Exhibit C
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REGISTRATION RIGHTS AGREEMENT
Dated as of March 19, 1998
By and Between
AAMES FINANCIAL CORPORATION
and
[PURCHAER]
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TABLE OF CONTENTS
Section 1. Certain Definitions................................................1
Section 2. Registration Under the Securities Act..............................5
Section 3. Registration Procedures............................................8
Section 4. Registration Expenses.............................................18
Section 5. Representations and Warranties....................................19
Section 6. Indemnification...................................................22
Section 7. Underwritten Offerings............................................27
Section 8. Rule 144..........................................................27
Section 9. Miscellaneous.....................................................28
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of March 19,
1998, by and among Aames Financial Corporation, a Delaware corporation (the
"Company"), and ____________, a _____________ (the "Purchaser").
RECITALS
WHEREAS, the Company and the Purchaser have entered into a Stock
Purchase Agreement, dated the date hereof (the "Stock Purchase Agreement"),
providing for, among other things, the sale by the Company and the purchase by
the Purchaser of an aggregate of shares (the "Shares") of Common
Stock of the Company, par value $.001 per share (the "Common Stock") and
warrants (each a "Warrant" and collectively, the "Warrants") to purchase
shares of Common Stock at an initial exercise price of $17.2031 per
share (the "Warrant Shares");
WHEREAS, the Company and (the "Other Purchaser") have
entered into a Stock Purchase Agreement, dated the date hereof (the "Other Stock
Purchase Agreement"), providing for, among other things, the sale by the Company
and the purchase by the Other Purchaser of an aggregate of shares
(the "Other Shares") of Common Stock and warrants (the "Other Warrants") to
purchase shares of Common Stock at an initial exercise price of
$17.2031 per share (the "Other Warrant Shares");
WHEREAS, the Company and the Purchaser have entered into a Warrant
Agreement, dated as of the date hereof (the "Warrant Agreement"), providing for,
among other things, the terms and conditions of the Warrants; and
NOW, THEREFORE, in consideration of the mutual covenants and conditions
as hereinafter set forth, the parties hereto agree as follows:
Section 1. Certain Definitions.
As used in this Agreement, the following terms shall have the following
respective meanings:
"Affiliate" means a person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with, the person specified.
"Closing Date" shall be the same date as the closing of the Stock
Purchase Agreement and the Other Stock Purchase Agreement.
"Commission" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
"Common Stock" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, or any
successor thereto, as the same shall be amended from time to time.
"Holder" shall mean the Purchaser, the Other Purchaser and each of
their successive successors and assigns who acquire Registrable Securities,
directly or indirectly, from either such persons or from any successive
successor or assign of either such persons.
"Other Purchaser" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Other Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated the date hereof, between the Company and the Other
Purchaser, with terms and provisions substantially similar to this Agreement.
"Other Shares" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Other Stock Purchase Agreement" shall have the meaning assigned to
such term in the preamble to this Agreement.
"Other Warrants" shall have the meaning assigned to such term in the
preamble to this Agreement.
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"Other Warrant Shares" shall have the meaning assigned to such term in
the preamble to this Agreement.
"Registrable Securities" shall mean the Shares, Other Shares, Warrant
Shares and Other Warrant Shares, and any securities of the Company issued
successively in exchange for or in respect of any of the foregoing, whether as a
result of any successive stock split or reclassifica tion of, or stock dividend
on, any of the foregoing or otherwise; provided, however, that such shares of
Common Stock or securities shall cease to be Registrable Securities when (i) a
registration statement registering such shares of Common Stock or securities, as
the case may be, under the Securities Act has been declared effective and such
shares of Common Stock or securities, as the case may be, have been sold or
otherwise transferred by the Holder thereof pursuant to such effective
registration statement, (ii) such shares of Common Stock or securities, as the
case may be, are sold pursuant to Rule 144 (or any successor provision) promul
gated under the Securities Act under circumstances in which any legend borne by
such shares of Common Stock or securities relating to restrictions on
transferability thereof, under the Securities Act or otherwise, is removed by
the Company or (iii) such shares of Common Stock or securities shall have been
transferred, new securities evidencing such shares of Common Stock or securities
without legends restricting further transfer shall have been delivered by the
Company and subsequent public distribution of such shares of Common Stock or
securities shall not require registration under the Securities Act.
"Registration Expenses" shall have the meaning assigned thereto in
Section 4 of this Agreement.
"Rights" shall mean any options, warrants, securities, rights or other
instruments convertible into or exchangeable or exercisable for, or otherwise
giving the holder thereof the right to acquire, directly or indirectly, any
Common Stock or any other such options, warrants, securities, rights or
instruments, including without limitation, the Warrants, Other Warrants and any
instrument the value of which is measured by reference to the value of the
Common Stock.
"Securities Act" shall mean the Securities Act of 1933, or any
successor thereto, as the same shall be amended from time to time.
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"Shares" shall have the meaning assigned to such term in the preamble
to this Agreement.
"Share Shelf Registration Statement" shall mean any registration
statement of the Company that covers the resale of any of the Shares and the
Other Shares pursuant to the provisions of this Agreement and the Other
Registration Rights Agreement, including any prospectus, amendments and
supplements to such registration statement or prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference, if any, in such
registration statement.
"Shelf Registration Statements" shall mean the Share Shelf Registration
Statement and the Warrant Shelf Registration Statement.
"Subsidiary" shall mean any corporation of which shares of stock having
a majority of the general voting power in electing the Board of Directors are,
at the time as of which any determination is being made, owned by the Company
either directly or through its Subsidiaries, any partnership in which the
Company or any Subsidiary is a general partner and any joint venture in which
the Company or any Subsidiary is a joint venturer.
"Warrants" shall have the meaning assigned to such term in the preamble
to this Agreement.
"Warrant Shelf Registration Statement" shall mean any registration
statement of the Company that covers the resale of any of the Warrant Shares and
the Other Warrant Shares, including any prospectus, amendments and supplements
to such registration statement or prospectus, including pre-and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.
"Warrant Shares" shall have the meaning assigned to such term in the
preamble to this Agreement.
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Section 2. Registration Under the Securities Act.
