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EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
________________, 1997, is between FIRST SIERRA FINANCIAL, INC., a Delaware
corporation (the "Company"), and each of the undersigned stockholders (each a
"Holder").
W I T N E S S E T H:
WHEREAS, the Company has undertaken to participate in an initial
public offering (the "Offering") of shares of common stock, par value $.01 per
share (the "Common Stock") of the Company; and
WHEREAS, after the Offering, each Holder will own a substantial
number of shares of Common Stock; and
WHEREAS, the Common Stock will be registered under Section 12 of the
Securities and Exchange Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇"); and
WHEREAS, under the provisions of the Securities Act of 1933 (the
"Securities Act") and the General Rules and Regulations promulgated by the
Securities and Exchange Commission (the "SEC") thereunder, each Holder is or
may be limited in the manner of selling the shares of Common Stock owned by
each Holder, absent registration under the Securities Act of the sale of such
shares or the availability of another exemption from the registration
requirements of the Securities Act; and
WHEREAS, the Holders are parties to a Stockholders Agreement dated as
of June 3, 1994 and the Holders desire to replace such Stockholders Agreement
with this Registration Rights Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
1. Demand Registration.
(A) Request for Registration. As used in this Agreement,
"Restricted Stock" shall mean all shares of Common Stock owned by the
Holders after the Offering, together with any securities issued or
issuable with respect to any such Common Stock by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization, or
otherwise. As to any particular shares of Restricted Stock, such
securities shall cease to be Restricted Stock when (a) a registration
statement with respect to the sale of such securities shall have
become effective under the Securities Act and such
securities shall have been disposed of in accordance with such
registration statement, (b) such securities shall have been
distributed to the public pursuant
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to Rule 144 (or any successor provision) under the Securities Act, (c)
such securities shall have been otherwise transferred, new
certificates representing such securities not bearing a legend
restricting transfer shall have been delivered by the Company and
subsequent disposition of such securities shall not require
registration or qualification of such securities under the Securities
Act or any similar state law then in force, (d) such securities shall
have ceased to be outstanding, or (e) the Holder or Holders thereof
shall agree in writing to terminate this Agreement (each Holder and
any permitted assignee of such Holder's rights and duties hereunder
are referred to herein as the "Holders" or individually as a
"Holder"). Subject to the conditions and limitations set forth in
Section 4 of this Agreement, at any time after the Offering, each of
Redstone Group, Ltd. ("Redstone") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇")
may make a written request for registration under the Securities Act
of all or part of its or their Restricted Stock pursuant to this
Section 1 (a "Demand Registration"), provided that at least 400,000
shares of Restricted Stock shall be registered in such offering. Such
request will specify the aggregate number of shares of Restricted
Stock proposed to be sold and will also specify the intended method of
disposition thereof. Within ten days after receipt of such request,
the Company will give written notice of such registration request to
all other Holders of Restricted Stock and include, subject to the
provisions of Section 1(B) hereof, in such registration all Restricted
Stock with regard to which the Company has received written requests
for inclusion therein within 15 business days after the receipt by the
applicable Holders of the Company's notice. Each such request will
also specify the aggregate number of shares of Restricted Stock to be
registered and the intended method of disposition thereof. The
Company may delay for a maximum of 90 days the filing of a
registration statement upon request from a Holder pursuant to this
Section 1 when, it its good faith judgment the Company reasonably
believes that the filing thereof at the time requested, or the
offering of securities pursuant thereto, would materially and
adversely affect a pending or proposed public offering of securities
of the Company, an acquisition, merger, recapitalization,
consolidation, reorganization or similar transaction relating to the
Company or negotiations, discussions or pending proposals with respect
thereto or require premature disclosure of information not otherwise
required to be disclosed to the potential detriment of the Company.
