Exhibit 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
December 22, 1997, by and among National Auto Finance Company, Inc., a Delaware
corporation (the "Company"), and the Persons set forth on Schedule I attached
hereto (the "Investors"). Capitalized terms used herein not otherwise defined
shall have the meanings set forth in Section 9 of this Agreement.
WHEREAS, the Company (through its predecessor, National Auto Finance
Company, L.P.) and Xxxxxx Guaranty Trust Company of New York, as trustee of the
Commingled Pension Trust Fund (Multi-Market Special Investment Fund II) and the
Multi-Market Special Investment Trust Fund, and as investment manager and agent
for The Xxxxxx X. Xxxxx Foundation (Multi-Market Account) (collectively, the
"Xxxxxx Trusts") are parties to that certain Registration Rights Agreement dated
August 6, 1996 (as amended to date, the "Xxxxxx Registration Rights Agreement")
pursuant to which the Xxxxxx Trusts have certain registration rights;
WHEREAS, FSA Portfolio Management, Inc. ("FSA") and the Company are
parties to that certain Registration Right Agreement (the "FSA Registration
Rights Agreement") entered into October 1, 1997 pursuant to which FSA has
certain registration rights;
WHEREAS, pursuant to the Second Amended and Restated Agreement of
Limited Partnership dated September 1, 1997 (as amended, the "NAFI Partnership
Agreement"), of National Auto Finance Company, L.P. (the "Partnership"),
IronBrand Capital LLC has certain registration rights;
WHEREAS, the Company has entered into a Securities Purchase Agreement
dated December 19, 1997 (the "Securities Purchase Agreement") with The 1818
Mezzanine Fund, L.P., PC Investment Company, Progressive Investment Company,
Inc., and Manufacturer's Life Insurance Company (U.S.A.) (together the
"1818/Progressive/ML Group") which contemplates that the Company will grant the
1818/Progressive/ML Group certain registration rights;
WHEREAS, the Company has also agreed to provide certain registration
rights to the Partnership (including its limited partners to whom Registrable
Securities are distributed) (the "Partners"); and
WHEREAS, the foregoing parties desire to set forth their agreement as
to the relative registration rights of such parties from this day forward and,
by so doing, to supersede and
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replace all prior registration rights agreements between the Company and the
other parties hereto;
NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration the receipt and sufficiency of which hereby are
acknowledged, agree as follows:
1. REGISTRATION STATEMENTS.
(a) DEMAND REGISTRATION. (i) Upon each notice to the Company by the
Xxxxxx Holders, IronBrand or the 1818/Progressive/ML Holders requesting the
registration of a specified number of their Registrable Securities, the Company
shall, as promptly as practicable and in any event not later than 90 days after
the Company's receipt of such notice, prepare and file with the Commission under
the Securities Act a Registration Statement (including by means of a shelf
registration pursuant to Rule 415 under the Securities Act (a "Shelf
Registration Statement") if so requested in such notice (but, in the case of a
shelf registration, only if the Company is then eligible to use such a shelf
registration and if Form S-2 or Form S-3 (or any successor forms) is then
available to the Company) with respect to the Registrable Securities to which
such notice relates, and shall use its reasonable best efforts to cause such
Registration Statement to be declared effective at the earliest practicable date
and to prepare and make available a Prospectus meeting the requirements of
Section 10(a) of the Securities Act and providing for the method of disposition
determined pursuant to Section 1(a)(ii) for such period as may be required by
the Securities Act, but in no event beyond the period specified in Section
1(a)(iii); provided, that the Company will not be required to effect any such
registration within the period beginning on the effective date of a Registration
Statement filed by the Company on its behalf or for the account of any other
Person covering a firm commitment Underwritten Offering and ending on the later
of (A) 90 days after such effective date and (B) the expiration of any lock-up
period required by the underwriters, if any, in connection therewith. Subject to
Section 1(a)(iii) below, each of the Xxxxxx Holders, the 1818/Progressive/ML
Holders and IronBrand may make two requests for registration pursuant to this
Section 1(a)(i); provided that the number of such permissible requests shall be
increased as set forth in Sections 1(c)(ii)(A) and 1(c)(iv) and provided no such
holders shall be entitled to make such a request while any other Registration
Statement (other than a Shelf Registration Statement) with the Commission is on
file prior to its becoming effective or within 90 days after such a Registration
Statement has been declared effective or in the case of a Shelf Registration
Statement while such registration is on file prior to being declared effective
until 90 days after such Registration Statement ceases to be effective.
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(ii) If a request for registration is made pursuant to
Section 1(a)(i), the Company shall promptly give written notice of such request
to all Demand Holders who did not participate in such request; and each Demand
Holders Group shall have the right, subject to Section 1(a)(iii), by giving
written notice to the Company promptly (and in any event within 30 days after
such notice is given by the Company), to join in such request and to have
included in the Registration Statement to be filed by the Company pursuant to
such request such number of Registrable Securities as such holders shall specify
in such notice; and the method of distribution of the Registrable Securities to
be included in such Registration Statement under Section 1(a)(i) shall be
selected by the holders of a majority of the Registrable Securities with respect
to which the request for registration was made under Section 1(a)(i);
(iii) any Demand Holder Group which shall have given the
Company a notice pursuant to Section 1(a)(i) above and all of whose shares
requested to be included shall have been included in the Registration Statement
at the time it is declared effective shall not be deemed to have used one of its
requests for registration (A) unless the Registration Statement with respect
thereto has become effective and remained effective in compliance with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Registration Statement until such time as
all of such Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such Registration Statement; PROVIDED, THAT, such period need not exceed 180
days, (B) if after it has become effective, such registration is interfered with
by any stop order, injunction or other order or requirement of the Commission or
other governmental agency or court for any reason not attributable to the Demand
Holders and has not thereafter become effective, or (C) if the conditions to
closing specified in the underwriting agreement, if any, entered into in
connection with such registration are not satisfied or waived, other than by
reason of a failure on the part of the Demand Holders.
