EXECUTION COPY
EXHIBIT 10.23
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EQUITY REGISTRATION RIGHTS AGREEMENT
among
CREDITRUST CORPORATION
and
THE LENDERS SET FORTH ON
THE SIGNATURE PAGES HERETO
Dated as of August 2, 1999
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TABLE OF CONTENTS
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Page
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SECTION 1. DEFINITIONS..................................................... 1
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SECTION 2. REGISTRATION RIGHTS............................................. 3
2.1. Demand Registration Rights...................................... 3
2.2. Incidental Registration......................................... 5
2.3. Supplements and Amendments...................................... 6
2.4. Restrictions on Public Sale by the Company and Others........... 6
2.5. Underwritten Registrations...................................... 7
2.6. Registration Procedures......................................... 7
2.7. Registration Expenses........................................... 13
2.8. Rule 144........................................................ 14
SECTION 3. INDEMNIFICATION................................................. 14
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3.1. Indemnification by the Company.................................. 14
3.2. Indemnification by Holder of Registrable Securities............. 15
3.3. Conduct of Indemnification Proceeding........................... 15
3.4. Contribution.................................................... 16
3.5. Other Indemnities............................................... 16
SECTION 4. MISCELLANEOUS................................................... 16
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4.1. Remedies........................................................ 16
4.2. No Inconsistent Agreements...................................... 16
4.3. Amendments and Waivers.......................................... 17
4.4. Notices......................................................... 17
4.5. Successors and Assigns.......................................... 17
4.6. Counterparts.................................................... 17
4.7. Headings........................................................ 17
4.8. Governing Law................................................... 18
4.9. Severability.................................................... 18
4.10. Entire Agreement................................................ 18
4.11. Attorneys' Fees................................................. 18
4.12. Securities Held by the Company or Its Subsidiaries.............. 18
Signature Pages............................................................ S-1
EQUITY REGISTRATION RIGHTS AGREEMENT
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This Equity Registration Rights Agreement (the "Agreement"), dated as
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of August 2, 1999, by and among CREDITRUST CORPORATION, a Maryland corporation
(or any successor, the "Company"), and the lenders whose signatures appear on
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the execution pages of this Agreement (each a "Lender" and collectively, the
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"Lenders").
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This Agreement is entered into in connection with the Bridge Loan
Agreement, dated as of August 2, 1999 (the "Bridge Loan Agreement"), by and
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among the Company, Creditrust SPV99-2, LLC, a Delaware limited liability company
(the "Borrower"), CRDT SPV99-2 Capital, Inc., ("Capital"), the Lenders and
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Norwest Bank Minnesota, National Association, as Administrative Agent (the
"Administrative Agent"). In order to induce the Lenders to enter into the
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Bridge Loan Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution of this Agreement is required by the
terms of the Bridge Loan Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
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Capitalized terms used herein without definition shall have their
respective meanings set forth in the Bridge Loan Agreement. As used in this
Agreement, the following terms shall have the following meanings:
"Advice" has the meaning set forth in the last paragraph of Section
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2.6.
"Affiliate" means, with respect to any Person, any other Person (i)
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directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person or (ii) directly or indirectly owning or holding
five percent (5%) or more of the equity interest in such Person. For purposes
of this definition, "control" when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agreement" has the meaning set forth in the first paragraph of this
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Agreement.
"Bridge Loan Agreement" has the meaning set forth in the second
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paragraph of this Agreement.
"Common Stock" means the Common Stock, par value $.01 per share, of
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the Company.
"Company" has the meaning set forth in the first paragraph of this
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Agreement.
"DTC" has the meaning set forth in Section 2.6(i) of this Agreement.
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"Effectiveness Date" has the meaning set forth in Section 2.1(a) of
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this Agreement.
"Effectiveness Period" has the meaning set forth in Section 2.1(a) of
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this Agreement.
"Exchange Act" has the meaning set forth in Section 2.6(a) of this
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Agreement.
"Exchange Shares" means the shares of Common Stock of the Company
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issuable or issued upon exercise of the Warrants.
"Filing Date" has the meaning set forth in Section 2.1(a) of this
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Agreement.
"Holder" means any holder of a Registrable Security.
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"Incidental Registration" has the meaning set forth in Section 2.2(a)
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of this Agreement.
"Inspectors" has the meaning set forth in Section 2.6(n) of this
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Agreement.
"Lender" has the meaning set forth in the first paragraph of this
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Agreement.
"Lenders" has the meaning set forth in the first paragraph of this
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Agreement.
"NASD" has the meaning set forth in Section 2.7 of this Agreement.
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"Person" means any individual, trustee, corporation, partnership,
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joint stock company, trust, unincorporated association, union, business
association, firm or other legal entity.
"Prospectus" means the prospectus included in any Registration
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Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
"Registrable Securities" means the Exchange Shares and any other
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securities issued or issuable with respect to the Exchange Shares by way of a
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization; provided,
however, that a security ceases to be a Registrable Security when it is no
longer a Transfer Restricted Security.