(B) Priority on Demand Registrations. If a registration
pursuant to this Section 1 involves an underwritten offering and the
managing underwriter shall advise the Company that, in its judgment,
the number of shares proposed to be included in such offering should
be limited due to market conditions, then the Company will promptly so
advise each Holder of Restricted Stock that has requested
registration, and the shares of the Company to be included in the
offering, in any, shall first be excluded from such offering to the
extent necessary to meet such limitation; and if further exclusions
are necessary to meet such limitation, the shares shall be excluded in
the following order until such limitation has been met: (i)
Restricted Stock requested to be registered pursuant to Section 1(A)
held by Holders other than Depping or Redstone shall be excluded pro
rata, based on the respective numbers of shares of Common Stock as to
which registration shall have been requested by such Holders, and (ii)
Restricted Stock requested to be registered pursuant to Section 1(A)
by Depping and Redstone shall be excluded pro rata, based on the
respective numbers of shares of Common Stock as to which registration
has been requested by such Holders. To the
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extent shares of Restricted Stock so requested to be registered by
Depping or Redstone are excluded from such offering, then Depping
and/or Redstone, as the case may be, shall have the right to one
additional Demand Registration under this Section with respect to such
Restricted Stock, provided that the failure of such Restricted Stock
to be registered is through no fault of such Holder.
(C) Selection of Underwriters and Counsel. The Company
will select and obtain the services of the investment banker or
investment bankers and manager or managers that will administer the
offering and the counsel to such investment bankers and managers;
provided that such investment bankers, managers and counsel must be
approved by the Holders of a majority in number of the shares of
Restricted Stock to be registered, which approval shall not be
unreasonably withheld.
2. Piggyback Registration. If the Company proposes to file a
registration statement under the Securities Act with respect to an offering for
its own account of any class of its equity securities (other than a
registration statement on Form S-8 (or any successor form) or any other
registration statement relating solely to director and/or employee benefit
plans or filed in connection with an exchange offer, a transaction to which
Rule 145 (or any successor rule) under the Securities Act applies, a
transaction relating solely to an exchange offering, a transaction relating
solely to an acquisition of assets or property for securities or an offering of
securities solely to the Company's existing stockholders), then the Company
shall in each case give written notice of such proposed filing to the Holders
of Restricted Stock as soon as practicable (but no later than 15 business days)
before the anticipated filing date, and such notice shall offer such Holders
the opportunity to register such number of shares of Restricted Stock as each
such Holder may request. Each Holder of Restricted Stock desiring to have such
holder's Restricted Stock included in such registration statement shall so
advise the Company in writing within five business days after the date of the
Company's notice, setting forth the amount of such Holder's Restricted Stock
for which registration is requested. If the Company's offering is to be an
underwritten offering, the Company shall, subject to the further provisions of
this Agreement, use its reasonable efforts to cause the managing underwriter or
underwriters of a proposed underwritten offering to permit the Holders of the
Restricted Stock requested to be included in the registration for such offering
to include such securities in such offering on the same terms and conditions as
any similar securities of the Company included therein. Moreover, if the
registration of which the Company gives notice does involve an underwriting,
the right of each Holder to registration pursuant to this Section 2 shall,
unless the Company otherwise agrees, be conditioned upon such Holder's
participation as a seller in such underwriting and its execution of an
underwriting agreement with the managing underwriter or underwriters selected
by the Company. Notwithstanding the foregoing, if the managing underwriter of
such offering advises the Company that the total number of shares of Common
Stock which the Holders, other than the Company, intend to include in such
offering will in the good faith opinion of such managing underwriter adversely
affect the terms or pricing of such offering, then the number of shares of
Common Stock to be offered for the account of the Holders shall be reduced on a
pro rata basis based on the number of shares proposed to be sold by the Holders
to the extent necessary to reduce the total number of shares of Common Stock to
be included in such offering for the Holders other than the Company to the
number of shares recommended by such managing underwriter. Any Restricted
Stock excluded from an underwriting shall be withdrawn from
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registration and shall not, without the consent of the Company and the manager
of the underwriting, be transferred in a public distribution prior to the
earlier of 90 days (or such other shorter period of time as the manager of the
underwriting may require) after the effective date of the registration
statement or 120 days after the date the Holders of such Restricted Stock are
notified of such exclusion.
