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EXHIBIT 10.22
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT is entered into as of August 5,
1998, by and between Renters Choice, Inc., a Delaware corporation (the
"Company"), and each of Apollo Investment Fund IV, L.P., a Delaware limited
partnership, and Apollo Overseas Partners IV, L.P., an exempted limited
partnership registered in the Cayman Islands acting through its general partner
(collectively, the "Investor").
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
Advice: See Section 6 hereof.
Common Stock: The common stock, $.01 par value, of the Company.
Series A Preferred Stock: The Series A Preferred Stock of the
Company, $.01 par value per share.
Demand Notice: See Section 3 hereof.
Demand Registrations: See Section 3 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Losses: See Section 8 hereof.
Notice: See Section 3 hereof.
Person: An individual, partnership, joint venture, limited liability
company, corporation, trust, unincorporated organization or government or any
department or agency thereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by such Registration Statement and all
other amendments and supplements to the prospectus, including post-effective
amendments, and all material incorporated or deemed to be incorporated by
reference in such prospectus.
Registrable Securities: (i) the Shares; (ii) the Common Stock issuable
or issued upon conversion of the Shares; (iii) any Series A Preferred Stock or
Common Stock issued as (or issuable
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upon the conversion or exercise of any warrant, right or other security which
is issued as) a dividend or other distribution with respect to, or in exchange
for or in replacement of the securities listed in clauses (i), or (ii) hereof;
and (iv) any security listed in clause (iii) hereof.
Registration Statement: Any registration statement of the Company
which covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated or deemed to be incorporated by reference in such
registration statement.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
Shares: The shares of Series A Preferred Stock purchased by Investor
pursuant to the Stock Purchase Agreement dated as of the date hereof between
the Company and Investor.
Underwritten registration or underwritten offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to
the public.
2. Securities Subject to this Agreement.
(a) Subject Securities. The securities entitled
to the benefits of this Agreement are the Registrable
Securities pursuant to the provisions of this Agreement.
(b) Holders of Registrable Securities. A person
is deemed to be a holder of Registrable Securities
whenever such person owns Registrable Securities or
has the right to acquire such Registrable Securities,
whether or not such acquisition has actually been
effected and disregarding any legal restrictions upon
the exercise of such right.
3. Demand Registrations
(a) Demand Registrations. From and after the
second anniversary of the closing date of Investor's
acquisition of the Shares, Investor shall have the
right, by written notice delivered to the Company,
to require the Company to register (the "Demand
Registrations") under the Securities Act not less
than 20% and up to 100% of its Registrable Securities
then outstanding in accordance with this Section 3.
For purposes of this Agreement, "Registrable
Securities then outstanding" shall be the total of
(i) the number of shares of Common Stock outstanding
which are Registrable Securities and (ii) the number
of shares of Common Stock issuable pursuant to then
exercisable or convertible securities, including but
not limited to the Shares, which are Registrable
Securities.
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The number of Demand Registrations pursuant to this Section
3(a) shall not exceed two (2).
(b) Filing and Effectiveness. The Company shall
file each of the Demand Registrations within 60 days and shall
use its best efforts to cause the same to be declared effective
by the SEC within 120 days of the date on which Investor first
gave the written notice (a "Demand Notice") required by Section
3(a) hereof with respect to such Demand Registration. If any
Demand Registration is requested to be a "shelf" registration,
the Company shall keep the Registration Statement filed in
respect thereof effective for a period of nine months from the
date on which the SEC declares such Registration Statement
effective or such shorter period which will terminate when the
distribution of all registered Registrable Securities pursuant
to such Registration Statement ends.
(c) Request for Demand Registrations. Subject to
the conditions set forth in Section 3(a) hereof, Investor may,
at any time, make a written request for a Demand Registration.
All requests made pursuant to this Section 3 will specify the
number of the Registrable Securities to be registered and will
also specify the intended methods of disposition thereof. If
Investor specifies one particular type of underwritten offering,
such method of disposition shall be such type of underwritten
offering or a series of such underwritten offerings (as Investor
may elect) during the time period the Registration Statement is
effective.
