Exhibit 6
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT is entered into as
of the 15th day of March 2000 (this "Agreement"), by and between XXXXXX
XXXXXXXXX CAPITAL PARTNERS II, L.P., a California limited partnership ("LLCP"),
and CONSUMER PORTFOLIO SERVICES, INC., a California corporation (the "Company").
R E C I T A L S
A. The parties entered into that certain Registration Rights Agreement
dated as of November 17, 1998, as amended by a First Amendment to Registration
Rights Agreement dated as of April 15, 1999 (as so amended, the "Original
Registration Rights Agreement"), pursuant to which, among other things, the
Company granted to LLCP certain registration rights with respect to the
Registrable Securities (as such term is defined therein), all as more fully
described therein.
B. The Company and LLCP are entering into that certain Amended and
Restated Securities Purchase Agreement dated of even date herewith (the
"Securities Purchase Agreement") pursuant to which, among other things, on the
date hereof, the Company is issuing and selling to LLCP, and LLCP is purchasing
from the Company, a Secured Senior Note Due 2001 in the principal amount of
$16,000,000, the Company and LLCP are amending and restating the Amended
November 1998 Primary Note and the April 1999 Note into one Amended and Restated
Secured Senior Note Due 2003 in the principal amount of $30,000,000, and the
Company is issuing to LLCP the March 2000 LLCP Shares, all on the terms and
subject to the conditions set forth therein and in the Related Agreements.
C. In connection with the transactions contemplated by the Securities
Purchase Agreement, the parties wish to amend and restate the Original
Registration Rights Agreement on the terms and subject to the conditions set
forth herein. The execution and delivery of this Agreement is a condition
precedent to the consummation of the transactions contemplated by the Securities
Purchase Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby amend and
restate the Original Registration Rights Agreement as follows:
1. DEFINITIONS. Unless otherwise indicated herein, all capitalized terms used
herein shall have the meanings set forth in the Securities Purchase Agreement.
In addition to the capitalized terms defined elsewhere in this Agreement, the
following terms shall have the meanings specified below:
"Demanding Holders" shall mean LLCP or, if LLCP does not hold a
majority of the Registrable Securities at any time, the holders of a
majority of Registrable Securities.
"Demand Registration" shall have the meaning specified in Section
2.1(a).
"FSA Registration Rights Agreement" shall mean the registration
rights granted to FSA Portfolio Management Inc. under Section 11 of the
FSA Warrant.
"Indemnified Party" shall have the meaning specified in Section 4.3.
"Indemnifying Party" shall have the meaning specified in Section
4.3.
"Inspectors" shall have the meaning specified in Section 3.1(h).
"LLCP Indemnified Party" shall have the meaning specified in Section
4.1.
"Maximum Number of Shares" shall have the meaning specified in
Section 2.1(d).
"Piggy-Back Registration" shall have the meaning specified in
Section 2.2(a).
"Purchase Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"Register", "registered" and "registration" shall mean a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the applicable
rules and regulations thereunder, and such registration statement becoming
effective.
"Registrable Securities" shall mean, collectively, any and all
Shares and any other shares of Common Stock or other securities issued or
issuable upon any stock dividend, stock split, recapitalization, merger,
consolidation or similar event with respect to the Shares. As to any
particular Registrable Securities, such securities shall cease to be
Registrable Securities when (i) a registration statement covering such
securities shall have been declared effective under the Securities Act and
such securities shall have been sold pursuant to such registration
statement, (ii) such securities shall have been distributed to the public
pursuant to Rule 144 or Rule 144A (or any successor provisions)
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under the Securities Act, (iii) such securities shall have ceased to be
outstanding or (iv) such Registrable Securities are sold pursuant to that
certain Securities Option Agreement of even date herewith among LLCP,
Stanwich and the Company.
"Shares" shall mean (i) any and all shares of Common Stock issued or
issuable upon exercise of, or otherwise under, any Warrants (including,
without limitation, any Warrant Shares or other shares issued as an
"anti-dilution" or other adjustment thereunder) and (ii) the March 2000
LLCP Shares. The holder of any Warrant or any portion thereof shall be
deemed to be the holder of the shares of Common Stock issuable upon
exercise of such Warrant and, to the extent such shares of Common Stock
constitute Registrable Securities, such holder shall be deemed to be the
holder of such Registrable Securities.
"Stanwich Registration Rights Agreement" shall mean that certain
Consolidated Registration Rights Agreement dated as of November 17, 1998,
between the Company and Stanwich, as amended by a First Amendment dated as
of the date hereof.
"Underwriter" shall mean a securities dealer who purchases any
Registrable Securities as principal in an underwritten offering and not as
part of such dealer's market-making activities.
"Warrant" or "Warrants" shall mean any "LLCP Warrant" or "LLCP
Warrants," as such terms are defined in the Securities Purchase Agreement.
2. REGISTRATION RIGHTS.
2.1 Demand Registration.
(a) Request for Registration. At any time and from time to time, the
Demanding Holders may make a written request for registration under the
Securities Act of all or part of their Registrable Securities (a "Demand
Registration"). Such request for a Demand Registration must specify the number
of shares of Registrable Securities proposed to be sold and must also specify
the intended method of disposition thereof. Upon any such request, the Demanding
Holders shall be entitled to have their Registrable Securities included in the
Demand Registration, subject to Section 2.1(d) and the proviso set forth in
Section 3.1(a). The Company shall not be obligated to effect more than three (3)
Demand Registrations under this Section 2.1(a).