"Registration Statement" means any registration statement of the
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Company that covers any of the Registrable Securities pursuant to the provisions
of Section 2.1 of this Agreement, including the Prospectus, amendments and
supplements to such registration
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statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
"Rule 144" means Rule 144 under the Securities Act, as such Rule may
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be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders of such securities being free of the registration and
prospectus delivery requirements of the Securities Act.
"SEC" means the Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended, and the
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rules and regulations of the SEC promulgated thereunder.
"Transfer Restricted Security" means an Exchange Share until such
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Exchange Share (i) has been effectively registered under the Securities Act and
disposed of in accordance with a registration statement filed under the
Securities Act covering it or (ii) is or may be distributed to the public
pursuant to Rule 144 without being subject to volume limitations.
"underwritten registration" or "underwritten offering" means a
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registration in which securities of the Company (including Registrable
Securities) are sold to an underwriter for reoffering to the public.
"Warrants" means the Common Stock warrants exchangable for up to 10%
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of the fully diluted Common Stock of the Company.
"Warrant Agreement" means that certain Warrant Agreement, dated as of
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July __, 1999, by and among the Company and the Lenders.
SECTION 2. REGISTRATION RIGHTS
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2.1. Demand Registration Rights. (a) The Company covenants and agrees
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with each Holder of Registrable Securities that if on or after May 2, 2000, the
Company at any time receives a written request from Holders of not less than 30%
of the then issued or issuable Registrable Securities, then within 45 days after
receipt of such notice (the 45th day after such notice, the "Filing Date") the
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Company shall use its best efforts to file a Registration Statement and cause
such Registration Statement to become effective under the Securities Act at the
earliest possible date after such notice (such date, the "Effectiveness Date")
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with respect to the offering and sale or other disposition of such Registrable
Securities as such Holders desire to have covered by such Registration
Statement. The Company shall use its best efforts to continuously maintain the
effectiveness of such Registration Statement until the earlier of (i) 270 days
after the effective date of the Registration Statement or (ii) the consummation
of the distribution by the Holders of all of the Registrable Securities covered
by such Registration Statement (the "Effectiveness Period"). The Company shall
not include any securities owned by any other Person other than the Registrable
Securities in any such Registration Statement pursuant to any "piggyback" or
similar registration rights granted by the Company without the consent of the
Holders of a majority of the Registrable Securities to be covered by such
Registration Statement, which consent shall not be unreasonably witheld or
delayed. Each
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notice to the Company requesting registration to be effected shall set forth (1)
the number of Registrable Securities to be included; (2) the name of the Holders
of the Registrable Securities and the amount to be sold by such Holders; and (3)
the proposed manner of sale. Within 10 (ten) days after receipt of such notice,
the Company shall notify each Holder of Registrable Securities who is not a
party to the written notice served on the Company (or the transferee(s) of such
Holder) and offer to them the opportunity to include their Registrable
Securities in such registration. A Registration Statement will not count as
complying with the terms hereof unless it is declared effective by the SEC and
remains continuously effective for the Effectiveness Period.
(b) Each Holder of Registrable Securities agrees, if requested by the
managing underwriter or underwriters in an underwritten offering, not to effect
any public sale or distribution of Registrable Securities or of securities of
the Company of the same class, or of securities convertible into or exchangeable
or exercisable for securities of the Company of the same class, as any
securities included in such Registration Statement, including a sale pursuant to
Rule 144 under the Securities Act (except as part of such underwritten
registration), during the 10-day period prior to, and during the 180-day period
beginning on, the closing date of each underwritten offering made pursuant to
such Registration Statement, to the extent timely notified in writing by the
Company or the managing underwriter or underwriters.
(c) The foregoing provisions of Section 2.1(b) shall not apply to any
Holder of Registrable Securities if such Holder is prevented by applicable
statute or regulation from entering into any such agreement; provided, however,
that any such Holder shall undertake, in its request to participate in any such
underwritten offering, not to effect any public sale or distribution of any
applicable class of Registrable Securities commencing on the date of sale of
such applicable class of Registrable Securities unless it has provided 60 days
prior written notice of such sale or distribution to the underwriter or
underwriters.
(d) The Company shall be entitled to include in any Registration
Statement referred to in this Section 2.1 that relates to an underwritten public
offering, securities to be sold by the Company for its own account, except as
and to the extent that, in the opinion of the managing underwriter, such
inclusion would adversely affect the marketing of the Registrable Securities to
be sold.
(e) Notwithstanding anything to the contrary contained herein, no
request may be made under this Section 2.1 within 90 days after the effective
date of the most recent registration statement filed by the Company (other than
registration statements on Form S-4 or S-8).
