective
registration statement under the Securities Act.
"Registrable Shares" means the Common Stock, the New Senior Secured
Notes, and the New Junior Subordinated Notes beneficially owned by the
Holders; PROVIDED, HOWEVER, that Registrable Shares shall not include (a) any
share that has been sold under an effective registration statement pursuant
to the Securities Act, or (b) any share that has been otherwise transferred
(other than to a New Securities Holder or an Affiliate of a New Securities
Holder) and in the opinion of counsel to the Company, the subsequent
disposition of such share shall not require registration under the Securities
Act.
"Registration Expenses" has the meaning ascribed to it in Section 7
of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Shelf Period" has the meaning set forth in Section 2(b).
"Shelf Registration" means a registration effected pursuant to
Section 2.
"Shelf Registration Statement" means a registration statement of
the Company filed with the Commission on Form S-1 or, if available, Form S-3
(or any successors thereto) for an offering to be made on a continuous basis
pursuant to Rule 415 (or any similar rule that may be adopted by the
Commission) covering some or all of the Registrable Shares, as applicable.
"Subsidiary" means any corporation, association or other entity of
which securities or other ownership interests representing more than fifty
percent (50%) of the ordinary
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voting power are, at the time as of which any determination is being made,
owned or controlled by the Company or one or more Subsidiaries of the Company
or by the Company and one or more Subsidiaries of the Company.
"Underwritten Offering" means a registration in which securities of
the Company are sold to an underwriter on a firm commitment basis for
reoffering to the public.
2. SHELF REGISTRATION
(a) FILING. As soon as is practicable after the effective date of
the Company's Plan, the Company shall file with the Commission a Shelf
Registration Statement relating to the offer and sale of the Registrable
Shares by the Holders thereof from time to time in accordance with the
methods of distribution elected by such Holders and set forth in such Shelf
Registration Statement and, thereafter shall use its best efforts to cause
such Shelf Registration Statement to be declared effective under the
Securities Act. If, on the effective date of the Plan, the Company does not
qualify to file a Shelf Registration Statement, then the provisions of
Section 3, below, shall apply, but any time thereafter that the Company does
so qualify, it shall, as promptly as practicable, file a Shelf Registration
Statement.
(b) CONTINUED EFFECTIVENESS. The Company shall use its best
efforts to keep the Shelf Registration Statement continuously effective in
order to permit the Prospectus forming part thereof to be usable by Holders
until the third anniversary of the Effective Date of the Plan (but in no
event prior to the applicable period referred to in Section 4(3) of the Act
and Rule 174 thereunder) (such period being the "Shelf Period"). The Company
shall not be deemed to have used its best efforts to keep the Shelf
Registration Statement effective during the Shelf Period if the Company
voluntarily takes any action or omits to take any action that would result in
Holders of the Registrable Shares covered thereby not being able to offer and
sell any such Registrable Shares during the Shelf Period, unless such action
or omission is required by applicable law.
(c) DELAY IN FILING; SUSPENSION OF REGISTRATION. If the filing of
the Shelf Registration Statement or the continued effectiveness of the Shelf
Registration Statement at any time would require the Company to make an
Adverse Disclosure, the Company may, upon giving prompt written notice of
such action to the Holders, delay filing the Shelf Registration Statement or
suspend use of the Shelf Registration Statement (in either case, a "Shelf
Suspension"); PROVIDED, HOWEVER, the Company shall not be permitted to
exercise a Shelf Suspension (i) more than twice during any twelve (12) month
period, (ii) for a period exceeding forty-five (45) days on any one occasion,
or (iii) for an aggregate period exceeding sixty (60) days in any twelve (12)
month period. In the case of a Shelf Suspension, the notice required above
shall request the Holders to suspend any sale or purchase, or offer to sell
or purchase the Registrable Shares, and to suspend use of the Prospectus
related to the Shelf Registration in connection with any such sale or
purchase or offer to sell or purchase. The Company shall immediately notify
the holders upon the termination of any Shelf Suspension, amend or supplement
the Prospectus, if necessary, so it does not contain any untrue statement or
omission therein and furnish to the holder such numbers of copies of the
Prospectus as so amended or supplemented as the Holders may reasonably
request.
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(d) UNDERWRITTEN OFFERING. If the Holders of not less than 10% of
the Shares covered by the Shelf Registration Statement so elect, the offering
of Registrable Shares pursuant to such Shelf Registration Statement shall be
in the form of an Underwritten Offering and the Company shall amend or
supplement the Registration Statement, if appropriate. The Holders of not
less than [ ] % of the Registrable Shares included in such Shelf
Registration shall have the right to select the managing underwriter or
underwriters to administer the offering, subject to the consent of the
Company, which consent shall not be unreasonably withheld.