(b) Effective Registration. Except in the case of a withdrawal
governed by the last sentence of Section 2.1(e), a registration will not count
as a Demand Registration until the registration statement covering the
Registrable Securities that are the subject of such Demand
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Registration has become effective and the Company has complied with all of its
obligations under this Agreement with respect thereto; provided, however, that,
after such registration statement has been declared effective, if the offering
of Registrable Securities pursuant to such Demand Registration is interfered
with by any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court, such Demand Registration will be deemed
not to have become effective during the period of such interference.
(c) Underwritten Offering. If the Demanding Holders so elect, the
offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. The Demanding Holders shall
select one or more firms of investment bankers to act as the managing
Underwriter or Underwriters in connection with such offering and shall select
any additional managers to be used in connection with the offering.
(d) Reduction of Offering. If the managing Underwriter or
Underwriters for a Demand Registration that is to be an underwritten offering
advises the Company and the Demanding Holders, in writing, that the dollar
amount or number of shares of Registrable Securities which the Demanding Holders
desire to sell, taken together with all other shares of Common Stock or other
securities which the Company desires to sell and the shares of Common Stock, if
any, as to which registration has been requested pursuant to the piggy-back
registration rights under the FSA Registration Rights Agreement and the Stanwich
Registration Rights Agreement or which other shareholders of the Company desire
to sell, exceeds the maximum dollar amount or number that can be sold in such
offering without adversely affecting the proposed offering price, the timing,
the distribution method or the probability of success of such offering (the
"Maximum Number of Shares"), then the Company shall include in such
registration:
(i) first, the Registrable Securities as to which Demand
Registration has been requested by the Demanding Holders (pro rata in
accordance with the number of shares of Registrable Securities held by
each Demanding Holder, regardless of the number of shares of Registrable
Securities which such Demanding Holder has requested be included in such
registration) that can be sold without exceeding the Maximum Number of
Shares;
(ii) second, to the extent the Maximum Number of Shares has
not been reached under the foregoing clause (i), the shares of Common
Stock for the account of other persons that the Company is obligated to
register pursuant to the FSA Registration Rights Agreement and the
Stanwich Registration Rights Agreement (to be allocated among the persons
requesting inclusion in such registration pursuant to such agreements pro
rata in accordance with the number of shares of Common Stock with respect
to which such person has the right to request such inclusion under such
agreements, regardless of
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the number of shares which such person has actually requested be included
in such registration) that can be sold without exceeding the Maximum
Number of Shares;
(iii) third, to the extent the Maximum Number of Shares has
not been reached under the foregoing clauses (i) and (ii), the shares of
Common Stock that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares; and
(iv) fourth, to the extent the Maximum Number of Shares has
not been reached under the foregoing clauses (i), (ii) and (iii), the
shares of Common Stock that other shareholders desire to sell that can be
sold without exceeding the Maximum Number of Shares.
(e) Withdrawal. If the Demanding Holders or any of them disapprove
of the terms of any underwriting or are not entitled to include all of their
Registrable Securities in any offering, such Demanding Holders may elect to
withdraw from such offering by giving written notice to the Company and the
Underwriter of their request to withdraw prior to the effectiveness of the
registration statement. If the Demanding Holders or any of them withdraw from a
proposed offering relating to a Demand Registration and, solely as a result of
such withdrawal the registration statement is withdrawn prior to being declared
effective, such registration shall count as a Demand Registration provided for
in Section 2.1(a) unless the withdrawing Demanding Holders pay their pro rata
share (based upon the number of shares to be included in such registration
statement) of the expenses incurred in connection with such registration
statement.
(f) Termination of Demand Registration Rights. LLCP's right to
request Demand Registrations pursuant to this Section 2.1 shall terminate upon
the earlier to occur of (a) the date upon which LLCP no longer owns or holds at
least five percent (5.0%) of Common Stock then outstanding and (b) the fifth
year anniversary of the date upon which all Indebtedness and other amounts owing
under the Notes have been indefeasibly paid in full. Notwithstanding the
foregoing sentence, LLCP's right to request Demand Registrations pursuant to
this Section 2.1 shall not terminate as provided above, or shall be reinstated
after any such termination, if, at the effective time of termination or
thereafter, LLCP requests a registration of Registrable Securities on Form S-3
(or any successor form) under Section 2.3 and the Company is then ineligible to
use such Form.
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2.2 Piggy-Back Registration.
(a) Piggy-Back Rights. If at any time the Company proposes to file a
registration statement under the Securities Act with respect to an offering of
equity securities, or securities convertible or exchangeable into equity
securities, by the Company for its own account or by shareholders of the Company
for their account (or by the Company and by shareholders of the Company) other
than a registration statement (i) on Form S-4 or S-8 (or any substitute or
successor form that may be adopted by the SEC), (ii) filed in connection with
any employee stock option or other benefit plan, (iii) for an exchange offer or
offering of securities solely to the Company's existing shareholders, or (iv)
for a dividend reinvestment plan, then the Company shall (x) give written notice
of such proposed filing to the holders of Registrable Securities as soon as
practicable but in no event less than 30 days before the anticipated filing
date, which notice shall describe the amount and type of securities to be
included in such offering, the intended method(s) of distribution, and the name
of the proposed managing Underwriter or Underwriters, if any, of the offering;
and (y) offer to the holders of Registrable Securities in such notice the
opportunity to register such number of shares of Registrable Securities as such
holders may request in writing within 15 days following receipt of such notice
(a "Piggy-Back Registration"). The Company shall cause such Registrable
Securities to be included in such registration and shall use its best efforts to
cause the managing Underwriter or Underwriters of a proposed underwritten
offering to permit the Registrable Securities requested to be included in a
Piggy-Back Registration to be included on the same terms and conditions as any
similar securities of the Company and to permit the sale or other disposition of
such Registrable Securities in accordance with the intended method of
distribution thereof.