3. Registration Procedures. Whenever, pursuant to Section 1 or
2, any of the Holders of Restricted Stock has requested that any Restricted
Stock be registered, the Company will, subject to the provisions of Section 4,
use all reasonable efforts to effect the registration and the sale of such
Restricted Stock in accordance with the intended method of disposition thereof
as promptly as practicable, and in connection with any such request, the
Company will:
(A) in connection with a request pursuant to Section 1,
prepare and file with the SEC, not later than 60 days after receipt of
a request to file a registration statement with respect to Restricted
Stock, a registration statement on any form for which the Company then
qualifies and which counsel for the Company shall deem appropriate and
which form shall be available for the sale of such Restricted Stock in
accordance with the intended method of distribution thereof, and use
its reasonable efforts to cause such registration statement to become
effective; provided that if the Company shall furnish to the Holders
making such a request a certificate signed by either the chief
financial officer or the chief accounting officer of the Company
stating that in such officer's good faith judgment it would be
significantly disadvantageous to the Company for such a registration
statement to be filed on or before the date filing would be required,
the Company shall have an additional period of not more than 90 days
within which to file such registration statement and provided further
(i) that, before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company will furnish to one
counsel selected by the Holders of a majority in number of shares of
the Restricted Stock covered by such registration statement copies of
all such documents proposed to be filed, which documents will be
subject to the review of such counsel, and (ii) that after the filing
of the registration statement, the Company will promptly notify each
of the selling Holders of Restricted Stock of any stop order issued
or, to the knowledge of the Company, threatened by the SEC and take
all reasonable actions to prevent the entry of such stop order or to
remove it if entered;
(B) in connection with a registration pursuant to Section
1, prepare and file with the SEC 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 a period of not less than 90 days or such shorter period
as shall terminate when all shares of Restricted Stock covered by such
registration statement have been sold, and comply with the provisions
of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period
in accordance with the intended methods of disposition by the selling
Holders thereof set forth in such registration statement;
(C) as soon as reasonably practicable, furnish to each
of the selling Holders, prior to filing a registration statement,
copies of such registration statement as proposed to be filed,
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and thereafter furnish to such selling Holders such number of copies
of such registration statement, each amendment and supplement thereto
(in each case, if specified by such Holder, including all exhibits
thereto), the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as a
selling Holder may reasonably request in order to facilitate the
disposition of the Restricted Stock owned by such selling Holder;
(D) with reasonable promptness, use its reasonable
efforts to register or qualify (or cause to be registered or
qualified) such Restricted Stock under such other securities or blue
sky laws of such jurisdictions within the United States as any selling
Holder (or managing underwriter in the case of an underwritten
offering) reasonably (in light of such selling Holder's or managing
underwriter's intended plan of distribution) requests and do any and
all other acts and things that may be reasonably necessary or
advisable to enable such selling Holder to consummate the disposition
in such jurisdictions of the Restricted Stock owned by such selling
Holder; provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection (D), (ii)
subject itself to taxation in any such jurisdiction or (iii) consent
to general service of process in any such jurisdiction;
(E) with reasonable promptness, use reasonable efforts to
cause the Restricted Stock covered by such registration statement to
be registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and
operations of the Company to enable the selling Holder or Holders
thereof to consummate the disposition of such Restricted Stock;
(F) promptly notify each selling Holder of such
Restricted Stock, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the occurrence
of any event known to the Company requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Restricted Stock, such prospectus
will not contain an untrue statement of a material fact or omit to
state any material fact required to
be stated therein or necessary to make the statements therein not
misleading and promptly make available to each selling Holder any such
supplement or amendment;
(G) in connection with a request pursuant to Section 1,
enter into an underwriting agreement in customary form, the form and
substance of such underwriting agreement being subject to the
reasonable satisfaction of the Company;
(H) with reasonable promptness make available for
inspection by any selling Holder, any underwriter participating in any
disposition pursuant to such registration statement, and any attorney,
accountant or other agent retained by any such selling Holder or
underwriter (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "Records"), as well as access at reasonable times
to the Company's executive officers, key employees and independent
accountants as shall be reasonably necessary
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to enable them to exercise their due diligence responsibility, and