(iv) The Company may delay the filing of a Registration
Statement requested pursuant to this Section 1(a) if, in its reasonable
judgment, (A) the filing of such Registration Statement at such time would
adversely affect or require the Company to disclose in the Registration
Statement a proposed financing, reorganization or recapitalization, or pending
negotiations relating to a merger, consolidation, acquisition or similar
transaction, or otherwise adversely affect the Company; or (B) financial
statements meeting the requirements of Regulation S-X are not available at such
time because of any such pending proposal or negotiations; provided, however,
that the right of the Company pursuant to clauses (A) and (B) of this subsection
(iv) to delay the filing of a Registration
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Statement shall not extend for more than 90 days from the date that notice is
given pursuant to Section 1(a)(i) requesting registration. The Company shall
promptly give the holders of Registrable Securities requesting registration
thereof pursuant to Sections 1(a)(1) or 1(a)(ii) written notice of such
determination, containing a general statement of the reasons for such
postponement and an approximation of the anticipated delay. If the Company shall
so postpone the filing of a Registration Statement, any Demand Holder Group
requesting registration thereof pursuant to Section 1(a)(i) shall have the right
to withdraw the request for registration by giving written notice to the Company
within 15 days after receipt of the notice of postponement and, in the event of
such withdrawal, such request shall not be counted for purposes of the requests
for registration to which holders of Registrable Securities are entitled
pursuant to Section 1(a) hereof.
(b) INCIDENTAL REGISTRATION. (i) In addition to, and independent of the
rights afforded by Section 1(a), prior to filing with the Commission any
Registration Statement (other than a Registration Statement on Form S-4 or S-8
or any successor forms to such Forms) with respect to (A) any public offering by
and for the account of the Company of its equity securities or any securities
convertible into or exchangeable or exercisable for such equity securities or
(B) any public offering by the Company for the account of any holders of equity
securities of the Company, of the Company's equity securities or any securities
convertible into or exchangeable or exercisable for such equity securities, the
Company shall notify each holder of the Registrable Securities of such proposed
filing, specifying whether such offering is to be an Underwritten Offering. Any
such holder wishing to have any of such holder's Registrable Securities included
in such Registration Statement shall promptly (and in any event within 30 days
after such notice is given by the Company) give written notice to the Company
requesting registration of such holder's Registrable Securities, specifying the
number of Registrable Securities requested to be registered and describing the
proposed method of disposition thereof, and if the proposed offering is to be an
Underwritten Offering and such holder wishes to participate therein, specifying
the number of Registrable Securities which such holder wishes to dispose of
pursuant to such Underwritten Offering.
(ii) If the proposed public offering as to which notice
is given by the Company pursuant to Section 1(b)(i) is other than an
Underwritten Offering, the Company shall use its reasonable best efforts to
register the Registrable Securities requested to be included in its Registration
Statement and, in connection therewith, to prepare and make available a
Prospectus meeting the requirements of Section 10(a) of the Securities Act for
such period as may be required by the Securities Act.
(iii) At any time prior to the time that a Registration
Statement as to which notice has been given by the Company pursuant to Section
1(b) has been filed by the
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Company or, if filed, has been declared effective, the Company may determine not
to file, or may withdraw, such Registration Statement, in either of which events
the Company shall have no obligation pursuant to this Section 1(b) to register
any Registrable Securities in connection with such proposed Registration
Statement.
(c) UNDERWRITTEN OFFERINGS. If the proposed method of disposition of
Registrable Securities as to which notice is given by the holders of Registrable
Securities under Sections 1(a)(i) and 1(a)(ii), collectively, or the proposed
public offering as to which notice is given by the Company pursuant to Section
1(b)(i) is to be an Underwritten Offering:
(i) the Company shall request the underwriter(s)
participating in such offering to purchase and sell all Registrable Securities
the disposition of which pursuant to such Underwritten Offering shall have been
requested by the holders thereof in notices given pursuant to Section 1(a)(i),
1(a)(ii) or 1(b)(i), as the case may be;
(ii) (A) each holder of Registrable Securities giving a
notice pursuant to Section 1(a)(i) or 1(a)(ii), as the case may be, agrees that,
by the giving of such notice, if the underwriter(s) desire(s) to purchase any of
the Registrable Securities requested by such holder to be purchased, such holder
shall sell such Registrable Securities to such underwriter(s) pursuant to an
underwriting agreement to be entered into by and among the Company, the
underwriter(s), such holder and any other holders of securities of the Company
participating in such Underwritten Offering, unless, upon written notice to the
Company and the managing underwriter given at least five Business Days prior to
the date that the Registration Statement with respect to such offering is
proposed to become effective (or any later proposed effective date), such holder
withdraws its Registrable Securities from such Underwritten Offering; provided,
that, if the Xxxxxx Holders, IronBrand or the 1818/Progressive/ML Holders (with
respect to a registration requested under Section 1(a)(i)) withdraw the
Registrable Securities requested by such holders pursuant to Section 1(a)(i) to
be included in such Underwritten Offering because the underwriter(s) have
advised the Company in writing that the number of Registrable Securities
requested to be included in such registration exceeds the number of such
securities that can be sold in such offering within a price range acceptable to
such holders, then such request for registration shall be withdrawn as to all
holders of Registrable Securities of the type held by the holders requesting
such withdrawal and the number of requests for registration that may be made by
such Demand Holder Group pursuant to 1(a)(i) should be increased by one, and
notwithstanding anything to the contrary in this Agreement, all of the costs
incurred by such holders in connection with such registration shall be paid by
the Company; and, provided, further, if any holder of Registrable Securities
requesting registration of such securities pursuant to Section 1(a)(i) or
1(a)(ii) withdraws its request for registration for any reason that
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is not based on such advice from the underwriter(s), then, notwithstanding
anything to the contrary in this Agreement, any expenses incident to the
Company's preparation in accordance with this Agreement for the registration of
such Registrable Securities so withdrawn shall be borne entirely by the holders
of such Registrable Securities, pro rata among such holders requesting such
withdrawal, in the proportion that the number of Registrable Securities
requested by each such holder to be included in such Underwritten Offering and
so withdrawn bears to the total number of Registrable Securities requested to be
included in such Underwritten Offering and so withdrawn.
(B) each holder of Registrable Securities giving a
notice pursuant to Section 1(b)(i) agrees that, by the giving of such notice, if
the underwriter(s) desire(s) to purchase any of the Registrable Securities
requested by such holder to be purchased, such holder shall sell such
Registrable Securities to such underwriter(s) pursuant to an underwriting
agreement to be entered into by and among the Company, the underwriter(s), such
holder and any other holders of securities of the Company participating in such
Underwritten Offering, unless, upon written notice to the Company and the
managing underwriter given at least five Business Days prior to the date that
the Registration Statement with respect to such offering is proposed to become
effective (or any later proposed effective date), such holder withdraws its
Registrable Securities from such Underwritten Offering.