(d) Piggy-Back by Other Shareholders. Subject to
the provisions of Section 3(e), the Company may include in a
Demand Registration shares of Common Stock ("Piggy-Back Shares")
for the account of other holders thereof exercising contractual
piggy-back rights ("Piggy-Back Holders"), on the same terms and
conditions as the Registrable Securities to be included therein
for the account of the Investor. The Company shall not have the
right to include any securities of the Company in any Demand
Registration for its own account.
(e) Reduction of Offering. If any of the
Registrable Securities registered pursuant to any Demand
Registration are to be sold in one or more firm commitment
underwritten offerings, and the managing underwriter advises the
Company and Investor in writing that in its opinion the total
amount of securities proposed to be sold in the offering is such
as to materially and adversely affect the success of such
offering, then the number of Piggy-Back Shares to be offered for
the account of any Piggy-Back Holders shall be reduced (to zero,
if necessary), pro rata in proportion to the respective number
of Piggy-Back Shares requested to be registered to the extent
necessary to reduce the total securities requested to be
included in such offering to the amount, if any, recommended by
such managing underwriters. If the Piggy-Back Shares have been
reduced to zero and the number of Registrable Securities
requested to be registered by Investor exceeds the number of
Registrable Securities
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recommended by the managing underwriter, then the number of
Registrable Securities to be offered for the account of
Investor may be reduced; provided, that if the number of
Registrable Securities the Investor has requested be registered
pursuant to a Demand Registration are reduced, upon the
recommendation of the managing underwriter in an underwritten
offering, or by the Company in a non-underwritten offering, to
less than 51% of the total number of Registrable Securities
Investor requested to be registered pursuant to such Demand
Registration, then such registration shall no longer constitute
a Demand Registration under this Agreement and shall not reduce
the number of Demand Registrations to which Investor is
otherwise entitled.
(f) Other Registrations. Except for (i)
registrations effected in accordance with (A) the Exchange
Notes registration rights and/or the Warrant Securities
registration rights granted to the "Lenders" under that certain
Senior Subordinate Credit Agreement of even date herewith (the
"Senior Subordinate Credit Agreement") entered into by and
among the Company and the "Lenders" named therein (such
Exchange Notes registration rights and such Warrant Securities
registration rights being hereinafter collectively referred to
as the "Senior Subordinate Credit Agreement Registration
Rights") and (ii) any registrations effected by Investor or its
assignee(s) in accordance with such registration rights as
Investor and/or its assignee(s) shall have either under this
Agreement or otherwise (such registration rights being
hereinafter referred to as "Investors' Additional Registration
Rights") (the Senior Subordinate Credit Agreement Registration
Rights and the Investor's Additional Registration Rights being
hereinafter collectively referred to as the "Authorized
Registration Rights"), the Company shall not effect any
registration of its securities (except on Form S-8 or any
successor form to such Form), or a sale pursuant to Regulation
D under the Securities Act (other than offerings made pursuant
to and in accordance with Rule 504 of Regulation D), whether on
its own behalf or at the request of any holder or holders of
such securities (other than pursuant to and in accordance with
this Section 3), from the date of a request to register
Registrable Securities pursuant to and in accordance with this
Section 3 until the earlier of (i) 90 days after the date on
which all securities covered by such Demand Registration have
been sold or (ii) 180 days after the effective date of such
Demand Registration, unless the Company shall have first
notified Investor in writing of its intention to do so, and
Investor or the managing underwriters, if any, shall have
consented thereto in writing.
4. Piggy-Back Registration
(a) Right to Piggy-Back. If at any time
the Company proposes to file a registration statement under the
Securities Act with respect to any class of its equity
securities (other than a registration statement (i) on Form S-8
or any successor form to such Form or (ii) filed in connection
with an exchange offer or an offering of its common stock or of
securities convertible or exchangeable into its common stock
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made solely to its existing shareholders in connection with a
rights offering or solely to employees of the Company), whether
or not for its own account, then the Company shall give written
notice of such proposed filing to Investor at least 30 days
before the anticipated filing date. Such notice shall offer
Investor the opportunity to register such amount of Registrable
Securities as Investor may request (a "Piggy-Back
Registration"). Subject to Section 4(b) hereof, the Company
shall include in each such Piggy-Back Registration all
Registrable Securities with respect to which the Company has
received from Investor a written request for inclusion therein
within 20 days after notice has been duly given to Investor.
