EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of March 12, 2002 (the
"Agreement") by and between XXXX FINANCE CO, LLC, a Delaware limited liability
company ("XXXX") and HOLIDAY RV SUPERSTORES, INC., a Delaware corporation (the
"Company").
W I T N E S S E T H:
WHEREAS pursuant to that certain Loan and Security Agreement, dated the
date hereof, by and between the Company and XXXX (the "Loan Agreement"), XXXX
has agreed to loan the Company the sum of $1,600,000 which loan is convertible
into shares (the "Common Shares") of the Company's Common Stock, par value $0.01
per share (the "Common Stock") in accordance with the provisions set forth
therein;
WHEREAS pursuant to the Loan Agreement, the Company issued to XXXX a
warrant (the "Warrant") to purchase up to an aggregate of 1,800,000 shares (the
"Common Shares") of Common Stock, subject to the terms and conditions set forth
therein;
WHEREAS pursuant to the Loan Agreement, XXXX has the right to convert
the indebtedness of the Company to XXXX under the promissory note issued by the
Company to XXXX into Common Shares; and
WHEREAS pursuant to the Loan Agreement, the Company may elect to pay
certain interest and fees payable under the Loan Agreement in Common Shares.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the Loan
Agreement and this Agreement, the Company and XXXX agree as follows:
1. CERTAIN DEFINITIONS. Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Loan Agreement. As used
in this Agreement, the following terms shall have the following respective
meanings:
"Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
under the Exchange Act.
"Associate" shall have the meaning ascribed to such term in Rule 12b-2
under the Exchange Act.
"Closing" and "Closing Date" shall mean the funding of the loan
contemplated by the Loan Agreement and the date on which such funding occurs.
"Commission" or "SEC" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, and the
rules and regulations promulgated thereunder, as the same may be amended from
time to time.
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"Holder" and "Holders" shall include XXXX and any transferee or
transferees of the Warrant, Common Shares or Registrable Securities which have
not been sold to the public to whom the registration rights conferred by this
Agreement have been transferred in compliance with this Agreement.
"Person" shall mean any individual, partnership, corporation, trust or
other entity of any nature whatsoever.
The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registrable Securities" shall mean: (i) the Common Shares or other
securities issued or issuable to each Holder or its permitted transferee or
designee upon exercise of the Warrant; (ii) the Common Shares issued to each
Holder pursuant to Section 2.02, 2.05 or 2.07 of the Loan Agreement, (iii)
securities issued or issuable upon any stock split, stock dividend,
recapitalization or similar event with respect to such Common Shares; and (iv)
any other security issued as a dividend or other distribution with respect to,
in exchange for or in replacement of the securities referred to in the preceding
clauses. For purposes of this Agreement, a Person will be deemed to be a holder
of Registrable Securities whenever such Person has the then-existing right to
acquire such Registrable Securities, whether or not such acquisition actually
has been effected. Notwithstanding the foregoing, Registrable Securities shall
not include any securities sold by a person to the public either pursuant to a
registration statement or Rule 144 or sold in a private transaction in which the
transferor's rights under this Agreement are not assigned.
"Registration Expenses" shall mean all expenses incurred in connection
with the Company's performance of or compliance with this Agreement, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, fees and disbursements of all
independent certified public accountants for the Company, blue sky fees and
expenses, any fees and disbursements of underwriters (excluding discounts and
commissions), the fees and expenses of any special experts retained in
connection with the registration, and the reasonable fees and disbursements of,
in each such registration, one counsel chosen by the Holders of at least a
majority of the Registrable Securities, but excluding underwriting discounts,
commissions and transfer taxes, if any, and fees and disbursements of counsel to
Holders in addition to the one counsel per registration to be paid for by the
Company. As used herein, the expression "Registration Expenses" also includes
all internal expenses of the Company (including, but not limited to, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance obtained by the Company, the expense and fees
for listing the securities to be registered on any Securities Exchange, expenses
incurred in obtaining any comfort letters, and all fees and expenses associated
with filings required to be made with the NASD.
"Registration Statement" shall have the meaning set forth in Section
2(a) herein.
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"Regulation D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.
"Securities" means the Loan Agreement, the Warrant and the Common
Shares.
"Securities Act" or "Act" shall mean the Securities Act of 1933, and the
rules and regulations promulgated thereunder, as amended.
"Selling Expenses" shall mean all underwriting discounts and commissions
applicable to the sale of Registrable Securities and all fees and disbursements
of counsel for Holders not included within "Registration Expenses".