(f) Notwithstanding the foregoing, (i) the Company's obligation to
file a Registration Statement pursuant to this Section 2.1 and (ii) following
the date on which a Registration Statement pursuant to this Section 2.1 first
becomes effective under the Act, the effectiveness of such Registration
Statement may, in the case of each of (i) and (ii) above, be suspended by the
Company by prior written notice to the Holders for a period not to exceed 30
days in any twelve month period if (x) an event occurs and is continuing as a
result of which the Registration Statement would, in the reasonable good faith
judgment of the Company's Board of Directors, contain an untrue statement of a
material fact or omit to state a material fact necessary
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in order to make the statements therein not misleading and (y)(1) the Company's
Board of Directors reasonably determines in good faith that the disclosure of
such event at such time would have a material adverse effect on the business,
operations or prospects of the Company and its subsidiaries, taken as a whole,
or (2) the disclosure otherwise relates to a previously undisclosed pending
material business transaction, the disclosure of which would, in the reasonable
good faith judgment of the Company's Board of Directors, impede the Company's
ability to consummate such transaction.
(g) The Company's obligations under this Section 2.1 are limited to
two occasions only.
2.2. Incidental Registration. (a) If, at any time when Registrable
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Securities are outstanding, the Company proposes to register any of its
securities under the Act (other than a registration on Form S-4 or S-8 or any
successor form thereto), whether or not for sale for its own account, and the
registration form to be used therefor may be used for the registration of
Registrable Securities, it will each such time give prompt written notice to all
Holders of Registrable Securities of the Company's intention to do so and, upon
the written request of any such Holder to the Company made within 10 days after
the receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such Holder and the intended method of
disposition thereof), the Company will use its best efforts to effect the
registration (an "Incidental Registration") under the Act of all Registrable
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Securities which the Company has been so requested to register by the Holders
thereof.
(b) Subject to Section 2.2(c), if an Incidental Registration is an
underwritten registration, and the managing underwriters thereof advise the
Company in writing that in their opinion the number of securities requested to
be included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the
Company will include in such registration (i) first, the securities the Company
proposes to sell for its own account in such registration, (ii) second, the
Registrable Securities requested to be included in such registration, pro rata
among the Holders of such Registrable Securities on the basis of the number of
shares owned by each such Holder and such beneficiaries and (iii) third, other
securities requested to be included in such registration.
(c) Notwithstanding Section 2.2(b), if an Incidental Registration is
an underwritten secondary registration solely on behalf of holders of the
Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in such offering
without adversely affecting the marketability of the offering, the Company will
include in such registration (i) first, the securities requested to be included
therein by the holders requesting such registration, (ii) second, the
Registrable Securities requested to be included in such registration, pro rata
among the Holders of such Registrable Securities on the basis of the number of
shares owned by each such Holder, and (iii) third, other securities requested to
be included in such registration.
(d) The Company's Incidental Registration obligations pursuant to
this Section 2.2 shall not apply to the shelf registration of shares of Common
Stock pursuant to the Registration Rights Agreement, dated as of April 2, 1998,
among the Company, ▇▇▇▇▇▇, ▇▇▇▇▇
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▇▇▇▇▇, Incorporated and Boenning & Scattergood, Inc., as placement agents, and
the initial holders of the Company's Senior Subordinated Notes, 1998 Series.
2.3. Supplements and Amendments.
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If a Registration Statement ceases to be effective for any reason at
any time during the period for which it is required to be effective under this
Agreement, the Company shall use its best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof and shall in
connection therewith promptly supplement and amend any such Registration
Statement in a manner reasonably and in good faith expected to obtain the
withdrawal of the order suspending the effectiveness thereof, and the Company
shall use its best efforts to cause any such Registration Statement to be
declared effective as soon as practicable after such amendment or supplement and
to keep such Registration Statement continuously effective for a period equal to
the period for which it is required to be effective under this Agreement less
the aggregate number of days during which any predecessor Registration Statement
was previously effective.
The Company shall supplement and amend a Registration Statement if
required by the rules, regulations or instructions applicable to the applicable
registration form for such Registration Statement, if required by the Securities
Act or the SEC, or if reasonably requested by the Holders of a majority of the
Registrable Securities covered by such Registration Statement or by any
underwriter of the Registrable Securities.
2.4. Restrictions on Public Sale by the Company and Others. The
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Company agrees (i) that it shall not, and that it shall not cause or permit any
of its subsidiaries to, effect any public sale or distribution of any securities
of the same class as any of the Registrable Securities or any securities
convertible into or exchangeable or exercisable for such securities (or any
option or other right for such securities) (except for any securities issued to
officers, directors and/or employees of the Company or its subsidiaries pursuant
to options or agreements entered into with such officers, directors and/or
employees in connection with their employment or pursuant to the Company's stock
option, stock bonus and other stock plans and arrangements for officers,
directors and employees) during the 15-day period prior to, and during the 180-
day period beginning on, the commencement of any underwritten offering of
Registrable Securities that has been scheduled prior to the Company or any of
its subsidiaries publicly announcing its intention to effect any such public
sale or distribution; (ii) that any agreement entered into after the date of
this Agreement pursuant to which the Company (or, if applicable, any subsidiary
of the Company) issues or agrees to issue any securities which have registration
rights shall contain (x) a provision under which the holders of such securities
agree, in the event of an underwritten offering of Registrable Securities, not
to effect any public sale or distribution of any securities of the same class as
any of the Registrable Securities (or any securities convertible into or
exchangeable or exercisable for any such securities), or any option or other
right for such securities, during the periods described in clause (i) of this
Section 2.4, in each case including a sale pursuant to Rule 144 under the
Securities Act (or any similar provision then in effect) and (y) a provision
that effects, upon notice given pursuant to Section 2.1 hereof to the Company
that an underwritten offering of Registrable Securities is to be undertaken, the
lapse of any demand registration rights with respect to any securities of the
Company (or, if applicable, of any subsidiary of the Company) until the
expiration of 90 days after the date of the completion of any such underwritten
offering; (iii) that the Company (and, if applicable, each subsidiary of the
Company) will not after the date hereof enter into any agreement or contract
wherein the holders
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of any securities of the Company or of any subsidiary of the Company issued or
to be issued are granted any "piggyback" registration rights with respect to any
registration effected pursuant to Section 2.1 hereof and (iv) that the Company
(and, if applicable, each subsidiary of the Company) will not after the date
hereof enter into any agreement or contract wherein the exercise by any Holder
of its right to an Incidental Registration hereunder would result in a breach
thereof or a default thereunder or would otherwise conflict with any provision
thereof.
