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EXHIBIT 10.23
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT is entered into as of August 5,
1998, by and between Renters Choice, Inc., a Delaware corporation (the
"Company"), and each of Apollo Investment Fund IV, L.P., a Delaware limited
partnership, and Apollo Overseas Partners IV, L.P., an exempted limited
partnership registered in the Cayman Islands acting through its general partner
(collectively, the "Investor").
1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
Advice: See Section 6 hereof.
Series B Preferred Stock: The Series B Convertible Stock of the
Company, $.01 par value per share.
Demand Notice: See Section 3 hereof.
Demand Registrations: See Section 3 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Losses: See Section 8 hereof.
Notice: See Section 3 hereof.
Non-Voting Common Stock: The non-voting common stock, $.01 par value,
of the Company.
Person: An individual, partnership, joint venture, limited liability
company, corporation, trust, unincorporated organization or government or any
department or agency thereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by such Registration Statement and all
other amendments and supplements to the prospectus, including post-effective
amendments, and all material incorporated or deemed to be incorporated by
reference in such prospectus.
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Registrable Securities: (i) the Shares; (ii) the Non-Voting Common
Stock issuable or issued upon conversion of the Shares; (iii) any Series B
Preferred Stock or Non-Voting Common Stock issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of the securities listed in clauses (i), (ii) hereof; and (iv) any
security listed in clause (iii) hereof.
Registration Statement: Any registration statement of the Company which
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated or deemed to be incorporated by reference in such
registration statement.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
Shares: The shares of Series B Preferred Stock purchased by Investor
pursuant to the Stock Purchase Agreement dated as of the date hereof between the
Company and Investor.
Underwritten registration or underwritten offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
2. Securities Subject to this Agreement.
(a) Subject Securities. The securities entitled to the
benefits of this Agreement are the Registrable Securities
pursuant to the provisions of this Agreement.
(b) Holders of Registrable Securities. A person is deemed to
be a holder of Registrable Securities whenever such person
owns Registrable Securities or has the right to acquire such
Registrable Securities, whether or not such acquisition has
actually been effected and disregarding any legal restrictions
upon the exercise of such right.
3. Demand Registrations
(a) Demand Registrations. From and after the second
anniversary of the closing date of Investor's acquisition of
the Shares, Investor shall have the right, by written notice
delivered to the Company, to require the Company to register
(the "Demand Registrations") under the Securities Act not less
than 20% and up to 100% of its Registrable Securities then
outstanding in accordance with this Section 3. For purposes of
this Agreement, "Registrable Securities then outstanding"
shall be the total of (i) the number of shares of Non-Voting
Common Stock outstanding which are Registrable Securities and
(ii) the number of shares of Non-Voting Common
Stock issuable pursuant to then exercisable or convertible
securities, including but not limited to the Shares, which are
Registrable Securities.
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The number of Demand Registrations pursuant to this Section
3(a) shall not exceed two (2).
(b) Filing and Effectiveness. The Company shall file each of
the Demand Registrations within 60 days and shall use its best
efforts to cause the same to be declared effective by the SEC
within 120 days of the date on which Investor first gave the
written notice (a "Demand Notice") required by Section 3(a)
hereof with respect to such Demand Registration. If any Demand
Registration is requested to be a "shelf" registration, the
Company shall keep the Registration Statement filed in respect
thereof effective for a period of nine months from the date on
which the SEC declares such Registration Statement effective
or such shorter period which will terminate when the
distribution of all registered Registrable Securities pursuant
to such Registration Statement ends.
(c) Request for Demand Registrations. Subject to the
conditions set forth in Section 3(a) hereof, Investor may, at
any time, make a written request for a Demand Registration.
All requests made pursuant to this Section 3 will specify the
number of the Registrable Securities to be registered and will
also specify the intended methods of disposition thereof. If
Investor specifies one particular type of underwritten
offering, such method of disposition shall be such type of
underwritten offering or a series of such underwritten
offerings (as Investor may elect) during the time period the
Registration Statement is effective.
