EXHIBIT 10.2
MICROFINANCIAL INCORPORATED
00-X Xxxxxxxx Xxx
Xxxxxx, XX 00000
WARRANT PURCHASE AGREEMENT
Fleet National Bank, as Agent
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxxxxxxx 00000
The Lenders on the
signature page attached hereto
April 14, 2003
Ladies and Gentlemen:
The undersigned, MicroFinancial Incorporated, a Massachusetts
corporation (the "Company"), agrees to issue and sell to Fleet National Bank, a
national banking association ("Fleet"), Banknorth, N.A., ("Banknorth"), Xxxxx
Brothers Xxxxxxxx & Co. ("Xxxxx Bros."), Citibank ("Citibank"), Citizens Bank of
Massachusetts ("Citizens"), Keybank National Association ("Key"), National City
Bank ("National City"), U.S. Bank ("U.S. Bank") and Union Bank of California,
N.A. ("UBOC" and together with Fleet, Banknorth, Xxxxx Bros., Citibank,
Citizens, Key, National City and U.S. Bank, the "Lenders") the Common Stock
Purchase Warrants of the Company in the form of Exhibit A hereto, all being on
the terms and subject to the conditions contained in this Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINED TERMS
As used herein, the following terms shall have the respective meanings
assigned to them in this Article I:
"Articles of Organization" shall have the meaning ascribed to that term
in Section 2.1(a) hereof.
"Closing" shall have the meaning ascribed to that term in Article IV
hereof.
"Closing Date" means the date of the Closing.
"Commission" means the Securities and Exchange Commission.
"Common Stock" shall have the meaning ascribed to that term in
Section 2.1(a) hereof.
"Company" shall have the meaning ascribed to that term in the preamble
hereto.
"GAAP" shall have the meaning ascribed to that term in the Loan
Agreement.
"Investor Consent" means, at any particular date, the consent, approval
or vote of the Majority Investors.
"Investors" means, collectively, (i) each Lender so long as such Lender
shall continue to own and hold of record any of the Securities, (ii) each
Permitted Transferee of a Lender so long as such Permitted Transferee shall
continue to own and hold of record any of the Securities, and (iii) each
Permitted Transferee of any other Investor so long as such Permitted Transferee
shall continue to own and hold of record any of the Securities.
"Lenders" shall have the meaning ascribed to that term in the preamble
hereto.
"Loan Agreement" means that certain Fourth Amended and Restated Loan
Agreement, as amended or modified from time to time, dated as of August 22,
2000, by and among Leasecomm Corporation (the "Borrower"), the Lenders, the
other lending institutions party thereto and the Agent (as defined therein).
"Majority Investors" means those Investors holding at least 50.1% of
the Common Stock issued or issuable upon exercise of the Warrants.
"NASDAQ" means the National Association of Securities Dealers automated
quotation system.
"Permitted Transferee" means any Person.
"Person" means an individual, corporation, partnership, joint venture,
trust, or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Registration Rights Agreement" means that certain Registration Rights
Agreement dated April __, 2003 among the Company and the Lenders.
"Securities" means the Warrants and the Warrant Shares.
"Securities Act" means the Securities Act of 1933, as amended, or any
federal statute or code which is a successor thereto.
"Subsidiary" means, in relation to the Company at any particular time,
any other corporation more than fifty percent (50%) of the outstanding voting
shares in the capital of which shall be owned or controlled (whether directly or
indirectly) by the Company and/or by any one or more of the Company's other
Subsidiaries.
"Warrants" shall have the meaning ascribed to that term in Section
2.2(a) hereof and shall in any event include all other warrants delivered in
exchange or in substitution therefor.
"Warrant Shares" means the shares of Common Stock issuable upon
exercise of the Warrants.
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ARTICLE II
REPRESENTATIONS OF THE COMPANY
The Company represents and warrants to the Lenders as follows:
SECTION 2.1. CAPITALIZATION OF COMPANY.
