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EXHIBIT 4.11
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of September 22, 2000,
between the investor or investors signatory hereto (each an "Investor" and
together the "Investors"), and Affinity Technology Group, Inc., a Delaware
corporation (the "Company").
WHEREAS, the Investors are purchasing from the Company, pursuant to a
Convertible Debenture and Warrants Purchase Agreement dated the date hereof
(the "Purchase Agreement") (capitalized terms not defined herein shall have the
meanings ascribed to them in the Purchase Agreement), $1,000,000 upon the
earlier of (i) the Effective Date, or (ii) 30 days after the initial filing
date of the Registration Statement; and
WHEREAS, the Company desires to grant to the Investors the
registration rights set forth herein with respect to the Conversion Shares of
Common Stock issuable upon conversion of or as interest upon the Convertible
Debentures and shares of Common Stock issuable upon exercise of the Warrants
purchased pursuant to the Purchase Agreement (the "Securities").
NOW, THEREFORE, the parties hereto mutually agree as follows:
Section 1. Registrable Securities. As used herein the term
"Registrable Security" means the Securities until (i) the Registration
Statement has been declared effective by the Commission, and all Securities
have been disposed of pursuant to the Registration Statement, (ii) all
Securities have been sold under circumstances under which all of the applicable
conditions of Rule 144 (or any similar provision then in force) under the
Securities Act ("Rule 144") are met, (iii) all Securities have been otherwise
transferred to holders who may trade such Securities without restriction under
the Securities Act, and the Company has delivered a new certificate or other
evidence of ownership for such Securities not bearing a restrictive legend or
(iv) such time as, in the opinion of counsel to the Company, all Securities may
be sold without any time, volume or manner limitations pursuant to Rule 144(k)
(or any similar provision then in effect) under the Securities Act. The term
"Registrable Securities" means any and/or all of the securities falling within
the foregoing definition of a "Registrable Security." In the event of any
merger, reorganization, consolidation, recapitalization or other change in
corporate structure affecting the Common Stock, such adjustment shall be deemed
to be made in the definition of "Registrable Security" as is appropriate in
order to prevent any dilution or enlargement of the rights granted pursuant to
this Agreement.
Section 2. Restrictions on Transfer. Each Investor acknowledges
and understands that prior to the registration of the Securities as provided
herein, the Securities are "restricted securities" as defined in Rule 144
promulgated under the Act. Each Investor understands that no disposition or
transfer of the Securities may be made by Investor in the absence of (i) an
opinion of counsel to the Investor, in form and substance reasonably
satisfactory to the Company, that such transfer may be made without
registration under the Securities Act or (ii) such registration.
With a view to making available to the Investors the benefits of Rule
144, the Company agrees to:
(a) comply with the provisions of paragraph (c)(1) of Rule 144;
(b) file with the Commission in a timely manner all reports and other
documents required to be filed with the Commission pursuant to Section 13 or
15(d) under the Exchange Act by companies subject to either of such sections,
irrespective of whether the Company is then subject to such reporting
requirements; and
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(c) Upon request by the Transfer Agent, the Company shall provide the
Transfer Agent an opinion of counsel, which opinion shall be reasonably
acceptable to the Transfer Agent, that the Investor has complied with the
applicable conditions of Rule 144 upon receipt of such documentation from the
Investor reasonably requested by the Company evidencing such compliance.
Section 3. Registration Rights With Respect to the Securities.
(a) The Company agrees that it will prepare and file with the
Securities and Exchange Commission ("Commission"), within thirty (30) calendar
days after the date hereof a registration statement (on Form S-3, or other
appropriate registration statement form) under the Securities Act (the
"Registration Statement"), at the sole expense of the Company (except as
provided in Section 3(c) hereof), in respect of the Investors, so as to permit
a public offering and resale of the Securities under the Act by the Investors
as selling stockholders and not as underwriters.