(d) Piggy-Back by Other Shareholders. Subject to the
provisions of Section 3(e), the Company may include in a
Demand Registration shares of Common Stock ("Piggy-Back
Shares") for the account of other holders thereof exercising
contractual piggy-back rights ("Piggy-Back Holders"), on the
same terms and conditions as the Registrable Securities to be
included therein for the account of the Investor. The Company
shall not have the right to include any securities of the
Company in any Demand Registration for its own account.
(e) Reduction of Offering. If any of the Registrable
Securities registered pursuant to any Demand Registration are
to be sold in one or more firm commitment underwritten
offerings, and the managing underwriter advises the Company
and Investor in writing that in its opinion the total amount
of securities proposed to be sold in the offering is such as
to materially and adversely affect the success of such
offering, then the number of Piggy-Back Shares to be offered
for the account of any Piggy-Back Holders shall be reduced (to
zero, if necessary), pro rata in proportion to the respective
number of Piggy-Back Shares requested to be registered to the
extent necessary to reduce the total securities requested to
be included in such offering to the amount, if any,
recommended by such managing underwriters. If the Piggy-Back
Shares have been reduced to zero and the number of Registrable
Securities requested
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to be registered by Investor exceeds the number of Registrable
Securities recommended by the managing underwriter, then the
number of Registrable Securities to be offered for the account
of Investor may be reduced; provided, that if the number of
Registrable Securities the Investor has requested be
registered pursuant to a Demand Registration are reduced, upon
the recommendation of the managing underwriter in an
underwritten offering, or by the Company in a non-underwritten
offering, to less than 51% of the total number of Registrable
Securities Investor requested to be registered pursuant to
such Demand Registration, then such registration shall no
longer constitute a Demand Registration under this Agreement
and shall not reduce the number of Demand Registrations to
which Investor is otherwise entitled.
(f) Other Registrations. Except for (i) registrations
effected in accordance with (A) the Exchange Notes
registration rights and/or the Warrant Securities registration
rights granted to the "Lenders" under that certain Senior
Subordinate Credit Agreement of even date herewith (the
"Senior Subordinate Credit Agreement") entered into by and
among the Company and the "Lenders" named therein (such
Exchange Notes registration rights and such Warrant Securities
registration rights being hereinafter collectively referred to
as the "Senior Subordinate Credit Agreement Registration
Rights") and (ii) any registrations effected by Investor or
its assignee(s) in accordance with such registration rights as
Investor and/or its assignee(s) shall have either under this
Agreement or otherwise (such registration rights being
hereinafter referred to as "Investors' Additional Registration
Rights") (the Senior Subordinate Credit Agreement Registration
Rights and the Investor's Additional Registration Rights being
hereinafter collectively referred to as the "Authorized
Registration Rights"), the Company shall not effect any
registration of its securities (except on Form S-8 or any
successor form to such Form), or a sale pursuant to Regulation
D under the Securities Act (other than offerings made pursuant
to and in accordance with Rule 504 of Regulation D), whether
on its own behalf or at the request of any holder or holders
of such securities (other than pursuant to and in accordance
with this Section 3), from the date of a request to register
Registrable Securities pursuant to and in accordance with this
Section 3 until the earlier of (i) 90 days after the date on
which all securities covered by such Demand Registration have
been sold or (ii) 180 days after the effective date of such
Demand Registration, unless the Company shall have first
notified Investor in writing of its intention to do so, and
Investor or the managing underwriters, if any, shall have
consented thereto in writing.
4. Piggy-Back Registration
(a) Right to Piggy-Back. If at any time the Company proposes
to file a registration statement under the Securities Act with
respect to any class of its equity securities (other than a
registration statement (i) on Form S-8 or any successor form
to such Form or (ii) filed in connection with an exchange
offer or an offering of its
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common stock or of securities convertible or exchangeable into
its common stock made solely to its existing shareholders in
connection with a rights offering or solely to employees of
the Company), whether or not for its own account, then the
Company shall give written notice of such proposed filing to
Investor at least 30 days before the anticipated filing date.
Such notice shall offer Investor the opportunity to register
such amount of Registrable Securities as Investor may request
(a "Piggy-Back Registration"). Subject to Section 4(b) hereof,
the Company shall include in each such Piggy-Back Registration
all Registrable Securities with respect to which the Company
has received from Investor a written request for inclusion
therein within 20 days after notice has been duly given to
Investor. Investor shall be permitted to withdraw all or any
part of the Registrable Securities from a Piggy-Back
Registration at any time prior to the effective date of such
Piggy-Back Registration.