2.5. Underwritten Registrations. If any of the Registrable Securities
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covered by a Registration Statement filed pursuant to Section 2.1 are to be sold
in an underwritten offering, the investment banker or investment bankers and
manager or managers that will manage the offering will be selected by the
Holders of not less than a majority of the Registrable Securities covered by
such Registration Statement and will be reasonably acceptable to the Company. If
the managing underwriter or underwriters advise the Company and the Holders in
writing that in the opinion of such underwriter or underwriters the amount of
Registrable Securities proposed to be sold in such offering exceeds the amount
of securities that can be sold in such offering, there shall be included in such
underwritten offering the amount of Registrable Securities which in the opinion
of such underwriter or underwriters can be sold, and such amount shall be
allocated pro rata among the Holders of Registrable Securities on the basis of
the number of Registrable Securities requested to be included by each such
Holder and all Holders. The Holders of Registrable Securities sold in any such
offering shall pay all underwriting discounts and commissions of the underwriter
or underwriters pro rata; provided, however, that this Section 2.5 shall not
relieve the Company of its obligations under Section 2.7 hereof.
No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Holders of not less than a majority of the
Registrable Securities and (b) completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
2.6. Registration Procedures. In connection with any Registration
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Statement, the Company shall effect such registrations to permit the offering
and sale of the Registrable Securities in accordance with the intended method or
methods of disposition thereof, and pursuant thereto the Company shall as
expeditiously as possible:
(a) Prepare and file with the SEC as soon as practicable each such
Registration Statement and cause such Registration Statement to become effective
and remain effective as provided herein; provided, however, that before filing
any such Registration Statement or any Prospectus or any amendments or
supplements thereto (including documents that would be incorporated or deemed to
be incorporated therein by reference, including such documents filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act') that would be
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incorporated therein by reference), the Company shall afford promptly to the
Holders of the Registrable Securities covered by such Registration Statement,
their counsel and the managing underwriter or underwriters, if any, an
opportunity to review copies of all such documents proposed to be filed a
reasonable time prior to the proposed filing thereof and the Company shall give
reasonable consideration in good faith to any comments of such Holders, counsel
and underwriters; provided that the Company may discontinue any registration of
its
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securities giving rise to registration rights pursuant to Section 2.2 hereof at
any time prior to the effective date of the registration statement relating
thereto. The Company shall not file any Registration Statement or Prospectus or
any amendments or supplements thereto if the Holders of a majority of the
Registrable Securities covered by such Registration Statement, their counsel, or
the managing underwriter or underwriters, if any, shall reasonably object in
writing.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the time periods prescribed
hereby; cause the related Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and comply
with the provisions of the Securities Act, the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to it with respect to
the disposition of all securities covered by such Registration Statement as so
amended or in such prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities, their counsel and
the managing underwriter or underwriters, if any, promptly, and confirm such
notice in writing, (i) when a Prospectus or any prospectus supplement or post-
effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective
(including in such notice a written statement that any Holder may, upon request,
obtain, without charge, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules and
exhibits), (ii) of the issuance by the SEC of any stop order suspending the
effectiveness of such Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the initiation or
threatening of any proceedings for that purpose, (iii) if at any time when a
prospectus is required by the Securities Act to be delivered in connection with
sales of the Registrable Securities the representations and warranties of the
Company contained in any agreement (including any underwriting agreement)
contemplated by Section 2.6(m) below, to the knowledge of the Company, cease to
be true and correct in any material respect, (iv) of the receipt by the Company
of any notification with respect to (A) the suspension of the qualification or
exemption from qualification of the Registration Statement or any of the
Registrable Securities covered thereby for offer or sale in any jurisdiction, or
(B) the initiation or threatening of any proceeding for such purpose, (v) of the
happening of any event, the existence of any condition or information becoming
known to the Company that requires the making of any changes in such
Registration Statement, Prospectus or documents so that, in the case of such
Registration Statement, it will conform in all material respects with the
requirements of the Securities Act and it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading, and that in the case of
the Prospectus, it will conform in all material respects with the requirements
of the Securities Act and it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (vi) of the Company's reasonable
determination that a post-effective amendment to such Registration Statement
would be appropriate.