The Company shall cause such Registration Statement to become
effective within sixty (60) calendar days from the date of Closing, or, if
earlier, within five (5) days of SEC clearance to request acceleration of
effectiveness. The number of shares designated in the Registration Statement to
be registered shall include all the Warrant Shares and at least 200% of the
shares which would be required to be issued upon the conversion of the
Convertible Debentures at the Conversion Price on the date of the filing of the
Registration Statement and such number of shares as the Company deems prudent
for the purpose of issuing shares of Common Stock as interest on the
Convertible Debentures, and shall, if permissible, include appropriate language
regarding reliance upon Rule 416 to the extent permitted by the Commission. The
Company will notify the Investors of the effectiveness of the Registration
Statement within one Trading Day of such event. In the event that the number of
shares so registered shall prove to be insufficient to register the resale of
all of the Securities, then the Company shall be obligated to file, within
fifteen (15) days after the day on which the number of Securities registered
for public offering and resale by the Investors is less than 125% of the number
of Securities (calculated at the Conversion Price on such date) held by the
Investors on such date, a further Registration Statement registering such
remaining shares and shall use reasonable best efforts to prosecute such
additional Registration Statement to effectiveness within sixty (60) days of
the date of such notice. Additionally, in the event the number of shares
registered initially shall prove to be insufficient to register the resale of
all of the Securities until such further registration, then the shares
registered initially shall apply pro-rata among all of the Investors.
(b) The Company will maintain the Registration Statement or
post-effective amendment filed under this Section 3 effective under the
Securities Act until the earlier of (i) the date that none of the Securities
covered by such Registration Statement are or may become issued and
outstanding, (ii) the date that all of the Securities have been sold pursuant
to such Registration Statement, (iii) the date the Investors receive an opinion
of counsel to the Company, which counsel shall be reasonably acceptable to the
Investors, that the Securities may be sold under the provisions of Rule 144
without limitation as to volume, (iv) all Securities have been otherwise
transferred to persons who may trade such shares without restriction under the
Securities Act, and the Company has delivered a new certificate or other
evidence of ownership for such securities not bearing a restrictive legend, (v)
all Securities may be sold without any time, volume or manner limitations
pursuant to Rule 144(k) or any similar provision then in effect under the
Securities Act in the opinion of counsel to the Company, which counsel shall be
reasonably acceptable to the Investor (the "Effectiveness Period"), or (vi)
three (3) years from the Effective Date.
(c) All fees, disbursements and out-of-pocket expenses and costs
incurred by the Company in connection with the preparation and filing of the
Registration Statement under subparagraph 3(a) and in complying with applicable
securities and Blue Sky laws (including, without limitation, all attorneys'
fees of the Company) shall be borne by the Company. The Investors shall bear
the cost of underwriting and/or brokerage discounts, fees and commissions, if
any, applicable to the Securities being registered and the fees and expenses of
their counsel. The Investors and their counsel shall have a reasonable period,
not to exceed five (5) Trading Days, to review the proposed Registration
Statement or any amendment thereto, prior to filing with the Commission, and
the Company shall provide each Investor
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with copies of any comment letters received from the Commission with respect
thereto within two (2) Trading Days of receipt thereof. The Company shall use
its best efforts to qualify any of the securities for sale in such states as
any Investor reasonably designates and shall furnish indemnification in the
manner provided in Section 6 hereof. However, the Company shall not be required
to qualify in any state which will require an escrow or other restriction
relating to the Company and/or the sellers, or which will require the Company
to qualify to do business in such state or require the Company to file therein
any general consent to service of process. The Company at its expense will
supply the Investors with copies of the applicable Registration Statement and
the prospectus included therein and other related documents in such quantities
as may be reasonably requested by the Investors.