(a) The Company agrees to file with the Commission as soon as
practicable after the Closing Date, but in no event later than the 120th day
after the Closing Date, the Share Shelf Registration Statement. The Share Shelf
Registration Statement shall be on Form S-3 under the Securities Act or another
appropriate form permitting registration of the Shares and the Other Shares for
resale by the Holders from time to time in open market transactions (with or
without the use of one or more brokers) or through an underwritten offering. The
Company shall not permit any securities other than the Shares and the Other
Shares to be included in the Share Shelf Registration Statement. The Company
shall use its reasonable best efforts to cause the Share Shelf Registration
Statement to be declared effective pursuant to the Securities Act as promptly as
practicable following the filing thereof, but in no event later than 60 days
following such filing date, and to keep the Share Shelf Registration Statement
continuously effective under the Securities Act thereafter for a period ending
the earlier of (i) three years from the Closing Date (subject to extension
pursuant to Section 2(e) below), or (ii) when there ceases to be any outstanding
Shares or Other Shares which are Registrable Securities (the "Purchase Shelf
Effectiveness Period").
(b) After the occurrence of a Purchase Event (as defined in the Warrant
Agreement or the Other Warrant Agreement, as the case may be), the Company
agrees to file with the Commission at the request of any registered holder of
Warrants, Warrant Shares, Other Warrants or other Warrant Shares, but in no
event later than the 90th day after any such registered holder makes such
request, the Warrant Shelf Registration Statement. The right of the Purchaser to
request registration of the Warrant Shares shall expire on the Expiration Date
of the Warrants (as defined in the Warrant Agreement). The Warrant Shelf
Registration Statement shall be on Form S-3 under the Securities Act or another
appropriate form permitting registration of such Warrant Shares and Other
Warrant Shares for resale by the Holders from time to time in open market
transactions (with or without the use of one or more brokers) or through an
underwritten offering. The Company shall not permit any securities other than
the Warrant Shares and the Other Warrant Shares to be included in the Warrant
Shelf Registration Statement. The Company shall use its
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reasonable best efforts to cause the Warrant Shelf Registration Statement to be
declared effective pursuant to the Securities Act as promptly as practicable
following the filing thereof, but in no event later than 60 days following such
filing date, and to keep such Warrant Shelf Registration Statement continuously
effective under the Securities Act thereafter for a period ending on the earlier
of (i) twelve months from the date the Warrant Shelf Registration Statement
becomes effective (subject to extension pursuant to Section 2(e) below), or (ii)
when there ceases to be any outstanding Warrant Shares and Other Warrant Shares
which are Registrable Securities (the "Warrant Shelf Effectiveness Period," and
each of the Purchase Shelf Effectiveness Period and Warrant Shelf Effectiveness
Period, an "Effectiveness Period").
(c) In the event that either (i) the no action relief contemplated by
Section 7.7 of the Stock Purchase Agreement and Other Stock Purchase Agreement
is obtained or (ii) the Company determines in its sole and absolute discretion
that there has been a change in law or change in administrative interpretation
by the Commission that would permit the Company to file a shelf registration
statement (the "Exercise Shelf Registration Statement") under the Securities Act
to register the offer and sale by the Company of the Common Stock issuable upon
exercise of the Warrants and Other Warrants after the occurrence of a Purchase
Event (as defined in the Warrant Agreement and Other Warrant Agreement, as the
case may be) and such filing will not result in the loss of the exemption from
the registration requirements under the Securities Act which was relied on by
the Company for the offer and sale of any of the Shares, Other Shares, Warrants
or Other Warrants, at the request of any registered holder of Warrants, Warrant
Shares, Other Warrants or Other Warrant Shares, the Company shall file with the
Commission the Exercise Shelf Registration Statement. The Company shall use its
reasonable best efforts to cause such Exercise Shelf Registration Statement to
be declared effective as promptly as practicable after the filing thereof and to
keep such Exercise Shelf Registration Statement continuously effective under the
Securities Act thereafter for a period ending on the earlier of (i) three years
from the Closing Date (subject to extension pursuant to Section 2(e) below) or
(ii) when there ceases to be any outstanding Warrants and Other Warrants which
have not expired or been exercised. As soon as practicable after (a) the
Exercise Shelf Registration
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Statement is declared effective under the Securities Act and (b) the Warrant
Agreement, Other Warrant Agreement, Warrants and Other Warrants shall have been
amended by the Company and each of the registered holders of Warrants and Other
Warrants in a manner acceptable to the Company to provide for a suspension of
the right of any registered holder of Warrants or Other Warrants to exercise
such Warrants or Other Warrants in the event the Exercise Shelf Registration
Statement shall not continue to remain effective with the Commission, the
Company will amend this Agreement in a manner consistent with the other terms
hereof to provide for the filing of a shelf registration statement under the
Securities Act covering the resale of the Warrants and Other Warrants.
(d) If, for any reason, any of the Shelf Registration Statements loses
its effectiveness during its applicable Effectiveness Period, the Company shall
file with the Commission as soon as practicable, but in no event later than 60
days after the date such shelf registration statement loses its effectiveness,
another registration statement covering all of the Registrable Securities which
were covered by the Shelf Registration Statement which so lost its
effectiveness; provided, that if the Company has notice that any Shelf
Registration Statement will lose its effectiveness, the Company shall use its
reasonable best efforts to file another registration statement covering the
Registrable Securities which are covered by such Shelf Registration Statement
for the applicable Effectiveness Period as soon as practicable after the Company
receives such notice.
(e) The Company shall use its reasonable best efforts to keep the shelf
registration statements continuously effective by supplementing and amending
them as required by the rules, regulations or instructions applicable to the
registration form used for such shelf registration statement if required by the
Securities Act or reasonably requested by the Holders of a majority in aggregate
principal amount of the Registrable Securities covered by such shelf
registration statement; provided that the applicable Effectiveness Period shall
be extended to the extent necessary to permit dealers to comply with the
applicable prospectus delivery requirements of Rule 174 and as otherwise
provided herein.
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Section 3. Registration Procedures.