(b) Priority on Piggy-Back Registrations. The Company shall
cause the managing underwriter or underwriters of a proposed
underwritten offering to permit Investor to include all the
Registrable Securities that Investor has requested to be
included in such offering on the same terms and conditions as
any similar securities, if any, of the Company included
therein. Notwithstanding the foregoing, if the managing
underwriter or underwriters of such offering deliver(s) a
written opinion to the Company and the Investor that the total
amount of securities which Investor, the Company, and any
other persons or entities having registration rights, intend
to include in such offering is such as to materially and
adversely affect the success of such offering, then the amount
of securities to be offered for the account of all Persons
shall be reduced or limited pro rata in proportion to the
amount of securities proposed to be registered in such
offering by each Person to the extent necessary to reduce the
total amount of securities to be included in such offering to
the amount recommended by such managing underwriter or
underwriters.
(c) Registration of Securities Other than Registrable
Securities. Except for the Authorized Registration Rights,
without the written consent of the holders of a majority in
aggregate amount of the Registrable Securities then
outstanding, the Company shall not grant to any Person the
right to request the Company to register any securities of the
Company under the Securities Act unless the rights so granted
are subject to the prior rights of the holders of Registrable
Securities set forth in, and are not otherwise in conflict or
inconsistent with the provisions of, this Agreement.
5. Holdback Agreements
(a) Restrictions on Public Sale by Holders of Registrable
Securities. Investor agrees, if reasonably requested by the
managing underwriter or underwriters in an underwritten
offering (to the extent timely notified in writing by the
Company or the managing underwriter or underwriters), not to
effect any public sale or distribution of securities of the
Company of any class included in a Registration Statement
registering the sale of Common Stock by the Company pursuant
to Section 3 hereof,
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including a sale pursuant to Rule 144 under the Securities Act
(except as part of such underwritten registration), during the
10-day period prior to, and the 90-day period beginning on,
the closing date of any underwritten offering made pursuant to
such Registration Statement.
The foregoing provisions shall not apply if Investor is
prevented by applicable statute or regulation from entering into any such
agreement; provided, however, that Investor shall undertake in its request to
participate in such underwritten offering, not to effect any public sale or
distribution of the class of Registrable Securities covered by such Registration
Statement (except as part of such underwritten registration) during such period
unless it has provided 45 days prior written notice of such sale or distribution
to the managing underwriters.
(b) Restrictions on Public Sale by the Company and Others.
The Company agrees (i) if requested by the managing
underwriter or underwriters in an underwritten offering of
Registrable Securities covered by a Registration Statement
filed pursuant to Section 3 hereof, not to effect any public
or private sale or distribution of its securities, including a
sale pursuant to Regulation D under the Securities Act, during
the 10-day period prior to, and the 90-day period beginning
on, the effective date of any underwritten offering made
pursuant to such Registration Statement (except as part of
such underwritten registration or pursuant to registrations on
Form S-8 or any successor form to such Form), and (ii) to
cause each holder of its securities purchased from the Company
at any time after the date of this Agreement (other than in a
registered public offering) to agree not to effect any public
sale or distribution of any such securities during such
period, including a sale pursuant to Rule 144 under the
Securities Act (except as part of such underwritten
registration, if otherwise permitted).