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(d) Use every reasonable effort to prevent the issuance of any order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Securities covered
thereby for sale in any jurisdiction, and, if any such order is issued, to
obtain the withdrawal of any such order at the earliest possible moment.
(e) If requested by the managing underwriter or underwriters, if any,
or the Holders of a majority of the Registrable Securities being sold in
connection with an underwriting offering, (i) promptly incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriter or underwriters, if any, or such Holders reasonably request
to be included therein to comply with applicable law and (ii) make all required
filings of such prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment.
(f) Furnish to each Holder of Registrable Securities who so requests
and to counsel for the Holders of Registrable Securities and each managing
underwriter, if any, without charge, upon request, one conformed copy of the
Registration Statement and each post-effective amendment thereto, including
financial statements and schedules, and of all documents incorporated or deemed
to be incorporated therein by reference and all exhibits (including exhibits
incorporated by reference).
(g) Deliver to each Holder of Registrable Securities, their counsel
and each underwriter if any, without charge, as many copies of each Prospectus
(including each form of prospectus) and each amendment or supplement thereto as
such persons may reasonably request but only for so long as the Company is
required to keep such Registration Statement effective; and, subject to the last
paragraph of this Section 2.6, the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the Holders of
Registrable Securities and the underwriter or underwriters or agents, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto.
(h) Prior to any offering of Registrable Securities, to use its best
efforts to register or qualify, and cooperate with the Holders of Registrable
Securities, the underwriter or underwriters, if any, and their respective
counsel in connection with the registration or qualification (or exemption from
such registration or qualification) of, such Registrable Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions within the
United States as may be required to permit the resale thereof by the Holders of
Registrable Securities, or as the managing underwriter or underwriters
reasonably request in writing; provided, however, that where Registrable
Securities are offered other than through an underwritten offering, the Company
agrees to cause its counsel to perform Blue Sky investigations and file
registrations and qualifications required to be filed pursuant to this Section
2.6(h); keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to be
effective hereunder and do any and all other acts or things reasonably necessary
or advisable to enable the disposition in such jurisdictions of the securities
covered thereby; provided, however, that the Company will not be
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required to (A) qualify generally to do business in any jurisdiction where it is
not then so qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
(C) become subject to taxation in any jurisdiction where it is not then so
subject.
(i) Cooperate with the Holders of Registrable Securities and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold, which certificates shall not bear any restrictive legends whatsoever
and shall be in a form eligible for deposit with The Depository Trust Company
("DTC"); and enable such Registrable Securities to be in such denominations and
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registered in such names as the managing underwriter or underwriters, if any, or
Holders may reasonably request at least two Business Days prior to any sale of
Registrable Securities in a firm commitment underwritten public offering.
(j) Use its best efforts to cause the Registrable Securities covered
by a Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be reasonably necessary to enable
the seller or sellers thereof or the underwriter or underwriters, if any, to
consummate the disposition of such Registrable Securities, except as may be
required solely as a consequence of the nature of such selling Holder's
business, in which case the Company will cooperate in all reasonable respects
with the filing of the Registration Statement and the granting of such
approvals; provided, however, that the Company will not be required to (A)
qualify generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or (C) become
subject to taxation in any jurisdiction where it is not then so subject.
(k) Upon the occurrence of any event contemplated by Section
2.6(c)(v) or 2.6(c)(vi) above, as promptly as practicable prepare a supplement
or post-effective amendment to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and, subject to Section 2.6(a) hereof, file such with the
SEC so that, as thereafter delivered to the purchasers of Registrable Securities
being sold thereunder, such Prospectus will not contain 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, in light of the circumstances under
which they were made, not misleading.
(l) Prior to the effective date of a Registration Statement, (i)
provide the registrar for the Registrable Securities with printed certificates
for such securities in a form eligible for deposit with DTC and (ii) provide a
CUSIP number for such securities.
(m) Enter into an underwriting agreement in form, scope and substance
as is customary in underwritten offerings and take all such other actions as are
reasonably requested by the managing underwriter or underwriters in order to
expedite or facilitate the registration or disposition of such Registrable
Securities in any underwritten offering to be made of the Registrable Securities
in accordance with this Agreement, and in such connection, (i) make such
representations and warranties to the underwriter or underwriters, with respect
to the business of the Company and the subsidiaries of the Company, and the
Registration Statement, Prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each
10
case, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings, and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriter or underwriters), addressed to the
underwriter or underwriters covering the matters customarily covered in opinions
requested in underwritten offerings with respect to secondary distributions and
such other matters as may be reasonably requested by underwriters; (iii) use its
best efforts to obtain "cold comfort" letters and updates thereof (which letters
and updates shall be reasonably satisfactory in form, scope and substance to the
managing underwriter or underwriters) from the independent certified public
accountants of the Company (and, if applicable, the subsidiaries of the Company)
and, to the extent reasonably practicable, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement, addressed to each of the
underwriters, such letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection with
underwritten offerings; and (iv) if an underwriting agreement is entered into,
the same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 3 hereof (or such other provisions and
procedures acceptable to Holders of a majority of Registrable Securities covered
by such Registration Statement and the managing underwriter or underwriters or
agents) with respect to all parties to be indemnified pursuant to said Section.