(b) Reduction of Offering.
(i) If the managing Underwriter or Underwriters for a
Piggy-Back Registration that is to be an underwritten offering of shares
for the Company's account advises the Company and the holders of
Registrable Securities in writing that the dollar amount or number of
shares of Common Stock which the Company desires to sell, taken together
with the Registrable Securities as to which registration has been
requested hereunder and the shares of Common Stock, if any, as to which
registration has been requested pursuant to the piggy-back registration
rights under the FSA Registration Rights Agreement or the Stanwich
Registration Rights Agreement or which other shareholders of the Company
desire to sell, exceeds the Maximum Number of Shares, then the Company
shall include in such registration:
(A) first, the shares of Common Stock or other
securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares;
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(B) second, to the extent the Maximum Number of Shares
has not been reached under the foregoing clause (A) of this clause (i),
the Registrable Securities as to which registration has been requested
hereunder and the shares of Common Stock, if any, as to which registration
has been requested pursuant to the piggy-back registration rights granted
under the FSA Registration Rights Agreement and the Stanwich Registration
Rights Agreement (to be allocated among the persons requesting inclusion
in such registration pursuant to such agreements pro rata in accordance
with the number of shares of Common Stock with respect to which such
person has the right to request such inclusion under such agreements,
regardless of the number of shares which such person has actually
requested be included in such registration) that can be sold without
exceeding the Maximum Number of Shares; and
(C) third, to the extent the Maximum Number of Shares
has not been reached under the foregoing clauses (A) and (B) of this
clause (i), the shares of Common Stock that other shareholders desire to
sell that can be sold without exceeding the Maximum Number of Shares.
(ii) If the managing Underwriter or Underwriters for a
Piggy-Back Registration that is to be an underwritten offering of shares
for the account of persons having demand registration rights under the
Stanwich Registration Rights Agreement account advises the Company and the
holders of Registrable Securities in writing that the dollar amount or
number of shares of Common Stock which such persons desire to sell, taken
together with the Registrable Securities as to which registration has been
requested hereunder, the shares of Common Stock, if any, as to which
registration has been requested pursuant to the piggy-back registration
rights under the FSA Registration Rights Agreement and the shares of
Common Stock, if any, which the Company or other shareholders of the
Company desire to sell, exceeds the Maximum Number of Shares, then the
Company shall include in such registration:
(A) first, the shares of Common Stock for the account of
persons having demand registration rights under the Stanwich Registration
Rights Agreement that can be sold without exceeding the Maximum Number of
Shares;
(B) second, to the extent the Maximum Number of Shares
has not been reached under clause (A) of this clause (ii), the Registrable
Securities as to which registration has been requested by the holders of
Registrable Securities hereunder and the shares of Common Stock, if any,
as to which registration has been requested pursuant to the piggy-back
registration rights granted under the FSA Registration Rights Agreement
(to be allocated among the persons requesting inclusion in such
registration pursuant to such agreements pro rata in accordance with the
number of shares of Common Stock with respect to which such person has the
right to request such inclusion
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under such agreements, regardless of the number of shares which such
person has actually requested be included in such registration) that can
be sold without exceeding the Maximum Number of Shares;
(C) third, to the extent the Maximum Number of Shares
has not been reached under clauses (A) and (B) of this clause (ii), the
shares of Common Stock, if any, that the Company desires to sell that can
be sold without exceeding the Maximum Number of Shares; and
(D) fourth, to the extent the Maximum Number of Shares
has not been reached under clauses (A), (B) and (C) of this clause (ii),
the shares of Common Stock, if any, which other shareholders desire to
sell that can be sold without exceeding the Maximum Number of Shares.
(iii) If the managing Underwriter or Underwriters for a
Piggy-Back Registration that is to be an underwritten offering of shares
for the account of persons having demand registration rights under the FSA
Registration Rights Agreement account advises the Company and the holders
of Registrable Securities in writing that the dollar amount or number of
shares of Common Stock which such persons desire to sell, taken together
with the Registrable Securities as to which registration has been
requested hereunder, the shares of Common Stock, if any, as to which
registration has been requested pursuant to the piggy-back registration
rights under the Stanwich Registration Rights Agreement and the shares of
Common Stock, if any, which the Company or other shareholders of the
Company desire to sell, exceeds the Maximum Number of Shares, then the
Company shall include in such registration:
(A) first, the shares of Common Stock for the account of
persons having demand registration rights under the FSA Registration
Rights Agreement that can be sold without exceeding the Maximum Number of
Shares;
(B) second, to the extent the Maximum Number of Shares
has not been reached under clause (A) of this clause (iii), the
Registrable Securities as to which registration has been requested by the
holders of Registrable Securities hereunder and the shares of Common
Stock, if any, as to which registration has been requested pursuant to the
piggy-back registration rights granted under the Stanwich Registration
Rights Agreement (to be allocated among the persons requesting inclusion
in such registration pursuant to such agreements pro rata in accordance
with the number of shares of Common Stock with respect to which such
person has the right to request such inclusion under such agreements,
regardless of the number of shares which such person has actually
requested be included in such registration) that can be sold without
exceeding the Maximum Number of Shares; and
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(C) third, to the extent the Maximum Number of Shares
has not been reached under clauses (A) and (B) of this clause (iii), the
shares of Common Stock, if any, that the Company desires to sell that can
be sold without exceeding the Maximum Number of Shares; and
(D) fourth, to the extent the Maximum Number of Shares
has not been reached under clauses (A), (B) and (C) of this clause (iii),
the shares of Common Stock, if any, which other shareholders desire to
sell that can be sold without exceeding the Maximum Number of Shares.