cause the Company's officers and employees to supply all information
reasonably requested for such purpose by any such Inspector in
connection with such registration statement; provided, however, that
the selection of any Inspector other than a selling Holder shall be
subject to the consent of the Company, which shall not be unreasonably
withheld. Each Inspector that actually reviews Records supplied by
the Company that include information that the Company determines, in
good faith, to be confidential ("Confidential Information") shall be
required, prior to any such review, to execute an agreement with the
Company providing that such Inspector shall not disclose any
Confidential Information unless such disclosure is required by
applicable law or legal process. Each selling Holder of Restricted
Stock agrees that Confidential Information obtained by it as a result
of such inspections shall not be used by it as the basis for any
transactions in securities of the Company unless and until such
information is made generally available to the public. Each selling
Holder of Restricted Stock further agrees that it will, upon learning
that disclosure of Confidential Information is sought in a court of
competent jurisdiction, give notice to the Company and allow the
Company, at its expense, to undertake appropriate action to prevent
disclosure of the Confidential Information. Each selling Holder also
agrees that the due diligence investigation made by the Inspectors
shall be conducted in a manner that will not unreasonably disrupt the
operations of the Company or the work performed by the Company's
officers and employees;
(I) in the event such sale is pursuant to an underwritten
offering, use its reasonable efforts to obtain a comfort letter or
letters from the Company's independent public accountants in customary
form and covering such matters of the type customarily covered by
comfort letters as the managing underwriter reasonably requests;
(J) otherwise use its reasonable efforts to comply with
all applicable rules and regulations of the SEC, and make available to
its security holders, as soon as reasonably practicable, an earnings
statement covering a period of twelve months,
beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act; and
(K) with reasonable promptness, use its reasonable
efforts to cause all such Restricted Stock to be listed on each
securities exchange on which the Common Stock of the Company is then
listed, provided that the applicable listing requirements are
satisfied.
Each selling Holder of Restricted Stock agrees that, upon receipt of
any notice from the Company of the happening of any event of the kind described
in subsection (F) hereof, such selling Holder will forthwith discontinue
disposition of Restricted Stock pursuant to the registration statement covering
such Restricted Stock until such selling Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subsection (F) hereof, and,
if so directed by the Company, such selling Holder will deliver to the Company
(at the Company's expense) all copies, other than permanent file copies then in
such selling Holder's possession, of the prospectus covering such Restricted
Stock current at the time of receipt of such notice. In the event the Company
shall give any such notice, the Company shall extend the period during which
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registration statement shall be maintained effective pursuant to this
Agreement (including the period referred to in subsection (B)) by the number of
days during the period from and including the date of the giving of such notice
pursuant to subsection (F) hereof to and including the date when each selling
Holder of Restricted Stock covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
subsection (F) hereof. Each selling Holder also agrees to notify the Company
if any event relating to such selling Holder occurs that would require the
preparation of a supplement or amendment to the prospectus so that such
prospectus 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.
4. Conditions and Limitations.
(A) The Company's obligations under Section 1 shall be
subject to the following limitations:
(i) the Company need not file a registration
statement either (x) during the period starting with the date
60 days prior to the Company's estimated date of filing of,
and ending 90 days after the effective date of, any
registration statement pertaining to securities of the Company
(other than a registration of securities in a Rule 145
transaction or exchange offer or with respect to an employee
benefit plan or dividend reinvestment plan), provided that if
such Company registration statement is not filed within 90
days after the first date on which the Company notifies a
Holder of Restricted Stock that it will delay a Demand
Registration pursuant to this clause (x), the Company may not
further postpone such Demand Registration pursuant to this
clause; or (y) during the period specified in the first proviso
of subsection (A) of Section 3;
(ii) the Company shall not be required to furnish
any audited financial statements other than those audited
statements customarily prepared at the end of its fiscal year,
or to furnish any unaudited financial information with respect
to any period other than its regularly reported interim
quarterly periods unless in the absence of such other
unaudited financial information the registration statement
would contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(iii) except as provided in Section 1(B), the
Company shall not be required to file more than two Demand
Registrations. A registration statement will not count as a
Demand Registration until it has become effective; and
(iv) the Company shall have received the
information and documents specified in Section 5 and each
selling Holder shall have observed or performed its other
covenants and conditions contained in such section.