(a) The authorized capital stock of the Company will, on and as of the
Closing Date, consist of (i) 25,000,000 shares of Common Stock, par value $0.01
per share (the "Common Stock"), of which 13,141,800 shares were outstanding as
of April 14, 2003, and (ii) 5,000,000 shares of preferred stock, of which no
shares are outstanding as of April 14, 2003. A description of the capital stock
and of the voting powers, rights, and privileges thereof is stated in the
Company's Articles of Organization (herein, the "Articles of Organization")
(b) Except as set forth in Schedule 2.1(b) hereto, there are no
existing options, warrants, calls, preemptive (or similar) rights, subscriptions
or other rights, agreements, arrangements or commitments of any character
obligating the Company to issue, transfer or sell, or cause to be issued,
transferred or sold, any shares of the capital stock of the Company or other
equity interests in the Company or any securities convertible into or
exchangeable for such shares of capital stock or other equity interests, and
there are no outstanding contractual obligations of the Company to repurchase,
redeem or otherwise acquire any shares of its capital stock or other equity
interests.
SECTION 2.2. AUTHORIZATION OF WARRANTS.
(a) The Company will, prior to the Closing Date, duly and properly
authorize the issuance to each of the Lenders (i) a Warrant evidencing rights to
purchase shares of the Company's Common Stock (each a "Warrant" and
collectively, the "Warrants") and (ii) the shares of Common Stock issuable by
the Company upon exercise of the Warrants.
(b) The Warrants will be exercisable commencing as of June 30, 2004 in
accordance with the terms thereof at a price, subject to adjustment as therein
provided,of eighty-two and one-half cents ($.82 1/2 ) per Warrant Share. The
Warrants will be in substantially the form of Exhibit A annexed to this
Agreement.
SECTION 2.3 ADDITIONAL REPRESENTATIONS.
(a) Incorporation. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and is qualified to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification, except where the failure to so qualify would not have a material
adverse effect upon the Company. The Company has all requisite corporate power
and authority to carry on its business as now conducted and to carry out the
transactions contemplated hereby.
(b) Authorization. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution,
delivery and performance of the Warrants, this Agreement and the Registration
Rights Agreement and the consummation of the transactions contemplated herein
and therein has been taken. When executed and delivered by the Company, each of
this Agreement, the Warrants and the Registration Rights Agreement shall
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constitute the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such may be limited
by bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights generally and by general equitable principles, and except as the same may
be limited by the indemnification obligations of the Company under the
Registration Rights Agreement. The Company has all requisite corporate power to
enter into this Agreement, the Warrants and the Registration Rights Agreement
and to carry out and perform its obligations under the terms of this Agreement,
the Warrants and the Registration Rights Agreement.
(c) Valid Issuance of the Shares. The Warrant Shares will, upon
issuance pursuant to the terms hereof, be duly authorized and validly issued,
fully paid and nonassessable and not subject to any encumbrances, preemptive
rights or any other similar contractual rights of the stockholders of the
Company or others.
(d) Financial Statements. The Company shall, by April 14, 2003, furnish
to each Investor its audited Statements of Income, Stockholders' Equity and Cash
Flows for the fiscal year ended December 31, 2002 and its audited Consolidated
Balance Sheet as of December 31, 2002. All such financial statements are
hereinafter referred to collectively as the "Financial Statements". The
Financial Statements have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved, and fairly present, in all
material respects, the financial position of the Company and the results of its
operations as of the date and for the period indicated thereon. Since December
31, 2002, there has been no material adverse change (actual or threatened) in
the assets, liabilities (contingent or other), affairs, operations, prospects or
condition (financial or other) of the Company.
(e) SEC Documents. The Company shall, by April 14, 2003, furnish to
each Investor, a true and complete copy of the Company's Annual Report on Form
10-K for the year ended December 31, 2002 (the "Annual Report") and any other
statement, report, registration statement (other than registration statements on
Form S-8) or definitive proxy statement filed by the Company with the SEC during
the period commencing December 31, 2002 and ending on the date hereof (the "SEC
Documents"). As of their respective filing dates, the SEC Documents complied in
all material respects with the requirements of the Exchange Act or the
Securities Act, as applicable, and none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading, as of
their respective filing dates.