(a) In connection with the Company's obligations with respect to any
registration of Registrable Securities pursuant to Section 2 hereof, the Company
shall use its reasonable best efforts to effect or cause such registration to
permit the sale of the Registrable Securities by the Holders thereof in open
market transactions or in one underwritten offering pursuant to Section 7
hereof. In connection therewith, the Company shall, as soon as reasonably
possible:
(i) comply with the provisions of the Securities Act applicable to
issuers with respect to the disposition of all of the Registrable
Securities covered by such registration statement in accordance with the
intended methods of disposition by the Holders thereof set forth in such
registration statement;
(ii) provide (A) each Holder of the Shares and the Other Shares,
in the case of the Share Shelf Registration Statement, and the Warrant
Shares and the Other Warrant Shares, in the case of the Warrant Shelf
Registration Statement, and counsel for such Holders the opportunity to
participate in the preparation of such Shelf Registration Statement and (B)
(1) each such Holder and counsel, (2) the underwriters (which term, for
purposes of this Agreement, shall include a person deemed to be an
underwriter within the meaning of Section 2(11) of the Securities Act), if
any, in connection with the one underwritten offering pursuant to Section 7
hereof and (3) counsel for such underwriters, if any, the opportunity to
participate in the preparation of each prospectus included in the
applicable Shelf Registration Statement or filed with the Commission, and
each amendment or supplement thereto (and, in the case of the parties
referred to in Sections 3(a)(ii)(B)(2) and 3(a)(ii)(B)(3), only with
respect to each prospectus, amendment or supplement relating to the one
underwritten offering pursuant to Section 7 hereof);
(iii) throughout the Effectiveness Period and after receiving
notice under Section 3(c) hereof until such offer and sale is completed,
make available for inspection during normal business hours by the parties
referred to in Section 3(a)(ii) above (and, in
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the case of the party referred to in Sections 3(a)(ii)(B)(2) and
3(a)(ii)(B)(3), only with respect to an offer and sale pursuant to Section
7 hereof) such financial and other information and books and records of the
Company, and cause the officers, directors, employees, counsel and
independent certified public accountants of the Company to respond to such
inquiries, as shall be reasonably necessary, in the judgment of the
respective counsel referred to in such Section, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act if the
recipient thereof has executed a confidentiality agreement in a form
reasonably acceptable to the Company protecting against the
misappropriation or disclosure of the Company's confidential information;
(iv) promptly notify the Holders of the Shares and the Other
Shares, in the case of the Share Shelf Registration Statement, and the
Holders of the Warrant Shares and the Other Warrant Shares, in the case of
the Warrant Shelf Registration Statement and confirm such advice in
writing, (A) when such registration statement or the prospectus included
therein or any prospectus amendment or supplement or post-effective
amendment has been filed, and, with respect to such registration statement
or any post-effective amendment, when the same has become effective, (B) of
any comments by the Commission and by the Blue Sky or securities
commissioner or regulator of any state with respect thereto or any request
by the Commission for amendments or supplements to such registration
statement or prospectus or for additional information, (C) of the issuance
by the Commission of any stop order suspending the effectiveness of such
registration statement or the initiation or threatening of any proceedings
for that purpose, (D) if at any time during the applicable Effectiveness
Period the representations and warranties of the Company contemplated by
Section 3(a)(xiii) or Section 5 hereof cease to be true and correct in all
material respects, (E) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, or (F) in addition to such Holders, the
managing underwriter or underwriters, if any, in connection with the one
underwritten offering pursuant
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to Section 7 hereof, at any time a prospectus (in the case of such
underwriter or underwriters, only when a prospectus relating to such
underwritten offering) is required to be delivered under the Securities
Act, that such registration statement, prospectus, prospectus amendment or
supplement or post-effective amendment, or any document incorporated by
reference in any of the foregoing, may contain an untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances then existing;
(v) use its reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of either of the Shelf Registration
Statements or any post-effective amendment thereto at the earliest
practicable date;
(vi) if requested by any managing underwriter or underwriters in
connection with the one underwritten offering pursuant to Section 7 hereof,
or any Holder, promptly incorporate in a prospectus supplement or
post-effective amendment such information as is required by the applicable
rules and regulations of the Commission and as such managing underwriter,
underwriters or Holder specifies should be included therein relating to the
terms of the sale of such Registrable Securities, including, without
limitation, information with respect to the number of Registrable
Securities being sold by the Holders or to any underwriters, the name and
description of the Holders and underwriter, the offering price of such
Registrable Securities and any discount, commission or other compensation
payable in respect thereof, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the offering of the
Registrable Securities to be sold by the Holders or to such underwriters;
and make all required filings of such prospectus supplement or
post-effective amendment promptly after notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment;
(vii) furnish (A) to each Holder of the Shares and the Other
Shares, in the case of the Share Shelf Registration Statement, and the
Warrant Shares and the
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Other Warrant Shares, in the case of the Warrant Shelf Registration
Statement, an executed copy of such registration statement, each such
amendment and supplement thereto (in each case including all exhibits
thereto and documents incorporated by reference therein), and (B) to any
Holder of Registrable Securities such number of copies of such registration
statement (excluding exhibits thereto and documents incorporated by
reference therein unless specifically so requested by any Holder or
underwriter, if any, in connection with the one underwritten offering
pursuant to Section 7 hereof) and of the prospectus included in such
registration statement (including each preliminary prospectus and any
summary prospectus), in conformity with the requirements of the Securities
Act, and such other documents, as any such Holder and underwriter, if any,
may reasonably request in order to facilitate the offering and disposition
of the Registrable Securities owned by any such Holder or underwritten by
such underwriter and to permit each Holder and underwriter to satisfy the
prospectus delivery requirements of the Securities Act; and the Company
hereby consents to the use of such prospectus (including such preliminary
and summary prospectus) and any amendment or supplement thereto by each
Holder and by any such underwriter, in each case in the form most recently
provided to such party by the Company, in connection with the offering and
sale of the Registrable Securities covered by the prospectus (including
such preliminary and summary prospectus) or any supplement or amendment
thereto;
(viii) use its reasonable best efforts to (A) register or qualify
the Registrable Securities to be included in the applicable Shelf
Registration Statement under such securities laws or Blue Sky laws of such
jurisdictions in the United States as any Holder and underwriter, if any,
in connection with the one underwritten offering pursuant to Section 7
hereof, thereof shall reasonably request, (B) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such jurisdictions for
so long as may be necessary to enable the Holders or underwriters to
complete its distribution of Registrable Securities pursuant to such
offering and (C) take any and all other actions as may be reasonably
necessary or advisable to enable the
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Holders and underwriters, if any, to consummate the disposition in such
jurisdictions of such Registrable Securities; provided, however, that the
Company shall not be required for any such purpose to (I) qualify as a
