REGISTRATION RIGHTS AGREEMENT
Dated as of September 16, 1997
BY AND AMONG
GENERAL ACCEPTANCE CORPORATION
and
CONSECO, INC.
Registration Rights Agreement
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
September 16, 1997 by and between GENERAL ACCEPTANCE CORPORATION, an Indiana
corporation (the "Company"), and CONSECO, INC., an Indiana corporation
("Conseco") (Conseco, its successors and assigns and each holder of the Note,
Warrant or any Shares are herewith referred to as Holders).
WHEREAS, the Company and Conseco, entered into that certain Agreement (the
"September Agreement"), dated as of the date hereof, pursuant to which the
Holder agreed to guarantee (the "Guaranty") certain obligations of the Company
in consideration, among other things, for (x) the issuance to the Holder the
Company's 12% Subordinated Convertible Note in the aggregate principal amount of
the amounts paid by, or on behalf of the Holder pursuant to the Guaranty (the
"Note"), and (y) a warrant (the "Warrant") to purchase shares of common stock of
the Company,
WHEREAS, the Note is convertible, and the Warrant is exercisable, at the option
of the Holders into shares of common stock of the Company in either case (the
"Shares"); and
WHEREAS, it is a condition precedent to the Holder purchasing the Note (pursuant
to the September Agreement) that this Agreement be entered into; and
WHEREAS, certain capitalized terms used herein are used as defined in the
September Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Demand Registration
1.1. Requests for Registration. At any time, a Holder of the Note, the
Warrant or Shares may demand registration under the Securities Act of all or any
portion of the Registrable Securities owned by such Holder. In order to
accomplish such demand, a Holder shall send written notice of the demand to the
Company, and such notice shall specify the number of Registrable Securities
sought to be registered. The Company shall proceed with any demand registration
requested by a Holder of the Note, the Warrant or Shares if the number of
Registrable Securities which the Holder shall have elected to include in such
Demand Registration pursuant
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to this Section 1.1 shall be at least 51% of the Shares issued or issuable upon
conversion of the Note or the exercise of the Warrant. The minimum share amounts
specified in this Section 1.1 shall be appropriately adjusted to account for any
stock dividend, stock split, recapitalization, merger, consolidation,
reorganization or other action as a result of which additional shares of common
stock of the Company are issued on account of, in conversion of or in exchange
for shares of outstanding common stock.
1.2. Maximum Number of Demand Registrations. In no event shall the total
number of Demand Registrations exceed two.
1.3. Procedure. Within 10 days after receipt of a demand pursuant to Section
1.1 hereof, the Company shall give written notice of such requested registration
to all other Persons who have registration rights and will include in such
registration, subject to the allocation provisions below, all other Registrable
Securities with respect to which the Company has received written requests for
inclusion within 20 days after the Company's mailing of such notice, plus any
securities of the Company that the Company chooses to include on its own behalf.
1.4. Expenses. The Company will pay the Registration Expenses of any demand
registration, but the Underwriting Commissions, if such demand registration is
underwritten, will be paid by the Holder in proportion to any Registrable
Securities to be included on their behalf.
1.5. Priority on Demand Registrations. If a demand registration is underwritten
and the managing underwriters advise the Company in writing that in their
opinion the number of Registrable Securities requested to be included exceeds
the number that can be sold in such offering, at a price reasonably related to
the fair value, the Company will allocate the Registrable Securities to be
included in such demand registration, first, to the Holder of Registrable
Securities pro rata on the basis of the number of Registrable Securities
(collectively, the "Selling Stockholders") for which the Company has received
written requests for inclusion, and, second, to the Company.
1.6. Selection of Underwriters. Any demand registration may be underwritten, at
the election of the Selling Stockholders, and the selection of investment
banker(s) and manager(s) and the other decisions regarding the underwriting
arrangements for any such offering will be made by the Selling Stockholders;
provided, however, that the selection of investment banker(s) and manager(s)
shall be subject to the consent of the Company, such consent not to be
unreasonably withheld.
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2. Piggyback Registrations
2.1. Right to Piggyback. Whenever the Company proposes to register the offer,
sale or offer and sale of any of its securities for its own behalf under the
Securities Act (other than a demand registration), and the registration form to
be used may be used for the registrations of Registrable Securities to be sold
in the manner proposed by the Holder ("Piggyback Registration""), the Company
will give prompt written notice to each Holder and will include in such
Piggyback Registration, subject to the allocation provisions below, all
Registrable Securities with respect to which the Company has received written
requests for inclusion within 20 days after the Company's mailing of such
notice. The Company shall not select a Restricted Form that would preclude
registration of the Registrable Securities that the Company has been requested
to include in such registration if the Company could use another available form
of registration statement which is not a Restricted Form and the use of which
would not give rise to added Registration Expenses.