(B) The Company's obligation under Section 2 shall be
subject to the limitations and conditions specified in such section
and in clauses (i), (ii) and (iv) of subsection (A) of
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this Section 4, and to the condition that the Company may at any time
terminate its proposal to register its shares and discontinue its
efforts to cause a registration statement to become or remain
effective.
5. Information from and Certain Covenants of Holders of
Restricted Stock. The Holders for whom Restricted Stock are to be registered
pursuant to this Agreement shall provide to the Company such information
regarding the Restricted Stock to be so registered, the Holder and the intended
method of disposition of such Restricted Stock as shall reasonably be required
in connection with the action to be taken. Any Holder whose Restricted Stock
is included in a registration statement pursuant to this Agreement shall
execute all consents, powers of attorney, registration statements and other
documents reasonably required to be signed by it in order to cause such
registration statement to become effective. Each selling Holder covenants
that, in disposing of such Holder's shares, such Holder will comply with Rules
l0b-2, l0b-6 and l0b-7 of the SEC adopted pursuant to the Exchange Act.
6. Registration Expenses. All Registration Expenses (as defined
herein) will be borne by the Company. Underwriting discounts and commissions
applicable to the sale of Restricted Stock shall be borne by each selling
Holder of the Restricted Stock to which such discount or commission relates,
and each selling Holder shall be responsible for the fees and expenses of any
legal counsel, accountants or other agents retained by such selling Holder and
all other out-of-pocket expenses incurred by such selling Holder in connection
with any registration under this Agreement.
As used herein, the term Registration Expenses means all expenses
incident to the Company's performance of or compliance with this Agreement
(whether or not the registration in connection with which such expenses are
incurred ultimately becomes effective), including without limitation all
registration and filing fees, fees and expenses of compliance with securities
or blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Restricted Stock), rating agency
fees, printing expenses, messenger and delivery expenses incurred by the
Company, internal expenses incurred by the Company (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the fees and expenses incurred in connection with
the listing of the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed, and fees and
disbursements of counsel for the Company and its independent certified public
accountants (including the expenses of any special audit or comfort letters
required by or incident to such performance), securities acts liability
insurance (if the Company elects to obtain such insurance), the reasonable fees
and expenses of any special experts retained by the Company and the fees and
expenses of other persons retained by the Company in connection with such
registration.
7. Indemnification; Contribution.
(A) Indemnification by the Company. The Company agrees
to indemnify and hold harmless each selling Holder of Restricted
Stock, its officers, directors and agents and each person, if any, who
controls such selling Holder within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation)
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arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any registration statement
or prospectus relating to the Restricted Stock or in any amendment or
supplement thereto or in any preliminary prospectus relating to the
Restricted Stock, or arising out of or based upon 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 such losses, claims, damages,
liabilities or expenses arise out of, or are based upon, any such
untrue statement or omission or allegation thereof based upon
information furnished in writing to the Company by such selling Holder
or on such selling Holder's behalf expressly for use therein and
provided further, that with respect to any untrue statement or
omission or alleged untrue statement or omission made in any
preliminary prospectus, the indemnity agreement contained in this
subsection shall not apply to the extent that any such loss, claim,
damage, liability or expense results from the fact that a copy of the
final prospectus was not sent or given to the person asserting any
such losses, claims, damages, liabilities or expenses at or prior to
the written confirmation of the sale of the Restricted Stock concerned
to such person if a final prospectus is made available by the Company
on a timely basis. The Company also agrees to include in any
underwriting agreement with any underwriters of the Restricted Stock
provisions indemnifying and providing for contribution to such
underwriters, their officers and directors and each person who
controls such underwriters on substantially the same basis as the
provisions of this Section 8 indemnifying and providing for
contribution to the selling Holders.