(d) The Company shall not be required by this Section 3 to include an
Investor's Registrable Securities in any Registration Statement which is to be
filed if, in the opinion of counsel for both the Investor and the Company (or,
should they not agree, in the opinion of another counsel experienced in
securities law matters acceptable to counsel for the Investor and the Company)
the proposed offering or other transfer as to which such registration is
requested is exempt from applicable federal and state securities laws and would
result in all purchasers or transferees obtaining securities which are not
"restricted securities", as defined in Rule 144 under the Securities Act.
(e) In the event that (i) the Registration Statement is not declared
effective by the Commission within sixty (60) calendar days from the Closing
Date or five (5) days of clearance by the Commission to request effectiveness,
(ii) such Registration Statement is not maintained as effective by the Company
for the period set forth in Section 3(b) above or (iii) the additional
Registration Statement referred to in Section 3(a) is not filed within fifteen
(15) days or declared effective within sixty (60) days as set forth therein
(each a "Registration Default") then the Company will pay Investor (pro rated
on a monthly basis) in cash or, at the option of the Investor, in shares of
Common Stock at the Conversion Price (as defined in the Convertible Debenture)
on the Trading Day prior to the date of payment, as liquidated damages for such
failure and not as a penalty, the cumulative sum of (i) in the event of late
filing (in the case of (iii) above), two percent (2%) of the aggregate market
value of shares of Common Stock purchased from the Company (including the
Conversion Shares which would be issuable upon conversion of the Convertible
Debentures on any date of determination (whether or not the Convertible
Debentures are then convertible pursuant to their terms) and including any
Warrant Shares held by the Investor which for the purposes of this provision
shall be valued at the difference between the market value of the Warrant
Shares at such time and the Warrant exercise price) and held by the Investor
for each month thereafter until such Registration Statement has been filed, and
(ii) in the event of late effectiveness (in case of clause (i) above) or lapsed
effectiveness (in the case of clause (ii) above), two percent (2%) of the
aggregate market value of shares of Common Stock purchased from the Company and
held by the Investor (including the Conversion Shares which would be issuable
upon conversion of the Convertible Debentures on any date of determination, and
including any Warrant Shares held by the Investor which for the purposes of
this provision shall be valued at the difference between the market value of
the Warrant Shares at such time and the Warrant exercise price) for each month
thereafter (regardless of whether one or more such Registration Defaults are
then in existence) until such Registration Statement has been declared
effective. Such payment of the liquidated damages shall be made to the
Investors in cash, within five (5) calendar days of demand, provided, however,
that the payment of such liquidated damages shall not relieve the Company from
its obligations to register the Securities pursuant to this Section. The market
value of the Common Stock for this purpose shall be the closing price (or last
trade, if so reported) on the Principal Market for each day during such
Registration Default. Notwithstanding anything to the contrary contained
herein, a failure to maintain the effectiveness of an filed Registration
Statement or the ability of an Investor to use an otherwise effective
Registration Statement to effect resales of Securities during the period after
forty-five (45) days and within ninety (90) days from the end of the Company's
fiscal year resulting solely from the need to update the Company's financial
statements contained or incorporated by reference in such Registration
Statement shall not constitute a Registration Default and shall not trigger the
accrual of liquidated damages hereunder.
If the Company does not remit the payment to the Investors as set
forth above, the Company will pay the Investors reasonable costs of collection,
including attorneys' fees, in addition to the
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liquidated damages. The registration of the Securities pursuant to this
provision shall not affect or limit the Investors' other rights or remedies as
set forth in this Agreement.
(f) No provision contained herein shall preclude the Company from
selling securities pursuant to any Registration Statement in which it is
required to include Securities pursuant to this Section 3.
