EXHIBIT 4.5
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WARRANTECH
[LOGO]
As of September 5, 1995
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Gentlemen:
This letter confirms our agreement and understanding relating to the
basis upon which Warrantech Corporation (the "Company") will engage you to
perform financial consulting services, as described below, on its behalf:
1. Advice and assistance in obtaining capital and financing for the
Company; provided that assistance in raising capital shall be subject to
separate agreements which shall specify the compensation to be paid to you in
connection therewith;
2. Monitoring the Company's operations on an ongoing basis, periodically
submitting written recommendations, observations and/or suggestions to the
Company's Board of Directors as you deem appropriate, including comments with
respect to the effect that potential agreements or transactions may have on the
structure or organization of the Company and the ability of the Company to raise
capital of various types at different costs; provided that it is understood that
you will not provide any legal advice;
3. Investment banking consultation services as may be reasonably
requested and all other financial consulting services that are customary under
the circumstances, and assisting the Company in gaining better access to the
investor media and in developing institutional interest in the Company's stock,
through direct contacts by you, introduction of the Company and its management
to your contacts, arrangement of presentations by Company management to the
investor press and to selected prospective institutional investors and
arrangement of publication in the media of information about the Company.
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In performing such services, you hereby acknowledge your
responsibility to (a) use your best efforts to preserve the confidentiality of
any proprietary or not publicly available information or data provided to you by
the Company or developed by you with the Company's assistance, and (b) fully
disclose to those parties that you contact on the Company's behalf the capacity
in which you are contacting them and your relationship with the Company.
We hereby acknowledge to you that you may rely upon the accuracy of
information about the Company provided to you by the Company and the Company
shall indemnify and hold you harmless from and against any claims relating
solely thereto, provided that you promptly notify the Company of any such claims
and provide the Company with an opportunity to defend against or settle such
claims with counsel of its choice and provided that the Company will not
indemnify you against any claims that result from your own willful misconduct.
You agree that any and all activities performed by you shall be
performed subject to the limitations set forth above and in compliance with
applicable Federal and state securities laws, rules and regulations as well as
in accordance with applicable rules and regulations of the National Association
of Securities Dealers, Inc. and NASDAQ, and that you shall indemnify and hold
harmless the Company and its affiliates from and against claims relating to any
breach by you of the foregoing covenant or resulting from your negligence or
misconduct, provided that the Company promptly notifies you of any such claim
and offers you the opportunity to approve its selection of counsel for the
defense of such claim, such approval not to be unreasonably withheld or delayed.
The term of this agreement shall be for a period commencing September
5, 1995 and expiring on December 31, 1996. Notwithstanding the foregoing,
either party may terminate this agreement with or without cause at any time upon
delivery of written notice to the other party.
As compensation for the services to be rendered by you hereunder, and
in lieu of any cash compensation, the Company shall, subject to the approval of
the Company's Board of Directors, grant you options (the "Options") to purchase
an aggregate of 50,000 shares of the Company's common stock at an exercise price
of $5.00 per share, 25,000 of which options shall vest at December 31, 1995 and
shall be exercisable commencing September 5, 1996 and 25,000 of which options
shall vest on December 31, 1996 and be immediately exercisable, in each case
provided that this Agreement has not been terminated by either
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party prior to such date in accordance with the terms hereof. No options shall
vest following termination of this Agreement. You shall have a period of five
years in which to exercise any vested option measured from the date of vesting
thereof.
As agreed, you shall have certain "piggy-back" registration rights
with respect to the common stock underlying the Options (hereinafter referred to
as the "Registerable Securities") (but not the Options themselves) as
hereinafter provided:
A. If at any time when you are unable to sell the Stock pursuant to
Rule 144 or another available exemption from registration, the Company proposes
to file with the Securities and Exchange Commission (the "SEC") a registration
statement under the Securities Act of 1933 as amended (the "Act") with respect
to any class of security (other than in connection with an offering to the
Company's employees) under the Act in a primary registration on behalf of the
Company and/or in a secondary registration on behalf of holders of such
securities and the registration form to be used may be used for registration of
the Registrable Securities, the Company will give prompt written notice to the
holders of Registrable Securities (regardless of whether some of the holders
shall have theretofore availed themselves of the registration rights provided
herein of its intention to file such registration statement and will offer to
include in such registration statement to the maximum extent possible, subject
to paragraphs (i) and (ii) below), such number of Registrable Securities with
respect to which the Company has received written requests for inclusion therein
within ten (10) days after the giving of notice by the Company. All
registrations requested pursuant hereto are referred to herein as "Piggyback
Registrations". This paragraph is not applicable to a registration statement
filed by the Company with the Commission on Forms S-4 or S-8 or any successor
forms.