The above shall be done at each closing under such underwriting agreement, or as
and to the extent required thereunder.
(n) Make available for inspection by a representative of the Holders
of Registrable Securities being sold, any underwriter participating in any such
disposition of Registrable Securities, if any, and any attorney or accountant
retained by such representative of the Holders or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable business
----------
hours, all pertinent financial and other records, pertinent corporate documents
and properties of the Company and the subsidiaries of the Company, and cause the
officers, directors and employees of the Company and the subsidiaries of the
Company to supply all information in each case reasonably requested by any such
Inspector in connection with such Registration Statement; provided, however,
that any information that is designated in writing by the Company, in good
faith, as confidential at the time of delivery of such information, shall be
kept confidential by such Inspector and not used by such Inspector for any
purpose other than in connection with such Inspector's review of the
Registration Statement for such registration except to the extent (i) disclosure
of such information is required by court or administrative order, (ii)
disclosure of such information, in the written opinion of counsel to such
Inspector (a copy of which is furnished to the Company), is necessary to avoid
or correct a misstatement or omission of a material fact in the Registration
Statement, Prospectus or any supplement or post-effective amendment thereto or
disclosure is otherwise required by law, (iii) disclosure of such information,
in the written opinion of counsel for any such Inspector (a copy of which is
furnished to the Company), is necessary or advisable in connection with any
action, claim, suit or proceeding, directly or indirectly, involving or
potentially involving such Inspector and arising out of, based upon, relating to
or involving this Agreement or any of the transactions contemplated hereby or
arising hereunder, or (iv) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard by such
Inspector; without limiting the foregoing, no such information shall be used by
such Inspector as the basis
11
for any market transactions in securities of the Company or the subsidiaries of
the Company in violation of applicable law. Each selling Holder of such
Registrable Securities agrees that information obtained by it as a result of
such inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Company or of any of
its Affiliates unless and until such is made generally available to the public
and such information will not be used by such Holder for any other purpose. Each
selling Holder of such Registrable Securities further agrees that it will, upon
learning that disclosure of such information is sought in a court of competent
jurisdiction, give prompt notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action to prevent disclosure of the
information deemed confidential.
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than forty-
five (45) days after the end of any 12-month period (or ninety (90) days after
the end of any 12-month period if such period is a fiscal year) (i) commencing
at the end of any fiscal quarter in which Registrable Securities are sold to an
underwriter or to underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to an underwriter or to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the Company
after the effective date of the relevant Registration Statement, which
statements shall cover said 12-month periods.
(p) Use its best efforts to cause all Registrable Securities relating
to such Registration Statement to be listed on each securities exchange, if any,
on which similar securities issued by the Company are then listed.
Each selling Holder of Registrable Securities as to which any
registration is being effected agrees, as a condition to the registration
obligations with respect to such Holder provided herein, to furnish promptly to
the Company such information regarding such selling Holder and the distribution
of such Registrable Securities as the Company may, from time to time, reasonably
request in writing to comply with the Securities Act and other applicable law.
The Company may exclude from such registration the Registrable Securities of any
selling Holder who fails to furnish such information within a reasonable time
after receiving such request. If the identity of a selling Holder of
Registrable Securities is to be disclosed in the Registration Statement, such
seller shall be permitted to include all information regarding such selling
Holder as it shall reasonably request.
Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 2.6(c)(ii), 2.6(c)(iv),
2.6(c)(v), or 2.6(c)(vi), such Holder will forthwith discontinue disposition of
such Registrable Securities covered by the Registration Statement or Prospectus
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 2.6(k), or until it is advised in writing
(the "Advice") by the Company that the use of the applicable prospectus may be
------
resumed, and has received copies of any amendments or supplements thereto, and,
if so directed by the Company, such Holder will deliver to the Company all
copies, other than permanent file copies, then in such Holder's possession, of
the Prospectus covering such Registrable Securities current at the
12
time of receipt of such notice. In the event the Company shall give any such
notice, the period of time for which a Registration Statement is required
hereunder to be effective shall be extended by the number of days during such
periods from and including the date of the giving of such notice to and
including the date when each selling Holder of Registrable Securities covered by
such Registration Statement shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 2.6(k) or (y) the
Advice.