(g) If at any time or from time to time after the effective date of
any Registration Statement, the Company notifies the Investors in writing of
the existence of a Potential Material Event (as defined in Section 3(h) below),
the Investors shall not offer or sell any Securities or engage in any other
transaction involving or relating to Securities, from the time of the giving of
notice with respect to a Potential Material Event until the Investors receive
written notice from the Company that such Potential Material Event either has
been disclosed to the public or no longer constitutes a Potential Material
Event; provided, however, that the Company may not so suspend the right to such
holders of Securities for more than twenty (20) business days in the aggregate
during any twelve month period, during the period the Registration Statement is
required to be in effect, and if such period is exceeded, such event shall be a
Registration Default and subject to liquidated damages as set forth in Section
3(e) hereof. If a Potential Material Event shall occur prior to the date a
Registration Statement is required to be filed, then the Company's obligation
to file such Registration Statement shall be delayed without penalty for not
more than twenty (20) business days, and such delay or delays shall not
constitute a Registration Default. Such twenty (20) business day period shall
not be in addition to the twenty (20) business day period allowed during the
period the Registration Statement is required to be in effect. The Company
must, if lawful, give the Investors notice in writing at least two (2) Trading
Days prior to the first day of the blackout period.
(h) "Potential Material Event" means any of the following: (a) the
possession by the Company of material information not ripe for disclosure in a
registration statement, as determined in good faith by the Chief Executive
Officer or the Board of Directors of the Company that disclosure of such
information in a Registration Statement would be detrimental to the business
and affairs of the Company; or (b) any material engagement or activity by the
Company which would, in the good faith determination of the Chief Executive
Officer or the Board of Directors of the Company, be adversely affected by
disclosure in a registration statement at such time, which determination shall
be accompanied by a good faith determination by the Chief Executive Officer or
the Board of Directors of the Company that the applicable Registration
Statement would be materially misleading absent the inclusion of such
information.
Section 4. Cooperation with Company. The Investors will
cooperate with the Company in all respects in connection with this Agreement,
including timely supplying all information reasonably requested by the Company
(which shall include all information regarding the Investors and proposed
manner of sale of the Registrable Securities required to be disclosed in any
Registration Statement) and executing and returning all documents reasonably
requested in connection with the registration and sale of the Registrable
Securities and entering into and performing their obligations under any
underwriting agreement, if the offering is an underwritten offering, in usual
and customary form, with the managing underwriter or underwriters of such
underwritten offering. Nothing in this Agreement shall obligate any Investor to
consent to be named as an underwriter in any Registration Statement. The
obligation of the Company to register the Registrable Securities shall be
absolute and unconditional as to those Securities which the Commission will
permit to be registered without naming the Investors as underwriters. Any delay
or delays caused by the Investors by failure to cooperate as required hereunder
shall not constitute a Registration Default.
Section 5. Registration Procedures. If and whenever the Company
is required by any of the provisions of this Agreement to effect the
registration of any of the Registrable Securities under the Act, the Company
shall (except as otherwise provided in this Agreement), as expeditiously as
possible, subject to the Investors' assistance and cooperation as reasonably
required with respect to each Registration Statement:
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(a)(i) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
to comply with the provisions of the Act with respect to the sale or other
disposition of all Registrable Securities covered by such registration
statement whenever the Investors shall desire to sell or otherwise dispose of
the same (including prospectus supplements with respect to the sales of
Registrable Securities from time to time in connection with a registration
statement pursuant to Rule 415 promulgated under the Act) and (ii) take all
lawful action such that each of (A) the Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and (B) the prospectus
forming part of the Registration Statement, and any amendment or supplement
thereto, does not at any time during the Registration Period include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(b)(i) prior to the filing with the Commission of any Registration
Statement (including any amendments thereto) and the distribution or delivery
of any prospectus (including any supplements thereto), provide draft copies
thereof to the Investors as required by Section 3(c) and reflect in such
documents all such comments as the Investors (and their counsel) reasonably may
propose respecting the Selling Shareholders and Plan of Distribution sections
(or equivalents) and (ii) furnish to each Investor such numbers of copies of a
prospectus including a preliminary prospectus or any amendment or supplement to
any prospectus, as applicable, in conformity with the requirements of the Act,
and such other documents, as such Investor may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities
owned by such Investor;
(c) register and qualify the Registrable Securities covered by the
Registration Statement under such other securities or blue sky laws of such