2. INCIDENTAL REGISTRATIONS.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. Each time the
Company proposes to register its Common Stock under the Securities Act
(other than a registration on Form S-4 or S-8, or any successor or other
forms promulgated for similar purposes), whether or not for sale for its
own account, pursuant to a registration statement ("Registration
Statement") on which it is permissible to register Registrable
Securities for sale to the public under the Securities Act, it will give
prompt written notice (which shall in any event be given not less than
30 days prior to the effective date of the Registration Statement) to
all Holders of its intention to do so and of the Holders' rights under
this Section 2. Upon the written request of any Holder made within 30
days after the receipt of any such notice (which request shall specify
the Registrable Securities intended to be disposed of by such Holder),
the Company will use its reasonable efforts to effect the registration
under the Securities Act of all Registrable Securities which the Company
has been so requested to register by the Holders thereof; provided that,
(i) if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the
Company shall determine for any reason not to proceed with the proposed
registration, the Company may, at its election, give written notice of
such determination to each Holder and thereupon shall be relieved of its
obligation to register any Registrable Securities in connection with
such registration (but not from its obligation to pay the Registration
Expenses in connection therewith), and (ii) if such registration
involves an underwritten offering by the Company (underwritten, at least
in part, by Persons who are not Affiliates or Associates of the Company
or any Holder), all Holders requesting to have Registrable Securities
included in the Company's registration must sell their Registrable
Securities to such underwriters who shall have been selected by the
Company on the same terms and conditions as apply to the Company, with
such differences, including any with respect to indemnification and
contribution, as may be customary or appropriate in combined primary and
secondary offerings.
(b) EXPENSES. The Company will pay all Registration
Expenses in connection with each registration of Registrable Securities
requested pursuant to this Section 2, regardless of whether such
registration statement becomes effective, and each Holder shall pay all
Selling Expenses and transfer taxes, if any, relating to the sale or
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disposition of such Holder's Registrable Securities pursuant to a
Registration Statement effected pursuant to this Section 2.
(c) PRIORITY IN INCIDENTAL PRIMARY REGISTRATIONS. If a
registration pursuant to this Section 2 involves an underwritten
offering by the Company (as described in Section 2(a)(ii)) and the
managing underwriter with respect to such offering advises the Company
in writing that, in its opinion, the number of securities (including all
Registrable Securities) which the Company, the Holders and any other
persons intend to include in such registration exceeds the largest
number of securities which can be sold in such offering without having
an adverse effect on the offering of securities as contemplated by the
Company (including the price at which the Company proposes to sell such
securities), then the Company will include in such registration (i)
first, all the securities the Company proposes to sell for its own
account, (ii) second, the number of Registrable Securities which the
Holders have requested to be included in such registration and which, in
the opinion of such managing underwriter, can be sold without having the
adverse effect referred to above, such reduced number of Registrable
Securities to be allocated pro rata among all requesting Holders on the
basis of the relative number of shares of Registrable Securities then
held by each such Holder (provided that any shares thereby allocated to
any such Holder that exceed such Holder's request will be reallocated
among the remaining requesting Holders in like manner).
(d) PRIORITY IN INCIDENTAL SECONDARY REGISTRATIONS. If a
registration pursuant to this Section 2 involves an underwritten
secondary registration 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 the
registration exceeds the largest number of securities which can be sold
in such offering without having an adverse effect on the offering of
such securities (including the price at which such securities are
proposed to be sold), the Company will include in such registration
first, the securities requested to be included therein by the Holders
requesting such registration and the Registrable Shares requested to be
included in such registration, pro rata among the holders of such
securities on the basis of the relative number of shares of Registrable
Securities which are owned by such holders, and second, other securities
requested to be included in such registration.
(e) SELECTION OF UNDERWRITERS. In connection with any
registration pursuant to this Section 2, Holders holding at least a
majority of the Registrable Securities requested to be registered shall
have the right to select the managing underwriters (subject to the
approval of the Company which shall not be unreasonably withheld or
delayed) to administer any offering of the Company's securities in which
the Company does not participate, and the Company will have such right
in any offering in which it participates.
(f) CUSTODY AGREEMENT AND POWER OF ATTORNEY. Upon the
Company's request, any Holder will execute and deliver a custody
agreement and power of attorney in form and substance reasonably
satisfactory to the Company with respect to the shares of Common Stock
to be registered pursuant to this Section 2 (a "Custody Agreement and
Power of Attorney"). The Custody Agreement and Power of
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Attorney will provide, among other things, that the Holder will deliver
to and deposit in custody with the custodian and attorney-in-fact named
therein a certificate or certificates representing such shares of Common
Stock (duly endorsed in blank by the registered owner or owners thereof
or accompanied by duly executed stock powers in blank) and irrevocably
appoint said custodian and attorney-in-fact as the Holder's agent and
attorney-in-fact with full power and authority to act under the Custody
Agreement and Power of Attorney on the Holder's behalf with respect to
the matters specified therein.
(g) OTHER AGREEMENTS. Each Holder agrees that it will
execute such other agreements as the Company may reasonably request to
further accomplish the purposes of this Section 2.
3. MANDATORY REGISTRATION.
(a) REGISTRATION STATEMENT. The Company shall prepare and
file with the SEC, by no later than December 1, 2002, a Registration
Statement on Form S-3 or similar short-form registration statement to
register for resale by the Holders all of the Registrable Securities.