(f) Consents. Except for (i) the filing and effectiveness of any
registration required to be filed by the Company under the Securities Act in
connection with the exercise by any Investor of its rights under the
Registration Rights Agreement and (ii) any required state "blue sky" law filings
in connection with the transactions contemplated under such registration
statement, all consents, approvals, orders and authorizations required on the
part of the Company in connection with the execution, delivery or performance of
this Agreement, the Warrants and the Registration Rights Agreement and the
consummation of the transactions contemplated herein and therein have been
obtained and will be effective as of the Effective Date of Amendment No. 2 to
the Loan Agreement.
(g) No Conflict. The execution and delivery of this Agreement, the
Warrants and the Registration Rights Agreement by the Company and the
consummation of the transactions contemplated hereby and thereby will not
conflict with or result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to a loss of a material
benefit under (i) any provision of the
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Articles of Organization or By-laws of the Company or (ii) any material or
instrument, permit, franchise, license, judgment, order, statute, law,
ordinance, rule or regulation, applicable to the Company or its properties or
assets.
(h) Brokers or Finders. Except as set forth on Schedule 2.3(h), the
Company has not dealt with any broker or finder in connection with the
transactions contemplated by this Agreement, and the Company has not incurred,
and shall not incur, directly or indirectly, any liability for any brokerage or
finders' fees or agents commissions or any similar charges in connection with
this Agreement or any transaction contemplated hereby.
(i) New York Stock Exchange. The Common Stock is listed on the New York
Stock Exchange.
(j) Absence of Litigation. There is no pending (or to the best of the
Company's knowledge, threatened) action, suit, proceeding or investigation
against the Company or any of its direct or indirect subsidiaries, other than
that described on Schedule 2.3(j) hereto.
(k) No Undisclosed Liabilities. Other than as disclosed on the
Financial Statements delivered to Purchaser, since December 31, 2002, the
Company has incurred no material liabilities or obligations, fixed or
contingent, matured or unmatured or otherwise, except for liabilities or
obligations that, individually or in the aggregate, do not or would not have a
material adverse effect on the financial condition or business of the Company
and its subsidiaries other than (a) liabilities and obligations arising in the
ordinary course of business and (b) other liabilities disclosed in the schedules
to this Agreement.
(l) Contracts. All contracts, agreements and instruments required to be
filed as an exhibit to the annual report of the Company are legal, valid,
binding and in full force and effect and, to the knowledge of the Company, are
enforceable by the Company in accordance with their respective terms, subject to
(a) laws of general application relating to bankruptcy, insolvency and the
relief of debtors, (b) rules of law governing specific performance, injunctive
relief or other equitable remedies, and (c) actions or omissions of Persons
other than the Company, provided, however, that the Company has no actual
knowledge of any material actions or omissions by such other Persons. Except as
disclosed in the Annual Report and other than contracts or agreements relating
exclusively to the Company's pre-clinical and clinical development and
manufacturing activities, the Company has not granted rights to manufacture,
produce, assemble, license, market or sell its products to any other person and
is not bound by any contract or agreement that materially restricts the
Company's exclusive right to develop, manufacture, assemble, distribute or sell
its products.
(m) Subsidiaries; Joint Ventures. The Company has no subsidiaries other
than Leasecomm Corporation, a company organized under the laws of the
Commonwealth of Massachusetts and a wholly-owned Subsidiary of the Company, and
does not otherwise own or control, directly or indirectly, any other Person,
other than MFI Finance Corp. I, a corporation organzied under the laws of the
Commonwealth of Massachusetts and a wholly-owned Subsidiary of Leasecomm
Corporation and MFI Finance II, LLC, a limited liability company organized under
the laws of the Commonwealth of Massachusetts and a wholly-owned Subsidiary of
Leasecomm Corporation. The Company is not a participant in any joint venture,
partnership, or similar arrangement material to its business.
