EXHIBIT B
FORM OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of April ____, 2000, between FA,
Inc. d/b/a FA of Delaware (the "Investor")and National Auto Credit, Inc., a
Delaware corporation (the "Company").
RECITALS
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WHEREAS, the Investor, an indirect wholly owned subsidiary of Reading
Entertainment, Inc. , a Delaware corporation (the "Parent"), has received or
will receive shares (the "Shares") of Common Stock, par value $0.05 per share,
of the Company (the "Common Stock"), in the amount and subject to the conditions
set forth in the Purchase Agreement, dated as of April ___, 2000, among, the
Investor, the Parent and the Company (the "Purchase Agreement");
WHEREAS, the Company has agreed to grant the Investor certain registration
rights with respect to the Shares; and
WHEREAS, the Company and the Investor desire to define the registration
rights of the Investor on the terms and subject to the conditions herein set
forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS
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As used in this Agreement, the following terms have the respective meanings
set forth below:
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Holder" shall mean any holder of Registrable Securities.
"Initiating Holder" shall mean any Holder or Holders of Registrable
Securities aggregating at least 25% of the aggregate number of shares of Common
Stock held by all Holders.
"Person" shall mean an individual, partnership, joint-stock company,
corporation, limited liability company, trust or unincorporated organization,
and a government or agency or political subdivision thereof.
"register, "registered" and "registration" shall mean a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be
filed) and the declaration or ordering of effectiveness of such registration
statement.
"Registrable Securities" shall mean the Shares and any additional shares of
Common Stock of the Company issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of, the Shares, until, in the
case of any such securities, (i) a registration statement covering such
securities has been declared effective by the Commission and such securities
have been disposed of pursuant to such effective Registration Statement or
(ii) such securities have been disposed of in open market transactions pursuant
to Rule 144 under the Securities Act (or similar rule then in effect).
"Registration Expenses" shall mean all expenses incurred by the Company in
compliance with Sections 2(a) and (b) hereof, excluding Selling and Legal
Expenses, but including, without limitation, all registration and filing fees,
printing expenses, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company).
"Security" and "Securities" shall have the meaning set forth in Section
2(l) of the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Selling and Legal Expenses" shall mean (x) all underwriting and selling
discounts, fees and commissions applicable to the sale of Registrable Securities
and (y) all reasonable fees and disbursements of counsel retained by the Holders
of the Registrable Securities to be included in a particular registration.
2. REGISTRATION RIGHTS
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(2) Requested Registration.
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(a) Request for Registration. If the Company shall receive from
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an Initiating Holder, at any time after September 30, 2000, a written
request that the Company effect any registration with respect to all or a
part of the Registrable Securities, the Company will:
(A) promptly, but in any event within ten (10) business days
of the receipt of such request, give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(B) as soon as reasonably practicable, but in any event
within 60 days following the receipt of such request, file a
registration statement on an
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appropriate form with the Commission and use its reasonable best
efforts to effect such registration (including, without limitation,
the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations
issued under the Securities Act) as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion
of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any
Holder or Holders joining in such request as are specified in a
written request received by the Company within 10 business days after
written notice from the Company is given under Section
2(a)(i)(A) above; provided that the Company shall not be obligated to
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effect, or take any action to effect, any such registration pursuant
to this Section 2(a):
(v) in any particular jurisdiction in which the Company
would be required to execute a general consent to service of process
in effecting such registration, qualification or compliance, unless
the Company is already subject to service in such jurisdiction and
except as may be required by the Securities Act or applicable rules or
regulations thereunder;
(w) with respect to a request for registration of Shares,
after the Company has effected one (1) such registration pursuant to
this Section 2(a) requested by an Initiating Holder and such
registration has been declared or ordered effective and the sales of
such Registrable Securities shall have closed;
(x) if the Registrable Securities requested by all Holders
to be registered pursuant to such request do not have an anticipated
aggregate public offering price (before any underwriting discounts and
commissions) of at least $1,000,000;
(y) if at the time of any request to register Registrable
Securities, the Company is engaged or intends to engage in an
acquisition, financing or other material transaction which, in the
good faith determination of the Board of Directors of the Company,
would be adversely affected by the requested registration to the
material detriment of the Company, or the Board of Directors of the
Company determines in good faith that the registration would require
the disclosure of material information that the Company has a bona
fide business purpose for preserving as confidential, and that the
Company is not otherwise required by applicable securities laws or
regulations to disclose, in which event, the Company may, at its
option, direct that such request be delayed for a period not in excess
of sixty days from the date of the determination by the Board of
Directors, as the case may be, such right to delay a request to be
exercised by the Company not more than once in any twelve-month
period; or
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(z) with respect to Holders who are officers, directors or
employees of the Company, if at the time of any request to register
Registrable Securities, directors, officers, or employees of the
Company are not permitted to offer or sell securities in accordance
with the Company's policies.