6. Registration Procedures. In connection with the registration
obligations of the Company pursuant to and in accordance with Section 3
of this Agreement, the Company shall effect such registrations to
permit the sale of such Registrable Securities in accordance with the
intended method or methods of disposition thereof, and pursuant thereto
the Company shall as expeditiously as possible:
(a) notify Investor and the managing underwriters, if any,
promptly, and (if requested by any such Person) confirm such
notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment related to such
Registrable Securities has been filed, and, with respect to a
Registration Statement or any post-effective amendment
related to such Registrable Securities, when the same has
become effective, (ii) of any request by the SEC for
amendments or supplements to such Registration Statement or
related Prospectus or for additional information, (iii) of the
issuance by the SEC of any stop order suspending the
effectiveness of such Registration Statement or the initiation
of any proceedings for that purpose, (iv) if at any time the
representations and warranties of the Company contained in any
agreement (including any underwriting agreement) contemplated
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Section 6(k) below cease to be true and correct, (v) of the
receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (vi) of the happening of any
event which makes any statement made in such Registration
Statement or related Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue or
which requires the making of any changes in such Registration
Statement or Prospectus so that such documents will not
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and
(vii) of the reasonable determination of the Company that a
post-effective amendment to such Registration Statement would
be appropriate;
(b) use every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration
Statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the
earliest possible moment;
(c) if requested by the managing underwriters or the
Investor, (i) immediately incorporate in a Prospectus
supplement or post-effective amendment such information as the
managing underwriters and such holder agree should be included
therein and as may be required by applicable law, (ii) make
all required filings of such Prospectus supplement or such
post-effective amendment as soon as the Company has received
notification of the matters to be incorporated in such
Prospectus supplement or such post-effective amendment and
(iii) supplement or make amendments to such Registration
Statement; provided, however, that the Company shall not be
required to take any of the actions in this Section 6(c) which
are not, in the opinion of counsel for the Company, in
compliance with applicable law;
(d) furnish to Investor and each managing underwriter, if
any, without charge, at least one signed copy of each
Registration Statement related to such Registrable Securities
and any post-effective amendments thereto, including financial
statements and schedules, all documents incorporated therein
by reference and all exhibits (including, if requested, those
previously furnished or incorporated by reference) at the
earliest practicable time under the circumstances before the
filing of such documents with the SEC;
(e) deliver to Investor and the underwriters, if any, without
charge, as many copies of the Prospectus or Prospectuses
related to such Registrable Securities (including each
preliminary prospectus) and as many copies of any amendment or
supplement thereto as such Persons may reasonably request; the
Company consents to the use of such Prospectus or any
amendment or supplement thereto by each of the
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selling holders of Registrable Securities and the
underwriters, if any, in connection with the offering and sale
of the Registrable Securities covered by such Prospectus or
any amendment or supplement thereto;
(f) prior to any public offering of Registrable Securities,
to register or qualify or cooperate with Investor, the
underwriters, if any, and their respective counsel in
connection with the registration or qualification (or
exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities
or Blue Sky laws of such jurisdictions as any seller or
underwriter reasonably requests in writing; keep each such
registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is
required to be kept effective 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 applicable Registration Statement; provided, however, that
the Company will not be required to (A) qualify generally to
do business in any jurisdiction where it is not then so
qualified or (B) take any action which would subject it to
general service of process in any such jurisdiction where it
is not then so subject;
(g) in connection with an underwritten offering, participate,
to the extent reasonably requested by the managing underwriter
for the offering or Investor, in customary efforts to sell the
securities under the offering, including, without limitation,
participating in "road shows;"
(h) cooperate with Investor and the managing underwriters, if
any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold,
which certificates shall not bear any restrictive legends;
(i) cause the Registrable Securities covered by each
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
underwriters, if any, to consummate the disposition of such
Registrable Securities;
(j) upon the occurrence of any event contemplated by
paragraphs 6(a)(vi) or 6(a)(vii) above, prepare a supplement
or post-effective amendment to each Registration Statement or
a supplement to the related Prospectus or any document
incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder, such
Prospectus will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading;
(k) to the extent possible, cause all Registrable Securities
covered by such a Registration Statement to be (i) listed on
each securities exchange, if any, on which
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similar securities issued by the Company are then listed, or
(ii) authorized to be quoted on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or
the National Market System of NASDAQ if the securities so
qualify, if requested by Investor;
(l) enter into such agreements (including an underwriting
agreement in form, scope and substance as is customary in
underwritten offerings) and take all such other actions in
connection therewith (including those reasonably requested by
the managing underwriters, if any, or Investor) in order to
expedite or facilitate the disposition of such Registrable
Securities and in such connection, whether or not an
underwriting agreement is entered into and whether or not the
registration is an underwritten registration (i) make such
representations and warranties to Investor and the
underwriters, if any, with respect to the business of the
Company and its Subsidiaries, the Registration Statement, the