(iii) if the underwriter(s) elect(s) to purchase less
than all securities (including Registrable Securities) which it is requested to
purchase in connection with such offering (or if, in the judgment of the
Company, on the written advice of such underwriter(s), the inclusion of all such
securities in such Underwritten Offering would adversely affect the proposed
public offering by and for the account of the Company), the Company shall use
its reasonable best efforts to cause purchases, if any, by such underwriter(s),
(A) if such Underwritten Offering is the result of a request for registration
pursuant to Section 1(a)(i) or 1(b)(i)(B), first, of securities to be offered
for the account of the Demand Holders requesting inclusion pursuant to Sections
1(a)(i) and 1(a)(ii), to be made pro rata according to the number of securities
requested by each such holder to be included in the Underwritten Offering,
second, of securities to be offered for the account of the Company, third, of
securities to be offered for the account of FSA and the Partners, to be made pro
rata according to the number of securities requested by each such holder to be
included in the Underwritten Offering, and fourth, of securities to be offered
for the account of Persons other than (1) the Company, (2) the Demand Holders
who requested inclusion pursuant to Sections 1(a)(i) and 1(a)(ii) and (3) FSA
and the Partners, to be made pro rata according to the number of securities
requested by such other Persons to be included in the Underwritten Offering, and
(B) if such Underwritten Offering is the result of a request for registration
pursuant to Section 1(b)(i)(A), first, of securities to be offered for the
account of
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the Company, second, of securities to be offered for the account of Demand
Holders to be made pro rata according to the number of securities requested by
each such holder to be included in the Underwritten Offering, third, of
securities to be offered for the account of FSA and the Partners to be made pro
rata according to the number of securities requested by such holders to be
included in the Underwritten Offering, and fourth, of securities to be offered
for the account of Persons other than (1) the Company (2) the Demand Holders and
(3) FSA and the Partners, to be made pro rata according to the number of
securities requested by such other Persons to be included in the Underwritten
Offering.
(iv) if (A) pursuant to Section 1(c)(iii), any of the
Registrable Securities requested by any Demand Holder Group to be disposed of
pursuant to any Underwritten Offering shall not have been purchased by the
underwriter(s) thereunder and (B) the Underwritten Offering is the result of a
request for registration pursuant to Section 1(a)(i), then the number of
permissible requests for registration that may be made pursuant to such Section
1(a)(i) by such Demand Holder Group shall be increased by one.
(d) RESTRICTIONS ON PUBLIC SALE BY HOLDER. Each holder whose
Registrable Securities are covered by a Registration Statement filed pursuant to
this Section 1 agrees, upon the request of the underwriter(s) in any
Underwritten Offering permitted pursuant to Section 8, not to effect any public
sale or distribution of securities of the Company of the same class as the
securities, or any security convertible into or exchangeable or exercisable for
such securities, included in such Registration Statement, including a sale
pursuant to Rule 144 under the Securities Act (except as part of such
registration), during the 10-day period prior to, and during the 90-day period
(or such longer period, not exceeding 180 days, as is required by the
underwriter(s)) beginning on, the closing date of any such Underwritten Offering
made pursuant to such Registration Statement, to the extent timely notified in
writing by the Company or such underwriter(s); provided, that all other Persons
selling securities in such Underwritten Offering and all officers and directors
of the Company shall enter into agreements providing for the same restriction on
a public sale as described herein.
The foregoing provisions shall not apply to any holder of Registrable
Securities if such holder is prevented by applicable statute, regulation or
preexisting contractual or fiduciary duty from entering into any such agreement.
(e) RESTRICTIONS ON SALE OF SECURITIES BY THE COMPANY. The Company
agrees not to effect any public or private offer, sale or distribution of its
equity securities or any security convertible into or exchangeable or
exercisable for such equity security, including a sale pursuant to Regulation D
under the Securities Act, during the 10-day period prior to, and during the
90-day period (or such longer period, not exceeding 180 days, as is required
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by the underwriter(s)) beginning on, the closing date of each Underwritten
Offering permitted pursuant to Section 8, to the extent timely and reasonably so
requested in writing by the underwriter(s) (except as part of such registration,
if permitted, or pursuant to registrations on Form S-4 or S-8 or any successor
forms to such Forms or pursuant to an issuance of equity securities of the
Company where such equity securities are exempted from the Securities Act
pursuant to Section 3(a)(10) thereof).
(f) AMENDMENTS. Upon the occurrence of any event that would cause any
Registration Statement (i) to contain a material misstatement or omission or
(ii) not to be effective and usable for resale of Registrable Securities during
the period that such Registration Statement is required to be effective and
usable, the Company shall promptly file an amendment to the Registration
Statement, in the case of clause (i), correcting any such misstatement or
omission, and in the case of either clause (i) or (ii), using its reasonable
best efforts to cause such amendment to be declared effective and such
Registration Statement to become usable as soon as practicable thereafter.