The registration statement filed pursuant to the request of an
Initiating Holder may, subject to the provisions of Section 2(a)(ii) below,
include other securities, other than Registrable Securities, of the Company
which are held by the other stockholders
("Other Stockholders") of the Company.
The Holders holding a majority of the Registrable Securities requested
to be registered may, at any time prior to the effective date of the
registration statement relating to such registration, revoke such request,
without liability to the Company, such Holders, any of the other Holders or
the Other Stockholders, by providing a written notice to the Company
revoking such request, provided that such revoked request shall count
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against the registrations available to the Holders pursuant to Section
2(a)(w) unless such Holders pay the costs and expenses associated with such
revoked request.
(ii) Underwriting. If the Initiating Holders intend to distribute
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the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request
made pursuant to Section 2(a). If shares held by Other Stockholders are
requested by such Other Stockholders to be included in any registration
pursuant to this Section 2, the Company shall condition such inclusion on
their acceptance of the further applicable provisions of this Section 2.
The Initiating Holders whose Registrable Securities are to be included in
such registration and the Company shall (together with all Other
Stockholders proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with
the representative of the underwriter or underwriters selected for such
underwriting by such Initiating Holders and reasonably acceptable to the
Company. Notwithstanding any other provision of this Section 2(a), if the
representative advises the Holders in writing that marketing factors
(including, without limitation, pricing considerations) require a
limitation on the number of shares to be underwritten or a limitation on
the inclusion of shares held by directors and officers of the Company, the
securities of the Company held by Other Stockholders shall be excluded from
such registration to the extent so required by such limitation. If, after
the exclusion of such shares, further reductions are still required, the
Registrable Securities of the Company held by each Holder other than the
Initiating Holders shall be excluded from such registration to the extent
so required by such limitation. Thereafter, if still further reductions are
required, the number of Registrable Securities included in the registration
by each Initiating Holder shall be reduced on a pro rata basis (based on
the number of Registrable Securities held by such Initiating Holder), by
such minimum number of Registrable Securities as is necessary to comply
with such request. No Registrable Securities or any other securities
excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in
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such registration. If any Other Stockholder who has requested inclusion in
such registration as provided above disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice
to the Company, the underwriter and the Initiating Holders. The securities
so withdrawn shall also be withdrawn from registration. If the underwriter
has not limited the number of Registrable Securities or other securities to
be underwritten, the Company and officers and directors of the Company may
include its or their securities for its or their own account in such
registration if the representative so agrees and if the number of
Registrable Securities and other securities which would otherwise have been
included in such registration and underwriting will not thereby be limited.
(iii) Other Registration Rights. The Company shall not grant any
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registration rights inconsistent with the provisions of this Section
2(a)and in granting any demand registration rights hereafter shall provide
that the Holders shall have the right to notice of the exercise of any such
demand registration right and to participate in such registration on a pro
rata basis.
(b) Company Registration.
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(i) If the Company shall determine to register any of its equity
securities either for its own account or for any Other Stockholders, other
than a registration relating solely to employee benefit plans, or a
registration relating solely to a Commission Rule 145 transaction, or a
registration on any registration form which does not permit secondary
sales, the Company will:
(A) promptly give to each of the Holders a written notice
thereof; and
(B) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made by the Holders
within fifteen (15) days after receipt of the written notice from the
Company described in clause (A) above, except as set forth in Section
2(b)(ii) below.
The Company may terminate, in its sole and absolute discretion, any
registration described in this Section 2 (b) at any time prior to the
effectiveness of the applicable registration statement. Upon such
termination, the Company's obligations under this Section 2(b) with respect
to such terminated registration shall terminate.