(c) Withdrawal. Any holder of Registrable Securities may elect to
withdraw such holder's request for inclusion of Registrable Securities in any
Piggy-Back Registration by giving written notice to the Company of such request
to withdraw prior to the effectiveness of the registration statement. The
Company may also elect to withdraw a registration statement at any time prior to
the effectiveness of the registration statement. Notwithstanding any such
withdrawal, the Company shall pay all expenses incurred by the holders of
Registrable Securities in connection with such Piggy-Back Registration as
provided in Section 3.3.
2.3 Registrations on Form S-3. The holders of Registrable Securities may
at any time request in writing that the Company register the resale of any or
all of such Registrable Securities on Form S-3 (or any similar short-form
registration which may be available at such time). Upon receipt of such written
request, the Company will promptly give written notice of the proposed
registration to all other holders of Registrable Securities, and, as soon as
practicable thereafter, effect the registration of all or such portion of such
holder's or holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
holder or holders joining in such request as are specified in a written request
given within 15 days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration pursuant to this Section 2.3 if (i) the Company is not eligible to
use a Form S-3 (or any successor form) to register such Registrable Securities;
(ii) the holders propose to effect an underwritten offering, (iii) the holders
propose to sell Registrable Securities at an anticipated aggregate price to the
public (net of any underwriters' discounts or commissions) of less than
$500,000, (iv) the Company shall furnish to the holders a certificate signed by
the Chief Executive Officer of the Company stating that in the good faith
judgment of the Board, it would be materially detrimental to the Company and its
shareholders for such Form S-3 registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than 60 days after receipt of
the request of the holder or holders under this Section 2.3; provided, however,
that in the event the Company elects to exercise such right with respect to any
registration, it shall not have the right to exercise such right again prior to
the date which is ten months after the date on which the registration statement
relating to such deferred registration is declared effective; or (v) the Company
has effected four (4) registrations pursuant
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to this Section 2.3. The Company shall use its best efforts to maintain each
registration statement under this Section 2.3 effective for sixty (60) days or
until the Registrable Securities covered thereby have been sold, whichever shall
first occur. Registrations effected pursuant to this Section 2.3 shall not be
counted as Demand Registrations effected pursuant to Section 2.1.
2.4 Purchase (and Exercise) of Warrants by the Underwriters.
Notwithstanding any other provision of this Agreement to the contrary, in
connection with any Demand Registration or Piggy-Back Registration which is to
be an underwritten offering, to the extent all or any portion of the Registrable
Securities to be included in such registration consist of shares of Common Stock
issuable upon exercise of any Warrant or any portion thereof, the holders of
such Registrable Securities may require that the Underwriter or Underwriters
purchase (and exercise) such Warrant or any portion thereof rather than require
the holders of the Registrable Securities to exercise such Warrant or portion
thereof in connection with such registration unless the Underwriters inform such
holders that such a purchase and exercise of such Warrant will materially and
adversely affect the proposed offering. The Company shall take all such action
and provide all such assistance as may be reasonably requested by the holders of
Registrable Securities to facilitate any such purchase (and exercise) of any
Warrant agreed to by the Underwriter or Underwriters, including, without
limitation, issuing the Common Stock issuable upon the exercise of such Warrant
or any portion thereof to be issued within such time period as will permit the
Underwriters to make and complete the distribution contemplated by the
underwriting.
3. REGISTRATION PROCEDURES.
3.1 Filings; Information. If and whenever the Company is required to
effect the registration of any Registrable Securities under the Securities Act
pursuant to Section 2, the Company shall use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof as expeditiously as practicable, and in
connection with any such request:
(a) Filing Registration Statement. The Company shall, as
expeditiously as possible, prepare and file, within sixty (60) days after
receipt of a request for a Demand Registration pursuant to Section 2.1, with the
SEC a registration statement on any form for which the Company then qualifies or
which counsel for the Company shall deem appropriate and which form shall be
available for the sale of the Registrable Securities to be registered thereunder
in accordance with the intended method of distribution thereof, and shall use
its best efforts to cause such registration statement to become and remain
effective for the period required by Section 3.1(c); provided, however, that the
Company shall have the right to defer such registration for up to 60 days if the
Company shall furnish to the holders a certificate signed by the Chief Executive
Officer of the Company stating that, in the good faith judgment of the Board, it
would be materially detrimental to the Company and its shareholders for such
registration statement to be
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effected at such time; provided further, that in the event the Company elects to
exercise such right with respect to any registration, it shall not have the
right to exercise such right again prior to the date which is twelve (12) months
after the date on which the registration statement relating to such deferred
registration is declared effective.