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(n) Taxes. Each of the Company and any Subsidiary of the Company has
filed (or has had filed on its behalf) or will timely file or will cause to be
timely filed, all material Tax Returns (as defined below) required by applicable
law to be filed by it prior to or as of the date of the Effective Date of
Amendment No. 2 to the Loan Agreement, and such Tax Returns are, or will be at
the time of filing, true, correct and complete in all material respects. Each of
the Company and any Subsidiary of the Company has paid (or has had paid on its
behalf) or, where payment is not yet due, has established (or has had
established on its behalf and for its sole benefit and recourse) or will
establish or cause to be established in accordance with GAAP on or before the
Effective Date of Amendment No. 2 to the Loan Agreement, an adequate accrual for
the payment of, all material Taxes (as defined below) due with respect to any
period ending prior to or as of the Effective Date of Amendment No. 2 to the
Loan Agreement. "Taxes" shall mean any and all taxes, charges, fees, levies or
other assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, social security, retirement, unemployment,
occupation, use, goods and services, license, value added, capital, net worth,
payroll, profits, franchise, transfer and recording taxes, fees and charges, and
any other taxes, assessment or similar charges imposed by the Internal Revenue
Service or any taxing authority (whether state, county, local or foreign) (each,
a "Taxing Authority"), including any interest, fines, penalties or additional
amounts attributable to or imposed upon any such taxes or other assessments.
"Tax Return" shall mean any report, return, document, declaration or other
information or filing required to be supplied to any Taxing Authority, including
information returns, any documents with respect to accompanying payments of
estimated Taxes, or with respect to or accompanying requests for extensions of
time in which to file any such return, report, document, declaration or other
information. There are no claims or assessments pending against the Company or
any subsidiary of the Company for any material alleged deficiency in any Tax,
and neither the Company nor any Subsidiary of the Company has been notified in
writing of any material proposed Tax claims or assessments against the Company
or any Subsidiary of the Company. Each of the Company and any Subsidiary of the
Company has withheld from each payment made to any of its past or present
employees, officers and directors, and any other person, the amount of all
material Taxes and other deductions required to be withheld therefrom and paid
the same to the proper Taxing Authority within the time required by law.
(o) Percentage. The Warrant Shares represent in the aggregate two
percent (2%) of the issued and outstanding capital stock of the Company as of
the date hereof calculated on a fully diluted basis, after giving effect to all
options and warrants (whether issued and outstanding or reserved for issuance
for the purchase of capital stock of the Company but exclusive of 1,675,000
shares of Common Stock of the Company issuable upon exercise of options to
purchase shares of the Company, outstanding on the date hereof, with a strike
price above the fair market value of the stock of the Company on the date
hereof).
ARTICLE III
SALE AND PURCHASE OF
WARRANTS AT CLOSING
At the Closing hereunder, the Company will issue and sell to each of
the Lenders, subject to the terms and conditions hereof and in reliance upon the
written representations and warranties of the Company, in consideration for each
of the Lenders entering into Amendment No. 2 to the Loan Agreement, a Warrant to
subscribe for and purchase the number of share of Common Stock indicated next to
such Lender's name on Exhibit B hereto and the Company hereby acknowledges
receipt of such consideration.
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ARTICLE IV
THE CLOSING
The closing under this Agreement (the "Closing") will take place at
9:00 a.m., local time, on April 14, 2003, or at such other time and on such
other date as may be mutually agreed upon in writing by the Lenders and the
Company. At the Closing, the Company will (among other things) deliver to the
Lenders the Warrants purchased by the Lenders hereunder, and each Lender will
deliver to the Company the total consideration payable by such Lender for the
Warrant.
ARTICLE V
REPRESENTATIONS OF THE LENDERS
Each Lender severally represents and warrants to the Company that:
(a) Such Lender is purchasing the Warrant from the Company in
accordance with the terms hereof for such Lender's own account without a view to
any distribution thereof in violation of the Securities Act, but, subject,
nevertheless, to any requirement of law that the disposition of such Lender's
property shall at all times be within such Lender's control. Each Lender has
been informed and understands that the Securities have not been registered
pursuant to the provisions of Section 5 of the Securities Act and therefore
cannot be offered, sold or transferred unless such Securities are registered
under the provisions of the Securities Act or an exemption from such
registration is available.
(b) Each Lender represents that it is an "accredited investor" within
the meaning of Rule 501(a) promulgated under the Securities Act. Each Lender has
sufficient knowledge and experience in investing in companies similar to the
Company so as to be able to evaluate the risks and merits of such an investment
and is able financially to bear the risks thereof.
(c) It agrees that each stock certificate or instrument representing or
evidencing any Securities shall bear a legend in or substantially in the
following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER, AND ARE SUBJECT TO,
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION UNDER THE 1933 ACT OR IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE 1933 ACT."