(ii) Underwriting. If the registration of which the Company gives
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notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2(b)(i)(A). In such event, the right of each of
the Holders to registration pursuant to this Section 2(b) shall be
conditioned upon such Holders' participation in such underwriting and the
inclusion of such Holders' Registrable Securities in the underwriting to
the extent
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provided herein. The Holders whose shares are to be included in such
registration shall (together with the Company and the Other Stockholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for underwriting by the Company.
Notwithstanding any other provision of this Section 2(b), if the
representative determines that marketing factors require a limitation on
the number of shares to be underwritten or a limitation on the inclusion of
shares held by directors and officers of the Company, the representative
may (subject to the allocation priority set forth below) limit the number
of Registrable Securities to be included in the registration and
underwriting to not less than twenty five percent (25%) of the total number
of shares to be included in such underwritten offering, subject to the
Company's compliance with any registration obligations to any Demanding
Holders (as hereinafter defined) participating in such registration. The
Company shall so advise all holders of securities requesting registration,
and the number of shares of securities that are entitled to be included in
the registration and underwriting shall be allocated in the following
manner: The securities of the Company held by officers, directors and Other
Stockholders (other than Registrable Securities and other than securities
held by holders who by contractual right demanded such registration ("
Demanding Holders")) shall be excluded from such registration and
underwriting to the extent required by such limitation, and, if a
limitation on the number of shares is still required, the number of shares
that may be included in the registration and underwriting by each of the
Holders other than the Demanding Holders shall be excluded from such
registration to the extent so required by such limitation. Thereafter, if
still further reductions are required, the number of shares included in the
registration by each of the Demanding Holders shall be reduced, on a pro
rata basis (based on the number of shares held by such Demanding Holders),
by such minimum number of shares as is necessary to comply with such
limitation. If any of the Holders or any officer, director or Other
Stockholder disapproves of the terms of any such underwriting, he may elect
to withdraw therefrom by written notice to the Company and the underwriter.
Any Registrable Securities or other securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration.
(iii) Number and Transferability. Each of the Holders shall be
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entitled to have its shares included in two registrations pursuant to this
Section 2(b); provided, however, that notwithstanding anything to the
contrary contained herein, the Holders shall not be entitled to have their
shares registered in the first registered public offering of the Company
occurring within six months of the Closing Date.
(c) Expenses of Registration. All Registration Expenses incurred in
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connection with any registration, qualification or compliance pursuant to this
Section 2 shall be borne by the Company, and all Selling and Legal Expenses
shall be borne by the Holders of the securities so registered pro rata on the
basis of the number of their shares so registered; provided, however, that if,
as a result of the withdrawal of a request for registration by any of the
Holders, as applicable, the registration statement does not become effective,
the Holders and Other Stockholders requesting registration may elect to bear the
Registration Expenses
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(pro rata on the basis of the number of their shares so included in the
registration request, or on such other basis as such Holders and Other
Stockholders may agree), in which case such registration shall not be counted as
a registration pursuant to Section 2(a)(i)(B)(w).
(d) Registration Procedures. In the case of each registration effected by
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the Company pursuant to this Section 2, the Company will keep the Holders
holding Registrable Securities requested to be included in such registration
("Participating Holders") advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company will:
(i) furnish to each Participating Holder, and to any underwriter
before filing with the Commission, copies of any registration statement
(including all exhibits) and any prospectus forming a part thereof and any
amendments and supplements thereto (including, upon request, all documents
incorporated or deemed incorporated by reference therein) prior to the
effectiveness of such registration statement and including each preliminary
prospectus, any summary prospectus or any term sheet (as such term is used
in Rule 434 under the Securities Act)) and any other prospectus filed under
Rule 424 under the Securities Act, which documents, other than exhibits and
documents incorporated or deemed incorporated by reference, will be subject
the review of the Participating Holders and any such underwriter for a
period of at least five business days, and the Company shall not file any
such registration statement or such prospectus or any amendment or
supplement to such registration statement or prospectus to which any
Participating Holder or any such underwriter shall reasonably object within
five business days after the receipt thereof; a Participating Holder or
such underwriter(s), if any, shall be deemed to have reasonably objected to
such filing only if the registration statement, amendment, prospectus or
supplement, as applicable, as proposed to be filed, contains a material
misstatement or omission;
(ii) furnish to each Participating Holder and to any underwriter,
such number of conformed copies of the applicable registration statement
and of each amendment and supplement thereto (in each case including all
exhibits) and such number of copies of the prospectus forming a part of
such registration statement (including each preliminary prospectus, any
summary prospectus or any term sheet (as such term is used in Rule 434