foreign corporation in any jurisdiction wherein it would not otherwise be
required to qualify but for the requirements of this Section 3(a)(viii) or
(II) consent to general service of process in any such jurisdiction;
(ix) use its reasonable best efforts to obtain the consent or
approval of each governmental agency or authority, whether federal, state
or local, which may be required to effect such registration or the offering
or sale in connection therewith or to enable the Holders to offer, or to
consummate the disposition of, the Registrable Securities;
(x) cooperate with the Holders and the managing underwriters, if
any, in connection with the one underwritten offering pursuant to Section 7
hereof to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold, which certificates shall be
printed, lithographed or engraved, or produced by any combination of such
methods, on steel engraved borders if required or appropriate and which
shall not bear any restrictive legends; and, in the case of an underwritten
offering, enable such Registrable Securities to be in such denominations
and registered in such names as the managing underwriters may request at
least two business days prior to any sale of the Registrable Securities;
(xi) (reserved);
(xii) in the event of the one underwritten offering pursuant to
Section 7 hereof, enter into one or more underwriting agreements,
engagement letters, agency agreements, "best efforts" underwriting
agreements or similar agreements, as appropriate, and take such other
actions in connection therewith as the Holders shall reasonably request in
order to expedite or facilitate the disposition of the Registrable
Securities registered;
(xiii) in the event of the one underwritten offering pursuant to
Section 7 hereof, (A) make such representations and warranties to the
Holders and the
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underwriters, in form, substance and scope as are customarily made in
connection with an offering of common stock or other equity securities
pursuant to any appropriate agreement and/or to a registration statement
filed on the form applicable to such registration; (B) to use reasonable
best efforts to obtain an opinion of counsel to the Company in customary
form and covering such matters, of the type customarily covered by such an
opinion, as the managing underwriters, and as the Holders may reasonably
request, addressed to the Holders and the underwriters, dated the date of
the closing under the underwriting agreement relating thereto, it being
agreed that the matters to be covered by such opinion shall include,
without limitation, subject to such customary assumptions, qualifications
and limitations as such counsel reasonably deems appropriate, the due
incorporation and good standing of the Company and its significant
Subsidiaries (as defined in Regulation S-X under the Exchange Act); the
qualification of the Company and its significant Subsidiaries to transact
business as foreign corporations; the due authorization, execution and
delivery of this Agreement and of any agreement of the type referred to in
Section (3)(a)(xii) hereof; the due authorization and valid issuance of,
full payment for, and nonassessability of, the Registrable Securities and
all other outstanding Common Stock; the absence of material legal or
governmental proceedings involving the Company; the absence of a breach by
the Company or its significant Subsidiaries of, or a default under,
material agreements binding the Company or any Subsidiary as a result of
(I) the execution and delivery by the Company of any agreement of the type
referred to in Section 3(a)(xii) hereof, (II) the consummation of the
transactions contemplated by any such agreement or (III) the performance by
the Company of its obligations hereunder with respect to such Registrable
Securities; the absence of governmental approvals required to be obtained
in connection with such registration, the offering and sale of the
Registrable Securities, this Agreement or any agreement of the type
referred to in Section (3)(a)(xii) hereof; the compliance as to form of
such registration statement and any documents incorporated by reference
therein with the requirements of the Securities Act; the effectiveness of
such registration statement under
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the Securities Act; and, as of the date of the opinion, the lack of
knowledge of such counsel of the inclusion in such registration statement
or the prospectus included therein, as then amended or supplemented, or
from the documents incorporated by reference therein of an untrue statement
of a material fact or the omission to state therein a material fact
necessary to make the statements therein not misleading (in the case of
such documents, in the light of the circumstances existing at the time that
such documents were filed with the Commission under the Exchange Act); (C)
to use its reasonable best efforts to obtain a "cold comfort" letter or
letters from the independent certified public accountants of the Company
addressed to the Holders and the underwriters, if any, thereof, dated (I)
the effective date of any prospectus supplement, if any, to the prospectus
included in such registration statement or post-effective amendment to such
registration statement which includes unaudited or audited financial
statements as of a date or for a period subsequent to that of the latest
such statements included in such prospectus and (II) dated the date of the
closing under the underwriting agreement relating thereto, such letter or
letters to be in customary form and covering such matters of the type
customarily covered by letters of such type; (D) deliver such documents and
certificates, including officers' certificates, as may be reasonably
requested by the Holders and the managing underwriters, if any, thereof to
evidence the accuracy of the representations and warranties made pursuant
to clause (A) above or those contained in Section 5(a) hereof and the
compliance with or satisfaction of any agreements or conditions contained
in the underwriting agreement or other agreement entered into by the
Company; and (E) undertake such obligations relating to expense
reimbursement, indemnification and contribution as are provided in Section
6 hereof;
(xiv) in the event of one underwritten offering pursuant to
Section 7 hereof, that (i) any broker-dealer registered under the Exchange
Act shall underwrite any Registrable Securities or participate as a member
of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of the Conduct Rules and the By-Laws of
the National Association of Securities Dealers, Inc. ("NASD")) thereof,
whether as a Holder of Registrable Securities
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or as an underwriter, or a broker or dealer in respect thereof, or
otherwise, or (ii) more than 10% of the net offering proceeds, not
including underwriting compensation, of such distribution is intended to be
paid to any such broker-dealer or "associated or affiliated persons" of
such broker-dealer or "members of the immediate family of such persons"
(each within the meaning of such Rules), the Company shall take reasonable
steps to assist such broker-dealer in complying with the requirements of
such Rules and By-Laws, including, without limitation, by (A) if such Rules
or By-Laws, including Rule 2720 thereto, shall so require, engaging a
"qualified independent underwriter" (as defined in such Schedule) to
participate in the preparation of the registration statement relating to
such Registrable Securities, to exercise usual standards of due diligence
in respect thereto and, if any portion of the offering contemplated by such
registration statement is an underwritten offering, to recommend the price
of such Registrable Securities, (B) indemnifying any such qualified
independent underwriter to the extent of the indemnification of
underwriters provided in Section 6 hereof, and (C) providing such
information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Conduct Rules of the
NASD;
(xv) comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders, as soon as
practicable after the date of filing of the last report of the Company
incorporated by reference into the prospectus next preceding the relevant
sale, an earning statement of the Company and its Subsidiaries complying
with Section 11(a) of the Securities Act (including, at the option of the
Company, Rule 158 thereunder); and
(xvi) use its reasonable best efforts to list prior to the
effective date of the Share Shelf Registration Statement, subject to notice
of issuance, the Shares and the Other Shares and prior to the effective
date of the Warrant Shelf Registration Statement, subject to the notice of
issuance, the Warrant Shares and the Other Warrant Shares covered by such
registration statement on any securities exchange on which the Common Stock
is then listed.