(b) Copies. The Company shall, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish without
charge to the holders of Registrable Securities included in such registration,
and such holders' legal counsel, copies of such registration statement as
proposed to be filed, each amendment and supplement to such registration
statement (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such registration
statement (including each preliminary prospectus), and such other documents as
the holders of Registrable Securities included in such registration or legal
counsel for any such holder may request in order to facilitate the disposition
of the Registrable Securities owned by such holders.
(c) Amendments and Supplements. The Company shall prepare and file
with the SEC such amendments, including post-effective amendments, and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
in compliance with the provisions of the Securities Act until all Registrable
Securities and other securities covered by such registration statement have been
disposed of in accordance with the intended methods of disposition set forth in
such registration statement (which period shall not exceed the sum of 120 days
plus any period during which any such disposition is interfered with by any stop
order, injunction or other order or requirement of the SEC or any governmental
agency or court) or such securities have been withdrawn.
(d) Notification. After the filing of the registration statement,
the Company shall promptly, and in no event more than two Business Days, notify
the holders of Registrable Securities included in such registration statement,
and confirm such advice in writing, (i) when such registration statement becomes
effective, (ii) when any post-effective amendment to such registration statement
becomes effective, (iii) of any stop order issued or threatened by the SEC (and
the Company shall take all actions required to prevent the entry of such stop
order or to remove it if entered) and (iv) of any request by the SEC for any
amendment or supplement to such registration statement or any prospectus
relating thereto or for additional information or of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of the securities covered by
such registration statement, 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 the holders of Registrable Securities included in
such registration statement any such supplement or amendment; except that before
filing with the SEC a registration statement or prospectus or any amendment or
supplement
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thereto, including documents incorporated by reference, the Company shall
furnish to the holders of Registrable Securities included in such registration
statement and to the legal counsel for any such holders, copies of all such
documents proposed to be filed sufficiently in advance of filing to provide such
holders and legal counsel with a reasonable opportunity to review such documents
and comment thereon, and the Company shall not file any registration statement
or prospectus or amendment or supplement thereto, including documents
incorporated by reference to which such holders or legal counsel, shall object
on a timely basis in light of the requirements of the Securities Act or any
other applicable laws and regulations.
(e) State Securities Laws Compliance. The Company shall use its best
efforts to (i) register or qualify the Registrable Securities covered by the
registration statement under such securities or blue sky laws of such
jurisdictions in the United States as the holders of Registrable Securities
included in such registration statement (in light of their intended plan of
distribution) may request and (ii) cause such Registrable Securities covered by
the registration statement to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary by
virtue of the business and operations of the Company and do any and all other
acts and things that may be necessary or advisable to enable the holders of
Registrable Securities included in such registration statement to consummate the
disposition of such Registrable Securities in such jurisdictions; provided,
however, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph (e), or subject itself to taxation in any such
jurisdiction.
(f) Agreements for Disposition. The Company shall enter into
customary agreements (including, if applicable, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of such Registrable Securities. The
representations, warranties and covenants of the Company in any underwriting
agreement which are made to or for the benefit of any Underwriters shall also be
made to and for the benefit of the holders of Registrable Securities included in
such registration statement. No holder of Registrable Securities included in
such registration statement shall be required to make any representations or
warranties in the underwriting agreement except, if applicable, with respect to
such holder's organization, good standing, authority, title to Registrable
Securities, lack of conflict of such sale with such holder's material agreements
and organizational documents, and with respect to written information relating
to such holder that such holder has furnished in writing expressly for inclusion
in such registration statement.
(g) Cooperation. The Chief Executive Officer, the President of the
Company, the Chief Financial Officer of the Company, any Senior Vice President
of the Company and any other members of the management of the Company shall
cooperate fully in any offering of Registrable Securities hereunder, which
cooperation shall include, without limitation, the preparation of the
registration statement with respect to such offering and all other offering
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materials and related documents, and participation in meetings with
Underwriters, attorneys, accountants and potential investors.
(h) Records. The Company shall make available for inspection by the
holders of Registrable Securities included in such registration statement, any
Underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other professional retained by any
holder of Registrable Securities included in such registration statement or any
Underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, as shall be necessary to enable them to exercise
their due diligence responsibility, and cause the Company's officers, directors
and employees to supply all information requested by any of them in connection
with such registration statement.
(i) Opinions and Comfort Letters. The Company shall furnish to each
holder of Registrable Securities included in any registration statement a signed
counterpart, addressed to such holder, of (i) any opinion of counsel to the
Company delivered to any Underwriter and (ii) any comfort letter from the
Company's independent public accountants delivered to any Underwriter. In the
event no legal opinion is delivered to any Underwriter, the Company shall
furnish to each holder of Registrable Securities included in such registration
statement, at any time that such holder elects to use a prospectus, an opinion
of counsel to the Company to the effect that the registration statement
containing such prospectus has been declared effective and that no stop order is
in effect.
(j) Earnings Statement. The Company shall comply with all applicable
rules and regulations of the SEC and the Securities Act, and make available to
its shareholders, as soon as practicable, an earnings statement covering a
period of 12 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 Rule 158 thereunder.