under the Securities Act)) and any other prospectus filed under Rule 424
under the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, including without limitation
documents incorporated or deemed to be incorporated by reference prior to
the effectiveness of such registration, as each of the Participating
Holders or any such underwriter, from time to time may reasonably request;
(iii) to the extent practicable, promptly prior to the filing of
any document that is to be incorporated by reference into any registration
statement or prospectus forming a part thereof subsequent to the
effectiveness thereof, and in any event no later than the date such
document is filed with the Commission, provide copies of such document to
the Participating Holders, if requested, and to any underwriter, make
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representatives of the Company available for discussion of such document
and other customary due diligence matters;
(iv) make available at reasonable times for inspection by the
Participating Holders, any underwriter participating in any disposition
pursuant to such registration and any attorney or accountant retained by
the Holders or any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company and cause the
officers, directors and employees of the Company to supply all information
reasonably requested by the Participating Holders and any such
underwriters, attorneys or accountants in connection with such registration
subsequent to the filing of the applicable registration statement and prior
to the effectiveness of the applicable registration statement, subject to
the execution of a customary confidentiality agreement;
(v) use its reasonable best efforts (x) to register or qualify
all Registrable Securities and other securities covered by such
registration under such other securities or blue sky laws of such States of
the United States of America where an exemption is not available and as the
sellers of Registrable Securities covered by such registration shall
reasonably request, (y) to keep such registration or qualification in
effect for so long as the applicable registration statement remains in
effect, and (z) to take any other action which may be reasonably necessary
or advisable to enable such sellers to consummate the disposition in such
jurisdictions of the securities to be sold by such sellers, except that the
Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction where it is not so
qualified, or to subject itself to taxation in any such jurisdiction, or to
execute a general consent to service of process in effecting such
registration, qualification or compliance, unless the Company is already
subject to service in such jurisdiction and except as may be required by
the Securities Act or applicable rules or regulations thereunder;
(vi) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the Company
and counsel to the Participating Holders of Registrable Securities to
enable the Holders thereof to consummate the disposition of such
Registrable Securities in accordance with the plan of distribution
described in the applicable registration statement;
(vii) promptly notify each Holder of Registrable Securities covered
by a registration statement (A) upon discovery that, or upon the happening
of any event as a result of which, the prospectus forming a part of such
registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (B) of the
issuance by the Commission of any stop order suspending the effectiveness
of such registration statement or the initiation of proceedings for that
purpose, (C) of any request by the
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Commission for (1) amendments to such registration statement or any
document incorporated or deemed to be incorporated by reference in any such
registration statement, (2) supplements to the prospectus forming a part of
such registration statement or (3) additional information, (D) of the
receipt by the Company of 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 of
any proceeding for such purpose, and at the request of any such Holder
promptly prepare and furnish to it a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(viii) use its reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of any such registration, or the
lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction;
(ix) if requested by a Participating Holder, or any underwriter,
subject to receipt of any required information from such Holder or
underwriter, promptly incorporate in such registration statement or
prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as the Participating Holder and any underwriter
may reasonably request to have included therein, including, without
limitation, information relating to the "plan of distribution" of the
Registrable Securities, information with respect to the number of shares of
Registrable Securities being sold to such underwriter, the purchase price
being paid therefor and any other terms of the offering of the Registrable
Securities to be sold in such offering and make all required filings of any
such prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment;
(x) furnish to the Participating Holders, addressed to them, an
opinion of counsel for the Company, dated the date of the closing under the
underwriting agreement, if any, or the date of effectiveness of the
registration statement if such registration is not an underwritten
offering, and use its reasonable best efforts to furnish to the
Participating Holders, addressed to them, a "cold comfort" letter signed by
the independent certified public accountants who have certified the
Company's financial statements included in such registration, covering
substantially the same matters with respect to such registration (and the
prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements,
as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten public
offerings of securities and such other matters as the Participating Holders
may reasonably request;
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(xi) provide promptly to the Participating Holders upon request
any document filed by the Company with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act; and
(xii) use its reasonable best efforts to cause all Registrable
Securities included in any registration pursuant hereto to be listed on
each securities exchange on which securities of the same class are then
listed or, if not then listed on any securities exchange, to be eligible
for trading in any over-the-counter market or trading system in which
securities of the same class are then traded.