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(b) In the event that the Company would be required, pursuant to
Section 3(a)(iv)(F) above, to notify the Holders and the managing underwriters,
if any, thereof in connection with the one underwritten offering pursuant to
Section 7 hereof, the Company shall without delay prepare and furnish to the
Holders, and to each underwriter, if any, a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter delivered to an
offeree of Registrable Securities, such prospectus shall not 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 not misleading in
light of the circumstances then existing. The Holders agree that upon receipt of
any notice from the Company pursuant to Section 3(a)(iv)(F) hereof, they shall
forthwith discontinue the disposition of Registrable Securities pursuant to the
registration statement applicable to such Registrable Securities until they
shall have received copies of such amended or supplemented prospectus, and if so
directed by the Company, the Holders shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in their
possession of the prospectus covering such Registrable Securities at the time of
receipt of such notice.
(c) If any Holder proposes to sell any of its Registrable Securities
pursuant to the applicable Shelf Registration Statement, such Holder shall
notify the Company of its intent to do so (including the proposed manner and
timing of such sales) at least two (2) but no more than five (5) full trading
days prior to such sale, and the provision of such notice to the Company shall
conclusively be deemed to reestablish and reconfirm an agreement by such Holder
to comply with the registration provisions in this Agreement. Unless otherwise
specified in such notice, such notice shall be deemed to constitute a
representation that any information previously supplied by such Holder expressly
for inclusion in the Share Shelf Registration Statement or the Warrant Shelf
Registration Statement, as appropriate (as the same may have been superseded by
subsequent information), is accurate as of the date of such notice. At any time
within such two (2) to five (5) trading day period, the Company may refuse to
permit any Holder to resell any Registrable Securities pursuant to the
appropriate Shelf Registration Statement, provided, that in order to exercise
this right, the Company or its counsel must deliver a certificate in writing to
the Holder to the effect that a delay in such
-16-
sale is necessary because a sale pursuant to the Shelf Registration Statement in
its then-current form without the addition of material, nonpublic information
about the Company could constitute a violation of the federal securities laws.
In addition, in connection with any sale of the Registrable Securities, the
Company may require the Holders to: (i) furnish to the Company such information
regarding the distribution of such Registrable Securities as is required by law
to be disclosed in the registration statement and (ii) provide to the Company a
signed writing accepting and acknowledging its rights and obligations hereunder.
(d) The registration rights of Holders pursuant to this Agreement and
the ability to offer and sell Registrable Securities pursuant to any Shelf
Registration Statement are subject to the conditions and limitations contained
in Sections 3(b) and 3(c), and Holders will be deemed to have agreed with the
Company that if the Board of Directors of the Company determines in its good
faith judgment that the use of any prospectus would require the disclosure of
material information that the Company has a bona fide business purpose for
preserving as confidential, and that the Company is not otherwise required by
applicable securities laws or regulations to disclose, or that the offer and
sale of the Registrable Securities would interfere with any financing,
acquisition or other material transaction contemplated by the Company, upon
written notice of such determination by the Company, the rights of the Holders
to offer, sell or distribute any Registrable Securities pursuant to a Shelf
Registration Statement or to require the Company to take action with respect to
the registration or sale of any Registrable Securities pursuant to a Shelf
Registration Statement shall be suspended until the date upon which the Company
notifies the Holders in writing (the "Suspension Termination Notice") that
suspension of such rights for the grounds set forth in this paragraph is no
longer necessary, and the Company agrees to give such notice as promptly as
practicable following the date that such suspension of rights is no longer
necessary. Further, if during the applicable Effectiveness Period, the Holder,
or a person who is a nominee, Affiliate, director, officer, trustee, beneficiary
or employee of such Holder, is an officer, director or employee of the Company,
the rights of the Holder to offer, sell or otherwise effect any distribution of
Registrable Securities pursuant to the Shelf Registration Statement or to
require the Company to take
-17-
action with respect to the registration or sale of any Registrable Securities
pursuant to the applicable Shelf Registration Statement shall be suspended
during any period in which directors, officers or employees of the Company are
not permitted to offer or sell securities in accordance with the Company's
policies.
(e) From the time that the Company receives any notice pursuant to
Section 3(c) from a Holder or Holders in connection with a sale of an aggregate
of $10.0 million of more of Registrable Securities in connection with the one
underwritten offering pursuant to Section 7, and the Company does not give
notice to Holders pursuant to Sections 3(b), 3(c) or 3(d) to suspend sales of
Registrable Securities, until the date 90 days after the sale relating thereto
or such shorter period as may be required by the managing underwriter or
underwriters of such offering, if any, or the selling Holders, the Company will
not offer, issue, sell, agree or commit to issue or sell, file with the
Commission a registration statement relating to any offering of or solicit any
offer to buy any Common Stock or any Rights, other than (A) in connection with
the Registrable Securities, (B) pursuant to a bona fide employee stock option,
bonus or other benefit plan as then in existence, (C) in connection with the
5.5% Convertible Subordinated Debentures due 2006 and (D) any other Rights which
may be issued by the Company, the terms of such issue requires a filing by the
Company of a shelf registration statement covering such Rights.
Section 4. Registration Expenses.