3. DEMAND REGISTRATIONS.
(a) REQUESTS FOR REGISTRATION. If, at any time within six months
after the Effective Date of the Plan and prior to the Expiration Time, a
Shelf Registration Statement shall not be effective (other than as a result
of the operation of the provisions of Section 2(c) hereof), then at such time
any Holder or Holders of at least 10% of the Shares may request registration
under the Securities Act of all or part of their Registrable Shares;
PROVIDED, HOWEVER, that such request shall relate to not less than 10% of the
Shares. Within 14 days after receipt of any request pursuant to this Section
3(a), the Company will give written notice of such request to all other
holders of Registrable Shares and, subject to the terms hereof and applicable
law, will use its best efforts to effect such registration and will include
in such registration all Registrable Shares with respect to which the Company
has received written requests for inclusion therein within 14 days after the
Company's notice has been given. All registrations requested pursuant to
this Section 3(a) are referred to herein as "Demand Registrations." Subject
to the terms hereof, the Company shall have the right to include securities
for its own account in any Demand Registration, and holders of the Company's
securities who have the right to participate in any Demand Registration
pursuant to an agreement with the Company shall have the right to include
securities (the "Required Shares") in such Demand Registration.
(b) NUMBER OF DEMAND REGISTRATIONS. The Holders may request no
more than, and the Company will be obligated to effect no more than, three
Demand Registrations pursuant to Section 3(a). A registration will not count
as a Demand Registration hereunder until the related registration statement
has become effective.
(c) PAYMENT OF EXPENSES FOR DEMAND REGISTRATIONS. The Company
will pay all Registration Expenses for any Demand Registration.
(d) PRIORITY ON DEMAND REGISTRATIONS. The Holder or Holders
initiating the Demand Registration may elect whether the offering of such
Registrable Shares pursuant to such Demand Registration shall be in the form
of a Underwritten Offering or otherwise. In any case in which an offering is
in the form of a Underwritten Offering, if the managing underwriter or
underwriters of such offering advises the Company in writing that, in its or
their opinion, it is probable that inclusion of the number of Registrable
Shares, Required Shares, if any, and securities of the Company ("Company
Shares"), if any, proposed to be included in such offering would adversely
affect the marketability of the Common Stock, the Company will include in
such registration the number of Registrable Shares, Required Shares, if any,
and Company Shares, if any, that in the opinion of such managing underwriter
or underwriters can be sold
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without adversely affecting the market for the Common Stock. In such event,
(a) FIRST, the number of Required Shares, if any, and Company Shares, if any,
to be offered shall be reduced to the extent necessary to reduce the total
number of shares to be included in such offering to the number recommended by
such managing underwriter or underwriters and (b) THEN, if necessary, the
number of Registrable Shares to be offered shall be reduced PRO RATA on the
basis of the relative number of Registrable Shares requested by each such
Holder to be included in such registration to the extent necessary to reduce
the total number of shares to be included in such offering to the number
recommended by such managing underwriter or underwriters.
(e) RESTRICTIONS ON REGISTRATIONS. (i) The Company may postpone
for a reasonable period not to exceed 120 days, the filing, amendment or the
effectiveness of a registration statement for a Demand Registration if the
board of directors of the Company determines reasonably and in good faith
that such filing would be significantly disadvantageous to the Company or its
stockholders.
(ii) A Holder shall not request the registration of Registrable
Shares pursuant to Section 3(a) hereof during the period commencing on the
seventh day prior to the effective date of an offering by the Company that is
registered under the Securities Act and ending on the ninetieth day after such
offering is completed.
(f) SHORT-FORM REGISTRATIONS. If an underwritten Demand Registration
is registered pursuant to Form S-3 (or any successor form thereto), and if the
managing underwriter reasonably requests the inclusion in the Registration
Statement of information which is not required under the Securities Act to be
included on Form S-3, the Company will provide such information for inclusion by
the managing underwriter.
4. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO INITIAL PIGGYBACK. In connection with a Qualified
Public Offering, if the registration form to be used may be used for the
registration of Registrable Shares (an "Initial Piggyback Registration"), the
Company will give written notice (the "Offering Notice") at least 21 days prior
to the anticipated filing date to all holders of Registrable Shares of its
intention to effect such a registration, and the Company will use its best
efforts to effect such registration and will include in such registration all
Registrable Shares with respect to which the Company has received written
requests for inclusion therein within 14 days after the Company's notice has
been given (the "Included Registrable Shares"). Notwithstanding the foregoing,
if, and to the extent, that the managing underwriter or underwriters of the
offering advise the Company that in its or their opinion it is probable that the
inclusion of the Included Registrable Shares in the Qualified Public Offering
would adversely affect the marketability of the shares to be sold in such
offering, then the total number of Included Registrable Shares may be reduced on
a PRO RATA basis on the basis of the relative number of Registrable Shares
requested by each such Holder to that number recommended by the underwriter or
underwriters.
(b) RIGHT TO ADDITIONAL PIGGYBACK. At any time after the effective
date of the Plan and prior to the Expiration Time, whenever Common Stock is to
be registered under the Securities Act (including pursuant to a Demand
Registration), and the registration form to be
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used may be used for the registration of Registrable Shares (a "Piggyback
Registration"), the Company will give an Offering Notice at least 21 days
prior to the anticipated filing date to all holders of Registrable Shares of
its intention to effect such a registration, and the Company will use its
best efforts to effect such registration and will include in such
registration all Registrable Shares with respect to which the Company has
received a written request for inclusion therein within 14 days after the
Offering Notice has been given.
(c) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration (including, without limitation, the Initial Piggyback
Registration) is a primary Underwritten Offering on behalf of the Company,
and the managing underwriter or underwriters advise the Company in writing
that in its or their opinion it is probable that the inclusion of the number
of securities requested to be included in the registration would adversely
affect the marketability of the shares to be sold in such offering, the
Company will include in such registration (i) FIRST, the securities the
Company proposes to sell, (ii) SECOND, the Registrable Shares requested to be
included in such registration which in the opinion of such underwriters can
be sold without having such effect, PRO RATA among the Holders of such
Registrable Shares on the basis of the number of Registrable Shares owned by
such Holders with further successive PRO RATA allocations among the Holders
of Registrable Shares if any such Holder has requested the registration of
less than all the Registrable Shares it is entitled to register, and (iii)
THIRD, other securities requested to be included in such registration.
(d) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration is a secondary Underwritten Offering on behalf of holders of the
Company's securities, and the managing underwriter or underwriters advise the
Company in writing that in their opinion it is probable that the inclusion of
the number of securities requested to be included in such registration would
adversely affect the marketability of the shares to be sold in such offering,
the Company will include in such registration the Registrable Shares held by
the Holders requested to be included in such registration and the securities
requested to be included therein by the holders of the Company's securities
requesting such registration (all such Registrable Shares and other
securities requesting such registration being collectively referred to as the
"Secondary Shares") which in the opinion of such underwriters can be sold
without having such effect, PRO RATA among the holders of such Secondary
Shares on the basis of the number of Secondary Shares owned or deemed to be
owned by such holders, with further successive PRO RATA allocations among the
holders of Secondary Shares if any such holder of Secondary Shares has
requested the registration of less than all such Secondary Shares it is
entitled to register.
5. HOLDBACK AGREEMENTS.
(a) The Company agrees, if reasonably requested by the managing
underwriter or underwriters, not to effect any public sale or distribution of
its equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days prior to, and during
the 90-day period beginning on, the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration (except as part of
such underwritten registration or pursuant to a registration on Form S-4 or
S-8 or any successor
form or pursuant to any commitment to do so, condition or otherwise, existing
on the date hereof).
(b) Each Holder agrees, if reasonably requested by the managing
underwriter or underwriters, not to effect any public sale or distribution
(including pursuant to Rule 144) of any equity securities of the Company or
any securities convertible into or exchangeable or exercisable for such
securities, during the seven days prior to, and during the 90-day period
beginning on, the effective date of any underwritten Piggyback Registration
(which included such Holder's shares) or any underwritten Demand Registration
(regardless of whether such Demand Registration included such Holder's
shares).
(c) Nothing herein shall prevent a Holder of Registrable Shares
that is a partnership from making a distribution of Registrable Shares to its
partners, a Holder of Registrable Shares that is a trust from making a
distribution of Registrable Shares to its beneficiaries or a Holder of
Registrable Shares that is a corporation from making a distribution of
Registrable Shares to its shareholders. The Holders agree that any such
distribution will be made in accordance with applicable law (including,
without limitation, applicable federal and state securities laws) and that
any distributees of Registrable Shares will take such shares subject to the
terms of this Agreement.