(k) Listing. The Company shall use its best efforts to cause all
Registrable Securities included in any registration to be listed on such
exchanges or otherwise designated for trading in the same manner as similar
securities issued by the Company are then listed or designated or, if no such
similar securities are then listed or designated, in a manner satisfactory to
the holders of a majority of the Registrable Securities included in such
registration.
3.2 Obligation to Suspend Distribution. Upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
3.1(d)(iv), each holder of Registrable Securities included in any registration
shall immediately discontinue disposition of such Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until such holder receives the supplemented or amended prospectus contemplated
by Section 3.1(d)(iv), and, if so directed by the Company, each such holder will
deliver to the
13
Company all copies, other than permanent file copies then in such holder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice.
3.3 Registration Expenses. The Company shall pay all expenses incurred in
connection with any Demand Registration pursuant to Section 2.1 and any
Piggy-Back Registration pursuant to Section 2.2, and all expenses incurred in
performing or complying with the Company's obligations under this Section 3,
whether or not the registration statement becomes effective, in each case
including, but not limited to: (i) all registration and filing fees; (ii) fees
and expenses of compliance with securities or blue sky laws (including fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities); (iii) printing expenses; (iv) the Company's internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees); (v) the fees and expenses incurred in connection with
the listing of the Registrable Securities as required by Section 3.1(k); (vi)
National Association of Securities Dealers, Inc. fees; (vii) fees and
disbursements of counsel for the Company and fees and expenses for independent
certified public accountants retained by the Company (including the expenses or
costs associated with the delivery of any opinions or comfort letters requested
pursuant to Section 3.1(i)); (viii) the fees and expenses of any special experts
retained by the Company in connection with such registration; (ix) one-half of
the cost for selling stockholder errors and omissions insurance for the benefit
of the holders of Registrable Securities included in such registration which the
holders of a majority of such Registrable Securities may elect to purchase (with
the other one-half of such cost to be paid by the holders of Registrable
Securities included in such registration, pro rata in accordance with the number
of shares included in such registration), and (x) all fees and expenses incurred
by the holders of Registrable Securities included in such registration statement
in connection with its participation in such registration, including, without
limitation, the fees and expenses of such holders' legal counsel, accountants
and other experts. The Company shall have no obligation to pay any underwriting
fees, discounts or selling commissions attributable to the Registrable
Securities being sold by holders of Registrable Securities, which expenses shall
be borne by such holders.
3.4 Information. The holders of Registrable Securities shall provide such
information as reasonably requested by the Company in connection with the
preparation of any registration statement, including amendments and supplements
thereto, in order to effect the registration of any Registrable Securities under
the Securities Act pursuant to Sections 2.
4. INDEMNIFICATION AND CONTRIBUTION.
4.1 Indemnification by the Company. The Company agrees to indemnify and
hold harmless (i) LLCP (including its general and limited partners), each holder
of Registrable Securities and Xxxxxx Xxxxxxxxx Capital Partners, Inc., and (ii)
the respective officers, employees, affiliates, directors, partners, members and
agents, and each person, if any, who
14
controls LLCP, any holder of Registrable Securities or Xxxxxx Xxxxxxxxx Capital
Partners, Inc. within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act (each, an "LLCP Indemnified Party"), from and against any
loss, claim, damage or liability and any action in respect thereof to which any
LLCP Indemnified Party may become subject under the Securities Act or the
Exchange Act or any other statute or common law, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (a) any untrue
statement or alleged untrue statement of a material fact made in connection with
the sale of Registrable Securities or shares of Common Stock, whether or not
such statement is contained or incorporated by reference in any registration
statement or prospectus relating to the Registrable Securities (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, (b) any omission or alleged omission to
state a material fact required to be stated in any registration statement or
prospectus or necessary to make the statements therein not misleading, or (c)
any violation by the Company of any Federal, state or common law, rule or
regulation applicable to the Company and relating to action required of or
inaction by the Company in connection with such registration. The Company also
shall promptly, but in no event more than ten Business Days after request for
payment, pay directly or reimburse each LLCP Indemnified Party for any legal and
other expenses incurred by such LLCP Indemnified Party in investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action. The Company also shall indemnify any Underwriter of the Registrable
Securities, their officers, affiliates, directors, partners, members and agents
and each person who controls such Underwriters on substantially the same basis
as that of the indemnification provided above in this Section 4.1.
The indemnity agreement contained in this Section 4.1 shall not apply to
amounts paid in settlement of any such loss, claim, damage or liability or any
action in respect thereof if such settlement is effected without the consent of
the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable to any holder of Registrable Securities included in any
registration for any loss, claim, damage, liability or any action in respect
thereof to the extent that it arises solely from or is based solely upon and is
in conformity with information related to such holder furnished in writing by
such holder expressly for use in connection with such registration, nor shall
the Company be liable to any holder of Registrable Securities included in any
registration for any loss, claim, damage or liability or any action in respect
thereof to the extent it arises solely from or is based solely upon (i) any
untrue statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus relating to the Registrable Securities
delivered in writing by such holder after the Company had provided written
notice to such holder that such registration statement or prospectus contained
such untrue statement or alleged untrue statement of a material fact, or (ii)
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 after
the Company had provided written notice to such holder that such registration
statement or prospectus contained such omission or alleged omission.