The Company will use its reasonable efforts to cause such Registration
Statement to be declared effective on a date which is no later than the
earlier of (x) five (5) days after notice by the SEC that it may be
declared effective or (y) sixty (60) days after the filing of such
Registration Statement. The Company will use its reasonable efforts to
cause such Registration Statement to remain effective with respect to
particular Securities until the earlier of the following: (w) such
Securities shall have been disposed of in accordance with such
Registration Statement, (x) such Securities shall have been distributed
to the public pursuant to Rule 144 (or any successor provision) under
the Securities Act or may be so distributed within any three month
period, (y) such Securities shall have been otherwise transferred, new
certificates for them shall have been delivered by the Company and
subsequent disposition of them shall not require registration or
qualification of them under the Securities Act or any similar state law
then in force, or (z) such Securities shall have ceased to be
outstanding. The registration effected pursuant to this Section 3(a) is
referred to herein as the "Mandatory Registration."
(b) PAYMENT OF EXPENSES FOR MANDATORY REGISTRATION. The
Company will pay all Registration Expenses in connection with the
Mandatory Registration, regardless of whether the registration statement
becomes effective, and each Holder shall pay all Selling Expenses and
transfer taxes, if any, relating to the sale or disposition of such
Holder's Registrable Securities pursuant to the Mandatory Registration.
(c) PRIORITY. If the Mandatory Registration is an
underwritten public offering and the managing underwriters advise the
Company in writing that in their opinion the inclusion of the number of
Registrable Securities and other securities requested to be included (by
the Company or others) creates a substantial risk that the price per
Common Share will be reduced, the Company will include in such
registration, prior to the inclusion of any securities which are not
Registrable Securities, the number of Registrable Securities requested
to be included which in the opinion of such underwriters
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can be sold without creating such a risk, pro rata among the respective
Holders of Registrable Securities on the basis of the number of
Registrable Securities owned by such Holders, with further successive
pro rata allocations among the Holders of Registrable Securities if any
such holder of Registrable Securities has requested the registration of
less than all such Registrable Securities it is entitled to register.
(d) RESTRICTIONS. The Company may postpone or suspend for
up to 90 days the filing or the effectiveness (but not the preparation)
of a registration statement for the Mandatory Registration if the Board
of Directors of the Company reasonably and in good faith determines that
such filing or effectiveness would require a disclosure of a material
fact that would have a material adverse effect on the Company or any
plan by the Company to engage in any acquisition of assets (other than
in the ordinary course of business) or any merger, consolidation, tender
offer or other significant transaction. In order to postpone or suspend
the filing or effectiveness of a registration statement pursuant to this
Section 3(d), the Company shall promptly (but in any event within ten
days), upon determining to seek such postponement or suspension, deliver
to each Holder of Registrable Securities a certificate signed by an
executive officer of the Company stating that the Company is postponing
such filing pursuant to this Section 3(d) and a general statement of the
reason for such postponement and an approximation of the anticipated
delay.
(e) SELECTION OF UNDERWRITERS. The Holders of at least a
majority of the Registrable Securities included in the Mandatory
Registration shall have the right to select the investment banker(s) and
manager(s) to administer the offering, subject to the Company's approval
which will not be unreasonably withheld or delayed.
(f) OTHER AGREEMENTS. Each Holder agrees that it will
execute such other agreements as the Company may reasonably request to
further accomplish the purposes of this Section 3.
4. HOLDBACK AGREEMENTS.
(a) HOLDERS' AGREEMENTS. Each Holder agrees not to effect
any public sale or distribution of equity securities of the Company, or
any securities convertible into or exchangeable or exercisable for such
securities or make any demand for registration under Sections 2 hereof,
during the seven days prior to, and during the 90 days following, the
effective date of any underwritten registration pursuant to Section 2 in
which Registrable Securities are included (except as part of such
underwritten registration), unless the underwriters managing the
registered public offering otherwise agree. Nothing herein shall prevent
a Holder that is a partnership from making a distribution of Registrable
Securities to its partners, a Holder that is a trust from making a
distribution of Registrable Securities to its beneficiaries or a Holder
that is a company from making a distribution of Registrable Securities
to its stockholders, provided that the transferees of such Registrable
Securities agree to be bound by the provisions of this Agreement to the
extent the transferor would be so bound.
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(b) COMPANY'S AGREEMENTS. The Company agrees (i) not to
effect any public sale or distribution of its equity securities, or any
securities convertible into or exchangeable or exercisable for such
securities, during the seven days prior to, and during the 90 days
following, the effective date of any underwritten registration pursuant
to Section 2 (except as part of such underwritten registration or
pursuant to registrations on Form S-8 or S-4 or any successor forms),
unless the underwriters managing the registered public offering
otherwise agree, (ii) to use commercially reasonable efforts to cause
each holder of at least 5% (on a fully diluted basis) of its equity
securities, or any securities convertible into or exchangeable or
exercisable for such securities to agree not to effect any public sale
or distribution of any such securities during such period (except as
part of such underwritten registration, if otherwise permitted), unless
the underwriters managing the registered public offering otherwise
agree, and (iii) if requested by the underwriters managing the
registered public offering, to use all reasonable efforts to cause each
other holder of its equity securities, or any securities convertible
into or exchangeable or exercisable for such securities, purchased from
the Company at any time (other than in a registered public offering) to
agree not to effect any public sale or distribution of any such
securities during such period (except as part of such underwritten
registration, if otherwise permitted), unless the underwriters managing
the registered public offering otherwise agree.