6. REGISTRATION PROCEDURES. Whenever the Holders of Registrable
Shares have requested that any Registrable Shares be registered pursuant to the
terms of this Agreement, the Company will use its best efforts to effect the
registration and the sale of such Registrable Shares in accordance with the
terms hereof and the intended method of disposition thereof, and pursuant
thereto the Company will as expeditiously as is practicable in connection with
such an offering:
(a) prepare and file with the Commission, on any registration form
for which the Company then qualifies and which the Company deems appropriate, a
registration statement with respect to such Registrable Shares and use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement until such
time as the Registrable Shares registered thereunder have been disposed of in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement; PROVIDED, HOWEVER, except as required by
the Securities Act and the rules and regulations promulgated thereunder, and
except pursuant to Shelf Registrations under Section 2 hereunder, the Company
shall not be obligated to keep any registration statement effective for a period
in excess of 45 days;
(c) furnish to each seller of such Registrable Shares and the
underwriters of the securities being registered such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement
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(including each preliminary prospectus) and such other documents as such
seller or underwriters may reasonably request in order to facilitate the
disposition of the Registrable Shares owned by such seller or the sale of
such securities by such underwriters;
(d) register or qualify such Registrable Shares under such other
securities laws of such jurisdictions as any seller reasonably requests and
do any and all other acts and things which may be reasonably necessary or
desirable to enable such seller to consummate the public sale or other
disposition in such jurisdictions of the Registrable Shares owned by such
seller; PROVIDED, HOWEVER, that the Company shall not be required to (i)
qualify generally to do business in any jurisdiction where it is not then so
qualified, (ii) subject itself to taxation in any such jurisdiction, (iii)
consent to general service of process in any such jurisdiction, or (iv)
provide any undertaking required by such other securities or "blue sky" laws
or make any change in its charter or by-laws that the board of directors of
the Company determines in good faith to be contrary to the best interest of
the Company and its stockholders;
(e) cause all such Registrable Shares to be listed on each
securities exchange on which similar securities issued by the Company are
then listed, provided that all applicable listing requirements are satisfied;
(f) provide a transfer agent and registrar for all such
Registrable Shares not later than the effective date of such registration
statement;
(g) enter into such customary agreements (including underwriting
agreements) and take all such other actions as are reasonably required in
order to expedite or facilitate the disposition of such Registrable Shares in
accordance with the Holders' intended methods of disposition;
(h) make available for inspection by any seller of such
Registrable Shares, any underwriter participating in any disposition pursuant
to such registration statement, and any attorney, accountant or other agent
designated by any such seller or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records") as shall be
reasonably necessary to exercise their due diligence responsibilities, and
cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such
Inspector in connection with such registration statement (other than those
documents subject to the attorney/client or attorney work product
privileges). Records that the Company determines, in good faith, to be
confidential and that it notifies the Inspectors are confidential shall not
be disclosed by the Inspectors unless the contents of such Records become
publicly available or the release of such Records is ordered pursuant to a
subpoena or other order from a court or governmental agency of competent
jurisdiction or required pursuant to applicable state or federal law. Each
seller of Registrable Shares agrees that it will, upon learning that
disclosure of such Records are sought by a court or governmental agency, give
notice to the Company and allow the Company, at the Company's expense, to
undertake appropriate action to prevent disclosure of the Records deemed
confidential;
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(i) notify each seller of such Registrable Shares, promptly after
it shall receive notice thereof, of the time when such registration statement
has become effective or a supplement to any prospectus forming a part of such
registration statement has been filed;
(j) notify each seller of such Registrable Shares of any request
by the Commission for the amending or supplementing of such registration
statement or prospectus or for additional information;
(k) prepare and promptly file with the Commission and promptly
notify each seller of such Registrable Shares of the filing of such amendment
or supplement to such registration statement or prospectus as may be
necessary to correct any statements or omissions if, at the time when a
prospectus relating to such securities is required to be delivered under the
Securities Act, any event shall have occurred as the result of which any such
prospectus or any other prospectus as then in effect would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances in which they
were made, not misleading;
(l) advise each seller of such Registrable Shares, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance of any
stop order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any proceeding for
such purpose and promptly use all reasonable efforts to prevent the issuance
of any stop order or to obtain its withdrawal if such stop order should be
issued;
(m) prior to the filing of any registration statement or prospectus
or any amendment or supplement to such registration statement or prospectus,
furnish a copy thereof to each seller of such Registrable Shares and refrain
from filing any such registration statement, prospectus, amendment or
supplement to which counsel selected b the Holders of a majority of the
Registrable Shares being registered shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Securities Act or the rules and
regulations thereunder, unless, in the case of an amendment or supplement, in
the opinion of counsel for the Company the filing of such amendment or
supplement is reasonably necessary to protect the Company from any
liabilities under any applicable federal or state law and such filing will
not violate applicable laws; and
(n) at the request of the managing underwriter or underwriters in
connection with an underwritten offering, furnish on the date or dates
provided for in the underwriting agreement: (i) an opinion of counsel,
addressed to the underwriters, covering such customary matters as such
underwriters may reasonably request; and (ii) a letter or letters from the
independent certified public accountants of the Company addressed to the
underwriters, covering such customary matters as such underwriters may
reasonably request.