(e) Indemnification.
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(i) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors and partners, and each person
controlling each of the Holders (within the meaning of the Securities Act),
with respect to each registration which has been effected pursuant to this
Section 2, and each underwriter, if any, and each person who controls any
underwriter, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any
preliminary, final or summary prospectus, offering circular or other
document (including any related registration statement, notification or the
like, or any amendment or supplement to any of the foregoing) incident to
any such registration, qualification or compliance, or based on 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, or any violation (or alleged violation) by the Company of the
Securities Act or the Exchange Act or any rule or regulation thereunder or
of any applicable state or common law applicable to the Company and
relating to action or inaction required of the Company in connection with
any such registration, qualification or compliance, and (subject to Section
2(e)(iii)) will reimburse each of the Holders, each of its officers,
directors and partners, and each person controlling each of the Holders,
each such underwriter and each person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such case to
the extent that any such claim, loss, damage, liability or expense arises
out of or is based on any untrue statement or omission based upon and in
conformity with written information furnished to the Company by the Holders
or underwriter and stated to be specifically for use therein. The foregoing
indemnification shall remain in effect regardless of any investigation by
any indemnified party and shall survive any transfer or assignment by a
Holder of its Registrable Securities or of its rights pursuant to this
Agreement.
(ii) Each of the Holders will, if Registrable Securities held by
it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each
of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration
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statement, each person who controls the Company or such underwriter, each
Other Stockholder and each of their officers, directors, and partners, and
each person controlling such Other Stockholder against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) made by such
Holder of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any omission (or
alleged omission) made by such Holder to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company and such directors,
officers, partners, persons, underwriters or control persons for any legal
or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each
case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by such Holder and stated to be specifically for use therein;
provided, however, that the obligations of each of the Holders hereunder
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shall be limited to an amount equal to the net proceeds to such Holder of
securities sold pursuant to such registration statement or prospectus.
(iii) Each party entitled to indemnification under Section 2(e)(the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom; provided that counsel
for the Indemnifying Party, who shall conduct the defense of such claim or
any litigation resulting therefrom, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld) and the
Indemnified Party may participate in such defense at such party's expense
(unless the Indemnified Party shall have reasonably concluded upon advice
from counsel that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case
the reasonable fees and expenses of counsel shall be at the expense of the
Indemnifying Party), and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2 except to the
extent the Indemnifying Party is materially prejudiced thereby. No
Indemnifying Party, in the defense of any such claim or litigation shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim
or litigation. Each Indemnified Party shall promptly furnish such
information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required
in connection with the defense of such claim and litigation resulting
therefrom.
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(iv) If the indemnification provided for in this Section 2(e) is
held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or
expense referred to herein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage or expense in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand and of
the Indemnified Party on the other in connection with the statements or
omissions which resulted in such loss, liability, claim, damage or expense,
as well as any other relevant equitable considerations, provided, however,
that 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 any such fraudulent
misrepresentation. The relative fault of the Indemnifying Party and of the
Indemnified 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 the Indemnifying Party or by the Indemnified Party
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, no Holder will be required to contribute any
amount pursuant to this paragraph (e) in excess of the total price at which
the Registrable Securities of such Holder were offered to the public (less
underwriting discounts and commissions, if any).
(v) The foregoing indemnity agreement of the Company and Holders
is subject to the condition that, insofar as they relate to any loss,
claim, liability or damage made in a prospectus, preliminary prospectus or
other offering document but eliminated or remedied in an amended
prospectus, preliminary prospectus or other offering document delivered to
an underwriter or Holder, as applicable (the "Final Prospectus"), such
indemnity agreement shall not inure to the benefit of (A) any underwriter
if a copy of the Final Prospectus was furnished to the underwriter and was
not furnished to the person asserting the loss, liability, claim or damage
at or prior to the time such action is required by the Securities Act or
(B) in circumstances where no underwriter is acting as such in the offer
and sale in question, any Holder who (1) either directly or through its
agent provided the preliminary prospectus to the Person asserting the loss,
liability, claim or damage, (2) was furnished with a copy of the Final
Prospectus, and (3) did not furnish or cause to be furnished the Final
Prospectus to the Person asserting the loss, liability, claim or damage at
or prior to the time such action is required by the Securities Act.
(vi) Any indemnification payments required to be made to an
Indemnified Party under this Section 2(e) shall be made as the related
claims, losses, damages, liabilities or expenses are incurred.