5. REGISTRATION PROCEDURES.
If and whenever the Company is required to use its reasonable efforts to
effect or cause the registration of any Registrable Securities under the
Securities Act as provided in this Agreement, the Company will, as expeditiously
as possible:
(a) furnish to each Holder of such Registrable Securities
such number of copies of such registration statement and of each
amendment and supplement thereto (in each case including all exhibits),
such number of copies of the prospectus included in such registration
statement (including each preliminary prospectus and summary prospectus
and prospectus supplement, as applicable), in conformity with the
requirements of the Securities Act, and such other documents as such
Holder may reasonably request in order to facilitate the disposition of
the Registrable Securities by such Holder;
(b) use its reasonable efforts to register or qualify such
Registrable Securities covered by such registration statement under such
other securities or blue sky laws of such jurisdictions as each Holder
shall reasonably request, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in such jurisdictions of the Registrable
Securities owned by such Holder, except that the Company shall not for
any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction where, but for the requirements
of this Section 5(b), it would not be obligated to be so qualified, to
subject itself to taxation in any such jurisdiction, or to consent to
general service of process in any such jurisdiction;
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(c) use its reasonable efforts to cause such Registrable
Securities covered by such registration statement to be registered with
or approved by such other governmental agencies or authorities as may be
necessary to enable the Holder or Holders thereof to consummate the
disposition of such Registrable Securities;
(d) notify each Holder of any such Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of
the Company's becoming aware that the prospectus included in such
registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing, and at the
request of any such Holder, prepare and furnish to such Holder a
reasonable number of copies of an amended or supplemental prospectus as
may be necessary so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
(e) otherwise use its reasonable efforts to comply with
all applicable rules and regulations of the SEC, and make available to
its security holders, as soon as reasonably practicable (but not more
than eighteen months) after the effective date of the registration
statement, an earnings statement which shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations
promulgated thereunder;
(f) enter into such customary agreements (including an
underwriting agreement in customary form) and take such other actions as
sellers of a majority of shares of such Registrable Securities or the
underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(g) make available for inspection by representatives of
the Holders of the Registrable Securities covered by such registration
statement, by any underwriter participating in any disposition to be
effected pursuant to such registration statement and by any attorney,
accountant or other agent retained by such Holders or any such
underwriter, all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause all of the
Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement.
(h) cause all such Registrable Securities to be (i) listed
on each securities exchange on which similar securities issued by the
Company are then listed, (ii) authorized to be quoted and/or listed (to
the extent applicable) on the NASD Automated Quotation System or The
Nasdaq National Market if the Registrable Securities so qualify, or
(iii) if no similar securities issued by the Company are then listed on
a securities exchange, a securities exchange selected by the holders of
at least a majority of the Registrable Securities included in such
registration;
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(i) at least forty eight (48) hours prior to the filing of
any registration statement or prospectus, or any amendment or supplement
to such registration statement or prospectus, furnish a copy thereof to
each seller of such Registrable Securities and refrain from filing any
such registration statement, prospectus, amendment or supplement to
which counsel selected by the holders of at least a majority of the
Registrable Securities being registered shall have reasonably objected
on the grounds that such document does not comply in all material
respects with the requirements of the Securities Act or the rules and
regulations thereunder, unless, in the case of an amendment or
supplement, in the opinion of counsel for the Company the filing of such
amendment or supplement is reasonably necessary to protect the Company
from any liabilities under any applicable federal or state law and such
filing will not violate applicable laws;
(j) at the request of any seller of such Registrable
Securities in connection with an underwritten offering, furnish on the
date or dates provided for in the underwriting agreement: (i) an opinion
of counsel, addressed to the underwriters and the sellers of Registrable
Securities, covering such matters as such underwriters and sellers may
reasonably request, including such matters as are customarily furnished
in connection with an underwritten offering and (ii) a letter or letters
from the independent certified public accountants of the Company
addressed to the underwriters and the sellers of Registrable Securities,
covering such matters as such underwriters and sellers may reasonably
request, in which letter(s) such accountants shall state, without
limiting the generality of the foregoing, that they are independent
certified public accountants within the meaning of the Securities Act
and that in their opinion the financial statements and other financial
data of the Company included in the registration statement, the
prospectus(es), or any amendment or supplement thereto, comply in all
material respects with the applicable accounting requirements of the
Securities Act;
(k) make generally available to the Company's
securityholders an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act no later than thirty days after the
end of the twelve month period beginning with the first day of the
Company's first fiscal quarter commencing after the effective date of a
registration statement, which earnings statement shall cover such twelve
month period, and which requirement will be deemed to be satisfied if
the Company timely files complete and accurate information on Forms
10-Q, 10-K, and 8-K under the Exchange Act and otherwise complies with
Rule 158 under the Securities Act;
(l) if requested by the managing underwriter or any seller
promptly incorporate in a prospectus supplement or post-effective
amendment such information as the managing underwriter or any seller
reasonably requests to be included therein, including, without
limitation, with respect to the Registrable Securities being sold by
such seller, the purchase price being paid therefor by the underwriters
and with respect to any other terms of the underwritten offering of the
Registrable Securities to be sold in such offering, and promptly make
all required filings of such prospectus supplement or post-effective
amendment;
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(m) cooperate with each seller and each underwriter
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be
made with the NASD;
(n) during the period when the prospectus is required to
be delivered under the Securities Act, promptly file all documents
required to be filed with the Commission pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act; and
(o) notify each seller of Registrable Securities promptly
of any request by the Commission for the amending or supplementing of
such registration statement or prospectus or for additional information.