The Company agrees to bear and to pay or cause to be paid promptly upon
request being made therefor all customary expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
(a) all Commission and any NASD registration and filing fees and expenses, (b)
all fees and expenses in connection with the qualification of the Registrable
Securities for offering and sale under the State securities and Blue Sky laws,
including reasonable fees and disbursements of one counsel for the underwriters
in connection with such qualifications, (c) all expenses relating to the
preparation, printing, distribution and reproduction of each registration
statement required to be filed hereunder, each prospectus included therein or
prepared for distribution pursuant hereto, each amendment or
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supplement to the foregoing, the certificates representing the Common Stock or
other equity securities to be sold and all other documents relating hereto, (d)
messenger and delivery expenses, (e) fees and expenses of any escrow agent or
custodian, (f) internal expenses of the Company (including, without limitation,
all salaries and expenses of the Company's officers and employees performing
legal or accounting duties), (g) fees, disbursements and expenses of counsel and
independent certified public accountants of the Company (including the expenses
of any opinions or "cold comfort" letters required by or incident to such
performance and compliance), (h) fees, disbursements and expenses (including
fees and expenses of one counsel) of any "qualified independent underwriter"
engaged pursuant to Section 3(a)(xiv) hereof but excluding underwriting
commissions and discounts, (i) reasonable fees, disbursements and expenses of
one counsel for all of the Holders retained in connection with one underwritten
offering pursuant to Section 7 hereof, and fees, expenses and disbursements of
any other persons, including special experts, retained by the Company in
connection with such registration, and (j) all fees and expenses (including,
without limitation, listing fees) in connection with the listing or quotation of
trading of the Registrable Securities as required by Section 3(a)(xvi) hereof
(collectively, the "Registration Expenses"). Under no circumstances will the
Company be obligated to bear and pay underwriting discounts, commissions and
brokerage fees. To the extent that any Registration Expenses are incurred,
assumed or paid by the Holder or any underwriter thereof in connection with the
one underwritten offering pursuant to Section 7 hereof, the Company shall
reimburse such person for the full amount of the Registration Expenses so
incurred, assumed or paid promptly after receipt of a request therefor.
Section 5. Representations and Warranties.
The Company represents and warrants to, and agrees with, each Holder
from time to time of Registrable Securities that:
(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware. The Company has
all requisite corporate power and authority to carry out and perform its
obligations under this Agreement.
-19-
(b) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes the valid and binding obligation of the Company
enforceable in accordance with its terms except as such enforceability may be
subject to any applicable bankruptcy, insolvency, reorganization, fraudulent
transfer, equitable subordination or other laws relating to or affecting
creditor's rights and general principles of equity including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing; and the registration of the Registrable Securities will not result in a
breach or violation of any terms or provisions of, or constitute a default
under, any contract, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is currently a party or by which
the Company is currently bound, the Certificate of Incorporation or Bylaws of
the Company, or any law, order, rule, regulation or decree of any government,
governmental agency or court, domestic or foreign, currently applicable to the
Company, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, except for such
breaches, violations or defaults as, individually and in the aggregate, do not
have a material adverse effect on the Company.
(c) Each registration statement covering Registrable Securities and
each prospectus (including any preliminary or summary prospectus) contained
therein or furnished pursuant to Section 3(a)(vii) hereof and any further
amendments or supplements to any such registration statement or prospectus, when
it becomes effective or is filed with the Commission, as the case may be, and,
in the case of an underwritten offering of Registrable Securities, at the time
of the closing under the underwriting agreement relating thereto will conform in
all material respects to the requirements of the Securities Act and will not
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 not
misleading; and at all times subsequent to the effective date of registration
statement when a prospectus would be required to be delivered under the
Securities Act, other than from (i) such time as a notice has been given to
Holders of Registrable Securities pursuant to Section 3(a)(iv)(F) hereof until
(ii) such time as the Company furnishes an amended or supplemented prospectus
pursuant to Section 3(b) hereof, each such registration statement, and each
prospectus (including any
-20-
summary prospectus) contained therein or furnished pursuant to Section 3(a)(vii)
hereof, as then amended or supplemented, will conform in all material respects
to the requirements of the Securities Act and will not 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 not misleading in the
light of the circumstances then existing; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by a Holder of Registrable Securities or any of the parties referred to
in Section 3(a)(ii) expressly for use therein.
(d) Any documents incorporated by reference in any prospectus referred
to in Section 5(c) hereof, when they become or became effective or are or were
filed with the Commission, as the case may be, as then amended or supplemented,
will conform or conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and none of such documents
will contain or contained an untrue statement of a material fact or will omit or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by a Holder of Registrable Securities or any of the parties referred to
in Section 3(a)(ii) expressly for use therein.
(e) The compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any
significant Subsidiary is or hereafter becomes a party or by which the Company
or any significant Subsidiary is or hereafter becomes bound or to which any of
the property or assets of the Company or any significant Subsidiary is or
hereafter becomes subject, except for such conflicts, breaches and defaults as,
individually and in the aggregate, do not have a material adverse effect on the
financial condition, results of
-21-
operations, business or prospects of the Company and its significant
Subsidiaries, taken as a whole, and do not materially hinder or delay the rights
of the Holders hereunder, nor will such action result in any violation of the
provisions of the Restated Certificate of Incorporation, as amended, or the
By-Laws of the Company or any statute or any order specifically applicable to
the Company, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any significant Subsidiary or any of
their properties; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body is
required for the consummation by the Company of the transactions contemplated by
this Agreement, except the registration under the Securities Act of the
Registrable Securities and such consents, approvals, authorizations,
registrations or qualifications as may be required under State securities or
Blue Sky laws in connection with the offering and distribution of the
Registrable Securities.
Section 6. Indemnification.
(a) Indemnification by the Company. Upon the registration of any
Registrable Securities pursuant to Section 2 hereof, and in consideration of the
agreements of the Holders contained herein and of the Purchaser, in the Stock
Purchase Agreement, and as an inducement to the Purchaser, to enter into such
Agreement, the Company shall, and it hereby agrees to, indemnify and hold
harmless each Holder, and each person who participates as an underwriter in any
offering or sale of such Registrable Securities, against any losses, claims,
damages or liabilities, joint or several, to which any such Holder or
underwriter 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 an untrue statement or alleged untrue statement
of a material fact contained in any registration statement under which such
Registrable Securities were registered under the Securities Act, or any
preliminary, final or summary prospectus contained therein or furnished by the
Company to any such Holder or underwriter, or any 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, and the Company shall, and it hereby
-22-
agrees to, reimburse any such Holder and underwriter for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such action or claim; provided, however, that the Company shall
not be liable to any such Holder or underwriter in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
(i) an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, or preliminary, final or summary
prospectus, or amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Holder or underwriter
expressly for use therein or (ii) any untrue statement or alleged untrue
statement of material fact contained in, or any omission or alleged omission of
a material fact from, a prospectus if (x) a later prospectus corrects the untrue
statement or alleged untrue statement, or omission or alleged omission, which is
the basis for the claim, action, demand, loss, damage, liability, cost or
expense for which indemnification is sought, (y) a copy of the later prospectus
has been made available to the Holders in a timely fashion in accordance with
the Securities Act and had not been sent or given to such purchaser at or prior
to confirmation of sale to such purchaser and the Holder seeking indemnification
was under an obligation to deliver such later prospectus to the purchaser and
(z) there would have been no such liability but for such failure to deliver such
later prospectus by such Holder.