ARTICLE VI
COVENANTS OF COMPANY
The Company hereby covenants with each of the Investors that, except as
otherwise expressly permitted or provided, in any particular instance, by a
written Investor Consent:
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SECTION 6.1. RECORDS AND ACCOUNTS. The Company will (i) keep, and
cause each of its Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in accordance with
GAAP and (ii) maintain adequate accounts and reserves for all taxes (including
income taxes), depreciation, depletion, obsolescence and amortization of its
properties and the properties of its Subsidiaries, contingencies, and other
reserves.
SECTION 6.2. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Company will deliver to each of the Investors at their request:
(a) as soon as practicable after the end of each Company fiscal year
and in any event within 90 days after the end of each such fiscal year, a
consolidated balance sheet of the Company and Subsidiaries as at the end of such
year, and the related statements of income and cash flows or shareholders'
equity of the Company and Subsidiaries setting forth in each case the
corresponding figures for the preceding fiscal year, such statements to be
certified by a firm of independent certified public accountants selected by the
Company;
(b) as soon as is practicable after the end of each fiscal quarter of
each Company fiscal year and in any event within 45 days thereafter,
consolidated balance sheet of the Company and Subsidiaries as of the end of such
period and the related statements of income and cash flows and shareholders'
equity of the Company and Subsidiaries, subject to changes resulting from
year-end adjustments, such balance sheet and statements to be prepared and
certified by an authorized representative of the company in an officer's
certificate as having been prepared in accordance with GAAP except for footnotes
and year-end adjustments; and
(c) contemporaneously with the filing or mailing thereof, copies of all
material of a financial nature filed with the Securities and Exchange Commission
or sent to the stockholders of the Company.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.
SECTION 7.1. SURVIVAL OF REPRESENTATIONS. The representations and
warranties of the Company and of the Lenders and the Investors contained in this
Agreement, or any agreement, instrument or document delivered pursuant to any of
the provisions of this Agreement, shall survive the execution and delivery of
this Agreement, any examination or investigation conducted by or on behalf of
the Company or the Lender, and the Closing hereunder.
SECTION 7.2. INDEMNIFICATION FOR MISREPRESENTATIONS. The Company agrees
to indemnify and hold the Lenders harmless from and against, and to pay to the
Lenders, on demand by the Lenders from time to time, the full amount of any
loss, claim, damage, liability, cost or expense (including reasonable attorneys'
fees) resulting to the Lenders from any false, incorrect or misleading
representation or warranty of the Company contained in this Agreement, or any
agreement, instrument or document delivered by the Company to the Lenders
pursuant to any of the provisions of this Agreement.
SECTION 7.3. EXPENSES. Whether or not all or any of the arrangements or
transactions contemplated by this Agreement or by any of the Warrants shall be
consummated, the Company agrees to pay to the Investors, on demand by the
Investors at any time and as often as the occasion
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therefor may require: (a) all of the reasonable legal fees, plus all reasonable
out-of-pocket expenses and disbursements, of one set of counsel to the
Investors, which have been or shall be incurred or sustained at any time in
connection with the preparation, negotiation, execution or delivery of this
Agreement, any of the Warrants, the Co-Sale Agreement, the Registration Rights
Agreement or any other agreements, instruments or documents relating thereto;
and (b) all reasonable out-of-pocket costs and expenses which shall be incurred
or sustained by any Investor at any time in connection with any modifications or
amendments to or consents, approvals or waivers under this Agreement, any of the
Warrants, the Co-Sale Agreement or the Registration Rights Agreement or in
connection with any litigation, proceeding or dispute arising out of or relating
to this Agreement, any of the Warrants, the Co-Sale Agreement, the Registration
Rights Agreement or relationships created thereby, or in connection with any
action or proceeding taken by any Investor to protect or preserve all or any of
the rights, remedies, powers or privileges of such Investor under any of such
documents or to enforce any of the covenants, agreements or obligations of the
Company under any of such documents (including, without limitation, all of the
reasonable fees and disbursements of legal counsel for each Investor).