The Company may require each Holder of Registrable Securities as to
which any registration is being effected to furnish the Company with such
information regarding such Holder and pertinent to the disclosure requirements
relating to the registration and the distribution of such securities as the
Company may from time to time reasonably request in writing.
Each Holder of Registrable Securities agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 5(d), such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 5(d), and, if so directed by the
Company, such Holder will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such Holder's possession, of
the prospectus covering such Registrable Securities current at the time of
receipt of such notice.
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any
registration of any securities of the Company under the Securities Act
pursuant to Section 2 or Section 3, the Company hereby indemnifies and
agrees to hold harmless, to the extent permitted by law, each Holder of
Registrable Securities covered by such registration statement, each
affiliate of such Holder and their respective directors and officers or
general and limited partners (and the directors, officers, affiliates
and controlling Persons thereof), each other Person who participates as
an underwriter in the offering or sale of such securities and each other
Person, if any, who controls such Holder or any such underwriter within
the meaning of the Securities Act (collectively, the "Indemnified
Parties"), against any and all losses, claims, damages or liabilities,
joint or several, and expenses to which such Indemnified Party may
become subject under the Securities Act, common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof, whether or not such Indemnified Party is
a party thereto) arise out of or are based upon (a) any untrue statement
or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under
the Securities Act, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement thereto, or (b) any
omission or alleged omission to state therein a material fact required
to be stated
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therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing, and the Company will
reimburse such Indemnified Party for any legal or other expenses
reasonably incurred by it in connection with investigating or defending
any such loss, claim, liability, action or proceeding; provided, that
the Company shall not be liable to any Indemnified Party in any such
case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises solely out of
or is based solely upon any untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, in
any such preliminary, final or summary prospectus, or any amendment or
supplement thereto in reliance upon and in strict conformity with
written information with respect to such Indemnified Party furnished to
the Company by such Indemnified Party expressly for use in the
preparation thereof; and provided, further, that the Company will not be
liable to any Person who participates as an underwriter in the offering
or sale of Registrable Securities or any other Person, if any, who
controls such underwriter within the meaning of the Securities Act,
under the indemnity agreement in this Section 6(a) with respect to any
preliminary prospectus or the final prospectus or the final prospectus
as amended or supplemented, as the case may be, to the extent that any
such loss, claim, damage or liability of such underwriter or controlling
Person results from the fact that such underwriter sold Registrable
Securities to a person to whom there was not sent or given, at or prior
to the written confirmation of such sale, a copy of the final prospectus
(including any documents incorporated by reference therein) or of the
final prospectus as then amended or supplemented (including any
documents incorporated by reference therein), whichever is most recent,
if the Company has previously furnished to the Indemnified Party
sufficient copies thereof for purposes of such delivery. Such indemnity
shall remain in full force and effect regardless of any investigation
made by or on behalf of such Holder or any Indemnified Party and shall
survive the transfer of such securities by such Holder.
(b) INDEMNIFICATION BY THE HOLDERS AND UNDERWRITERS. The
Company may require, as a condition to including any Registrable
Securities in any registration statement filed in accordance with
Section 2 herein, that the Company shall have received an undertaking
reasonably satisfactory to it from the prospective Holder of such
Registrable Securities or any underwriter to indemnify and hold harmless
(in the same manner and to the same extent as set forth in Section 6(a))
the Company, all other prospective Holders or any underwriter, as the
case may be, and any of their respective affiliates, directors, officers
and controlling Persons, with respect to any statement or alleged
statement in or omission or alleged omission from such registration
statement, any preliminary, final or summary prospectus contained
therein, or any amendment or supplement, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and
in conformity with written information with respect to such Holder or
underwriter furnished to the Company by such Holder or underwriter
expressly for use in the preparation of such registration statement,
preliminary, final or summary prospectus or amendment or supplement, or
a document incorporated by reference into any of the foregoing, but only
to the extent such untrue statement or omission is contained in any
information so furnished in writing by such Holder specifically for
inclusion in the registration statement or prospectus and provided,
further, that such liability will be limited to the net amount received
by such seller from the sale of the
11
Registrable Securities pursuant to such registration statement and
provided, further, that such seller of Registrable Securities shall not
be liable in any such case to the extent that, prior to the filing of
any such registration statement, prospectus, amendment thereof, or
supplement thereto, such seller has furnished in writing to the Company
information expressly for use in such registration statement,
prospectus, amendment thereof, or supplement thereto that corrected or
made not misleading the information previously furnished to the Company.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any of the Holders,
or any of their respective affiliates, directors, officers or
controlling Persons and shall survive the transfer of such securities by
such Holder.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any
action or proceeding with respect to which a claim for indemnification
may be made pursuant to this Section 6, such indemnified party will, if
a claim in respect thereof is to be made against an indemnifying party,
give written notice to the latter of the commencement of such action;
provided, that the failure of the indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its
obligations under Sections 6(a) or 6(b), except to the extent that the
indemnifying party is actually prejudiced by such failure to give
notice. In case any such action is brought against an indemnified party,
unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist in
respect of such claim, the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish,
with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party for any legal or other
expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. If, in
such indemnified party's reasonable judgment, having common counsel
would result in a conflict of interest between the interests of such
indemnified and indemnifying parties, then such indemnified party may
employ separate counsel reasonably acceptable to the indemnifying party
to represent or defend such indemnified party in such action, it being
understood, however, that the indemnifying party shall not be liable for
the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such indemnified parties (and not more
than one separate firm of local counsel at any time for all such
indemnified parties) in such action. No indemnifying party will consent
to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in
respect of such claim or litigation.