2.2. Piggyback Expenses. In all Piggyback Registrations, the Company will
pay the Registration Expenses related to the Registrable Securities of the
Holders, but the Underwriting Commissions will be paid by the Selling
Stockholders in proportion to any Registrable Securities included on their
behalf.
2.3. Priority on Primary Registrations. If a Piggyback Registration is an
underwritten registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number that
can be sold in such offering, at a price reasonable related to fair value, the
Company will allocate the securities to be included as follows: first, the
securities the Company proposes to sell on its own behalf; and, second,
Registrable Securities requested to be included in such registration, pro rata
on the basis of the number of Registrable Securities owned, among the Selling
Stockholders.
2.4. Withdrawal or Abandonment. Nothing contained in this Section 2 shall be
construed as limiting or otherwise interfering with the right of the Company to
withdraw or abandon in its sole discretion any registration statement filed by
it in connection with a Piggyback Registration notwithstanding the inclusion
therein of Registrable Securities.
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3. Holdback Agreements
The Holders and the Company agree not to effect any public sale or public
distribution of equity securities of the Company of any securities convertible
into or exchangeable or exercisable for such securities during the 7 days prior
to and the 180 days after any underwritten registration of equity securities of
the Company becomes effective (except as part of such underwritten registration
or except in connection with obligations of the Company existing on the
effective date of the registration statement relating to such underwritten
offering).
4. Registration Procedures
Whenever a Holder has requested that any Registrable Securities be registered
pursuant to Section 1 of this Agreement, the Company will, as expeditiously as
possible, or whenever the Holder has requested that any Registrable Securities
be registered pursuant to Section 2 of this Agreement, the Company will, to the
extent applicable:
(a) Preparation and Filing of Registration Statement. Prepare and file with the
Securities and Exchange Commission a registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration
statement to become effective (provided that before filing a registration
statement or prospectus or any amendments or supplements thereto, the Company
will furnish the Holder with copies of all such documents proposed to be filed).
(b) Preparation and Filing of Amendments and Supplements. Prepare and file with
the Securities and Exchange Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for the greater of (x) a
period of not less than 120 days or (y) until the Registrable Securities
included therein have been sold.
(c) Copies of Documents. Furnish to the Holder such number of copies of such
registration statement, each amendment and supplement thereto and the prospectus
included in such registration statement (including each preliminary prospectus),
and such other documents as the Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities included therein owned
by the Holder.
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(d) Blue Sky Qualifications. Use its best efforts to register or quality such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as the Holder or managing underwriters may reasonably request;
provided, however, that in connection with any such registration or
qualification the Company shall not be obligated to file a general consent to
service of process, or to qualify to do business as a foreign corporation, or
otherwise subject itself to taxation in connection with such qualification or
compliance.
(e) Notification of Effectiveness; Amendments. Notify the Holder at any time
when a prospectus relating to the Registrable Securities included therein is
required to be delivered under the Securities Act within the period that the
Company is required to keep the registration statement effective of the
happening of any event as a result of which the prospectus included in such
registration statement as theretofore amended or supplemented contains an untrue
statement of a material fact or omits any material fact necessary to make the
statements therein not misleading, and, at the request of the Holder, the
Company will prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading.
(f) Listing. Cause all such Registrable Securities to be listed or included on
securities exchanges on which similar securities issued by the Company are then
listed or included.
(g) Transfer Agent and Registrar. Provide a transfer agent and registrar
for all such Registrable Securities not later than the effective date of such
registration statement.
(h) Other Agreements. Enter into such customary agreement (including an
underwriting agreement containing customary terms and conditions, including
usual and customary indemnification provisions, in form reasonably acceptable to
the Company) and take such other customary actions as may be reasonable
necessary to expedite or facilitate the disposition of such Registrable
Securities.
(i) Letters from Independent Accountants. Obtain a "cold comfort" letter
addressed to the Company from its independent accountants in such form and
covering such matters of the type customarily covered by "cold comfort" letters
delivered by such public accountants.
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(j) Inspection of Records. Make available for inspection by the Holder, and,
upon execution of a confidentiality agreement mutually acceptable to all
parties, by any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
the Holder or any underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by the Holder or any underwriter, attorney, accountant or agent in connection
with such registration statement.