Investor shall be permitted to withdraw all or any part of the
Registrable Securities from a Piggy-Back Registration at any
time prior to the effective date of such Piggy-Back
Registration.
(b) Priority on Piggy-Back Registrations. The Company
shall cause the managing underwriter or underwriters of a
proposed underwritten offering to permit Investor to include
all the Registrable Securities that Investor has requested to
be included in such offering on the same terms and conditions
as any similar securities, if any, of the Company included
therein. Notwithstanding the foregoing, if the managing
underwriter or underwriters of such offering deliver(s) a
written opinion to the Company and the Investor that the total
amount of securities which Investor, the Company, and any other
persons or entities having registration rights, intend to
include in such offering is such as to materially and adversely
affect the success of such offering, then the amount of
securities to be offered for the account of all Persons shall
be reduced or limited pro rata in proportion to the amount of
securities proposed to be registered in such offering by each
Person to the extent necessary to reduce the total amount of
securities to be included in such offering to the amount
recommended by such managing underwriter or underwriters.
(c) Registration of Securities Other than Registrable
Securities. Except for the Authorized Registration Rights,
without the written consent of the holders of a majority in
aggregate amount of the Registrable Securities then
outstanding, the Company shall not grant to any Person the
right to request the Company to register any securities of the
Company under the Securities Act unless the rights so granted
are subject to the prior rights of the holders of Registrable
Securities set forth in, and are not otherwise in conflict or
inconsistent with the provisions of, this Agreement.
5. Holdback Agreements
(a) Restrictions on Public Sale by Holders of
Registrable Securities. Investor agrees, if reasonably
requested by the managing underwriter or underwriters in an
underwritten offering (to the extent timely notified in writing
by the Company or the managing underwriter or underwriters),
not to effect any public sale or distribution of securities of
the Company of any class included in a Registration Statement
registering the sale of Common Stock by the Company pursuant to
Section 3 hereof, including a sale pursuant to Rule 144 under
the Securities Act (except as part of such
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underwritten registration), during the 10-day period prior to,
and the 90-day period beginning on, the closing date of any
underwritten offering made pursuant to such Registration
Statement.
The foregoing provisions shall not apply if Investor is
prevented by applicable statute or regulation from entering into any such
agreement; provided, however, that Investor shall undertake in its request to
participate in such underwritten offering, not to effect any public sale or
distribution of the class of Registrable Securities covered by such
Registration Statement (except as part of such underwritten registration)
during such period unless it has provided 45 days prior written notice of such
sale or distribution to the managing underwriters.
(b) Restrictions on Public Sale by the Company and
Others. The Company agrees (i) if requested by the managing
underwriter or underwriters in an underwritten offering of
Registrable Securities covered by a Registration Statement
filed pursuant to Section 3 hereof, not to effect any public or
private sale or distribution of its securities, including a
sale pursuant to Regulation D under the Securities Act, during
the 10-day period prior to, and the 90-day period beginning on,
the effective date of any underwritten offering made pursuant
to such Registration Statement (except as part of such
underwritten registration or pursuant to registrations on Form
S-8 or any successor form to such Form), and (ii) to cause each
holder of its securities purchased from the Company at any time
after the date of this Agreement (other than in a registered
public offering) to agree not to effect any public sale or
distribution of any such securities during such period,
including a sale pursuant to Rule 144 under the Securities Act
(except as part of such underwritten registration, if otherwise
permitted).