(d) OTHER INDEMNIFICATION. Indemnification similar to that
specified in this Section 6 (with appropriate modifications) shall be
given by the Company and each Holder of Registrable Securities with
respect to any required registration or other qualification of
securities under any federal or state law or regulation or governmental
authority other than the Securities Act.
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(e) CONTRIBUTION. If recovery is not available under the
foregoing indemnification provisions of this Section 6 for any reason
other than as expressly specified therein, the parties entitled to
indemnification by the terms thereof shall be entitled to contribution
to liabilities and expenses except to the extent that contribution is
not permitted under Section 11(f) of the Securities Act. In determining
the amount of contribution to which the respective parties are entitled,
there shall be considered the relative benefits received by each party
from the offering of the Registrable Securities (taking into account the
portion of the proceeds realized by each), the parties' relative
knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent
any misstatement or omission and any other equitable considerations
appropriate under the circumstances. The parties hereto agree that it
would not be just and equitable if contribution pursuant to this Section
6(e) were determined by pro rata allocation (even if the Holders or any
underwriters or all of them were treated as one Person for such purpose)
or by any other method of allocation that does not take account of the
equitable considerations referred to in this Section 6(e). The amount
paid or payable by an Indemnified Party as a result of the losses,
liabilities, claims, damages, or expenses (or actions in respect
thereafter referred to above) shall be deemed to include any legal or
other fees or expenses reasonably incurred by such Indemnified Party in
connection with investigating or, except as provided in Section 6(a),
defending any such action or claim. Notwithstanding the provisions of
this Section 6(e), no Holder shall be required to contribute an amount
greater than the dollar amount by which the net proceeds received by
such Holder with respect to the sale of any Registrable Securities
exceeds the amount of damages which such Holder has otherwise been
required to pay by reason of any and all untrue or alleged untrue
statements of material fact or omissions or alleged omissions of
material fact made in any registration statement, prospectus, or
preliminary prospectus or any amendment thereof or supplement thereto,
related to such sale of Registrable Securities. 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. The Holders'
obligations in this Section 6(e) to contribute shall be several in
proportion to the amount of Registrable Securities registered by them
and not joint. If indemnification is available under this Section 6, the
Indemnifying Parties shall indemnify each Indemnified Party to the full
extent provided in Sections 6(c) and 6(d) without regard to the relative
fault of such Indemnifying Party or Indemnified Party or any other
equitable consideration provided for in this Section 6(e) subject, in
the case of the Holders, to the limited dollar amounts get forth herein.
(f) NON-EXCLUSIVITY. The obligations of the parties under
this Section 6 shall be in addition to any liability which any party may
otherwise have to any other party.
(g) SURVIVAL. The indemnification provided for under this
Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified Person or any
officer, director or controlling Person of such indemnified Person and
will survive the transfer of securities. The Company also agrees to make
such provisions as are reasonably requested by any indemnified Person
for
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contribution to such Person in the event the Company's indemnification
is unavailable for any reason.
7. XXXX REPRESENTATIONS AND COVENANTS.
XXXX represents, warrants and covenants to the Company that on
the date hereof, as of the Closing Date and as of the date of any conversion of
indebtedness into Common Shares, exercise of the Warrants or any transfer of
Registrable Securities by XXXX:
(a) XXXX is an "accredited investor" within the meaning of
Regulation D under the Securities Act, and is acquiring the Securities
for investment for AGHI's own account, and not with a view to
distribution subject, nevertheless, to any requirement of law that the
disposition of AGHI's property shall at all times be within AGHI's
control. XXXX has such knowledge and experience in financial and
business matters that XXXX is capable of evaluating the merits and risks
of purchasing the Securities. XXXX is aware that XXXX may be required to
bear the economic risk of an investment in the Securities for an
indefinite period, and it is able to do so. XXXX acknowledges (i) that
the Securities being acquired by XXXX are not being registered under the
Securities Act on the grounds that (A) the offer and sale of the
Securities are exempt from registration under Section 4(2) of the
Securities Act as not involving any public offering and (B) such
issuance is exempt from registration under Rule 506 of Regulation D and
(ii) the Company's reliance on such exemptions is predicated in part on
the representations made to the Company by XXXX in this Section 7.