jurisdictions as the Investors shall reasonably request (subject to the
limitations set forth in Section 3(c) above), and do any and all other acts and
things which may be reasonably necessary or advisable to enable each Investor
to consummate the public sale or other disposition in such jurisdiction of the
Registrable Securities owned by such Investor;
(d) list such Registrable Securities on the Principal Market, if the
listing of such Registrable Securities is then permitted under the rules of
such Principal Market;
(e) notify each Investor at any time when a prospectus relating
thereto covered by the Registration Statement is required to be delivered under
the Act, of the happening of any event of which it has knowledge as a result of
which the prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing, subject to
Section 3(g), and the Company shall prepare and file a curative amendment under
Section 5(a) as quickly as commercially possible and during such period, the
Investors shall not make any sales of Registrable Securities pursuant to the
Registration Statement;
(f) as promptly as practicable after becoming aware of such event,
notify each Investor who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance
by the Commission of any stop order or other suspension of the effectiveness of
the Registration Statement at the earliest possible time and take all lawful
action to effect the withdrawal, recession or removal of such stop order or
other suspension;
(g) cooperate with the Investors to facilitate the timely preparation
and delivery of certificates for the Registrable Securities to be offered
pursuant to the Registration Statement and enable such certificates for the
Registrable Securities to be in such denominations or amounts, as the case may
be, as the Investors reasonably may request and registered in such names as the
Investors may request; and, within three (3) Trading Days after a Registration
Statement which includes Registrable Securities is declared effective by the
Commission, deliver and cause legal counsel selected by the Company to
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deliver to the transfer agent for the Registrable Securities (with copies to
the Investors) an appropriate instruction and, to the extent necessary, an
opinion of such counsel relating to the effectiveness of the Registration
Statement;
(h) take all such other lawful actions reasonably necessary to
expedite and facilitate the disposition by the Investors of their Registrable
Securities in accordance with the intended methods therefor provided in the
prospectus which are customary for issuers to perform under the circumstances;
(i) in the event of an underwritten offering, promptly include or
incorporate in a prospectus supplement or post-effective amendment to the
Registration Statement such information as the managers reasonably agree should
be included therein and to which the Company does not reasonably object and
make all required filings of such prospectus supplement or post-effective
amendment as soon as practicable after it is notified of the matters to be
included or incorporated in such Prospectus supplement or post-effective
amendment; and
(j) maintain a transfer agent and registrar for its Common Stock.
Section 6. Indemnification.
(a) To the maximum extent permitted by law, the Company agrees to
indemnify and hold harmless the Investors and each person, if any, who controls
an Investor within the meaning of the Securities Act (each a "Distributing
Investor") against any losses, claims, damages or liabilities, joint or several
(which shall, for all purposes of this Agreement, include, but not be limited
to, all reasonable costs of defense and investigation and all reasonable
attorneys' fees and expenses), to which the Distributing Investor may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement, or any related final prospectus
or amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company will not be liable in any such case to the
extent, and only to the extent, that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such Registration Statement,
preliminary prospectus, final prospectus or amendment or supplement thereto in
reliance upon, and in conformity with, written information furnished to the
Company by the Distributing Investor, its counsel, affiliates or any
underwriter, specifically for use in the preparation thereof or (ii) by such
Investor's failure to deliver to the purchaser a copy of the most recent
prospectus (including any amendments or supplements thereto). This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) To the maximum extent permitted by law, each Distributing Investor
agrees that it will indemnify and hold harmless the Company, and each officer
and director of the Company or person, if any, who controls the Company within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities (which shall, for all purposes of this Agreement, include, but not
be limited to, all reasonable costs of defense and investigation and all
reasonable attorneys' fees and expenses) to which the Company or any such
officer, director or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) such Investor's
failure to deliver to the purchaser a copy of the most recent prospectus
(including any amendment or supplement provided by the Company thereto) or (ii)
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement, or any related final prospectus or amendment or
supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but in each case
only to the extent that such untrue statement or alleged untrue statement or
omission or alleged omission was made in such Registration Statement, final
prospectus or amendment or supplement thereto in reliance upon, and in
conformity with, written information furnished to the Company by such
Distributing Investor, its counsel, affiliates or any underwriter, specifically
for use in the preparation thereof. This indemnity agreement will be in
addition to
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any liability, which the Distributing Investor may otherwise have.