6. Registration Procedures. In connection with the registration
obligations of the Company pursuant to and in accordance with Section 3 of
this Agreement, the Company shall effect such registrations to permit the
sale of such Registrable Securities in accordance with the intended method
or methods of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(a) notify Investor and the managing underwriters, if
any, promptly, and (if requested by any such Person) confirm
such notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment related to such
Registrable Securities has been filed, and, with respect to a
Registration Statement or any post-effective amendment related
to such Registrable Securities, when the same has become
effective, (ii) of any request by the SEC for amendments or
supplements to such Registration Statement or related
Prospectus or for additional information, (iii) of the issuance
by the SEC of any stop order suspending the effectiveness of
such Registration Statement or the initiation of any
proceedings for that purpose, (iv) if at any time the
representations and warranties of the Company contained in any
agreement (including any underwriting agreement) contemplated
by Section 6(k) below cease to be true and correct, (v) of the
receipt by the Company of
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any notification with respect to the suspension of the
qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose,
(vi) of the happening of any event which makes any statement
made in such Registration Statement or related Prospectus or
any document incorporated or deemed to be incorporated therein
by reference untrue or which requires the making of any changes
in such Registration Statement or Prospectus so that such
documents will not contain any 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, in light
of the circumstances under which they were made, not
misleading, and (vii) of the reasonable determination of the
Company that a post-effective amendment to such Registration
Statement would be appropriate;
(b) use every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of a
Registration Statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the
earliest possible moment;
(c) if requested by the managing underwriters or the
Investor, (i) immediately incorporate in a Prospectus
supplement or post-effective amendment such information as the
managing underwriters and such holder agree should be included
therein and as may be required by applicable law, (ii) make all
required filings of such Prospectus supplement or such
post-effective amendment as soon as the Company has received
notification of the matters to be incorporated in such
Prospectus supplement or such post-effective amendment and
(iii) supplement or make amendments to such Registration
Statement; provided, however, that the Company shall not be
required to take any of the actions in this Section 6(c) which
are not, in the opinion of counsel for the Company, in
compliance with applicable law;
(d) furnish to Investor and each managing
underwriter, if any, without charge, at least one signed copy
of each Registration Statement related to such Registrable
Securities and any post-effective amendments thereto, including
financial statements and schedules, all documents incorporated
therein by reference and all exhibits (including, if requested,
those previously furnished or incorporated by reference) at the
earliest practicable time under the circumstances before the
filing of such documents with the SEC;
(e) deliver to Investor and the underwriters, if any,
without charge, as many copies of the Prospectus or
Prospectuses related to such Registrable Securities (including
each preliminary prospectus) and as many copies of any
amendment or supplement thereto as such Persons may reasonably
request; the Company consents to the use of such Prospectus or
any amendment or supplement thereto by each of the selling
holders of Registrable Securities and the underwriters, if any,
in connection
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with the offering and sale of the Registrable Securities
covered by such Prospectus or any amendment or supplement
thereto;
(f) prior to any public offering of Registrable
Securities, to register or qualify or cooperate with Investor,
the underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption
from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky
laws of such jurisdictions as any seller or underwriter
reasonably requests in writing; keep each such registration or
qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept
effective and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of
the Registrable Securities covered by the applicable
Registration Statement; provided, however, that the Company
will not be required to (A) qualify generally to do business in
any jurisdiction where it is not then so qualified or (B) take
any action which would subject it to general service of process
in any such jurisdiction where it is not then so subject;
(g) in connection with an underwritten offering,
participate, to the extent reasonably requested by the managing
underwriter for the offering or Investor, in customary efforts
to sell the securities under the offering, including, without
limitation, participating in "road shows;"
(h) cooperate with Investor and the managing
underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to
be sold, which certificates shall not bear any restrictive
legends;
(i) cause the Registrable Securities covered by each
Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the
underwriters, if any, to consummate the disposition of such
Registrable Securities;
(j) upon the occurrence of any event contemplated
by paragraphs 6(a)(vi) or 6(a)(vii) above, prepare a supplement
or post-effective amendment to each Registration Statement or a
supplement to the related Prospectus or any document
incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder, such
Prospectus will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading;
(k) to the extent possible, cause all Registrable