Prospectus, and documents, if any incorporated or deemed to be
incorporated by reference in the Registration Statement, in
each case, in form, substance and scope as are customarily
made by issuers to underwriters in underwritten offerings and
confirm the same if and when requested; (ii) obtain opinions
of counsel to the Company and updates thereof (which counsel
and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters, if any,
and Investor) addressed to Investor and each of the
underwriters, if any, covering the matters customarily covered
in opinions requested in underwritten offerings and such other
matters as may be reasonably requested by Investor and such
underwriters, (iii) obtain "cold comfort" letters and updates
thereof from the independent certified public accountants of
the Company (and, if necessary, any other certified public
accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial
statements and financial data is or is required to be included
in the Registration Statement) addressed to Investor and each
of the underwriters, if any, such letters to be in customary
form and covering matters of the type customarily covered in
"cold comfort" letters in connection with underwritten
offerings; (iv) if an underwriting agreement is entered into,
cause the same to contain indemnification provisions and
procedures no less favorable than those set forth in Section 8
hereof (or such other provisions and procedures acceptable to
Investor) with respect to all parties to be indemnified
pursuant to said Section; and (v) deliver such documents and
certificates as may be requested by Investor and the managing
underwriters, if any, to evidence the continued validity of
the representations and warranties of the Company made
pursuant to paragraph 6(k)(i) above and to evidence compliance
with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company. The
above shall be done at each closing under such underwriting or
similar agreement or, as and to the extent required
thereunder;
(m) make available for inspection by a representative of
Investor, any underwriter participating in any disposition of
Registrable Securities, and any attorney or accountant
retained by such selling holders or underwriter, all financial
and other
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records, pertinent corporate documents and properties of the
Company; and cause the officers, directors and employees of
the Company and its subsidiaries to supply all information
reasonably requested by any such representative, underwriter,
attorney or accountant in connection with such Registration
Statement; provided, however, that any records, information or
documents that are designated by the Company in writing as
confidential at the time of delivery of such records,
information or documents shall be kept confidential by such
Persons and their designees unless (i) such records,
information or documents are in the public domain or otherwise
publicly available, (ii) disclosure of such records,
information or documents is required by court or
administrative order or (iii) disclosure of such records,
information or documents, in the opinion of counsel to such
Person, is otherwise required by law (including, without
limitation, pursuant to the requirements of the Securities
Act); and
(n) comply with all applicable rules and regulations of the
SEC and make generally available to its securityholders
earning statements satisfying the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder no later than 45
days after the end of any 12-month period (or 90 days after
the end of any 12-month period if such period is a fiscal
year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if
not sold to underwriters in such an offering, commencing on
the first day of the first fiscal quarter of the Company after
the effective date of a Registration Statement, which
statements shall cover said 12- month periods.
The Company may require Investor to furnish to the Company
such information regarding the distribution of Registrable Securities as the
Company may from time to time reasonably request in writing and the Company may
exclude from such registration the Registrable Securities if Investor
unreasonably fails to furnish such information within a reasonable time after
receiving such request; provided, that Investor's Registrable Securities shall
be counted for the demand made upon the Company hereunder.
Investor agrees by acquisition of Registrable Securities that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 6(a)(ii), 6(a)(iii), 6(a)(v), 6(a)(vi) or 6(a)(vii)
hereof, Investor shall forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement or Prospectus until Investor's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 6(i) hereof, or until it is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are incorporated
or deemed to be incorporated by reference in such Prospectus.
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7. Registration Expenses
(a) All reasonable fees and expenses incidental to the
Company's performance of or compliance with this Agreement
(including, without limitation, (i) all registration and
filing fees including, without limitation, fees and expenses
(A) with respect to filings required to be made with the
National Association of Securities Dealers, Inc., and (B) of
compliance with securities or Blue Sky laws (including,
without limitation, fees and disbursements of counsel for the
underwriters or selling holders (subject to the provisions of
Section 6(b)) in connection with Blue Sky qualifications of
the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under
the laws of such jurisdictions as the managing underwriters or
holders of a majority in number of the Registrable Securities
being sold may designate), (ii) printing expenses, (iii)
messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company, and Special Counsel
or other counsel for the sellers of the Registrable Securities
(subject to the provisions of Section 7(b) hereof), (v) fees
and disbursements of all independent certified public
accountants referenced to in Section 6(k)(iii) hereof
(including the expenses of any special audit and "cold
comfort" letters required by or incident to such performance),
(vi) underwriter's fees and expenses (excluding discounts,
commissions or fees of underwriters, selling brokers, dealer
managers or similar securities industry professionals relating
to the distribution of the Registrable Securities or legal
expenses of any Person other than the Company, the
underwriters and the selling holders; but including the fees
and expenses of any "qualified independent underwriter" or
other independent appraiser participating in an offering
pursuant to Section 3 of Schedule E to the Bylaws of the
National Association of Securities Dealers, Inc.), (vii)
Securities Act liability insurance if the Company so desires
such insurance and (viii) fees and expenses of all other
Persons retained by the Company) shall be borne by the Company
whether or not any Registration Statement becomes effective.