2. REGISTRATION PROCEDURES.
In connection with any Registration Statement and subject to the
provisions of Section 1 the Company shall use its reasonable best efforts to
effect such registration to permit the sale of the Registrable Securities being
sold in accordance with the intended method or methods of distribution thereof,
and pursuant thereto the Company shall as expeditiously as possible:
(a) prepare and file with the Commission a Registration Statement
relating to the registration on any appropriate form under the Securities Act,
which form shall be available for the sale of the Registrable Securities being
sold in accordance with the intended method or methods of distribution thereof
and shall include all financial statements required by the Commission to be
filed therewith (including, if required by the Securities Act or any regulation
thereunder, financial statements of any Subsidiary of the Company which shall
have guaranteed any indebtedness of the Company), cooperate and assist in any
filings required to be made with the NASD and use its reasonable best efforts to
cause such Registration Statement to become effective and approved by such
governmental agencies or authorities as may be necessary to enable the selling
holders to consummate the disposition of such Registrable Securities; provided,
that before filing a Registration Statement or any Prospectus, or any amendments
or supplements thereto, the Company shall (i) furnish to the holders of the
Registrable Securities and the underwriter(s), if any, copies of all such
documents proposed to be filed, which documents shall be subject to the review
of such holders and (ii) make the Company's representative available for
discussion of such
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documents; and provided, further, that in connection with any registration of
Registrable Securities pursuant to Section 1(a), the Company shall not file any
Registration Statement or amendment thereto or any Prospectus or any supplement
thereto to which the holders of a majority of Registrable Securities covered by
such Registration Statement or the underwriter(s), if any, shall reasonably
object within 10 Business Days after the receipt thereof, and provided, further,
that in connection with any registration pursuant to Section 1 (b)(i), if the
holders of a majority of Registrable Securities covered by a Registration
Statement in connection therewith reasonably object within 10 Business Days
after the receipt of such Registration Statement or amendment thereto or any
Prospectus or any supplement thereto, the Company shall provide written notice
not more than five Business Days after the end of the 10 Business-Day period
referred to above to such holders as to whether or not the Company plans on
filing such document, notwithstanding such objection (which such notice shall
bind the Company), and if the Company notifies such holders that it plans on
filing such document, any holder of Registrable Securities to be registered
under such Registration Statement may withdraw its Registrable Securities from
such Registration Statement and the offering in connection therewith and, if
such holder makes such a withdrawal, it shall have no further obligations in
connection with such Registration Statement or offering. For purposes of the
preceding provisos, an objection made by a holder of the Registrable Securities
or an underwriter, if any, shall be deemed to be reasonable if, including
without limitation, the Registration Statement, amendment, Prospectus or
supplement, as applicable, as filed or proposed to be filed, contains, in the
reasonable judgment of the holder of Registrable Securities or underwriter, a
material misstatement or omission;
(b) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for the applicable period set forth in
Section 1, or such shorter period which will terminate when all Registrable
Securities covered by such Registration Statement have been sold;
(c) if requested by the holders of a majority of the Registrable
Securities being sold in an Underwritten Offering permitted by Section 7 or the
underwriter(s) thereof, promptly incorporate in a Prospectus, Prospectus
supplement or post-effective amendment such information as such underwriter(s)
and the holders of a majority of the Registrable Securities being sold agree
should be included therein relating to the plan of distribution of the
Registrable Securities, including, without limitation, information with respect
to the number of Registrable Securities being sold to such underwriter(s), the
purchase price being paid therefor and with respect to any other terms of the
offering of the Registrable Securities to be sold in such offering; and make any
required filings of such Prospectus, Prospectus supplement or post-effective
amendment as soon as practicable after the Company is notified
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of the matters to be incorporated in such Prospectus, Prospectus supplement or
post-effective amendment;
(d) advise the underwriter(s), if any, and holders of the Registrable
Securities promptly and, if requested by such Persons, confirm such advice in
writing:
(i) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment thereto, when the same has become
effective;
(ii) of any request by the Commission for amendments to
the Registration Statement or amendments or supplements to the Prospectus or for
additional information relating thereto;
(iii) if at any time the representations and warranties
of the Company contemplated by clause (l)(i) below cease to be true and correct;
(iv) if the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by reference
therein contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading; and
(v) of the issuance by the Commission of any stop order
or other order suspending the effectiveness of the Registration Statement, or
any order issued by any state securities commission or other regulatory
authority suspending the qualification or exemption from qualification of such
Registrable Securities under state securities or "blue sky" laws. If at any time
the Company shall receive any such stop order suspending the effectiveness of
the Registration Statement, or any such order from a state securities commission
or other regulatory authority, the Company shall use its reasonable best efforts
to obtain the withdrawal or lifting of such order at the earliest possible time.
(e) furnish to each holder of the Registrable Securities and each of
the underwriter(s), if any, without charge, at least one complete conformed copy
of the Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference therein and
all exhibits (including exhibits incorporated therein by reference);
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(f) deliver to each holder of the Registrable Securities and each of
the underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons may reasonably request; the Company consents to the use of the
Prospectus and any amendment or supplement thereto by each of the holders of the
Registrable Securities and each of the underwriter(s), if any, in connection
with the offering and the sale of the Registrable Securities covered by the
Prospectus or any amendment or supplement thereto;
(g) prior to any public offering of Registrable Securities, cooperate
with the holders of the Registrable Securities, the underwriter(s), if any, and
their respective counsel in connection with the registration and qualification
of the Registrable Securities under the securities or "blue sky" laws of such
jurisdictions as the holders of the Registrable Securities or underwriter(s) may
reasonably request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement, except that the Company shall
not for any such purpose be required to (i) qualify generally to do business as
a foreign corporation in any jurisdiction wherein it would not, but for the
requirements of this clause (g), be obligated to so qualify or to consent to any
general service of process in any such jurisdiction or (ii) subject itself to
taxation in respect of doing business in any jurisdiction in which it would not
otherwise be so subject;
(h) cooperate with the holders of the Registrable Securities and the
underwriter(s), if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold without bearing any
restrictive legends; and enable such Registrable Securities to be in such
denominations and registered in such names as such holders or the
underwriter(s), if any, may request;
(i) use its reasonable best efforts to cause the Registrable Securities
covered by the Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof or the underwriter(s), if any, to consummate the
disposition of such Registrable Securities;
(j) if any fact or event contemplated by clause (d)(iv) above shall
exist or have occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Registrable Securities, the Prospectus will not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
in which they were made, not misleading;
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(k) provide a transfer agent and registrar (which may include the
Company) and CUSIP number for all Registrable Securities not later than the
effective date of the Registration Statement;
(l) enter into such agreements (including an underwriting agreement)
and take all such other actions in connection therewith as may be reasonably
required in order to expedite or facilitate the disposition of the Registrable
Securities pursuant to the Registration Statement, and in connection with any
such underwriting agreement entered into by the Company:
(i) make such representations and warranties to the
underwriter(s), in form, substance and scope as are customarily made by issuers
to underwriters in primary underwritten offerings;
(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 underwriter(s)) and the holders of the
Registrable Securities, addressed to the underwriter(s) and the holders of the
Registrable Securities covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may reasonably be
requested by such holders and underwriters;
(iii) obtain "cold comfort" letters and updates thereof
from the Company's independent certified public accountants, addressed to the
underwriters, such letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters by underwriters in connection
with primary underwritten offerings and, subject to the policies of the
Commission, the Company's certified public accountants and the U.S. accounting
profession, use its reasonable best efforts to have such letters and updates
addressed to FSA Portfolio Management;
(iv) set forth in full or incorporate by reference in
the underwriting agreement the indemnification provisions and procedures of
Section 4 with respect to all parties to be indemnified pursuant to said
Section; and
(v) deliver such documents and certificates as may be
reasonably requested by the holders of the Registrable Securities being sold or
the underwriter(s) of such Underwritten Offering to evidence compliance with
subclause (i) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company pursuant
to this clause (1).