Securities covered by such a Registration Statement to be (i)
listed on each securities exchange, if any, on which similar
securities issued by the Company are then listed, or (ii)
authorized to be
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quoted on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or the National Market
System of NASDAQ if the securities so qualify, if requested by
Investor;
(l) enter into such agreements (including an
underwriting agreement in form, scope and substance as is
customary in underwritten offerings) and take all such other
actions in connection therewith (including those reasonably
requested by the managing underwriters, if any, or Investor) in
order to expedite or facilitate the disposition of such
Registrable Securities and in such connection, whether or not
an underwriting agreement is entered into and whether or not
the registration is an underwritten registration (i) make such
representations and warranties to Investor and the
underwriters, if any, with respect to the business of the
Company and its Subsidiaries, the Registration Statement, the
Prospectus, and documents, if any incorporated or deemed to be
incorporated by reference in the Registration Statement, in
each case, in form, substance and scope as are customarily made
by issuers to underwriters in underwritten offerings and
confirm the same if and when requested; (ii) obtain opinions of
counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and
Investor) addressed to Investor and each of the underwriters,
if any, covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as
may be reasonably requested by Investor and such underwriters,
(iii) obtain "cold comfort" letters and updates thereof from
the independent certified public accountants of the Company
(and, if necessary, any other certified public accountants of
any subsidiary of the Company or of any business acquired by
the Company for which financial statements and financial data
is or is required to be included in the Registration Statement)
addressed to Investor and each of the underwriters, if any,
such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in
connection with underwritten offerings; (iv) if an underwriting
agreement is entered into, cause the same to contain
indemnification provisions and procedures no less favorable
than those set forth in Section 8 hereof (or such other
provisions and procedures acceptable to Investor) with respect
to all parties to be indemnified pursuant to said Section; and
(v) deliver such documents and certificates as may be requested
by Investor and the managing underwriters, if any, to evidence
the continued validity of the representations and warranties of
the Company made pursuant to paragraph 6(k)(i) above and to
evidence compliance with any customary conditions contained in
the underwriting agreement or other agreement entered into by
the Company. The above shall be done at each closing under such
underwriting or similar agreement or, as and to the extent
required thereunder;
(m) make available for inspection by a representative
of Investor, any underwriter participating in any disposition
of Registrable Securities, and any attorney or accountant
retained by such selling holders or underwriter, all financial
and other records, pertinent corporate documents and properties
of the Company; and cause the
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officers, directors and employees of the Company and its
subsidiaries to supply all information reasonably requested by
any such representative, underwriter, attorney or accountant in
connection with such Registration Statement; provided, however,
that any records, information or documents that are designated
by the Company in writing as confidential at the time of
delivery of such records, information or documents shall be
kept confidential by such Persons and their designees unless
(i) such records, information or documents are in the public
domain or otherwise publicly available, (ii) disclosure of such
records, information or documents is required by court or
administrative order or (iii) disclosure of such records,
information or documents, in the opinion of counsel to such
Person, is otherwise required by law (including, without
limitation, pursuant to the requirements of the Securities
Act); and
(n) comply with all applicable rules and regulations
of the SEC and make generally available to its securityholders
earning statements satisfying the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder no later than 45
days after the end of any 12-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if
not sold to underwriters in such an offering, commencing on the
first day of the first fiscal quarter of the Company after the
effective date of a Registration Statement, which statements
shall cover said 12-month periods.
The Company may require Investor to furnish to the Company
such information regarding the distribution of Registrable Securities as the
Company may from time to time reasonably request in writing and the Company may
exclude from such registration the Registrable Securities if Investor
unreasonably fails to furnish such information within a reasonable time after
receiving such request; provided, that Investor's Registrable Securities shall
be counted for the demand made upon the Company hereunder.
Investor agrees by acquisition of Registrable Securities that,
upon receipt of any notice from the Company of the happening of any event of
the kind described in Section 6(a)(ii), 6(a)(iii), 6(a)(v), 6(a)(vi) or
6(a)(vii) hereof, Investor shall forthwith discontinue disposition of such
Registrable Securities covered by such Registration Statement or Prospectus
until Investor's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 6(i) hereof, or until it is advised in
writing (the "Advice") by the Company that the use of the applicable Prospectus
may be resumed, and has received copies of any additional or supplemental
filings which are incorporated or deemed to be incorporated by reference in
such Prospectus.