Notwithstanding the foregoing, the Company will not be
required to reimburse Investor for its out-of-pocket expenses
arising out of a Demand Registration if the Registration
Statement for such Demand Registration fails to become
effective at the request of Investor.
(b) In connection with each Piggy-Back Registration
hereunder, the Company shall reimburse Investor for the
reasonable fees and disbursements of not more than one counsel
(or more than one counsel if a conflict exists among such
selling holders in the exercise of the reasonable judgment of
counsel for the selling holders and counsel for the Company)
chosen by Investor.
8. Indemnification
(a) Indemnification by the Company. The Company shall,
notwithstanding termination of this Agreement and without
limitation as to time, indemnify and hold harmless, to the
full extent permitted by law, Investor, its officers,
directors, agents
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and employees, each person who controls such holder (within
the meaning of Section 15 of the Securities Act or Section 20
the Exchange Act), and the officers, directors, agents or
employees of any such controlling person, from and against all
losses, claims, damages, liabilities, costs (including,
without limitation, reasonable costs of preparation and
attorneys' fees) and reasonable expenses (collectively,
"Losses") arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus,
or arising out of or based upon any omission or alleged
omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading except
insofar as the same are based solely upon information
furnished in writing to the Company by Investor expressly for
use therein. The Company shall also indemnify underwriters,
selling brokers, dealer managers and similar securities
industry professionals participating in the distribution,
their officers, directors, a gents and employees and each
Person who controls such Persons (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act) to the same extent as provided above with respect to the
indemnification of Investor.
(b) Indemnification by Investor. In connection with any
Registration Statement in which Investor is participating,
Investor shall furnish to the Company in writing such
information as the Company reasonably requests for use in
connection with any Registration Statement or Prospectus and
agrees to indemnify and hold harmless, to the full extent
permitted by law, the Company, its directors, officers, agents
and employees, each Person who controls the Company (within
the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) and the directors, officers, agents or
employees of such controlling persons, from and against all
Losses arising out of or based upon any untrue statement of a
material fact contained in any Registration Statement,
Prospectus or preliminary prospectus, or arising out of or
based upon any omission of a material fact required to be
stated therein or necessary to make the statement therein not
misleading, to the extent, but only to the extent, that such
untrue statement or omission is contained in any information
so furnished in writing by Investor to the Company expressly
for use in such Registration Statement or Prospectus and that
such information was solely relied upon by the Company in
preparation of any Registration Statement, Prospectus or
preliminary prospectus. In no event shall the liability of
Investor be greater in amount than the dollar amount of the
proceeds (net of the payment of all expenses) received by
Investor upon the sale of the Registrable Securities giving
rise to such indemnification obligation. The Company shall be
entitled to receive indemnities from underwriters, selling
brokers, dealer managers and similar securities industry
professionals participating in the distribution to the same
extent as provided above with respect to information so
furnished in writing by such Persons expressly for use in any
Prospectus or Registration Statement.