Notwithstanding anything to the contrary herein, the Distributing Investor
shall be liable under this Section 6(b) for only that amount as does not exceed
the net proceeds to such Distributing Investor as a result of the sale of
Registrable Securities pursuant to the Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action against such indemnified party,
such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 6, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve the indemnifying party from any liability
which it may have to any indemnified party except to the extent the failure of
the indemnified party to provide such written notification actually prejudices
the ability of the indemnifying party to defend such action. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, assume the defense thereof,
subject to the provisions herein stated and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section 6 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation, unless the indemnifying party shall not
pursue the action to its final conclusion. The indemnified parties as a group
shall have the right to employ one separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall not be at the expense of the indemnifying party if the indemnifying party
has assumed the defense of the action with counsel reasonably satisfactory to
the indemnified party unless (i) the employment of such counsel has been
specifically authorized in writing by the indemnifying party, or (ii) the named
parties to any such action (including any impleaded parties) include both the
indemnified party and the indemnifying party and the indemnified party shall
have been advised by its counsel that there may be one or more material legal
defenses available to the indemnifying party materially different from or in
conflict with any legal defenses which may be available to the indemnified
party or any other indemnified party (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf of such
indemnified party, it being understood, however, that the indemnifying party
shall, 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 only for the reasonable fees
and expenses of one separate firm of attorneys for the indemnified party, which
firm shall be designated in writing by the indemnified party). No settlement of
any action against an indemnified party shall be made without the prior written
consent of the indemnified party, which consent shall not be unreasonably
withheld so long as such settlement includes a full release of claims against
the indemnified party.
All fees and expenses of the indemnified party (including reasonable
costs of defense and investigation in a manner not inconsistent with this
Section and all reasonable attorneys' fees and expenses) shall be paid to the
indemnified party, as incurred, within ten (10) Trading Days of written notice
thereof to the indemnifying party (provided, that the indemnifying party may
require such indemnified party to undertake to reimburse all such fees and
expenses to the extent it is finally judicially determined that such
indemnified party is not entitled to indemnification hereunder).
Section 7. Contribution. In order to provide for just and
equitable contribution under the Securities Act in any case in which (i) the
indemnified party makes a claim for indemnification pursuant to Section 6
hereof but is judicially determined (by the entry of a final judgment or decree
by a court of competent jurisdiction and the expiration of time to appeal or
the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that the express provisions of
Section 6 hereof provide for indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of any indemnified party,
then the Company and the applicable Distributing Investor shall contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (which shall, for all purposes of this Agreement, include, but not be
limited to, all reasonable costs of defense and investigation and all
reasonable attorneys' fees and expenses), in either such case (after
contribution from others) on the basis of relative fault as well as any other
relevant
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equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the
applicable Distributing Investor on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Distributing Investor agree
that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 7. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. 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.
Notwithstanding any other provision of this Section 7, in no event
shall any (i) Investor be required to undertake liability to any person under
this Section 7 for any amounts in excess of the dollar amount of the proceeds
received by such Investor from the sale of such Investor's Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) pursuant to any Registration Statement under which such Registrable
Securities are registered under the Securities Act and (ii) underwriter be
required to undertake liability to any person hereunder for any amounts in
excess of the aggregate discount, commission or other compensation payable to
such underwriter with respect to the Registrable Securities underwritten by it
and distributed pursuant to such Registration Statement.