2.7. Registration Expenses. All fees and expenses incident to the
---------------------
performance of or compliance with the provisions of Section 2 of this Agreement
by the Company shall be borne by the Company whether or not any Registration
Statement is filed or becomes effective, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the National Association of
Securities Dealers Inc. (the "NASD") in connection with an underwritten offering
----
and (B) fees and expenses of compliance with state securities or Blue Sky laws
(including, without limitation, fees and disbursements of counsel for the
underwriter or underwriters in connection with Blue Sky qualifications of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as provided in
Section 2.6(h)), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities in a form eligible for
deposit with DTC and of printing prospectuses if the printing of prospectuses is
requested by the managing underwriter or underwriters, if any, or, in respect of
Registrable Securities, by the Holders of a majority of Registrable Securities
included in any Registration Statement), (iii) reasonable fees and disbursements
of all independent certified public accountants referred to in Section
2.6(m)(iii) (including, without limitation, the reasonable expenses of any
special audit and "cold comfort" letters required by or incident to such
performance), (iv) the fees and expenses of any "qualified independent
underwriter" or other independent appraiser participating in an offering
pursuant to Schedule E to the By-laws of the NASD, (v) liability insurance under
the Securities Act, if the Company so desires such insurance, (vi) fees and
expenses of all attorneys, advisors, appraisers and other persons retained by
the Company or any subsidiary of the Company, (vii) internal expenses of the
Company and the subsidiaries of the Company (including, without limitation, all
salaries and expenses of officers and employees of the Company and the
subsidiaries of the Company performing legal or accounting duties), (viii) the
expense of any annual audit, (ix) the fees and expenses incurred in connection
with the listing of the securities to be registered on any securities exchange
and (x) the expenses relating to printing, word processing and distributing all
Registration Statements, underwriting agreements, securities sales agreements,
indentures and any other documents necessary in order to comply with this
Agreement. All underwriting discounts and selling commissions applicable to the
sale of the Registrable Securities shall be (1) borne by the participating
sellers in proportion to the number of shares sold by each or (2) by such
participating sellers (including the Company if it shall be a participating
seller) as they may otherwise agree.
In connection with any Registration Statement hereunder or any
amendment thereto, the Company shall reimburse the Holders of the Registrable
Securities being registered in such registration for the reasonable out-of-
pocket expenses of such Holders incurred in connection therewith including,
without limitation, the reasonable fees and disbursements of not more than one
counsel (together with appropriate local counsel) chosen by the Holders of a
majority of the Registrable Securities to be included in such Registration
Statement.
13
2.8. Rule 144. The Company covenants that it will file the reports
--------
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder in a timely manner and, if
at any time the Company is not required to file such reports, it will, upon the
reasonable request of any Holder of Registrable Securities, make publicly
available other information so long as necessary to permit sales pursuant to
Rule 144 and Rule 144A under the Securities Act. The Company further covenants
that it will take such further action as any Holder of Registrable Securities
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
and Rube 144A under the Securities Act, as such Rules may be amended from time
to time, or (b) any similar rule or regulation hereafter adopted by the SEC.
Upon the request of any Holder of Registrable Securities, the Company will
deliver to such Holder a written statement as to whether it has complied with
such information requirements.
SECTION 3. INDEMNIFICATION
---------------
3.1. Indemnification by the Company. The Company agrees to indemnify
------------------------------
and hold harmless each Holder and each Person, if any, who controls any Holder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities, joint or several, to which such Holder or controlling Person may
become subject, under the Securities Act or otherwise, caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or any Prospectus or any amendment or supplement thereto
or any preliminary prospectus, caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading, and will reimburse each Holder for any legal or other
expenses reasonably incurred by such Holder in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company will not be liable insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
furnished in writing to the Company by any Holder expressly for use therein; and
provided further, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission in the Prospectus, if such untrue statement or alleged untrue
statement or omission or alleged omission is corrected in an amendment or
supplement to the Prospectus and the selling Holder of Registrable Securities
thereafter fails to deliver such Prospectus as so amended or supplemented prior
to or concurrently with the sale of Registrable Securities to the person
asserting such loss, claim, damage, or liability after the Company had furnished
such selling Holder with a sufficient number of copies of the same or if the
selling Holder received written notice from the Company of the existence of such
untrue statement or alleged untrue statement or omission or alleged omission and
the selling Holder continued to dispose of Registrable Securities prior to the
time of the receipt of either (A) an amended or supplemented Prospectus which
corrected such untrue statement or omission or (B) a notice from the Company
that the use of the existing Prospectus may be resumed. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Holder or any Person controlling such Holder within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act.
14
3.2. Indemnification by Holder of Registrable Securities. Each Holder
---------------------------------------------------
agrees, severally and not jointly, to indemnify and hold harmless the Company,
the Company's directors, the Company's officers who sign the Registration
Statement and any person controlling the Company to the same extent as the
foregoing indemnity from the Company to each Holder set forth in Section 3.1,
but only with reference to, and in conformity with, information relating to such
Holder furnished in writing by such Holder expressly for use in a Registration
Statement, the Prospectus or any preliminary prospectus, or any amendment or
supplement thereto and will reimburse any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any such director, officer or Person
controlling the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and shall survive the transfer
of such securities by such Holder.