ARTICLE VIII
PREEMPTIVE RIGHTS
(a) The Company shall not issue or sell any of its equity securities
(including securities convertible into equity securities) (collectively, the
"Future Shares") to any Person without first providing each Investor the right
to subscribe for its Proportionate Percentage (as defined in Section 8(f)) of
such Future Shares at the same price and on the same terms (including the method
of purchase; provided, however, that the Investors shall have the option of
purchasing Future Shares with cash, regardless of the method of purchase offered
to such Person) as shall be offered to such third party and which shall have
been specified by the Company in a writing delivered to each Investor (the
"Proposal"). The Proposal by its terms shall remain open and irrevocable for a
period of 20 days from the date it is delivered by the Company to each Investor
(the "Future Shares Exercise Period"). The Proposal shall also certify that the
Company has either (i) received a firm offer from a prospective purchaser, who
shall be identified in such certification, so that the Company in good faith
believes a binding agreement of sale is obtainable for consideration having a
fair market, cash equivalent or present value set forth in such certification;
or (ii) intends in good faith to make an offering of its securities at the price
and on the terms set forth in such certification.
(b) Notice of each Investor's acceptance, in whole or in part, of the
Proposal made pursuant to Article 8(a) hereof shall be evidenced by a writing
signed by such Investor delivered to the Company prior to the end of the Future
Shares Exercise Period setting forth that portion of the Future Shares, as the
case may be, which the Investor elects to purchase (the "Notice of Purchase").
If an Investor does not deliver such written notice within the Future Shares
Exercise Period, such Investor shall be deemed to have elected not to purchase
all or any part of such Future Shares.
(c) The Company shall promptly, in writing, inform each Investor which
purchases all the shares available to it ("Fully-Exercising Investor") of any
other Investor's failure to do likewise. During the ten-day period commencing
after the delivery by the Company of such information, each Fully-Exercising
Investor shall be entitled to obtain that portion of the Future Shares for which
Investors were entitled to subscribe but which were not subscribed for by the
Investors which is equal to the proportion that the number of shares of Common
Stock, and other securities, issued and
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held, or issuable (whether directly or indirectly) upon exercise of the Warrant,
or other derivative securities, held by such Fully-Exercising Investor, as the
case may be, then held, by such Fully-Exercising Investor bears to the total
number of shares of Common Stock, and other securities, issued and held, or
issuable (whether directly or indirectly) upon exercise of the Warrant, or other
derivative securities, held by such Fully-Exercising Investor, as the case may
be, then held, by all Fully-Exercising Investors who wish to purchase some of
the unsubscribed shares.
(d) In the event that the Investors do not purchase all of the
remaining Future Shares pursuant to Article 8(c) above, the Company shall have
120 days from the expiration of the Future Shares Exercise Period to offer and
sell any part of such Future Shares not elected to be purchased by the Investors
(the "Refused Future Shares") to any other Person(s), but only upon terms and
conditions in all respects (including, without limitation, price, seniority,
dividends and liquidation, redemption and conversion rights) which are no more
favorable to such other Person(s) or less favorable to the Company than those
set forth in the Proposal; provided, however, that such sale be to the same
Person(s) or their affiliates identified in the Proposal, if so identified
pursuant to Article 8(a). In the event that the Company so sells the Refused
Future Shares to such identified Person(s), the sale to each Investor of the
Future Shares in respect of which a Notice of Purchase was delivered to the
Company by such Investor shall occur upon the closing of the sale to such other
Person(s) of Refused Future Shares (which closing shall include full payment to
the Company). If there are no Refused Future Shares, the sale to such Investor
of such Future Shares shall occur within 20 days of the expiration of the Future
Shares Exercise Period. In any event, the sale to such Investor of such Future
Shares shall be on the terms specified in the Proposal. Any Refused Future
Shares not purchased by such other Person(s) within such 120-day period shall
remain subject to this Article 8.
(e) The term "Proportionate Percentage" in Article 8(a) shall mean, as
to any Investor, that percentage figure which expresses the ratio which (i) the
aggregate number of shares of Common Stock, and other securities, then (a)
outstanding and owned by such Investor and (b) issuable (whether directly or
indirectly) upon exercise of such Investor's Warrant bears to (ii) the aggregate
number of shares of Common Stock, and other securities, (a) outstanding and
owned by all Investors and (b) issuable (whether directly or indirectly) upon
conversion of the Warrants of all Investors. An Investor shall be entitled to
apportion the preemptive rights hereby granted it among its partners, members
and affiliates in such proportion as it deems appropriate.