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The above shall be done at each closing under such underwriting or similar
agreement, as and to the extent required thereunder;
(m) make available for inspection by a representative of the selling
holders of the Registrable Securities, any underwriter participating in any
disposition pursuant to the Registration Statement, and any attorney, accountant
or other professional retained by such holders or any of the underwriters,
subject to reasonable notice and during regular business hours, all financial
and other records, pertinent corporate documents and properties of the Company,
provided, that all expenses incurred by any party requesting such access shall
be paid by such party, and cause the Company's officers, directors and employees
to supply all information reasonably requested by any such holder, underwriter,
attorney, accountant or other professional in connection with such Registration
Statement subsequent to the filing thereof and prior to its effectiveness,
except that the aforementioned advisors may be required to sign a reasonably
acceptable confidentiality agreement;
(n) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to the holders of the Registrable Securities, as soon as practicable, a
consolidated earnings statement (which need not be audited) for the 12-month
period (A) commencing at the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm or best efforts Underwritten
Offering or (B) if not sold to underwriters in such an offering, beginning with
the first month of the Company's first fiscal quarter commencing after the
effective date of the Registration Statement; provided, however, that such
reporting obligations shall be in addition to and not in place of the
obligations imposed on the Company by Section 5 of the Xxxxxx Purchase
Agreements and Section 9.1 of the 1818/Progressive/ML Purchase Agreement;
(o) use its reasonable best efforts to cause all Registrable Securities
to be listed on each securities exchange, if any, on which equity securities
issued by the Company are then listed; and
(p) use its reasonable best efforts to take all other steps necessary
to effect the registration of the Registrable Securities contemplated hereby.
The Company may require each holder of Registrable Securities as to
which any registration is being effected to furnish the Company such information
regarding such holder and the distribution of such securities as the Company may
from time to time reasonably request in writing and as is required by applicable
laws and regulations.
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Each holder of the Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company
pursuant to Section 2(d)(iv), or notice of a stop order or suspension described
in Section 2(d)(v), such holder shall forthwith discontinue disposition of
Registrable Securities and cease to use the Prospectus in use under such
Registration Statement. Each holder of Registrable Securities also agrees that
if in an Underwritten Offering effected pursuant to this Agreement it is
required to deliver a signed opinion of counsel to the underwriter(s) under the
underwriting agreement, it will cause its counsel to address and deliver a copy
of such opinion to the Company. The Company shall, as promptly as practicable,
provide each holder with copies of the supplemented or amended Prospectus
contemplated by Section 2(j), or advise the holders in writing that the use of
the Prospectus may be resumed, and provide each holder with copies of any
additional or supplemental filings which are incorporated by reference in the
Prospectus. If so directed by the Company, each such holder shall 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.
3. REGISTRATION EXPENSES.
(a) All expenses incident to the Company's performance of or compliance
with this Agreement shall be borne by the Company, regardless of whether a
Registration Statement becomes effective, including without limitation:
(i) all registration and filing fees and expenses
(including filings made with the NASD);
(ii) fees and expenses of compliance with federal
securities and state "blue sky" or securities laws;
(iii) expenses of printing (including printing
certificates for the Registrable Securities and Prospectuses), messenger and
delivery services and telephone;
(iv) fees and disbursements of counsel for the Company
and one counsel, and one local counsel for each local jurisdiction where it is
reasonably necessary, for the holders of the Registrable Securities selling such
securities pursuant to a Registration Statement (subject to the provisions of
Section 3(b));
(v) all application and filing fees in connection with
listing the Registrable Securities on a national securities exchange or
automated quotation system pursuant to the requirements hereof;
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(vi) all fees and disbursements of independent certified
public accountants of the Company (including the expenses of any special audit
and "cold comfort" letters required by or incident to such performance);
(vii) any reasonable out-of-pocket expenses of the
holders of the Registrable Securities (or the agents and fiduciaries who manage
their accounts); and
(viii) such other reasonable and customary expenses as
may be at such time (A) associated with underwritten offerings and (B)
customarily borne by the issuer, which such reasonable and customary expenses
shall not be deemed to include any underwriter discounts, commissions or
applicable transfer taxes attributable to the sale of Registrable Securities.
The Company shall, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, rating
agency fees and the fees and expenses of any Person, including special experts,
retained by the Company.
(b) In connection with any Registration Statement, the Company shall
reimburse the holders of the Registrable Securities for the reasonable fees and
disbursements of not more than one counsel chosen by the holders of a majority
of the Registrable Securities covered by such Registration Statement and of all
local counsel that is reasonably necessary. Notwithstanding the provisions of
this Section 3, each holder shall pay registration expenses if and to the extent
required by applicable law.
4. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each holder of
the Registrable Securities and each Person, if any, who controls such holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses (including, without limiting the foregoing but subject to Section
4(c), the reasonable legal and other expenses incurred in connection with any
action, suit or proceeding or any claim asserted) arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or arising out of or based upon 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
under which they were made, not misleading, except to the extent that such
15
losses, claims, damages, liabilities or expenses are the result of an untrue
statement or omission contained in information relating to such holder,
furnished in writing to the Company by or on behalf of such holder expressly for
use therein. In connection with any Underwritten Offering permitted by Section
8, the Company shall also indemnify underwriters, if any, selling brokers,
dealer managers and similar securities industry professionals participating in
the distribution, their officers and directors and each Person who controls such
Persons (within the meaning of the Securities Act and the Exchange Act) to the
same extent as provided above with respect to the indemnification of the
holders, if requested in connection with any Registration Statement.