15
4.2 Indemnification by Holders of Registrable Securities. Each holder of
Registrable Securities shall indemnify and hold harmless the Company, its
officers, directors, partners, members and agents and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to such holder, but solely with reference to information
related to such holder furnished in writing by such holder expressly for use in
any registration statement or prospectus relating to Registrable Securities of
such holder included in any registration, or any amendment or supplement
thereto, or any preliminary prospectus. Each holder of Registrable Securities
included in any registration hereunder shall also indemnify and hold harmless
any Underwriter of such holder's Registrable Securities, their officers,
directors, partners, members and agents and each person who controls such
Underwriters on substantially the same basis as that of the indemnification of
the Company provided in this Section 4.2; provided, however, that in no event
shall any indemnity obligation under this Section 4.2 exceed the dollar amount
of the net proceeds (after payment of any underwriting fees, discounts or
commissions) actually received by such holder from the sale of Registrable
Securities which gave rise to such indemnification obligation under such
registration statement or prospectus.
4.3 Conduct of Indemnification Proceedings. Promptly after receipt by any
person of any notice of any loss, claim, damage or liability or any action in
respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such
person (the "Indemnified Party") shall, if a claim in respect thereof is to be
made against any other person for indemnification hereunder, notify such other
person (the "Indemnifying Party") in writing of the loss, claim damage,
liability or action; provided, however, that the failure by the Indemnified
Party to notify the Indemnifying Party shall not relieve the Indemnifying Party
from any liability which the Indemnifying Party may have to such Indemnified
Party hereunder, except to the extent the Indemnifying Party is actually
prejudiced by such failure. If the Indemnified Party is seeking indemnification
with respect to any claim or action brought against the Indemnified Party, then
the Indemnifying Party shall be entitled to participate in such claim or action,
and, to the extent that it wishes, jointly with all other Indemnifying Parties,
to assume the defense thereof with counsel satisfactory to the Indemnified
Party. After notice from the Indemnifying Party to the Indemnified Party of its
election to assume the defense of such claim or action, the Indemnifying Party
shall not be liable to the Indemnified Party for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that in
any action in which both the Indemnified Party and the Indemnifying Party are
named as defendants, the Indemnified Party shall have the right to employ
separate counsel (but no more than one such separate counsel) to represent the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses of
such counsel to be paid by such Indemnifying Party if, based upon the written
opinion of counsel of such Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
16
interests between them. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, consent to entry of judgment or effect any
settlement of any claim or pending or threatened proceeding in respect of which
the Indemnified Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such judgment or
settlement includes an unconditional release of such Indemnified Party from all
liability arising out of such claim or proceeding.
4.4 Contribution. If the indemnification provided for in the foregoing
Sections 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of
any loss, claim, damage, liability or action referred to herein, 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 loss, claim, damage, liability or action in such proportion as is
appropriate to reflect the relative fault of the Indemnified Parties and the
Indemnifying Parties in connection with the actions or omissions which resulted
in such loss, claim, damage, liability or action, as well as any other relevant
equitable considerations. The relative fault of any Indemnified Party and any
Indemnifying 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 Indemnified Party or such Indemnifying Party and 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 4.4 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 any loss, claim,
damage, liability or action referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 4.4, no holder of Registrable Securities shall be
required to contribute any amount in excess of the dollar amount of the net
proceeds (after payment of any underwriting fees, discounts or commissions)
actually received by such holder from the sale of Registrable Securities which
gave rise to such contribution obligation. 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.
5. UNDERWRITING AND DISTRIBUTION.
5.1 Rule 144. The Company covenants that it shall file any reports
required to be filed by it under the Securities Act and the Exchange Act and
shall take such further action as the holders of Registrable Securities may
reasonably request, all to the extent required from time to
17
time to enable such holders to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 or Rule 144A under the Securities Act, as such Rules may be amended
from time to time, or any similar Rule or regulation hereafter adopted by the
SEC.
5.2 Restrictions on Sale by the Company and Others. The Company agrees (i)
not to effect any sale or distribution of any securities similar to those being
registered in accordance with Section 2.1, or any securities convertible into or
exchangeable or exercisable for such securities, during the 90 days prior to,
and during the 120-day period beginning on, the effective date of any Demand
Registration (except as part of such Demand Registration to the extent permitted
by Section 2.1(d)); and (ii) that any agreement entered into after November 17,
1998, pursuant to which the Company issues or agrees to issue any privately
placed securities shall contain a provision under which holders of such
securities agree not to effect any sale or distribution of any such securities
during the periods described in (i) above, in each case including a sale
pursuant to Rule 144 or 144A under the Securities Act (except as part of any
such registration, if permitted); provided, however, that the provisions of this
Section 5.2 shall not prevent the conversion or exchange of any securities
pursuant to their terms into or for other securities and shall not prevent the
issuance of securities by the Company under any employee benefit, stock option
or stock subscription plans.