5. Representations and Warranties of the Company
The Company hereby represents and warrants to the Holders:
5.1. Due Organization and Good Standing. The Company is a corporation duly
organized and validly existing under the laws of its jurisdiction of
incorporation and is duly qualified as a foreign corporation in each
jurisdiction in which the failure to be so qualified could reasonably be
expected to have a material adverse effect on the Company.
5.2. Due Authorization; Binding Effect. The execution and delivery of this
Agreement by the Company has been duly authorized by all necessary corporate
action and this Agreement constitutes the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms.
5.3. No Violation or Default. The execution and delivery by the Company of this
Agreement does not, and the performance by the Company of its obligations
hereunder will not, violate any provisions of its charter or by-laws or
constitute a default under any other agreement to which the Company is a party
or by which it or its assets may be bound.
6. Representations and Warranties of Conseco
Conseco represents and warrants to the Company:
6.1. Due Organization and Good Standing. Conseco is a corporation duly
organized and validly existing under the laws of the state of its incorporation
and is duly qualified as a foreign corporation in each jurisdiction in which the
failure to be so qualified could reasonably be expected to have a material
adverse effect on the Holder.
6.2. Due Authorization; Binding Effect. The execution and
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delivery of this Agreement by the Holder has been duly authorized by all
necessary action and this Agreement constitutes the legal, valid and binding
obligation of the Holder enforceable against each of the Holder in accordance
with its terms.
6.3. No Violation. The execution and delivery of this Agreement by the
Holder does not, and the performance by the Holder of its obligations hereunder
will not, violate any provision of the organizational documents of the Holder.
6.4. No Default. The execution and delivery of this Agreement by the Holder
does not, and the performance by the Holder of its obligations hereunder will
not, violate any other agreement to which the Holder is a party or by which any
of its assets may be bound.
7. Information Regarding Holder
The Holder shall provide to the Company such information as may be
reasonably requested by the Company for use in the preparation and filing of any
registration statement covering Registrable Securities owned by the Holder, and
the obligation of the Company to include Registrable Securities in any
registration statement on behalf of the Holder shall be subject to the Holder's
providing such information as promptly as practicable.
8. Indemnification
8.1. Indemnification by the Company. The Company hereby indemnifies, to the
extent permitted by law, the Holder, its officers and directors, and each person
who controls such Holder (within the meaning of the Securities Act), against all
losses, claims, damages, liabilities and expenses arising out of or resulting
from any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading except insofar as the
same occurs in reliance upon and in conformity with any information furnished in
writing to the Company by the Holder expressly for use therein or is caused by
the Holder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished the Holder with copies of the same.
8.2. Indemnification by the Holder. In connection with any registration
statement in which the Holder is participating, the participating Holder will
furnish to the Company in writing such
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information as is reasonably requested by the Company for use in such
registration statement or prospectus and will indemnify, to the extent permitted
by law, the Company, its directors and officers and each person who controls the
Company (within the meaning of the Securities Act) against any losses, claims,
damages, liabilities and expenses arising out of or resulting from any untrue or
alleged untrue statement of material fact or any omission or alleged omission of
a material fact required to be stated in the registration statement or
prospectus or any amendment thereof or supplement thereto or necessary to make
the statements therein not misleading, but only to the extent that such untrue
statement or omission or such alleged untrue statement or alleged omission
occurs in reliance upon and in conformity with information so furnished in
writing by the Holder specifically for use in the registration statement.
8.3. Procedures as to Indemnification. Any person entitled to indemnification
hereunder shall (i) give prompt notice to the indemnifying party of any claim
with respect to which it may seek indemnification and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonable satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party will not be subject to any liability for any settlement
made without its consent (but such consent will not be unreasonably withheld).
An indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of more
than one counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim.
8.4. Contribution. If the indemnification provided for in this Section 8 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense (including legal fees or expenses) as well
as any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall
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be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission. The Company and
each holder of Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section 8.4 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 provisions of this Section 8, an indemnified
holder shall not be required to contribute any amount in excess of the net
proceeds received by the indemnified holder from the sale of the Registrable
Securities. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
9. Condition to the Company's Obligations
In connection with an underwritten offering, it shall be a condition
to the Company's obligations to include Registrable Securities on behalf of the
Holder that the underwriters agree to indemnify the Company, its directors and
officers and each person who controls the Company (within the meaning of the
Securities Act) against any losses, claims, damages, liabilities and expenses
arising out of or resulting from any untrue or alleged untrue statement of
material fact or any omission or alleged omission of a material fact required to
be stated in the registration statement or prospectus or any amendment thereof
or supplement thereto or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission or
such alleged untrue statement or alleged omission is contained in information
furnished in writing by such underwriters on their own behalf specifically for
use in preparing the registration statement.