(B) Indemnification by Holders of Restricted Stock. Each
selling Holder agrees to indemnify and hold harmless the Company, its
officers, directors and agents and each person, if any, who controls
the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus relating to the
Restricted Stock or in any amendment or supplement thereto or in any
preliminary prospectus relating to the Restricted Stock, or arising
out of or based upon 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, provided (i) that such losses,
claims, damages, liabilities or expenses arise out of, or are based
upon, any such untrue statement or omission or allegation thereof
based upon information furnished in writing to the Company by such
selling Holder or on such selling Holder's behalf expressly for use
therein, (ii) that with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary
prospectus, the indemnity agreement contained in this subsection shall
not apply to the extent that any such loss, claim, damage, liability
or expense results from the fact that a copy of the final prospectus
was not sent or given to the person asserting any such losses, claims,
damages, liabilities or expenses at or prior to the written
confirmation of the sale of the Restricted Stock concerned to such
person, and (iii) that no selling Holder shall be liable for any
indemnification under this Section 8 in an aggregate amount that
exceeds the total net proceeds (before deducting expenses) received by
such selling Holder from the offering. Each selling Holder also
agrees to include in any underwriting agreement with underwriters of
the Restricted Stock provisions indemnifying and providing for
contribution to such
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underwriters, their officers and directors, and each person who
controls such underwriters, on substantially the same basis as the
provisions of this Section 7 indemnifying and providing for
contribution to the Company.
(C) Conduct of Indemnification Proceedings. If any
action or proceeding (including any governmental investigation) shall
be brought or asserted against any indemnified party hereunder in
respect of which indemnity may be sought from an indemnifying party,
the indemnifying party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such indemnified
party, and shall assume the payment of all expenses. Such indemnified
party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party has agreed to pay such fees
and expenses or (ii) the indemnifying party shall have failed to
assume the defense of such action or proceeding and employ counsel
reasonably satisfactory to such indemnified party, or (iii) the use of
counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest (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),
in any of which events such fees and expenses shall be borne by the
indemnifying party and paid as incurred; provided that the
indemnifying party shall only be responsible for the fees and expenses
of one counsel for the indemnified party or parties hereunder. The
indemnifying party shall not be liable for any settlement of any such
action or proceeding effected without its written consent, but if
settled with its written consent, or if there is a final judgment for
the plaintiff in any such action or proceeding, the indemnifying party
agrees to indemnify and hold harmless such indemnified party from and
against any loss or liability (to the extent stated above) by reason
of such settlement or judgment.
(D) Contribution. If the indemnification provided for in
this Section 7 is unavailable to the Company or the selling Holders in
respect of any losses, claims, damages, liabilities or judgments
referred to therein, then each such indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities and judgments, in such proportion as is
appropriate to reflect the relative fault of each such party in
connection with such statements or omissions, as well as any other
relevant equitable considerations. The relative fault of each such
party shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Holders agree that it would not be just
and equitable if contribution pursuant to this Section 7(D) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages,
liabilities or judgments referred
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to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigation or defending any such action or claim.
Notwithstanding the provisions of this Section 7(D), no selling Holder
shall be required to contribute any amount in excess of the amount by
which the total price at which the Restricted Stock of such selling
Holder were offered to the public exceeds the amount of any damages
which such selling Holder has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation.
8. Amendments. This Agreement may be amended or modified upon
the written consent thereto of the Company and the Holders of not less than
66-2/3% of Restricted Stock.
9. Assignments. This Agreement shall be binding on and inure to
the benefit of the respective successors and assigns of the parties hereto.
10. Entire Agreement; Governing Law. This Agreement constitutes
the entire agreement of the parties relating to the subject matter hereof and
all prior or contemporaneous written or oral agreements are merged herein.
This Agreement shall be governed by the laws of the State of Delaware.
11. Notices. Any notice, request, instruction, correspondence or
other document to be given hereunder by either party to the other (herein
collectively called "Notice") shall be in writing and delivered personally or
mailed, postage prepaid, or by telegram or telecopier, as follows:
If to the Company:
First Sierra Financial, Inc.
Texas Commerce Tower, Suite 7050
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
If to a Holder, to the address set
forth on Schedule I hereto.
Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telegram or telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. Any party or Holder may change
any address to which Notice is to be given to it by giving Notice as provided
above of such change of address.
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IN WITNESS WHEREOF, the Company and the Holder have caused this
Agreement to be signed by their respective officers thereunto duly authorized.
FIRST SIERRA FINANCIAL, INC.
By: ___________________________________
REDSTONE GROUP, LTD.
BY: Redstone, Inc., its general partner
By:_____________________________________
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President
________________________________________
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________________________________________
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________________________________________
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________________________________________
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