3.3. Conduct of Indemnification Proceeding. In case any proceeding
-------------------------------------
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to either Section
3.1 or Section 3.2, such Person (the "indemnified party") shall promptly notify
-----------------
the Person against whom such indemnity may be sought (the "indemnifying party")
------------------
in writing; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than as provided above. In case any such proceeding is instituted
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall have the right to retain
counsel reasonably satisfactory to such indemnified party to defend against such
proceeding and shall pay the reasonable fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party has not retained counsel to defend such proceeding
within a reasonable period of time. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
firm for all such indemnified parties. Such firm shall be designated in writing
by the Holders of a majority of the Registrable Securities included in such
Registration Statement in the case of parties indemnified pursuant to Section
3.1 and by the Company in the case of parties indemnified pursuant to Section
3.2. All fees and expenses which an indemnified party is entitled to receive
from an indemnifying party under this Section 3 shall be reimbursed as they are
incurred. No indemnifying party shall, without prior written consent of the
indemnified party (which shall not be unreasonably withheld or delayed), effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
15
3.4. Contribution. If the indemnification provided for in Section
------------
3.1 or Section 3.2 is unavailable as a matter of law to an indemnified party in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under either such Section, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the Company on the one hand and of the Holders of Registrable Securities
covered by the Registration Statement in question on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the Company, or by the
Holders of Registrable Securities covered by the Registration Statement in
question and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 3 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph of this Section 3.4 shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 3, no Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities sold by such Holder and
distributed to the public were offered to the public exceeds the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
3.5. Other Indemnities. The obligations of the Company and of each
-----------------
of the Holders under this Section 3 shall be in addition to any liability which
the Company or which any of the Holders may otherwise have.
SECTION 4. MISCELLANEOUS
-------------
4.1. Remedies. In the event of a breach by the Company of any of its
--------
obligations under this Agreement, each Holder of Registrable Securities, in
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, will be entitled to specific performance of
its rights under this Agreement. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of any of the provisions of this Agreement.
4.2. No Inconsistent Agreements. The Company shall not, after the
--------------------------
date of this Agreement, enter into any agreement with respect to any of its
securities that materially adversely affects the rights granted to the Holders
of Registrable Securities in this Agreement or
16
otherwise conflicts with the provisions hereof. The Company will not enter into
any agreement with respect to any of its securities which will grant to any
Person "piggyback" rights with respect to any Registration Statement filed
pursuant to Section 2.1 of this Agreement.
4.3. Amendments and Waivers. The provisions of this Agreement may
----------------------
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the Company has obtained the
prior written consent of Holders of at least a majority of the then issued or
issuable Registrable Securities. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other
Holders of Registrable Securities may be given by Holders of at least a majority
of the Registrable Securities being sold by such Holders pursuant to such
Registration Statement; provided, however, that the provisions of this sentence
may not be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence. This Section 4.3 may not be
amended, modified or supplemented, and waivers or consents to departures
therefrom may not be given at any time without the consent of the Company, on
the one hand, and the consent of each of the Holders, on the other hand.
4.4. Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery or next-day air
courier:
(i) If to a Holder of Registrable Securities, at the most current
address given by such Holder to the Company in accordance with the
provisions of this Section 4.4, which address initially is, with respect to
each Holder, the address set forth on the signature page attached hereto;
and
(ii) if to the Company, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Chief Financial Officer, with a copy to ▇▇▇▇▇ & ▇▇▇▇▇▇▇
L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
4.5. Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Registrable Securities.
4.6. Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same Agreement.
4.7. Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
17
4.8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF [NEW YORK] IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
4.9. Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
4.10. Entire Agreement. This Agreement, together with the Bridge Loan
----------------
Agreement, is intended by the parties as a final expression of their agreement,
and is intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. This Agreement and the Bridge Loan Agreement supersede all
prior agreements and understandings between the parties with respect to such
subject matter.
4.11. Attorneys' Fees. As between the parties to this Agreement, in
---------------
any action or proceeding brought to enforce any provision of this Agreement, or
where any provision hereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys' fees in addition to its
costs and expenses and any other available remedy.
4.12. Securities Held by the Company or Its Subsidiaries. Whenever the
--------------------------------------------------
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
by any of its Subsidiaries shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
4.13. Termination. This Agreement shall terminate upon the earlier of
-----------
(a) the release of the Warrants to the Company pursuant to the terms of the
Escrow Agreement, dated as of August 2, 1999, among the Borrower, Capital, the
Company, the Escrow Agent, the Administrative Agent and the Lenders set forth on
the signature pages thereto and (b) the date upon which the Registrable
Securities are no longer Transfer Restricted Securities.
18
[Signature page follows]
19
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
CREDITRUST CORPORATION
By:_______________________________________________
Name:
Title:
U.S. BANCORP INVESTMENTS, INC.
By:_______________________________________________
Name:
Title:
Address:
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ & CO., INC.
By:_______________________________________________
Name:
Title:
Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
WHIPPOORWILL ASSOCIATES, INC.
By:_______________________________________________
Name:
Title:
Address:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EVEREST CAPITAL
By:_______________________________________________
Name:
Title:
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
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[New Lender]
By:_______________________________________________
Name:
Title:
Address:
[address]