Section 8. Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) hand delivered,
(ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by facsimile, addressed as set forth in the
Purchase Agreement or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand
delivery or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is
to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the first business day following the date
of sending by reputable courier service, fully prepaid, addressed to such
address, or (c) upon actual receipt of such mailing, if mailed. Either party
hereto may from time to time change its address or facsimile number for notices
under this Section 8 by giving at least ten (10) days' prior written notice of
such changed address or facsimile number to the other party hereto.
Section 9. Assignment. This Agreement is binding upon and
inures to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns. The rights granted the Investors under this
Agreement may be assigned to any purchaser of substantially all of the
Registrable Securities (or the rights thereto) from an Investor, as otherwise
permitted by the Purchase Agreement.
Section 10. Additional Covenants of the Company. The Company
agrees that if the Registration Statement is on Form S-3, for so long as it
shall be required to maintain the effectiveness of such registration statement,
it shall use its reasonable best efforts to file all reports and information
required to be filed by it with the Commission in a timely manner and take all
such other action so as to maintain such eligibility for the use of such form.
Section 11. Counterparts/Facsimile. This Agreement may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which, when together shall constitute but one and the same
instrument, and shall become effective when one or more counterparts have been
signed by each party hereto and delivered to the other parties. In lieu of the
original, a facsimile transmission or copy of the original shall be as
effective and enforceable as the original.
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Section 12. Remedies. The remedies provided in this Agreement
are cumulative and not exclusive of any remedies provided by law. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction.
Section 13. Conflicting Agreements. The Company shall not enter
into any agreement with respect to its securities that is inconsistent with the
rights granted to the holders of Registrable Securities in this Agreement or
otherwise prevents the Company from complying with all of its obligations
hereunder.
Section 14. Headings. The headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 15. Governing Law, Arbitration. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made in New York by persons domiciled in New York City
and without regard to its principles of conflicts of laws. Any dispute under
this Agreement shall be submitted to arbitration under the American Arbitration
Association (the "AAA") in New York City, New York, and shall be finally and
conclusively determined by the decision of a board of arbitration consisting of
three (3) members (hereinafter referred to as the "Board of Arbitration")
selected as according to the rules governing the AAA. The Board of Arbitration
shall meet on consecutive business days in New York City, New York, and shall
reach and render a decision in writing (concurred in by a majority of the
members of the Board of Arbitration) with respect to the amount, if any, which
the losing party is required to pay to the other party in respect of a claim
filed. In connection with rendering its decisions, the Board of Arbitration
shall adopt and follow the laws of the State of New York. To the extent
practical, decisions of the Board of Arbitration shall be rendered no more than
thirty (30) calendar days following commencement of proceedings with respect
thereto. The Board of Arbitration shall cause its written decision to be
delivered to all parties involved in the dispute. Any decision made by the
Board of Arbitration (either prior to or after the expiration of such thirty
(30) calendar day period) shall be final, binding and conclusive on the parties
to the dispute, and entitled to be enforced to the fullest extent permitted by
law and entered in any court of competent jurisdiction. The Board of
Arbitration shall be authorized and is hereby directed to enter a default
judgment against any party failing to participate in any proceeding hereunder
within the time periods set forth in the AAA rules. The non-prevailing party to
any arbitration (as determined by the Board of Arbitration) shall pay the
expenses of the prevailing party, including reasonable attorneys' fees, in
connection with such arbitration. Any party shall be entitled to obtain
injunctive relief from a court in any case where such relief is available, and
the non-prevailing party in any such injunctive proceeding shall pay the
expenses of the prevailing party, including reasonable attorneys' fees, in
connection with such injunctive proceeding.
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed, on this 22nd day of September, 2000.
AFFINITY TECHNOLOGY GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President & CEO
INVESTOR(S):
AMRO INTERNATIONAL, S.A.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
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▇.▇. ▇▇▇▇▇▇▇▇, Director
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