7. Registration Expenses
(a) All reasonable fees and expenses incidental to
the Company's performance of or compliance with this Agreement
(including, without limitation, (i) all
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registration and filing fees including, without limitation,
fees and expenses (A) with respect to filings required to be
made with the National Association of Securities Dealers, Inc.,
and (B) of compliance with securities or Blue Sky laws
(including, without limitation, fees and disbursements of
counsel for the underwriters or selling holders (subject to the
provisions of Section 6(b)) in connection with Blue Sky
qualifications of the Registrable Securities and determination
of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions as the managing
underwriters or holders of a majority in number of the
Registrable Securities being sold may designate), (ii) printing
expenses, (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company, and
Special Counsel or other counsel for the sellers of the
Registrable Securities (subject to the provisions of Section
7(b) hereof), (v) fees and disbursements of all independent
certified public accountants referenced to in Section 6(k)(iii)
hereof (including the expenses of any special audit and "cold
comfort" letters required by or incident to such performance),
(vi) underwriter's fees and expenses (excluding discounts,
commissions or fees of underwriters, selling brokers, dealer
managers or similar securities industry professionals relating
to the distribution of the Registrable Securities or legal
expenses of any Person other than the Company, the underwriters
and the selling holders; but including the fees and expenses of
any "qualified independent underwriter" or other independent
appraiser participating in an offering pursuant to Section 3 of
Schedule E to the Bylaws of the National Association of
Securities Dealers, Inc.), (vii) Securities Act liability
insurance if the Company so desires such insurance and (viii)
fees and expenses of all other Persons retained by the Company)
shall be borne by the Company whether or not any Registration
Statement becomes effective. Notwithstanding the foregoing,
the Company will not be required to reimburse Investor for its
out-of-pocket expenses arising out of a Demand Registration if
the Registration Statement for such Demand Registration fails
to become effective at the request of Investor.
(b) In connection with each Piggy-Back Registration
hereunder, the Company shall reimburse Investor for the
reasonable fees and disbursements of not more than one counsel
(or more than one counsel if a conflict exists among such
selling holders in the exercise of the reasonable judgment of
counsel for the selling holders and counsel for the Company)
chosen by Investor.
8. Indemnification
(a) Indemnification by the Company. The Company
shall, notwithstanding termination of this Agreement and
without limitation as to time, indemnify and hold harmless, to
the full extent permitted by law, Investor, its officers,
directors, agents and employees, each person who controls such
holder (within the meaning of Section 15 of the Securities Act
or Section 20 the Exchange Act), and the officers, directors,
agents or employees of any such controlling person, from and
against all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable costs of
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preparation and attorneys' fees) and reasonable expenses
(collectively, "Losses") arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus or
preliminary prospectus, or arising out of or based upon any
omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not
misleading except insofar as the same are based solely upon
information furnished in writing to the Company by Investor
expressly for use therein. The Company shall also indemnify
underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the
distribution, their officers, directors, agents and employees
and each Person who controls such Persons (within the meaning
of Section 15 of the Securities Act or Section 20 of the
Exchange Act) to the same extent as provided above with respect
to the indemnification of Investor.
(b) Indemnification by Investor. In connection with
any Registration Statement in which Investor is participating,
Investor shall furnish to the Company in writing such
information as the Company reasonably requests for use in
connection with any Registration Statement or Prospectus and
agrees to indemnify and hold harmless, to the full extent
permitted by law, the Company, its directors, officers, agents
and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) and the directors, officers, agents or
employees of such controlling persons, from and against all
Losses arising out of or based upon any untrue statement of a
material fact contained in any Registration Statement,
Prospectus or preliminary prospectus, or arising out of or
based upon any omission of a material fact required to be
stated therein or necessary to make the statement therein not
misleading, to the extent, but only to the extent, that such
untrue statement or omission is contained in any information so
furnished in writing by Investor to the Company expressly for
use in such Registration Statement or Prospectus and that such
information was solely relied upon by the Company in
preparation of any Registration Statement, Prospectus or
preliminary prospectus. In no event shall the liability of
Investor be greater in amount than the dollar amount of the
proceeds (net of the payment of all expenses) received by
Investor upon the sale of the Registrable Securities giving
rise to such indemnification obligation. The Company shall be
entitled to receive indemnities from underwriters, selling
brokers, dealer managers and similar securities industry
professionals participating in the distribution to the same
extent as provided above with respect to information so
furnished in writing by such Persons expressly for use in any
Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. If any
action or proceeding (including any governmental investigation
or inquiry) shall be brought or any claim shall be asserted
against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly
notify the party from which such indemnity is sought (the
"Indemnifying Party") in writing, and the Indemnifying
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Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses
incurred in connection with the defense thereof. All such fees
and expenses (including any fees and expenses incurred in
connection with investigating or preparing to defend such