(b) XXXX acknowledges and agrees that until one year after
the conclusion of the transactions contemplated hereby, an offer or sale
of the Securities within the United States may violate the registration
requirements of the Securities Act if such offer or sale is made
otherwise than pursuant to an effective registration statement under the
Securities Act. XXXX acknowledges that the exemption from registration
provided by Rule 144 may not be available to a resale of the Securities
by XXXX.
(c) XXXX has reviewed the Company's documents filed with
the Securities Exchange Commission and has had an opportunity to make
such inquiries of management of the Company and has received such
answers and information as XXXX has requested.
(d) So long as XXXX beneficially Securities which if
converted or exercised together with any other Company securities
beneficially owned by XXXX or its Affiliates that in the aggregate
represent more than ten (10%) of the outstanding shares of the Common
Stock after giving effect to such conversion and exercise, XXXX agrees
to execute and deliver such market stand-off or lock-up agreements as
the managing underwriter(s) for the Company's underwritten public
offering(s) shall reasonably request in connection with such
offering(s), in such customary form and in such manner as shall be
reasonably requested by such managing underwriters; provided that the
lock-up period shall not exceed 90 days and all of the officers and
directors of the Company also sign such agreement. The agreement
contained in this clause (d) shall relate to all Securities acquired by
XXXX pursuant to the Loan Agreement.
14
(e) XXXX agrees not to, directly or indirectly, loan any
Common Stock or any derivative security related thereto to any party for
the purpose of facilitating any short sale or similar transaction
involving the Common Stock, provided that this covenant shall in no way
prevent XXXX from any investment entered into for the purpose of hedging
or reducing the risk of AGHI's investments.
(f) Except as provided in this Section 7(f) or as waived
by the Company, during the period commencing on the date hereof through
January 7, 2003 (the "Lock-up Period") XXXX shall not, directly or
indirectly, offer, sell, transfer, assign (except to an entity
controlled by, controlling or under common control with XXXX and except
to trusts principally for the benefit of members of the family of any
person who is a member of XXXX), contract to sell or otherwise dispose
of (any such action, to "Dispose") any Securities acquired pursuant to
the Loan Agreement. Notwithstanding any other provision of this
Agreement, XXXX shall have the unilateral right to Dispose of any of the
Securities if any of the following events involving the Company shall
have been announced as pending or planned, or shall have occurred (each
a "Terminating Event"):
(1) A Change in Control Transaction (as
defined below);
(2) The Company shall (1) become insolvent;
(2) admit in writing its inability to pay its debts generally as
they mature; (3) make an assignment for the benefit of creditors
or commence proceedings for its dissolution; or (4) apply for or
consent to the appointment of a trustee, liquidator or receiver
for it or for a substantial part of its property or business;
(3) Bankruptcy, reorganization, insolvency
or liquidation proceedings or other proceedings, or relief under
any bankruptcy law or any law for the relief of debt shall be
instituted by the Company, or the Company shall by any action or
answer approve of, consent to, or acquiesce in any such
proceedings or admit to any material allegations of, or default
in answering a petition filed in any such proceedings, or any
such proceedings shall be commenced against the Company and shall
not be terminated or stayed within 90 days of such commencement;
or
(4) An "Event of Default," as that term is
used in the Loan Agreement, shall have occurred and be
continuing.
As used in this Agreement, a "Change of Control
Transaction" shall mean, (a) the sale, conveyance or disposition of all or
substantially all of the assets of the Company (or the approval of any such
sale, conveyance or disposition by the shareholders of the Company), (b) a
consolidation or merger of the Company (or the approval of such consolidation or
merger of the Company by the shareholders of the Company) with or into any other
"Person" (whether or not the Company is the surviving Person, but other than a
merger or consolidation whereby the stockholders of the Company immediately
preceding the merger or consolidation continue to own, in such merger or
consolidation, greater than 50% of the voting power of the capital stock of the
surviving Person that is normally entitled to vote in the election of directors,
managers or trustees, as applicable) or (c) the individuals who, as of the date
hereof, constitute the Company's
15
board of directors (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Company's board of directors; provided, however, that
any individual becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
(either by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for director) shall be considered as
though such individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
contests by or on behalf of a Person other than the Company's board of
directors.
XXXX understands that, until the earlier of (a) the
expiration of the Lock-up Period or (b) a Terminating Event occurs, the
certificates for the Common Shares and the Warrants will bear a restrictive
legend (the "Stock Legend") in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR DISPOSED OF, EXCEPT IN ACCORDANCE WITH THE TERMS OF THE
LOCK-UP PROVISION SET FORTH IN A REGISTRATION RIGHTS BETWEEN HOLIDAY RV
SUPERSTORES, INC. (THE "COMPANY") AND XXXX FINANCE CO., LLC. A TRUE AND CORRECT
COPY OF THE REGISTRATION RIGHTS AGREEMENT IS AVAILABLE FROM THE COMPANY UPON
REQUEST.
8. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. This Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, only if the Company shall
have obtained the written consent to such amendment, action or omission
to act, of the Holders holding at least 60% of the Registrable
Securities that are subject to this Agreement; provided, that, if any
amendment is not unanimously approved by all Holders of shares of
Registrable Securities that are subject to this Agreement, any changes
set forth in such amendment must apply in the same manner to all such
Holders. Each Holder of any Registrable Securities that are subject to
this Agreement shall be bound by any consent authorized by this Section
8(a), whether or not such Registrable Securities shall have been marked
to indicate such consent.