6. MISCELLANEOUS.
6.1 Other Registration Rights. The Company represents and warrants that,
except as provided in the Stanwich Registration Rights Agreement, no Person has
any right to require the Company to register any shares of the Company's Capital
Stock for sale or to include shares of the Company's Capital Stock in any
registration filed by the Company for the sale of shares of Capital Stock for
its own account or for the account of any other Person. From and after November
17, 1998, the Company shall not, without the prior written consent of LLCP, (i)
enter into any agreement granting any demand registration right (i.e., the right
to require the Company to register the sale of any shares of the Company's
Capital Stock) other than demand registration rights under the FSA Registration
Rights Agreement, (ii) enter into any agreement granting any piggy-back
registration right (i.e., the right to require the Company to register the sale
of any shares of the Company's Capital Stock in any registration filed by the
Company for the sale of shares of Capital Stock for its own account or for the
account of any other person) which is inconsistent with, equal to (except
pursuant to the FSA Registration Rights Agreement) or superior to any
registration rights granted hereunder, or (iii) amend the Stanwich Registration
Rights Agreement (or enter into or amend the FSA Registration Rights Agreement
at any time) so as to cause the registration rights granted therein to be
inconsistent with, equal to or superior to the rights granted to the holders of
Registrable Securities hereunder or to otherwise adversely affect the
registration rights granted to the holders of Registrable Securities hereunder.
18
6.2 Successors and Assigns. The rights and obligations of LLCP under this
Agreement shall be freely assignable in whole or in part. Each such assignee, by
accepting such assignment of the rights of the assignor hereunder shall be
deemed to have agreed to and be bound by the obligations of the assignor
hereunder. The rights and obligations of the Company hereunder may not be
assigned.
6.3 Notices. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given if transmitted by telecopier with receipt
acknowledged, or upon delivery, if delivered personally or by recognized
commercial courier with receipt acknowledged, or upon the expiration of 72 hours
after mailing, if mailed by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to LLCP:
x/x Xxxxxx Xxxxxxxxx Capital Partners, Inc.
000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to any assignee of LLCP:
At such assignee's address as shown on the books of the
Company.
If to the Company:
Consumer Portfolio Services, Inc.
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx., President
and Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address or addresses as LLCP, such assignee or the Company, as
the case may be, may specify by written notice given in accordance with this
Section.
19
6.4 Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
6.5 Counterpart. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
6.6 Descriptive Headings, Construction and Interpretation. The descriptive
headings of the several paragraphs of this Agreement are for convenience of
reference only and do not constitute a part of this Agreement and are not to be
considered in construing or interpreting this Agreement. All section, preamble,
recital and party references are to this Agreement unless otherwise stated. No
party, nor its counsel, shall be deemed the drafter of this Agreement for
purposes of construing the provisions of this Agreement, and all provisions of
this Agreement shall be construed in accordance with their fair meaning, and not
strictly for or against any party.
6.7 Waivers and Amendments. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally or by course of
dealing, except by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought.
6.8 Remedies. In the event that the Company fails to observe or perform
any covenant or agreement to be observed or performed under this Agreement, LLCP
or any other holder of Registrable Securities may proceed to protect and enforce
its rights by suit in equity or action at law, whether for specific performance
of any term contained in this Agreement or for an injunction against the breach
of any such term or in aid of the exercise of any power granted in this
Agreement or to enforce any other legal or equitable right, or to take any one
or more of such actions. The Company agrees to pay all fees, costs, and
expenses, including, without limitation, fees and expenses of attorneys,
accountants and other experts, and all fees, costs and expenses of appeals,
incurred by LLCP or any other holder of Registrable Securities in connection
with the enforcement of this Agreement or the collection or any sums due
hereunder, whether or not suit is commenced. None of the rights, powers or
remedies conferred under this Agreement shall be mutually exclusive, and each
such right, power or remedy shall be cumulative and in addition to any other
right, power or remedy whether conferred by this Agreement or now or hereafter
available at law, in equity, by statute or otherwise.
6.9 Governing Law. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE (WITHOUT REGARD TO
20
THE CHOICE OF LAW OR CONFLICTS OF LAW PROVISIONS THEREOF) AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.
6.10 Amendment and Restatement; Full Force and Effect. This Agreement
amends and restates the Original Registration Rights Agreement on and as of the
Closing Date, and the Original Registration Rights Agreement shall remain in
full force and effect as amended and restated hereby. The Original Registration
Rights Agreement, as amended and restated hereby, is hereby ratified and
affirmed by the parties in all respects.
6.11 Termination of Registration Rights. This Agreement, and the rights
and obligations of the parties hereunder, shall terminate on the seventh
anniversary of the date hereof; provided, however, that the rights and
obligations of the parties under Section 4 (Indemnification and Contribution)
shall expressly survive the termination hereof.
6.12 Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES THE RIGHT TO A
TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING ARISING OUT OF, CONNECTED
WITH OR RELATED TO THE SECURITIES PURCHASE AGREEMENT, THIS AGREEMENT OR ANY
OTHER RELATED AGREEMENT, OR ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR
RELATED TO THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, REGARDLESS OF WHICH
PARTY INITIATES SUCH ACTION OR ACTIONS.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
21
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized representatives as of the date first
written above.
LLCP
XXXXXX XXXXXXXXX CAPITAL PARTNERS, INC.,
a California corporation
On behalf of XXXXXX XXXXXXXXX CAPITAL
PARTNERS II, L.P., a California limited
partnership
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
Xxxxxx X. Xxxxxx
President
COMPANY
CONSUMER PORTFOLIO SERVICES, INC.,
a California corporation
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-------------------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
President and Chief Executive Officer
By: /s/ Xxxxx X. Stock
-------------------------------------------------
Xxxxx X. Stock
Senior Vice President and Chief Financial Officer
22