action or proceeding) shall be paid to the Indemnified Party,
as incurred, within 5 days of written notice thereof to the
Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to
indemnification hereunder). Any such Indemnified Party shall
have the right to employ separate counsel in any such action,
claim or proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be the expenses
of such Indemnified Party unless (a) the Indemnifying Party has
agreed to pay such fees and expenses or (b) the Indemnifying
Party shall have failed to promptly assume the defense of such
action, claim or proceeding and to employ counsel reasonably
satisfactory to the Indemnified Party in any such action, claim
or proceeding or (c) the named parties to any such action,
claim or proceeding (including any impleaded parties) include
both such Indemnified Party and the Indemnifying Party, and
such Indemnified Party shall have been advised by counsel that
there may be one or more legal defenses available to it which
are different from or additional to those available to the
Indemnifying Party (in which case, if such Indemnified Party
notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to
assume the defense of such action, claim or proceeding on
behalf of such Indemnified Party, it being understood, however,
that the Indemnifying Party shall not, in connection with any
one such action, claim or proceeding or separate but
substantially similar or related actions, claims or proceedings
in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (together
with appropriate local counsel) at any time for all such
Indemnified Parties, unless in the reasonable judgment of any
such Indemnified Party a conflict of interest may exist between
such Indemnified Party and any other of such Indemnified
Parties with respect to such action, claim or proceeding, in
which event the Indemnifying Party shall be obligated to pay
the fees and expenses of such additional counsel or counsels).
(d) Contribution. If the indemnification provided
for in this Section 8 is unavailable to an Indemnified Party
under Section 8(a) or 8(b) hereof (other than by reason of
exceptions provided in those Sections) in respect of any
Losses, then each applicable Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall, jointly and
severally, contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of
the Indemnifying Party and Indemnified Party in connection with
the actions, statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and such
Indemnified Party shall be determined by reference to, among
other things,
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whether any action in question, including any untrue statement
or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by,
or relates to information supplied by, such Indemnifying Party
or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to
include, subject to the limitations set forth in Section 8(c),
any legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provision of this Section 8(d), an Indemnifying
Party which is a selling holder of Registrable Securities shall not be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities sold by such Indemnifying Party and
distributed to the public were offered to the public exceeds the amount of any
damages which such Indemnifying Party 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.
9. Rule 144 and Rule 144A. The Company shall file the reports
required to be filed by it under the Securities Act and the Exchange
Act in a timely manner and, if at any time the Company is not required
to file such reports, it will, upon the request of Investor, make
available public or other information so long as necessary to permit
sales of its securities pursuant to Rules 144 and 144A. The Company
further covenants that it will take such further action as Investor may
reasonably request, all to the extent required from time to time to
enable Investor to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions
provided by Rules 144 and 144A. Upon the request of Investor, the
Company shall deliver to Investor a written statement as to whether it
has complied with such requirements. The Company will cooperate to
enable Investor to sell Registrable Securities in block trades or other
similar transactions, including furnishing to Investor (i) an opinion
or opinions of counsel to the Company, and (ii) a comfort letter from
the Company's independent public accountants, as Investor reasonably
requests, (iii) such reasonable representations, warranties, covenants
and indemnities as are customary for such transactions, and (iv) as to
prospective purchasers of Investor's securities, the information
described in Rule 144A(d)(4). Notwithstanding the foregoing, nothing
in this Section 9 shall be deemed to require the Company to register
any of its securities pursuant to the Exchange Act.
10. Underwritten Registrations. If any Demand Registration is an
underwritten offering, the Investor will have the right to select the
investment banker or investment bankers and
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managers and attorneys to administer the offering; provided, that such
investment bank or manager shall be reasonably satisfactory to the
Company. If any Piggy-Back Registration is an underwritten offering,
the Company will have the right to select the investment banker or
investment bankers and managers to administer the offering; provided,
that such investment bank or manager shall be reasonably satisfactory
to Investor if Investor is participating in such underwritten offering.
No Person may participate in any underwritten registration
hereunder unless such Person (a) agrees to sell such Person's securities to be
included in the underwritten registration on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
11. Miscellaneous
(a) Remedies. In the event of a breach by the Company of
its obligations under this Agreement, Investor, in addition to
being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it
of any of the provisions of this Agreement and hereby further
agrees that, in the event of any action for specific
performance in respect of any such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Except for the agreement
pursuant to which the Authorized Registration are granted, (i)
the Company shall not, on or after the date of this Agreement,
enter into any agreement with respect to its securities which
is inconsistent with the rights granted to Investor in this
Agreement or otherwise conflicts with the provisions hereof,
and (ii) the Company has not entered into any agreement with
respect to its securities granting any registration rights to
any person other than this Agreement.