(f) Notwithstanding anything in this Article 8 to the contrary, a
Investor shall not be entitled to any preemptive rights in connection with any
issuance of shares of Common Stock (i) upon exercise of any of the Warrants (and
other convertible securities outstanding as of the date hereof); (ii) upon
exercise of options or warrants to purchase Common Stock of the Company that are
outstanding on the date of this Agreement; (iii) issued pursuant to, or upon
exercise of options granted under, the Company's existing stock plan entitled
MicroFinancial Incorporated 1998 Equity Incentive Plan; (iv) issued as a stock
dividend to accomplish a stock spilt or subdivision of shares or upon any
subdivision of shares; (v) issued in connection with the acquisition of another
corporation or other business entity by the Company by merger, purchase of
substantially all assets or other reorganization whereby the Company owns, upon
consummation of such acquisition, greater than fifty percent (50%) of the voting
power to elect the directors of such corporation or other business entity; (vi)
to underwriters and/or the public pursuant to a qualified public offering and
(vii) issued in any merger or consolidation of the Company, provided that such
merger or consolidation is approved by the Majority Investors; provided,
however, that notwithstanding anything in this Article 8(f) to the contrary, to
the extent legally permissible, the Investors (excluding any individuals) shall
have the preemptive rights described in Article 8(a) hereof to purchase a number
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of shares equal, in the aggregate, to 5% of the shares of the Company (other
than underwriters' warrants) sold in the qualified public offering (excluding
the over-allotment option), such shares to be allocated by the Investors on a
pro rata basis determined in accordance with the number of shares of Common
Stock issuable upon exercise of the Warrants; and provided further, that (i)
such shares are purchased at the price at which such securities are sold by the
underwriters to the public, (ii) the Investors shall purchase such shares
directly from the Company in a transaction that is exempt from registration
under the 1933 Act and that will close prior to or concurrently with the
qualified public offering, (iii) such offering shall occur on or after that date
which is one year from the date hereof; (iv) Investors who purchase such shares
shall be qualified institutional buyers (as such term is defined in Rule 144A
promulgated under the Securities Act); and (v) Investors shall comply with all
federal and state securities laws in connection with such purchase.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. NOTICES.
(a) All notices and other communications pursuant to this Agreement
shall be in writing, either delivered in hand, mailed by United States
registered or certified first-class mail, postage prepaid, sent by overnight
courier, or sent by telegraph, telecopy, facsimile or telex and confirmed by
delivery via courier or postal service, addressed as follows:
(i) if to the Company, at the address of the Company set forth on
the first page hereof, or at such other address as shall have been furnished to
each of the Investors in writing by the Company and a copy thereof shall in any
event be simultaneously transmitted to Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxxxx Xxxxxx;
(ii) if to any Investor, at such addresses (in each case) as shall
have been furnished to the Company and to the other Investors by such
Investor in writing, and a copy thereof shall in any event be
simultaneously transmitted to Xxxxxxxx X. Xxxxxxxxx, Esq., Xxxxxxx
XxXxxxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxxxxx, XX 00000.
(b) Any notice or other communication pursuant to this Agreement shall
be deemed to have been duly given or made and to have become effective (i) if
delivered by hand, overnight courier or facsimile to a responsible officer of
the party to which it is directed, at the time of receipt thereof by such
officer or the sending of such facsimile or (ii) if sent by registered or
certified first-class mail, postage prepaid, on the third business day following
the mailing thereof.
SECTION 9.2. GOVERNING LAW. THIS AGREEMENT IS INTENDED TO TAKE EFFECT
AS A SEALED INSTRUMENT. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
SECTION 9.3. AMENDMENTS AND WAIVERS.
(a) Except as otherwise provided by paragraph (b) of this Section 9.3,
and except as otherwise expressly required by any other provisions of this
Agreement, none of the terms or provisions contained in this Agreement, and none
of the agreements, obligations or covenants of the Company
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contained in this Agreement, may be amended, modified, supplemented, waived or
terminated unless (i) the Company shall execute an instrument in writing
agreeing or consenting to such amendment, modification, supplement, waiver or
termination, and (ii) the Company shall receive a prior written Investor Consent
therefor.