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(c) Conduct of Indemnification Proceedings. If any action or
proceeding (including any governmental investigation or
inquiry) shall be brought or any claim shall be asserted
against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly
notify the party from which such indemnity is sought (the
"Indemnifying Party") in writing, and the Indemnifying Party
shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection
with the defense thereof. All such fees and expenses
(including any fees and expenses incurred in connection with
investigating or preparing to defend such action or
proceeding) shall be paid to the Indemnified Party, as
incurred, within 5 days of written notice thereof to the
Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to
indemnification hereunder). Any such Indemnified Party shall
have the right to employ separate counsel in any such action,
claim or proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be the
expenses of such Indemnified Party unless (a) the Indemnifying
Party has agreed to pay such fees and expenses or (b) the
Indemnifying Party shall have failed to promptly assume the
defense of such action, claim or proceeding and to employ
counsel reasonably satisfactory to the Indemnified Party in
any such action, claim or proceeding or (c) the named parties
to any such action, claim or proceeding (including any
impleaded parties) include both such Indemnified Party and the
Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that there may be one or more legal
defenses available to it which are different from or
additional to those available to the Indemnifying Party (in
which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the
defense of such action, claim or proceeding on behalf of such
Indemnified Party, it being understood, however, that the
Indemnifying Party shall not, in connection with any one such
action, claim or proceeding or separate but substantially
similar or related actions, claims or proceedings in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (together with appropriate
local counsel) at any time for all such Indemnified Parties,
unless in the reasonable judgment of any such Indemnified
Party a conflict of interest may exist between such
Indemnified Party and any other of such Indemnified Parties
with respect to such action, claim or proceeding, in which
event the Indemnifying Party shall be obligated to pay the
fees and expenses of such additional counsel or counsels).
(d) Contribution. If the indemnification provided for in this
Section 8 is unavailable to an Indemnified Party under Section
8(a) or 8(b) hereof (other than by reason of exceptions
provided in those Sections) in respect of any Losses, then
each applicable Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall, jointly and severally,
contribute to the amount paid or payable by such Indemnified
Party as a result of such Losses, in such proportion as is
appropriate to reflect the
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relative fault of the Indemnifying Party and Indemnified Party
in connection with the actions, statements or omissions which
resulted in such Losses as well as any other relevant
equitable considerations. The relative fault of such
Indemnifying Party and such Indemnified Party shall be
determined by reference to, among other things, whether any
action in question, including any untrue statement or alleged
untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or
relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed
to include, subject to the limitations set forth in Section
8(c), any legal or other fees or expenses reasonably incurred
by such party in connection with any investigation or
proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provision of this Section 8(d), an Indemnifying
Party which is a selling holder of Registrable Securities shall not be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities sold by such Indemnifying Party and distributed
to the public were offered to the public exceeds the amount of any damages which
such Indemnifying Party has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
9. Rule 144 and Rule 144A. The Company shall file the reports
required to be filed by it under the Securities Act and the Exchange
Act in a timely manner and, if at any time the Company is not required
to file such reports, it will, upon the request of Investor, make
available public or other information so long as necessary to permit
sales of its securities pursuant to Rules 144 and 144A. The Company
further covenants that it will take such further action as Investor may
reasonably request, all to the extent required from time to time to
enable Investor to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions
provided by Rules 144 and 144A. Upon the request of Investor, the
Company shall deliver to Investor a written statement as to whether it
has complied with such requirements. The Company will cooperate to
enable Investor to sell Registrable Securities in block trades or other
similar transactions, including furnishing to Investor (i) an opinion
or opinions of counsel to the Company, and (ii) a comfort letter from
the Company's independent public accountants, as Investor reasonably
requests, (iii) such reasonable representations, warranties, covenants
and indemnities as are customary for such transactions, and (iv) as to
prospective purchasers of Investor's securities, the information
described in Rule 144A(d)(4). Notwithstanding the foregoing, nothing in
this Section 9 shall be deemed to require the Company to register any
of its securities pursuant to the Exchange Act.
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10. Underwritten Registrations. If any Demand Registration is an
underwritten offering, the Investor will have the right to select the
investment banker or investment bankers and managers and attorneys to
administer the offering; provided, that such investment bank or manager
shall be reasonably satisfactory to the Company. If any Piggy-Back
Registration is an underwritten offering, the Company will have the
right to select the investment banker or investment bankers and
managers to administer the offering; provided, that such investment
bank or manager shall be reasonably satisfactory to Investor if
Investor is participating in such underwritten offering.
No Person may participate in any underwritten registration
hereunder unless such Person (a) agrees to sell such Person's securities to be
included in the underwritten registration 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 required
under the terms of such underwriting arrangements.