(f) Information bv the Holders. Each of the Holders holding securities
--------------------------
included in any registration shall furnish to the Company such information
regarding such Holder and the
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distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Section 2. No Investor shall be
required, in connection with any underwriting agreements entered into in
connection with any registration, to provide any information, representations or
warranties, or covenants with respect to the Company, its business or its
operations, and such Investor shall not be required to provide any
indemnification with respect to any registration statement except as
specifically provided for in Section 2(d)(ii) hereof.
(g) Rule 144 Reporting.
------------------
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted
securities to the public without registration, the Company agrees to:
(i) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act ("Rule 144"),
at all times;
(ii) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(iii) so long as the Holder owns any Registrable Securities,
furnish to the Holder upon request, a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed as the Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing the Holder to sell any such
securities without registration.
(h) Termination. The registration rights set forth in this Section 2
-----------
shall not be available to any Holder if, in the opinion of counsel to the
Company, all of the Registrable Securities then owned by such Holder could be
sold in any 120-day period pursuant to Rule 144(k)or at such time that no
Registrable Securities are outstanding. The Company will arrange for a provision
to the transfer agent for such shares of an opinion of counsel in connection
with any such sale under Rule 144. The Company shall use its reasonable best
efforts to comply with the requirements of Rule 144 as will enable the Holders
to make sales pursuant to Rule 144.
(i) Assignment. The registration rights set forth in Section 2 hereof may
----------
be assigned, in whole or in part, to any transferee of Registrable Securities
(who shall be considered thereafter to be a Holder and shall be bound by all
obligations and limitations of this Agreement).
(j) The Holders agree that, upon receipt of any notice from the Company
pursuant to Section 2(d)(vii), they shall immediately discontinue the
disposition of Registrable Securities
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pursuant to the registration statement applicable to such Registrable Securities
until they have received copies of the amended or supplemented prospectus as
described in Section 2(d)(vii). The Holders shall destroy all copies in their
possession of the registration statement and related materials covering such
Registrable Securities at the time of receipt of the Company's notice.
3. MISCELLANEOUS
-------------
(a) Directly or Indirectly. Where any provision in this Agreement refers
----------------------
to action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.
(c) Section Headings. The headings of the sections and subsections of
----------------
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
(d) Notices.
-------
(i) All communications under this Agreement shall be in writing
and shall be delivered by hand or by facsimile or mailed by overnight
courier or by registered or certified mail, postage prepaid:
(A) If to the Investor:
FA, Inc.
c/o Reading Entertainment, Inc.
One Penn Square West
00 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx, Executive Vice President
Facsimile: (000)000-0000
14
Copy to:
Potter Xxxxxxxx & Xxxxxxx LLP
Hercules Plaza
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx, Esq.
Facsimile: (302)658-l192
If to the Company:
National Auto Credit, Inc.
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxx, Chairman of the Board
Facsimile: (000)000-0000
Copy to:
National Auto Credit, Inc.
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq., Vice President,
Secretary and General Counsel
Facsimile: (000)000-0000
Any party may change its address for the purpose of this Section by
giving the other party written notice of its new address in the manner set
forth above.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand or facsimile, on the date of such delivery; if mailed by
courier, on the first business day following the date of such mailing; and
if mailed by registered or certified mail, on the third business day after
the date of such mailing.
(e) Reproduction of Documents. This Agreement and all documents relating
-------------------------
thereto, including, without limitation, any consents, waivers and modifications
which may hereafter be executed may be reproduced by the parties hereto by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and the parties hereto may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Investor in the regular course
of business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and be binding upon the successors and assigns of each of the parties.
15
(g) Entire Agreement; Amendment and Waiver. This Agreement constitutes
--------------------------------------
the entire understanding of the parties hereto and supersedes all prior
understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and the Holders holding a majority of the then
outstanding Registrable Securities.
(h) Severability. In the event that any part or parts of this Agreement
------------
shall be held illegal or unenforceable by any court or administrative body of
competent jurisdiction, such determination shall not effect the remaining
provisions of this Agreement which shall remain in full force and effect.
(i) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
[Signature page follows]
16
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
INVESTOR:
FA, INC.
By:
------------------------
Name:
Title:
COMPANY:
NATIONAL AUTO CREDIT, INC.
By:
------------------------
Name:
Title:
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