10. Definitions
10.1. Registrable Securities. The term "Registrable Securities" means any
common stock of the Company issued or issuable upon exercise of any convertible
notes, warrant, or similar instruments and any securities issued or to be issued
with respect to such securities by way of a stock dividend or stock split or in
connection with a combination of shares,
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recapitalization, merger, consolidation or other reorganization. As to any
particular Registrable Securities, such securities will cease to be Registrable
Securities when they have been (i) effectively registered under the Securities
Act or disposed of in accordance with the registration statement covering them
or (ii) transferred pursuant to Rule 144 under the Securities Act (or any
similar rule then in force).
10.2. Registration Expenses. The term "Registration Expenses" means all
expenses incident to the Company's performance of or compliance with this
Agreement, including without limitation all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses, expenses and fees for listing the securities to
be registered on exchanges or trading system on which similar securities issued
by the Company are then listed or included, and fees and disbursements of
counsel for the Company.
10.3. Restricted Form. The term "Restricted Form" shall mean a form of
registration statement under the Securities Act which imposes for its use a
limitation on the maximum value or number of securities to be included therein.
10.4. Securities Act. The term "Securities Act" shall mean the Securities Act
of 1933, as amended.
10.5 Shares. The term "Shares" shall mean any common stock of the Company
issued upon conversion of the Notes or upon the exercise of the Warrant.
10.6. Underwriting Commissions. The term "Underwriting Commissions" means
all underwriting discounts or commissions relating to the sale of securities of
the Company, but excludes any expenses reimbursed to underwriters.
11. Miscellaneous
11.1. Notices. Any notices required hereunder shall be sent by certified or
registered mail or telecopied and confirmed by telecopy answer back and, until
changed by notice to the Holder, to the Company at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention Chief Financial Officer, Facsimile (▇▇▇) ▇▇▇-▇▇▇▇, and
until changed by notice to the Company, to the Holder at ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention ▇▇▇▇ ▇▇▇▇, Facsimile (317)
817-6327.
11.2. Amendments and Waivers. The provisions of this Agreement may be amended
and the Company may take any action herein
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prohibited, or omit to perform any act herein required to be performed by it, if
the Company has obtained the prior written consent of the Holder.
11.3. Successors and Assigns. All covenants and agreements in this Agreement by
or on behalf of any of the parties hereto will bind and inure to the benefit of
their respective transferees and successors. The rights to cause the Company to
register Registrable Securities pursuant to this Agreement shall follow the
Note, the Warrant or the Shares, and shall be exercisable by Holder of the Note
or any Warrant or Shares including any transferees of the Note, the Warrant or
the Shares.
11.4. Governing Law. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by the law of the State of
Indiana.
11.5. Jurisdiction. The parties hereto agree to submit to personal jurisdiction
and to waive any objection as to venue in the federal or state courts in the
County of ▇▇▇▇▇▇▇▇ or Marion, State of Indiana. Service of process on any party
hereto in any action arising out of or relating to this Agreement shall be
effective if mailed to such party at the address listed in Section 11.1 hereof.
11.6. Arbitration. If a dispute arises as to interpretation of this Agreement,
it shall be decided finally by three arbitrators in an arbitration proceeding
conforming to the Rules of the American Arbitration Association applicable to
commercial arbitration. The arbitrators shall be appointed as follows: one by
the Company, one by the Holder, and one by the two other arbitrators. The
arbitration shall take place in Carmel, Indiana. The decision of a majority of
the arbitrators shall be conclusively binding upon the parties and final, and
such decision shall be enforceable as a judgment in any court of competent
jurisdiction. Each party shall pay the fees and expenses of the arbitrator
appointed by it, its counsel and its witnesses. The parties shall share equally
the fees and expenses of the impartial arbitrator.
11.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered to be an original instrument and
to be effective as of the date first written above.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
GENERAL ACCEPTANCE CORPORATION
By /s/ R. E. ▇▇▇▇▇▇
Name:R. E. ▇▇▇▇▇▇
Title:
CONSECO, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Printed:▇▇▇▇▇▇ ▇. ▇▇▇▇
Title:Executive Vice President
Chief Financial Officer