(i) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration includes an underwritten primary registration on
behalf of the Company and the underwriter(s) for the offering
being registered by the Company shall determine in good faith and
advise the Company in writing that in its/their opinion the
number of Registrable Securities requested to be included in such
registration exceeds the number that can be sold in such offering
without materially adversely affecting the distribution of such
securities by the Company, the Company will include in such
registration (A) first, the securities that the
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Company proposes to sell and (B) second, securities requested to
be included in such registration, apportioned pro rata among the
Holders of Registrable Securities and holders of other securities
requesting registration.
(ii) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration consists only of an underwritten secondary
registration on behalf of holders of securities of the Company
and the underwriter(s) for the offering being registered by the
Company advise the Company in writing that in its/their opinion
the number of Registrable Securities requested to be included in
such registration exceeds the number which can be sold in such
offering without materially adversely affecting the distribution
of such securities by the Company, the Company will include in
such registration (A) first, the securities requested to be
included therein by the holders requesting such registration and
the Registrable Securities requested to be included in such
registration above pro rata among all such holders on the basis
of the number of shares requested to be included by each such
holder and (B) second, other securities requested to be included
in such registration.
B. Notwithstanding the foregoing, if any such underwriter shall
determine in good faith and advise the Company in writing that the distribution
of the Registrable Securities requested to be included in the registration
concurrently with the securities being registered by the Company would
materially adversely affect the distribution of such securities by the Company,
then the Holders of such Registrable Securities shall delay their offering and
sale for such period ending with the earliest of (1) 90 days following the
effective date of the Company's registration statement, (2) the day upon which
the underwriting syndicate, if any, for such offering shall have been disbanded
or, (3) such date as the Company, managing underwriter and holders of
Registrable Securities shall otherwise agree. In the event of such delay, the
Company shall file such supplements, post-effective amendments and take any such
other steps as may be necessary to permit such holders to make their proposed
offering and sale for a period of 120 days immediately following the end of such
period of delay. If any party disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company and the underwriter.
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C. Notwithstanding the foregoing, the Company shall not be required
to file a registration statement to include Shares pursuant hereto if an opinion
of independent counsel, reasonably satisfactory to counsel for the Company, that
the Shares proposed to be disposed of may be transferred pursuant to the
provisions of Rule 144 under the Act shall have been delivered to counsel for
the Company.
D. The Company agrees to bear the expenses of any registration
hereunder, including, but not limited to, legal, accounting and printing fees;
PROVIDED, HOWEVER, that in no event shall the Company be obligated to pay
(A) any fees and disbursements of special counsel for holders of Registrable
Securities, or (B) any underwriters' discount or commission in respect of such
Registrable Securities, or (C) any SEC or Blue Sky registration fees
attributable to the Registrable Securities included in such registration.
E. You shall furnish to the Company such information as the Company
shall reasonably require in connection with a Registration Statement.
F. The Company shall use its best efforts to cause the Registration
Statement to be filed in such "blue sky" jurisdictions as you may reasonable
request, but the Company shall not be required to do so if, in its discretion,
it determines that it would be required to register as a foreign corporation, to
consent to general service of process or to incur any tax liability.
G. In selling any of the Registrable Securities, the Company shall
comply with all applicable securities laws and regulations.
H. The Company shall indemnify you from any liability arising out of
any untrue statement or omission of a material fact in the Registration
Statement, or any prospectus or amendment relating thereto, or arising out of
any other material violation of any securities laws, unless the same shall arise
as a result of information supplied by you or the failure by you to deliver a
prospectus to any person. You shall indemnify the Company and each of its
controlling persons from any liability arising out of information supplied by
you or your failure to deliver a prospectus to any person.
You hereby represent and warrant that your entering into this
Agreement or providing services hereunder does not and will not violate any
obligation that you may have or constitute a
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breach of the provisions of any agreement by which you are or may be bound.
This agreement constitutes the entire understanding and agreement
between the parties with respect to the subject matter covered in and all prior
or contemporaneous understanding, negotiations and agreements are herein merged.
This agreement may not be altered or modified, nor any of its provisions waived,
except by a document in writing signed by the party against whom such
alteration, modification or waiver are sought to be enforced. A waiver by
either party of any breach or omission of the other party is not deemed to be a
waiver of any subsequent or similar breach or omission. The terms and
provisions of this agreement shall be binding upon and shall inure to the
benefit of each party and its respective successors and assigns.
If the foregoing correctly sets forth the terms and conditions of our
agreement, please sign the enclosed copy of this agreement beneath the words
"Agreed to and Accepted" and return same to us in the envelope provided
herewith.
We look forward to working with you and to a long and mutually
satisfying relationship.
Very truly yours,
WARRANTECH CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Agreed to and Accepted:
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By:
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