(b) Indemnification by the Holder and any Underwriters. The Company may
require, as a condition to including any Registrable Securities in any
registration statement filed pursuant to Section 2 hereof and to entering into
any underwriting agreement with respect thereto in connection with the one
underwritten offering pursuant to Section 7 hereof, that the Company shall have
received an undertaking from the Holder thereof and from each underwriter named
in any such underwriting agreement, severally and not jointly, to (i) indemnify
and hold harmless the Company against any losses, claims, damages or liabilities
to which the Company 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 an untrue statement or alleged untrue
statement of a material fact contained in such registration statement, or any
preliminary, final or summary prospectus contained therein or furnished to the
-23-
Company by the Holders or underwriter, or any 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, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by the Holder or underwriter expressly for
use therein, and (ii) reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim; provided, however, that no Holder shall be required to
undertake liability under this Section 6(b) for any amounts in excess of the
dollar amount of the proceeds to be received by such Holder from the sale of its
Registrable Securities pursuant to such registration, as reduced by any damages
or other amounts that such Holder was otherwise required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 6, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party other than under the indemnification provisions of or
contemplated by Section 6(a) or 6(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who may be counsel to
the indemnifying party unless representation of both parties by the same counsel
would be inappropriate due to actual or potential conflicts of interest between
them) provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that
-24-
there may be legal defenses available to it and/or other indemnified parties
that are different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select separate
counsel (in which case the indemnifying party shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties). After
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, such indemnifying party shall not be liable to
such indemnified party for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of investigation
unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence, (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time, or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. No indemnifying party shall be liable for
settlement of any proceeding effected without its written consent, which consent
shall not be unreasonably withheld.
(d) Contribution. Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 6(a) or Section 6(b) hereof
are unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying party or by
such indemnified party, and
-25-
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The parties hereto agree that
it would not be just and equitable if contribution pursuant to this Section 6(d)
were determined by pro rata allocation (even if the Holders or underwriters or
all of them were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in this Section 6(d). 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 shall be deemed to include any legal or other
fees or expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no Holder shall be required to contribute any
amount in excess of the amount of the proceeds received by such Holder from the
sale of any Registrable Securities, and no underwriter shall be required to
contribute any amount in excess of the amount of compensation received. 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. The Holders' and any
underwriter's obligations in this Section 6(d) to contribute shall be several in
proportion to the number or amount of Registrable Securities registered or
underwritten, as the case may be, by them and not joint.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of any
Holder or underwriter and each person, if any, who controls any Holder or
underwriter within the meaning of the Securities Act; and the obligations of the
Holders and any underwriters contemplated by this Section 6 shall be in addition
to any liability which the Holders or underwriter may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company (including any person who, with his consent, is named in any
registration statement as about to become a director of the Company) and to each
person, if any, who controls the Company within the meaning of the Securities
Act.
-26-
Section 7. Underwritten Offerings.
(a) In addition to selling Registrable Securities from time to time in
open market transactions under the Shelf Registration Statements, Holders of
Registrable Securities shall be permitted to sell such Registrable Securities in
one underwritten offering, provided that the aggregate market value of all
Registrable Securities to be sold in such underwritten offering exceeds $10
million, and provided further that, if an underwritten offering is elected
pursuant to the Other Registration Rights Agreement, then such right to elect an
underwritten offering pursuant to this Agreement shall terminate.
(b) Upon a receipt of a notice under Section 3(c) which includes a
request to sell Registrable Securities pursuant to an underwritten offering, the
Company shall provide all Holders of Registrable Securities then covered by the
appropriate Shelf Registration Statement a written notice of and opportunity to
participate in the offering. The managing underwriter or underwriters thereof
shall be designated by the Holders of a majority of the Registrable Securities
so to be offered, provided that such designated managing underwriter or
underwriters is or are reasonably acceptable to the Company.
(c) Each Holder hereby agrees that it may not participate in any
underwritten offering hereunder unless it (i) agrees to sell its Registrable
Securities on the basis provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
Section 8. Rule 144.
The Company covenants to and with each Holder of Registrable Securities
that to the extent it shall be required to do so under the Exchange Act, the
Company shall timely file the reports required to be filed by it under the
Exchange Act or the Securities Act (including, but not limited to, the reports
under Section 13 and 15(d) of the Exchange Act referred to in subparagraph
(c)(1) of Rule 144 adopted by the Commission under the Securities Act) and the
rules and regulations adopted by the Commission thereunder,
-27-
and shall take such further action as any Holder may reasonably request, all to
the extent required from time to time to enable the Holders to sell Registrable
Securities without registration under the Securities Act within the limitations
of the exemption provided by Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any Holder of Registrable
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements.
Section 9. Miscellaneous.
(a) Purchaser Lock-Up. If, at any time, the Company undertakes to
register any of its Common Stock or Rights or any other equity securities under
the Securities Act on a registration statement on Form S-1, Form S-2 or Form S-3
(or an equivalent general registration form then in effect), from the time that
the Company files such registration statement or, in the case of a Form S-3, a
prospectus or prospectus supplement thereunder relating to an offering pursuant
thereto with the Commission until the earlier of (i) the date 90 days after the
effectiveness of the registration statement or, in the case of a Form S-3, the
filing of a prospectus or prospectus supplement thereunder relating to an
offering pursuant thereto or such shorter period as may be required by the
managing underwriter or underwriters of such offering and (ii) the date an
election is made to withdraw such registration statement with the Commission, no
Holder will offer, sell, agree or commit or sell, grant any option for the
purchase of or solicit any offer to buy any Common Stock or any Rights. If
requested by the Company or the managing underwriter or underwriters, if any,
the Holders will execute and deliver all such documents as are necessary and
appropriate to reflect the foregoing.
(b) No Inconsistent Agreements. The Company covenants and agrees that
it shall not grant registration rights with respect to any class of Common Stock
or any other securities which would adversely affect the rights of the Holders
as set forth in this Agreement; provided, the Holders acknowledge that the
Company has heretofore granted registration rights in connection with its 5.5%
Subordinated Convertible Debentures due 2006.