(b) As a condition to the inclusion of its Registrable Securities in
any Registration Statement pursuant to this Agreement, each holder thereof shall
furnish to the Company in writing, promptly after receipt of a request therefor,
such information as the Company may reasonably request for use in connection
with any Registration Statement, Prospectus or preliminary prospectus and each
such holder agrees to indemnify and hold harmless, severally and not jointly,
the Company and its directors, its officers who sign such Registration
Statement, and any Person controlling the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the indemnity from the Company to each holder and Persons controlling such
holder, but only with reference to information relating specifically to such
holder furnished in writing by or on behalf of such holder expressly for use in
such Registration Statement or the Prospectus or any preliminary prospectus
included therein, and of which none of the Company, its directors or officers
has actual knowledge independent of such holder; provided, however, that such
holder of Registrable Securities shall not be liable in any such case to the
extent that the holder has furnished in writing to the Company, reasonably in
advance of the filing of any such Registration Statement, Prospectus or
preliminary prospectus with the Commission, information expressly for use in
such Registration Statement, Prospectus or preliminary prospectus which
corrected or made not misleading information previously furnished to the
Company, and the Company failed to include such information therein. In case any
action shall be brought against the Company, any of its directors, any such
officer, or any such controlling Person based on the Registration Statement, the
Prospectus or any preliminary prospectus and in respect of which indemnity may
be sought against one or more of the holders, such holders shall have the rights
and duties given to the Company by Section 4(c) (except that if the Company as
provided in Section 4(c) shall have assumed the defense thereof such holders
shall not be required to do so, but may employ separate counsel therein and
participate in the defense thereof but all the fees and expenses of such counsel
shall be at such holder's expense and not at the expense of the Company) and the
Company and its directors, any such officers, and any such controlling Person
shall have the rights and duties given to the holders by Section 4(c). In no
event shall the liability of any selling holder
16
hereunder be greater than the net proceeds (i.e., proceeds net of underwriting
discounts, fees, commissions and any other expenses payable by such selling
holder) received by such holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(c) In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought against any current or
former holder of the Registrable Securities or any Person controlling such
holder, with respect to which indemnity may be sought against the Company
pursuant to Section 4(a), such holder or such Person controlling such holder
shall promptly notify the Company in writing and the Company shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such holder and payment of all fees and expenses relating thereto. Such holder
and such Persons controlling such holder shall have the right to employ separate
counsel in any such action or proceeding and participate in the defense thereof,
but all the fees and expenses of such counsel shall be at such holder's expense
and not at the expense of the Company unless (i) the employment of such counsel
has been specifically authorized in writing by the Company, which authorization
shall not be unreasonably withheld, (ii) the Company has not assumed the defense
and employed counsel reasonably satisfactory to such holder within 15 days after
written notice of any such action or proceeding, or (iii) the named parties to
any such action or proceeding (including any impleaded parties) include both
such holder or any Person controlling such holder and the Company and such
holder or any Person controlling such holder shall have been advised by such
counsel that there may be one or more legal defenses available to such holder or
Person controlling such holder that are different from or additional to those
available to the Company and, in the reasonable opinion of such counsel, could
not be asserted by the Company's counsel without creating a conflict of interest
(in which case the Company shall not have the right to assume the defense of
such action or proceeding on behalf of such holder or controlling Person, it
being understood, however, that the Company shall not, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to all local counsel which is necessary, in the good
faith opinion of both counsel for the indemnifying party and counsel for the
indemnified party in order to adequately represent the indemnified parties) for
all such holders and controlling Persons, which firm shall be designated in
writing by the holders of a majority of the Registrable Securities currently or
formerly held by such holders and that all such reasonable fees and expenses
shall be reimbursed as they are incurred upon written request and presentation
of invoices). The Company shall not be liable for any settlement of any such
action effected without the written consent of the Company (which consent shall
not be unreasonably withheld), but if settled with the written consent of the
Company or if there is a
17
final judgment for the plaintiff, the Company agrees to indemnify and hold
harmless such holder and any Persons controlling such holder from and against
any loss or liability by reason of such settlement or judgment. The Company
shall not, without the prior written consent of the holder, effect any
settlement of any pending or threatened proceeding in respect of which any
holder or any Person controlling such holder is a party and indemnity has been
sought hereunder by such holder or any Person controlling such holder unless
such settlement includes an unconditional release of such holder or such
controlling Person from all liability on claims that are the subject matter of
such proceeding.
(d) If the indemnification provided for in this Section 4 is
unavailable to an indemnified party under paragraphs (a), (b) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities and expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the holders of the Registrable Securities on the
other hand from the original sale by the Company of the Registrable Securities,
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and such holders on the other hand in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the Company on the one hand and such holders on the other
hand 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 on the one hand or
by such holders on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or expenses 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.
(e) The Company and the holders of the Registrable Securities agree
that it would not be just and equitable if contribution pursuant to this Section
4 were determined by a pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
subsection (d) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to in
subsection (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in
18
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding any other provision of this Agreement, no holder of
the Registrable Securities shall be required to contribute an amount greater
than the net proceeds received by such holder with respect to the sale of
Registrable Securities giving rise to any indemnification or contribution
obligation under this Section 4. 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.
5. RULE 144A. The Company hereby agrees with each holder of the
Registrable Securities for so long as any Registrable Securities remain
outstanding and during any period in which the Company is not subject to Section
13 or 15(d) of the Exchange Act, to make available to any Purchaser or
beneficial owner of Registrable Securities in connection with any sale thereof
and any prospective purchaser of Registrable Securities from such Purchaser or
beneficial owner, the information required by Rule 144A(d)(4) under the
Securities Act.
6. RULE 144. The Company agrees with each holder of Registrable
Securities to:
(a) comply with the requirements of Rule 144(c) under the Securities
Act with respect to current public information about the Company;
(b) use its reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time it has become subject to such
reporting requirements); and
(c) furnish to any holder of Registrable Securities upon request (i) a
written statement by the Company as to its compliance with the requirements of
said Rule 144(c) and the reporting requirements of the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents of the Company as such
holder may reasonably request to avail itself of any similar rule or regulation
of the Commission allowing it to sell any such securities without registration.
7. PARTICIPATION IN UNDERWRITTEN OFFERINGS. No holder of the
Registrable Securities may participate in any Underwritten Offering hereunder
unless such holder (a) agrees to sell such holder's Registrable Securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
19
arrangements; provided, that no holder of Registrable Securities included in any
Underwritten Offering shall be required to make any representations or
warranties to the Company or the underwriter(s) other than representations and
warranties regarding such holder and such holder's intended method of
distribution.
8. SELECTION OF UNDERWRITERS.
(a) DEMAND REGISTRATION. In any Underwritten Offering of Registrable
Securities covered by a Registration Statement under Section 1(a)(i), the
investment banker(s) and manager(s) that will administer the offering shall be
selected by the holders of a majority of the Registrable Securities with respect
to which the request for registration was made under Sections 1(a)(i),
collectively; provided, that such investment banker(s) and manager(s) must be of
national stature and reasonably acceptable to the Company.