11. Miscellaneous
(a) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, Investor, in addition to
being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it
of any of the provisions of this Agreement and hereby further
agrees that, in the event of any action for specific
performance in respect of any such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Except for the agreements
pursuant to which the Authorized Registration Rights are
granted, (i) the Company shall not, on or after the date of
this Agreement, enter into any agreement with respect to its
securities which is inconsistent with the rights granted to
Investor in this Agreement or otherwise conflicts with the
provisions hereof, and (ii) the Company has not entered into
any agreement with respect to its securities granting any
registration rights to any person other than this Agreement.
(c) Adjustments Affecting Registrable Securities. The Company
shall not take any action, or permit any change to occur, with
respect to the Registrable Securities (i) which would
adversely affect the ability of Investor to include such
Registrable Securities in a registration undertaken pursuant
to this Agreement or (ii) which would adversely affect the
marketability of such Registrable Securities in any such
registration.
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(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, except
by written instrument signed by the Company and Investor.
(e) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, nationally
recognized air courier, telex or telecopier:
If to Investor:
Apollo Investment Fund IV, L.P. and/or
Apollo Overseas Partners IV, L.P.
c/o Apollo Management IV, L.P.
1999 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: (000)000-0000
With a copy (which shall not constitute notice) to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Fax: (000)000-0000
If to Company:
Renters Choice, Inc.
00000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: J. Xxxxxx Xxxxxx, Chief Executive Officer
Fax: (000)000-0000
With a copy (which shall not constitute notice) to:
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
5400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax: (000)000-0000
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All such notices and communication shall be deemed to have
been duly given: when delivered by hand, if personally delivered; two business
days after being deposited in the mail, postage prepaid, if mailed; one business
day after being timely dispatched, if by air courier; when answered back, if
telexed; and when receipt is acknowledged, if telecopy. Any of the above
addresses may be changed by notice made in accordance with this Section 12(e).
(f) Owner of Registrable Securities. The Company will
maintain, or will cause its registrar and transfer agent to
maintain, a stock book with respect to the Common Stock, in
which all transfers of Registrable Securities of which the
Company has received notice will be recorded. The Company may
deem and treat the person in whose name Registrable Securities
are registered in the stock book of the Company as the owner
thereof for all purposes, including without limitation, the
giving of notices under this Agreement.
(g) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns
of each of the parties, including without limitation and
without the need for an express assignment, subsequent holders
of Registrable Securities. Notwithstanding the foregoing, the
Demand Registration rights set forth herein, prior to the
exercise thereof by Investor, may be assigned only in
connection with a transfer to any single Person or group of
affiliated Persons (in a single transaction or series of
related transactions) of at least 25% of the Registrable
Securities held by it on the date hereof.
(h) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS, AND
EACH PARTY HERETO SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
THE FEDERAL AND STATE COURTS WITHIN THE STATE OF NEW YORK.
(k) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions
set forth herein shall remain in full force and effect and
shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ
an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have
executed the
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remaining terms, provisions, covenants and restrictions
without including any of such which may be hereafter declared
invalid, void or unenforceable.
(l) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement, and is
intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto, in respect
of the subject matter contained herein. There are no
restrictions, promises, warranties nor undertakings, other
than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to
the securities sold pursuant to the Purchase Agreement. This
Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(m) Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any
provision hereof is validly asserted as a defense, the
prevailing party shall be entitled to recover reasonably
attorneys' fees in addition to its costs and expenses and any
other available remedy.
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IN WITNESS WHEREOF, the undersigned have executed, or caused to be
executed on their behalf by an agent thereunto duly authorized, this
Registration Rights Agreement as of the date first above written.
THE COMPANY:
RENTERS CHOICE, INC.,
a Delaware corporation
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
INVESTOR:
APOLLO INVESTMENT FUND IV, L.P.
a Delaware limited partnership
By: Apollo Advisors IV, L.P.
its General Partner
By: Apollo Capital Management IV, Inc.
its General Partner
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
APOLLO OVERSEAS PARTNERS IV, L.P.
an exempted limited partnership registered
in the Cayman Islands
By: Apollo Advisors IV, L.P.
its General Partner
By: Apollo Capital Management IV, Inc.
its Managing General Partner
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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