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(c) Specific Performance. The Company acknowledges that it would be
impossible to determine the amount of damages that would result from any breach
by it of any of the provisions of this Agreement and that the remedy at law for
any breach, or threatened breach, of any of such provisions would likely be
inadequate and, accordingly, agrees that each Holder shall, in addition to any
other rights or remedies which it may have, be entitled to seek such equitable
and injunctive relief as may be available from any court of competent
jurisdiction to compel specific performance of, or restrain the Company from
violating any of, such provisions. In connection with any action or proceeding
for injunctive relief, the Company hereby waives the claim or defense that a
remedy at law alone is adequate and agrees, to the maximum extent permitted by
law, to have each provision of this Agreement specifically enforced against it,
without the necessity of posting bond or other security against it, and consents
to the entry of injunctive relief against it enjoining or restraining any breach
or threatened breach of this Agreement.
(d) Illegality. If any term or provision of this Agreement or any
application thereof shall be declared or held invalid, illegal or unenforceable,
in whole or in part, whether generally or in any particular jurisdiction, such
provision shall be deemed amended to the extent, but only to the extent,
necessary to cure such invalidity, illegality or unenforceability, and the
validity, legality and enforceability of the remaining provisions, both
generally and in every other jurisdiction, shall not in any way be affected or
impaired thereby.
(e) Recovery of Litigation Costs. Except as otherwise expressly
provided herein to the contrary, in the event any dispute between the parties to
this Agreement shall result in litigation, arbitration or other proceeding, the
prevailing party shall be entitled to recover from the losing party all
reasonable costs and expenses, including without limitation reasonable
attorneys' fees and disbursements, incurred by the prevailing party in
connection with such litigation or other proceeding and any appeal thereof. Such
costs, expenses, fees and disbursements shall be included in and made a part of
the judgment recovered by the prevailing party, if any.
(f) Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be
-29-
in writing and shall be deemed to have been duly given when delivered by hand,
when delivered personally or by courier, three days after being deposited in the
mail (registered or certified mail, postage prepaid, return receipt requested),
or when received by facsimile transmission if promptly confirmed by one of the
foregoing means, as follows: If to the Company, to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
facsimile transmission no. (▇▇▇) ▇▇▇-▇▇▇▇, and if to a Holder, to the address or
facsimile transmission number of such Holder set forth in the security register
or other records of the Company, or to such other address or facsimile
transmission number as any party may have furnished to the others in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
(g) Parties in Interest. All the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by
the parties hereto and their respective successors and assigns, but, except as
set forth in this Section 9(g), no such term or provision is for the benefit of,
or intended to create any obligations to, any other persons. In the event that
any transferee of a Purchaser or other Holder shall acquire Registrable
Securities, in any manner, whether by gift, bequest, purchase, operation of law
or otherwise, such transferee shall, by the execution and delivery of an
agreement to be bound to the terms of this Agreement, be deemed a party hereto
for all purposes and such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by delivering such agreement, such transferee
shall be entitled to receive all the benefits of and be bound by all of the
terms and provisions of this Agreement. Until the execution and delivery of such
agreement, the transferee shall have no rights under this Agreement. In
addition, in connection with a bona fide pledge of any Registrable Securities to
secure indebtedness or other obligations, a Purchaser or other Holder may assign
its rights, interests and obligations hereunder to the beneficiary of such
pledge; provided that neither the beneficiary of such pledge, nor any other
person who through the exercise of remedies under such pledge becomes a Holder
of Registrable Securities, shall be entitled to exercise any rights under this
Agreement unless and until the person who wishes to exercise such rights agrees
in writing to be bound by the terms of this Agreement. The Company shall not
have
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either the right or the power to assign or delegate any right or obligation
hereunder (except by merger or other operation of law) without the written
consent of Holders who own a majority of the aggregate of the then outstanding
Registrable Securities and Warrants.
(h) Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Agreement or made pursuant
hereto shall remain in full force and effect regardless of any investigation (or
statement as to the results thereof) made by or on behalf of any Holder, any
director, officer, partner or employee of any Holder, any underwriter or any
director, officer, partner or employee thereof, or any controlling person of any
of the foregoing, and shall survive delivery of and payment for the Warrants
pursuant to the Warrant Agreement and the transfer and registration of
Registrable Securities by any Holder.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO
CONFLICT OF LAW PROVISIONS THEREOF.
(j) Jurisdiction and Venue. Each of the parties hereto hereby
irrevocably submits in any legal action or proceeding relating to or arising out
of this Agreement or any other document relating hereto or delivered in
connection with the transactions contemplated hereby, or for recognition and
enforcement of any judgment in respect thereof, to the exclusive jurisdiction of
the United States District Court for the District of Delaware (or if such court
does not have jurisdiction, the courts of the State of Delaware, Newcastle
County), and appellate courts thereof. Each of the parties hereto further (a)
consents that any such action or proceeding may be brought in such court and
waives any objection that it may now or hereafter have to the venue of any such
action or proceeding in such court or that such action or proceeding was brought
in an inconvenient court and agrees not to plead or claim the same; (b) agrees
that service of process in any such action or proceeding may be effected by
personal delivery thereof to such party's registered office in the jurisdiction
in which it is incorporated, with a copy to such party at its address as
provided in Section 9(f); and (c) agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law.
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(k) Headings. The descriptive headings of the several Sections and
paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
(l) Entire Agreement; Amendments. This Agreement and the other writings
referred to herein or delivered pursuant hereto which form a part hereof contain
the entire understanding of the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter. This Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a written
instrument duly executed by the Company and the Holders of at least a majority
of the Warrants and of the Registrable Securities at the time outstanding. Each
Holder of any Registrable Securities at the time or thereafter outstanding shall
be bound by any amendment or waiver effected pursuant to this Section 9(l),
whether or not any notice, writing or marking indicating such amendment or
waiver appears on such Registrable Securities or is delivered to such Holder.
(m) Inspection. For so long as this Agreement shall be in effect, this
Agreement and a complete list of the names and addresses of all the Holders of
Registrable Securities and Warrants shall be made available for inspection and
copying on any business day by any Holder of Registrable Securities at the
offices of the Company at the address thereof set forth in Section 9(f) above.
(n) 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
AAMES FINANCIAL CORPORATION
By:
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Name:
Title:
[PURCHAER]
By:
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Name:
Title:
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