(c) Adjustments Affecting Registrable Securities. The
Company shall not take any action, or permit any change to
occur, with respect to the Registrable Securities (i) which
would adversely affect the ability of Investor to include such
Registrable Securities in a registration undertaken pursuant
to this Agreement or (ii) which would adversely affect the
marketability of such Registrable Securities in any such
registration.
(d) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not
be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given,
except by written instrument signed by the Company and
Investor.
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(e) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, nationally
recognized air courier, telex or telecopier:
If to Investor:
Apollo Investment Fund IV, L.P. and/or
Apollo Overseas Partners IV, L.P.
c/o Apollo Management IV, L.P.
1999 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx Fax: (000)000-0000
With a copy (which shall not constitute notice) to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Fax: (000)000-0000
If to Company:
Renters Choice, Inc.
00000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: J. Xxxxxx Xxxxxx, Chief Executive Officer
Fax: (000)000-0000
With a copy (which shall not constitute notice) to:
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
5400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax: (000)000-0000
All such notices and communication shall be deemed to have
been duly given: when
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delivered by hand, if personally delivered; two business days after being
deposited in the mail, postage prepaid, if mailed; one business day after being
timely dispatched, if by air courier; when answered back, if telexed; and when
receipt is acknowledged, if telecopy. Any of the above addresses may be
changed by notice made in accordance with this Section 12(e).
(f) Owner of Registrable Securities. The Company will
maintain, or will cause its registrar and transfer agent to
maintain, a stock book with respect to the Common Stock, in
which all transfers of Registrable Securities of which the
Company has received notice will be recorded. The Company may
deem and treat the person in whose name Registrable Securities
are registered in the stock book of the Company as the owner
thereof for all purposes, including without limitation, the
giving of notices under this Agreement.
(g) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and
assigns of each of the parties, including without limitation
and without the need for an express assignment, subsequent
holders of Registrable Securities. Notwithstanding the
foregoing, the Demand Registration rights set forth herein,
prior to the exercise thereof by Investor, may be assigned
only in connection with a transfer to any single Person or
group of affiliated Persons (in a single transaction or series
of related transactions) of at least 25% of the Registrable
Securities held by it on the date hereof.
(h) 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.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS,
AND EACH PARTY HERETO SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF THE FEDERAL AND STATE COURTS WITHIN THE STATE
OF NEW YORK.
(k) Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their best
efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by
such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties
that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such which
may be hereafter declared invalid, void or unenforceable.
(l) Entire Agreement. This Agreement is intended by
the parties as a final expression of their agreement, and is
intended to be a complete and exclusive
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statement of the agreement and understanding of the parties
hereto, in respect of the subject matter contained herein.
There are no restrictions, promises, warranties nor
undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted by the
Company with respect to the securities sold pursuant to the
Purchase Agreement. This Agreement supersedes all prior
agreements and understandings between the parties with respect
to such subject matter.
(m) Attorneys' Fees. In any action or proceeding
brought to enforce any provision of this Agreement, or where
any provision hereof is validly asserted as a defense, the
prevailing party shall be entitled to recover reasonably
attorneys' fees in addition to its costs and expenses and any
other available remedy.
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IN WITNESS WHEREOF, the undersigned have executed, or caused to be
executed on their behalf by an agent thereunto duly authorized, this
Registration Rights Agreement as of the date first above written.
THE COMPANY:
RENTERS CHOICE, INC.,
a Delaware corporation
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
INVESTOR:
APOLLO INVESTMENT FUND IV, L.P.
a Delaware limited partnership
By: Apollo Advisors IV, L.P.
its General Partner
By: Apollo Capital Management IV, Inc.
its General Partner
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
APOLLO OVERSEAS PARTNERS IV, L.P.
an exempted limited partnership registered
in the Cayman Islands
By: Apollo Advisors IV, L.P.
its General Partner
By: Apollo Capital Management IV, Inc.
its Managing General Partner
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
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