(b) Each of the terms and provisions contained in this Section 9.3 or
in the definitions of Permitted Transferee, Investor Consent or Majority
Investors contained in Article I hereof may be amended, modified, supplemented,
waived or terminated only by a written instrument or consent signed by the
Company and by each of the Investors holding of record any Securities at the
effective date thereof.
(c) In connection with any action taken or to be taken pursuant to
paragraph (a) of this Section 9.3, there shall be no obligation or requirement
on the part of the Company, any of the Investors or any other Persons (i) to
solicit or to attempt to solicit from all of the Investors the consent or
approval of all of the Investors for such action, or (ii) to submit any notices
of any kind to all of the Investors in advance of any action proposed to be
taken pursuant to paragraph (a) of this Section 9.3. However, copies of all
written consents or approvals given by Investors in connection with any action
taken or to be taken pursuant to and in compliance with paragraph (a) of this
Section 9.3 shall be sent by the Company, promptly after the receipt thereof by
the Company, to each Investor who shall have failed or refused to give a written
consent or approval for such action.
(d) Any action taken pursuant to and in compliance with paragraph (a)
of this Section 9.3 shall be binding upon the Company and upon all of the
Investors, including all of the Investors who shall have failed or refused to
give a written consent or approval for such action.
SECTION 9.4. RIGHTS AND OBLIGATIONS SEVERAL. The rights and obligations
of each of the parties hereto shall be several (and not joint), except as
otherwise expressly provided by this Agreement.
SECTION 9.5. NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the
part of any Investor in exercising any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.6. ASSIGNMENT. This Agreement shall inure to the benefit and
be binding upon each Lender and its heirs, successors and assigns. The Company's
obligations under this Agreement shall not be assigned, and its duties under
this Agreement shall not be delegated.
SECTION 9.7. ENTIRE AGREEMENT. This Agreement, including Exhibit A
hereto, and the Warrants constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof and supersede any prior
understandings or agreements concerning the subject matter hereof.
SECTION 9.8. SEVERABILITY. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
SECTION 9.9. BINDING EFFECT. All of the covenants and agreements of the
Company contained in, and all of the rights granted by the Company pursuant to,
this Agreement, shall inure to the benefit of each Investor, including each of
the Permitted Transferees of such Investor. None of such
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covenants, agreements or rights shall be assignable or transferable by any
Investor to any Person except to a Person who is a Permitted Transferee of such
Investor.
SECTION 9.10. COUNTERPARTS. This Agreement may be executed
simultaneously in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.
In making proof of this Agreement, it shall not be necessary to produce or
account for more than one such counterpart signed by each of the parties hereto.
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If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this Agreement and return such
counterpart to the undersigned, whereupon this Agreement, as so accepted by you,
shall become a binding agreement under seal between you and the undersigned.
Very truly yours,
MICROFINANCIAL INCORPORATED
By: /s/ Authorized Signatory
--------------------------
Name:
Title:
Dated as of: April 14, 2003
The foregoing Warrant Purchase Agreement with MicroFinancial
Incorporated is hereby accepted by the undersigned on and as of the date
thereof.
INVESTORS:
FLEET NATIONAL BANK, individually and
as Agent
By: /s/ Authorized Signatory
----------------------------------
Name:
Title:
BANKNORTH, N.A.
By: /s/ Authorized Signatory
----------------------------------
Name:
Title:
XXXXX BROTHERS XXXXXXXX & CO.
By: /s/ Authorized Signatory
----------------------------------
Name:
Title:
CITIBANK
By: /s/ Authorized Signatory
----------------------------------
Name:
Title:
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Authorized Signatory
----------------------------------
Name:
Title:
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KEYBANK NATIONAL ASSOCIATION
By: /s/ Authorized Signatory
----------------------------------
Name:
Title:
NATIONAL CITY BANK
By: /s/ Authorized Signatory
----------------------------------
Name:
Title:
By: /s/ Authorized Signatory
----------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Authorized Signatory
----------------------------------
Name:
Title:
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