Each Holder of Registrable Shares agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described
in paragraph (k) of this Section 6, such Holder shall forthwith discontinue
disposition of Registrable Shares pursuant to the registration statement
covering such Registrable Shares until such Holder's receipt of the copies of
the supplemented or amended prospectus contemplated by paragraph (k) of this
Section 6 and,
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if so directed by the Company, such Holder shall deliver to the Company (at
the Company's expense) all copies of the prospectus covering such Registrable
Shares current at the time of receipt of such notice.
7. REGISTRATION EXPENSES. All expenses incident to the Company's
performance of or compliance with this Agreement, including, but not limited
to, all registration and filing fees, fees and expenses of compliance with
federal, state and foreign securities laws, printing expenses, messenger and
delivery expenses, and fees and disbursements of counsel for the Company and
its independent certified public accountants, underwriters (excluding
discounts and commissions attributable to the Registrable Shares included in
such registration which shall be borne by the holder of such Registrable
Shares) and other Persons retained by the Company (all such expenses being
herein called "Registration Expenses"), will be borne by the Company. In
addition, the Company will pay its internal expenses (including, but not
limited to, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review and the expense of any liability insurance obtained by the
Company and the expenses and fees for listing the securities to be registered
on each securities exchange. Registration Expenses shall not include
expenses incurred by the Holders in connection with a Piggyback Registration
(such expenses of the Holders shall include, but not be limited to,
underwriting discounts and commissions relating to the Registrable Shares,
brokerage fees, transfer taxes, and the fees and expenses of any counsel,
accountants or other representatives retained by the Holders) which expenses
shall be borne by the Holders.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify, to the fullest extent
permitted by law, each seller of Registrable Shares, its partners, officers,
directors, trustees and beneficiaries and each Person who controls such
seller (within the meaning of the Securities Act) against all losses, claims,
damages, liabilities and expenses including, but not limited to, reasonable
attorneys' fees except as limited by Section 8(c) caused by any untrue or
alleged untrue statement of a material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein, in
the case of a prospectus, in light of the circumstances in which they were
made, not misleading, except insofar as the same are caused by or contained
in any information furnished in writing to the Company by such seller
expressly for use therein or by such seller's failure to deliver a copy of
the prospectus or any amendments or supplements thereto after the Company has
furnished such seller with a sufficient number of copies of the same or by
the seller's delivery of a prospectus after the Company notified such seller
to discontinue delivery of prospectuses. In connection with an underwritten
offering, the Company, if requested, will indemnify such underwriters, their
officers and directors and each Person who controls such underwriters (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the sellers of Registrable Shares.
(b) In connection with any registration statement in which a seller
of Registrable Shares is participating, each such seller will furnish to the
Company in writing such
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information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the
fullest extent permitted by law, will indemnify the Company, its directors
and officers and each Person who controls the Company (within the meaning of
the Securities Act) against any losses, claims, damages, liabilities and
expenses (including, but not limited to, reasonable attorneys' fees except as
limited by Section 8(c)) resulting from any untrue statement of a material
fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission of
a material fact required to be stated therein or necessary to make the
statements therein, in the case of a prospectus, in light of the
circumstances in which they were made, not misleading, but only to the extent
that such untrue statement or omission is contained in or improperly omitted
from, as the case may be, any information or affidavit so furnished in
writing by such seller; PROVIDED that the obligation to indemnify will be
several, not joint and several, among such sellers of Registrable Shares, and
the liability of each such seller of Registrable Shares will be in proportion
to, and provided further that such liability will be limited to, in any
event, the net amount received by such seller from the sale of Registrable
Shares pursuant to such registration statement. In connection with an
underwritten offering, each seller of Registrable Shares will, if requested,
agree to indemnify such underwriters, their officers and directors and each
Person who controls such underwriters (within the meaning of the Securities
Act) to the same extent as provided in this Section 8(b) with respect to the
Company.