(b) SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns. In addition, and whether or not
any express assignment shall have been made, the provisions of this
Agreement which are for the benefit of the parties hereto other than the
Company shall also be for the benefit of and enforceable by any
subsequent Holder of any Registrable Securities that are subject to this
Agreement, subject to the provisions contained herein.
(c) NOTICES. All notices and other communications provided for in
this Agreement shall be in writing and delivered by registered or
certified mail, postage
16
prepaid, or delivered by overnight courier (for next business day
delivery) or telecopied, addressed as set forth on the signature pages
hereof, or at such other address as any of the parties hereto may
hereafter designate by notice to the other parties given in accordance
with this Section. Any such notice or communication shall be deemed to
have been duly given on the seventh day after being so mailed, the next
business day after delivery by overnight courier, when received when
transmitted by telecopy with confirmation of successful transmission or
upon receipt when delivered personally.
(d) DESCRIPTIVE HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning of the terms contained herein.
(e) SEVERABILITY. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained
herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision, paragraph,
word, clause, phrase or sentence in every other respect and of the
remaining provisions, paragraphs, words, clauses, phrases or sentences
hereof shall not be in any way impaired, it being intended that all
rights, powers and privileges of the parties hereto shall be enforceable
to the fullest extent permitted by law.
(f) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, and by different parties on separate counterparts, each of
which shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
(g) GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
Delaware applicable to contracts made and to be performed therein. The
parties to this Agreement hereby agree to submit to the non-exclusive
jurisdiction of the courts of the State of Delaware in any action or
proceeding arising out of or relating to this Agreement.
(h) INJUNCTIVE RELIEF. The parties hereto acknowledge and agree
that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, it is agreed
that they shall be entitled to an injunction, restraining order or other
equitable relief to prevent breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions hereof in any court
of competent jurisdiction in the United States or any state thereof, in
addition to any other remedy to which they may be entitled at law or
equity.
(i) SIGNATURES. Facsimile signatures shall be valid and binding
on each party submitting the same.
(j) ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with
the Loan Agreement, the Warrant and the agreements and documents
contemplated hereby and thereby, contains the entire understanding and
agreement of the parties.
17
(k) JURY TRIAL. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY
JURY. EACH PARTY HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, THE REGISTRABLE SECURITIES OR ANY OTHER AGREEMENTS RELATING
TO THE REGISTRABLE SECURITIES OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS TRANSACTION. NOTWITHSTANDING ANYTHING TO THE
CONTRARY HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT, THE REGISTRABLE SECURITIES OR ANY OF THE DOCUMENTS OR
AGREEMENTS RELATING TO THE REGISTRABLE SECURITIES.
(l) NO INCONSISTENT AGREEMENTS. The Company will not hereafter
enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement.
(m) ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company
will not take any action, or permit any change to occur, with respect to
its securities which would adversely affect the ability of the Holders
of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement or which would
adversely affect the marketability of such Registrable Securities in any
such registration, including, but not limited to, effecting a stock
split or combination of shares.
(n) FINAL AGREEMENT. This Agreement, together with the Loan
Agreement and all other agreements entered into by the parties hereto
pursuant to the Loan Agreement, constitutes the complete and final
agreement of the parties concerning the matters referred to herein, and
supersedes all prior agreements and understandings.
[Signature Page Follows]
18
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement
or caused this Agreement to be executed on its behalf as of the date first
written above.
HOLIDAY RV SUPERSTORES, INC.
A DELAWARE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
________________________________
Xxxxxx X. Xxxxxxx
Chief Executive Officer
------------------------------------------------- -----------------------------------------------
Address for Notices: With a copy of any notice to:
------------------------------------------------- -----------------------------------------------
------------------------------------------------- -----------------------------------------------
Holiday RV Superstores, Inc. Sheppard, Mullin, Xxxxxxx & Xxxxxxx, LLP
000 X. Xxxxxxx Xxxxxx, Xxxxx 000 000 Xxxxxxx Xxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000 Xxxxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxx Attn: Xxxxxxxx X. Xxxxxxx, Esq.
Phone: (000) 000-0000 Phone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
------------------------------------------------- -----------------------------------------------
XXXX FINANCE CO, LLC
a Delaware limited liability company
By: /s/ Xxxx X. Xxxxxxxx
__________________________________
Xxxx X. Xxxxxxxx, Vice President
------------------------------------------------- -----------------------------------------------
Address for Notices: With a copy of any notice to:
------------------------------------------------- -----------------------------------------------
------------------------------------------------- -----------------------------------------------
2575 Vista del Mar Drive Xxxxxx, Xxxxxxxx and Xxxxxx, P.A.
Xxxxxxx, XX 00000 5500 Xxxxx Fargo Center
Attn: Xxxxxxx Xxxxx 00 Xxxxx Xxxxxxx Xxxxxx
Phone: (000) 000-0000 Xxxxxxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000 Attn: Xxxxxx X. Xxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
------------------------------------------------- -----------------------------------------------
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