(b) INCIDENTAL REGISTRATION. In any Underwritten Offering of
Registrable Securities covered by a Registration Statement under Section 1(b),
the investment banker(s) and manager(s) that will administer the offering shall
be selected by the Company.
9. INTERPRETATION OF AGREEMENT; DEFINITIONS.
(a) DEFINITIONS. Unless the context otherwise requires, the terms
hereinafter set forth when used herein shall have the following meanings and the
following definitions shall be equally applicable to both the singular and
plural forms of any of the terms herein defined.
"Agreement" means this Registration Rights Agreement and all Schedules
hereto.
"Business Day" means a day other than a Saturday, a Sunday or other day
which commercial banks located in Florida or New York are authorized or
obligated to be closed.
"Commission" means the Securities and Exchange Commission as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Exchange Act, then the Person performing
such duties at such time.
"Company" has the meaning assigned in the first paragraph of this
Agreement.
"Demand Holder Group" means each of the Xxxxxx Holders, IronBrand and
the 1818/Progressive/ML Holders, as the case may be.
20
"Demand Holders" means the holders of the Xxxxxx Registrable
Securities, the 1818/Progressive/ML Registrable Securities and the Registrable
Securities of IronBrand.
"1818/Progressive/ML Equity Interests" means (i) the shares of Common
Stock for which the warrants issued to the 1818/Progressive/ML Group pursuant to
the Securities Purchase Agreement are exercisable, plus (ii) the shares of
Common Stock purchased by the 1818/Progressive/ML Group pursuant to the
Securities Purchase Agreement and (iii) Related Registrable Securities.
"1818/Progressive/ML Holders" means the holders of the 1818/Registrable
Securities then constituting at least of a majority of the 1818/Progressive/ML
Registrable Securities.
"1818/Progressive/ML Registrable Securities" means the
1818/Progressive/ML Equity Interests that constitute Registrable Securities.
"Equity Interest" means any partnership interests, shares of stock,
limited liability company interests or membership interests or other equity
interests directly in the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FSA Equity Interest" means the 100,000 shares of the Common Stock
purchased by FSA pursuant to the Investment Agreement dated October 1, 1997
between the Company and FSA.
"FSA Registrable Securities" means the FSA Registrable Equity Interests
that constitute Registrable Securities.
"IronBrand" means IronBrand Capital, LLC, a North Carolina limited
liability company, and any successors or permitted assignees of any of its
rights under the Partnership Agreement and, at any time the Registrable
Securities of IronBrand are held by more than one Person, means the holders of
such securities then constituting at least a majority of such securities.
"Xxxxxx Equity Interests" means units of Equity Interests issued in
exchange for the Deferred Additional Interest Notes (as defined in the Xxxxxx
Note Purchase Agreement) in accordance with the terms of the Xxxxxx Note
Purchase Agreement.
"Xxxxxx Holders" means the holders of the Xxxxxx Registrable Securities
then constituting at least a majority of the Xxxxxx Registrable Securities.
21
"Xxxxxx Note Purchase Agreement" means the agreements, dated as of
August 9, 1996, between the Company and the Xxxxxx Trusts.
"Xxxxxx Registrable Securities" means the Xxxxxx Equity Interests that
constitute Registrable Securities.
"NASD" means National Association of Securities Dealers, Inc.
"Person" means an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus included in a Registration Statement,
as amended or supplemented by any prospectus supplement and by all other
amendments thereto, including posteffective amendments, and all material
incorporated by reference into such Prospectus.
"Public Offering" means a public offering of the Company's equity
securities pursuant to an effective Registration Statement filed by the Company
with the Commission.
"Registrable Securities" means, collectively, each Xxxxxx Equity
Interests, 1818/Progressive/ML Equity Interest, Equity Interest of IronBrand,
FSA Equity Interest and Equity Interests of the Partners until each such
security has been (i) transferred in a public offering registered under the
Securities Act or (ii) transferred in a sale made through a broker, dealer or
market-maker pursuant to Rule 144 or Rule 144A under the Securities Act.
"Registration Statement" means a registration statement of the Company,
filed with the Commission on an appropriate form, including any registration
statement filed pursuant to the provisions of this Agreement, including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
"Related Registrable Securities" means with respect to shares of Common
Stock issuable upon exercise of the Warrants issued to the 1818/Progressive/ML
Holders, any securities of the Company issued or issuable with respect to such
shares of Common Stock by way of a dividend or stock split or in connection with
a combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise.
"Securities Act" means the Securities Act of 1933, as amended.
22
"Subsidiary" means any corporation, partnership, joint venture,
association, company, business trust or other entity in which the Company
directly or indirectly (i) beneficially owns or controls, directly or
indirectly, a majority of the outstanding voting securities having by the terms
thereof ordinary voting power to elect a majority of the board of directors (or
other body fulfilling a substantially similar function) of such entity (other
than by reason of the happening of any contingency) or (ii) in the case of an
entity which does not have a board of directors (or other body fulfilling a
substantially similar function) has the authority to control the policies of
such entity (including any partnership or joint venture of or in which the
Company or a Subsidiary is a general partner or joint venture participant or
owns or has the fight to obtain a majority of limited partnership interests).
"Underwritten Offering" means a Public Offering in which securities of
the Company are sold to an underwriter for reoffering to the public.
(b) ACCOUNTING PRINCIPLES. Where the character or amount of any asset
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with the
generally accepted accounting principles in effect from time to time, to the
extent applicable, except where such principles are inconsistent with the
express requirements of this Agreement including without limitation the
definitions set out in Section 9.
(c) DIRECTLY OR INDIRECTLY. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether the action in question
is taken directly or indirectly by such Person.
10. MISCELLANEOUS.
(a) REMEDIES. Each holder of the Registrable Securities, in addition to
being entitled to exercise all rights provided herein, and granted by law,
including recovery of damages, shall 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
the provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company shall not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent
23
with the rights granted to such holders of the Registrable Securities in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the holders hereunder do not in any way conflict with and are not
inconsistent with the fights granted to the holders of the Company's securities
under any other agreements.