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party will not be subject to any liability for any
settlement made by the indemnified party without its consent (but such
consent will not be unreasonably withheld). An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and will survive the transfer of securities.
Each indemnifying party also agrees to make such provisions as are
reasonably requested by any indemnified party for contribution to such party
in the event such indemnifying party's indemnification is unavailable for any
reason.
9. COMPLIANCE WITH RULE 144. The Company covenants that it shall
file the reports required to be filed by it under the Securities Exchange
Act, and the rules and regulations thereunder so long as the Company is
obligated to file such reports, and it shall take such further action as any
Holder may reasonably request, all to the extent required from time to time
to
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enable such Holder to sell Registrable Shares without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule
144 under the Securities Act, as such Rule may be amended from time to time
or (b) any similar rules or regulations hereafter adopted by the Commission.
Upon the written request of any Holder, the Company shall delivery to such
Holder a written statement as to whether it has complied with such
requirements.
10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any registration hereunder which is underwritten unless such
Person (A) agrees to sell such Person's securities on the basis provided in
any underwriting arrangements approved by the Person or Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
11. REDUCTIONS OF REGISTRABLE SHARES IN AN OFFERING. In the event
the aggregate number of Registrable Shares to be included in a Demand
Registration or Piggyback Registration is reduced by operation of the terms
hereof to a number less than the number requested by the Holders to be
included in such registration, such aggregate reduction may be allocated
among, and borne by, the Holders in any manner agreed upon by the Holders
notwithstanding any provision herein regarding the manner in which such
reduction shall be allocated among, and borne by, the Holders.
12. INTENTIONALLY OMITTED.
13. REMEDIES. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically, to
recover damages caused by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law.
14. AMENDMENTS AND WAIVERS. The provisions of this Agreement may be
amended or waived at any time only by the written agreement of the Company and
the Holders of a majority of the Registrable Shares. Any waiver, permit,
consent or approval of any kind or character on the part of any such holders of
any provision or condition of this Agreement must be made in writing and shall
be effective only to the extent specifically set forth in writing. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each Holder of Registrable Shares and the Company. Each Holder
acknowledges that by operation of this paragraph the Holders of a majority of
the Registrable Shares, acting in conjunction with the Company, will have the
right and power to diminish or eliminate all rights pursuant to this Agreement.
15. SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by
or on behalf of any of the parties hereto will bind and inure to the benefit
of the respective successors and assigns of the parties hereto, whether so
expressed or not. In addition and whether or not any express assignment has
been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Shares are also for the benefit of, and
enforceable by, any subsequent holder of
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Registrable Shares, PROVIDED that, such subsequent holder beneficially owns
no less than 10% of the Shares.
16. FINAL AGREEMENT. This Agreement constitutes the final
agreement of the parties concerning the matters referred to herein, and
supersedes all prior agreements and understandings.
17. SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
18. DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience of reference only and do not
constitute a part of and shall not be utilized in interpreting this Agreement.
19. NOTICES. any notices required or permitted to be sent
hereunder shall be delivered personally, telecopied (and confirmed) or
mailed, certified mail, return receipt requested, or delivered by overnight
courier service to the following addresses, or such other addresses as shall
be given by notice delivered hereunder, and shall be deemed to have been
given upon delivery, if delivered personally or telecopied, three business
days after mailing, if mailed, or one business day after delivery to the
courier, if delivered by overnight courier service:
If to the initial Holders of the Registrable Shares, to the addresses
set forth on Schedule 1 hereto.
If to the Holders of Registrable Shares other than the initial Holders
of the Registrable Shares, to the addresses set forth on the stock record books
of the Company.
If to the Company, to:
Mercury Finance Company
[address]
Facsimile:
Attention:
20. GOVERNING LAW. The validity, meaning and effect of this
Agreement shall be determined in accordance with the laws of the State of
Illinois applicable to contracts made and to be performed in that state.
21. COUNTERPARTS AND FACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an
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original, and such counterparts together shall constitute one instrument.
This agreement may be executed by the exchange of signatures by facsimile
transmission. Each party shall receive a duplicate original of the
counterpart copy or copies executed by it and the Company.
[Remainder of page intentionally left blank.
Signature pages follow.]
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