(c) COMPARABLE AGREEMENTS. The Company hereby represents and warrants
that it has not entered into or agreed to any side letter or similar arrangement
or other agreement with any other holder or prospective holder of any securities
of the Company providing for registration rights with respect to the securities
of the Company that confers rights or benefits more favorable than the rights
and benefits conferred upon the holders of the Registrable Securities hereunder
(such a letter, arrangement or agreement, whether or not it confers such more
favorable fights or benefits, a "Side Arrangement"). The Company shall not enter
into or amend any Side Arrangement unless, in each case, each of the holders of
the Registrable Securities have been notified in writing and been provided with
a copy of such proposed Side Arrangement or amendment at least 20 Business Days
prior to the effective date of such Side Arrangement or amendment and have been
given the opportunity to receive the rights and benefits in such Side
Arrangement or amendment as of the date of such Side Arrangement or amendment.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given without the written consent of the Company and each of the other parties
hereto.
(e) NOTICES. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery. Such notices, demands and other communications will be sent to any
Investor at the address indicated on Schedule I hereto, to any other holder of
Registrable Securities at such holder's address of record appearing on the
Company's books and to the Company at the address indicated below:
National Auto Finance Company, Inc.
1325 Avenue of the Americas
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopier: (000) 000-0000
24
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party. All
such notices, demands and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; upon receipt, if
mailed postage prepaid; when answered back, if telexed; when receipt is
acknowledged, if telecopied; or at the time delivered, if delivered by an air
courier guaranteeing overnight delivery.
(f) SUCCESSORS AND ASSIGN. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties.
In addition, whether or not any express assignment has been made, the provisions
of this Agreement which are for the benefit of purchasers or holders of
Registrable Securities are also for the benefit of, and enforceable by, any
subsequent holder of Registrable Securities.
(g) 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.
(h) GOVERNING LAW. THE LAWS OF THE STATE OF DELAWARE SHALL GOVERN ALL
ISSUES AND QUESTIONS CONCERNING THE RELATIVE RIGHTS AND OBLIGATIONS OF THE
COMPANY AND ITS SECURITY HOLDERS. ALL OTHER ISSUES AND QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND THE
EXHIBITS AND SCHEDULES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAWS PRINCIPLES THEREOF, EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
(i) SEVERABILITY. Should any part of this Agreement for any reason be
declared invalid, such decision shaft not affect the validity of any remaining
portion, which remaining portion shall remain in force and effect as if this
Agreement had been executed with the invalid portion thereof eliminated and it
is hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including therein any
such part, parts, or portion which may, for any reason, be hereafter declared
invalid.
(j) SUBMISSION TO JURISDICTION. THE COMPANY HEREBY CONSENTS TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN
00
XXX XXXXXX XX XXX XXXX, XXXXX XX XXX XXXX WITH RESPECT TO ALL ACTIONS OR
PROCEEDINGS RELATING TO THIS AGREEMENT, AND THE COMPANY WAIVES ANY OBJECTION
WHICH IT MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT
OF ANY PROCEEDING IN ANY SUCH COURT AND WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MAIL
OR MESSENGER DIRECTED TO IT AT THE ADDRESS OF THE COMPANY SET FORTH IN SECTION
10 ABOVE, AND THAT SERVICE SO MADE, SHALL BE DEEMED TO BE COMPLETED UPON THE
EARLIER OF ACTUAL RECEIPT AND FIVE BUSINESS DAYS AFTER THE SAME SHALL HAVE BEEN
POSTED TO THE COMPANY'S ADDRESS, AS THE CASE MAY BE, IN ACCORDANCE HEREWITH. THE
COMPANY AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
(IF SUCH A PROCEDURE IS AVAILABLE UNDER APPLICABLE LAW) OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING CONTAINED IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY
INVESTOR TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
ANY ACTION OR PROCEEDING IN THE COURTS OF ANY JURISDICTION AGAINST THE COMPANY
OR TO ENFORCE A JUDGMENT OBTAINED IN THE COURTS OF ANY OTHER JURISDICTION.
(k) CAPTIONS. The descriptive headings of the various Sections or parts
of this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
(l) WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND THE INVESTORS WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
(m) AMENDMENT OF EXISTING RIGHTS. Each of the Xxxxxx Trusts, FSA and
IronBrand agrees with the Company that this agreement amends and restates the
Xxxxxx Registration Rights Agreement, the FSA Registration Rights Agreement and
Article 6 of the
26
Partnership Agreement, respectively, and that the Company shall have no further
obligations thereunder.
(n) NOMINEES FOR BENEFICIAL OWNERS. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable Securities for purposes of
any request or other action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any number or percentage of
shares of Registrable Securities held by any holder or holders of Registrable
Securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
(o) CALCULATION OF PERCENTAGE INTERESTS IN REGISTRABLE SECURITIES. For
purposes of this Agreement, all references to a percentage of the Registrable
Securities shall be calculated based upon the number of shares of Registrable
Securities outstanding at the time such calculation is made, assuming the
conversion of all Warrants issued to the 1818/Progressive/ML Holders into shares
of Common Stock.
(p) FINAL AGREEMENT. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF.
27
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or caused this Agreement to be duly executed on its behalf, as of the
date first written above.
NATIONAL AUTO FINANCE COMPANY,
INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice Chairman and Treasurer
IRONBRAND CAPITAL LLC
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
FSA PORTFOLIO MANAGEMENT INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: XXXXX X. XXXXX
Title: MANAGING DIRECTOR
28
THE 1818 MEZZANINE FUND, L.P.
By: Xxxxx Brothers Xxxxxxxx & Co.,
its General Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
MANUFACTURERS LIFE INSURANCE
COMPANY (U.S.A.)
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxx Xxxxx
Title: V.P.
PROGRESSIVE INVESTMENT COMPANY, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Investment Officer
PC INVESTMENT COMPANY
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Investment Officer
29
Xxxxxx Guaranty Trust Company of New York,
as trustee of the Commingled Pension Trust
Fund (Multi-Market Special Investment Fund
II) of Xxxxxx Guaranty Trust Company of
New York
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
Xxxxxx Guaranty Trust Company of New York,
as trustee of the Multi-Market Special
Investment Trust Fund, of Xxxxxx Guaranty
Trust Company of New York
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
Xxxxxx Guaranty Trust Company of New York,
as investment manager and agent for The
Xxxxxx X. Xxxxx Foundation (Multi-Market
Account)
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
30
