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EXHIBIT 10.30
CONSOLIDATED REGISTRATION RIGHTS AGREEMENT
THIS CONSOLIDATED REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
entered into as of November 17, 1998 by and between Consumer Portfolio Services,
Inc., a California corporation (the "Company"), and the following parties
(collectively, the "Stanwich Parties"): Stanwich Financial Corp, a Rhode Island
corporation ("Stanwich"), and Xxxx X. Xxxxx ("Xxxxx").
RECITALS
X. Xxxxxxxx is the holder of seven Partially Convertible Subordinated 9%
Notes, each dated June 12, 1997 and issued by the Company to Stanwich, in the
following principal amounts (collectively, the "1997 Stanwich Notes"): two such
notes for $5,000,000 each, and five such notes for $1,000,000 each. Each of the
0000 Xxxxxxxx Notes contains provisions granting to the holder thereof the right
to convert 20% of the principal thereof into shares of Common Stock at the rate
of $11.86 per shares, subject to adjustment as provided therein.
X. Xxxxxxxx is the holder of 443,450 shares of Common Stock, which it
subscribed for and purchased from the Company on or about July 21, 1998 (the
"1998 Issued Shares").
C. The Company and the Stanwich Parties are parties to a certain Debt
Restructure Agreement of even date herewith (the "Restructure Agreement")
pursuant to which, simultaneously herewith, the Company has (i) issued to
Stanwich a certain Convertible Subordinated 12.5% Note dated the date hereof in
the principal amount of $4,000,000 (the "1998 Stanwich Note") and (ii) issued to
Xxxxx a certain Convertible Subordinated 12.5% Note dated the date hereof in the
principal amount of $1,000,000 (the "Xxxxx Note"). The principal of each of the
0000 Xxxxxxxx and the Xxxxx Note is convertible into shares of Common Stock at
the rate of $3.00 per share, subject to adjustment as provided therein.
D. The Company is obligated to enter into this Agreement under the terms
of the Restructure Agreement.
E. In consideration of the substantial direct and indirect benefits
which the Company will realize from the consummation of the transactions
contemplated by the Restructure Agreement, the Company desires to enter into
this Agreement and to be bound by the terms and conditions hereof.
AGREEMENT
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 hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meanings specified below:
"Business Day" shall mean any day that is not a Saturday, Sunday or
other day on which banks in the State of California are authorized or required
to close.
"Commission" shall mean the Securities and Exchange Commission or any
other Federal agency at the time administering the 1933 Act.
"Common Stock" shall mean the common stock, no par value, of the
Company.
"Company" shall have the meaning set forth in the preamble of this
Agreement.
"Conversion Right" means, with respect to each of the Notes, the right
to convert the principal thereof into shares of Common Stock, as provided
therein.
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"Demanding Holders" shall mean Stanwich or, if Stanwich 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 have the meaning given to such
term in the LLCP Registration Rights Agreement.
"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" shall mean Xxxxxx Xxxxxxxxx Capital Partners II, L.P., a
California limited partnership.
"LLCP Registration Rights Agreement" shall mean that certain
Registration Rights Agreement of even date herewith between the Company and
LLCP.
"Maximum Numbers of Shares" shall have the meaning specified in Section
2.1(d).
"1998 Issued Shares" shall have the meaning set forth in the recitals to
this Agreement.
"1998 Stanwich Note" shall have the meaning set forth in the recitals to
this Agreement.
"1997 Stanwich Notes" shall have the meaning set forth in the recitals
to this Agreement.
"1933 Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.
"Notes" shall mean, collectively, the 0000 Xxxxxxxx Notes, the 1998
Notes and the Xxxxx Note.
"Piggy-Back Registration" shall have the meaning specified in Section
2.2(a).
"Xxxxx" shall have the meaning set forth in the recitals to this
Agreement.
"Xxxxx Note" 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 1933 Act, and the applicable rules and regulations
thereunder, and such registration statement becoming effective.
"Registrable Securities" shall mean, collectively, the Shares and any
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 become effective under the 1933 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) under the 1933 Act, or (iii) such
securities shall have ceased to be outstanding.
"Restructure Agreement" shall have the meaning set forth in the recitals
to this Agreement.
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"SFSC Warrant" shall have the meaning given to such term in that certain
Securities Option Agreement of even date herewith among LLCP, Stanwich and the
Company.
"Shares" shall mean, collectively, (i) the 1998 Issued Shares, (ii) the
shares of Common Stock issued or issuable upon exercise of any and all of the
Conversion Rights and (iii) the shares of Common Stock issued or issuable
pursuant to the SFSC Warrant. As used in this Agreement, the holder of any
Conversion Right or of the SFSC Warrant or any portion thereof shall be deemed
to be the holder of the shares of Common Stock issuable upon exercise thereof
and, to the extent such shares constitute Registrable Securities, such holder
shall be deemed to be the holder of such Registrable Securities.
"Stanwich" shall have the meaning set forth in the recitals to this
Agreement.
"Stanwich Parties" shall have the meaning set forth in the recitals to
this Agreement.
"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.
As used herein, the plural or singular include each other, and pronouns
in any gender are to be construed as masculine, feminine or neuter, as the
context requires.
2. REGISTRATION RIGHTS.
2.1 Demand Registration.
(a) Request for Registration. At any time and from time to time
on or after the first anniversary of the date of this Agreement, the Demanding
Holders may make a written request for registration under the 1933 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 two Demand
Registrations with respect to the Shares 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 it has become effective and the Company has
complied with its obligations under this Agreement with respect thereto;
provided, however, that, after it has been declared effective, if the offering
of Registrable Securities pursuant to a Demand Registration is interfered with
by any stop order, injunction or other order or requirement of the Commission 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
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 LLCP Registration Rights Agreement and the FSA
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
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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 LLCP Registration Rights
Agreement and 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 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, (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 (iii) 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.
2.2 Piggy-Back Registration.
(a) Piggy-Back Rights. If at any time the Company proposes to
file a registration statement under the 1933 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 Commission), (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 LLCP
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: (i) 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, (ii) second, to the extent the Maximum Number of Shares has
not been reached under the foregoing clause (i), the Registrable Securities as
to which registration has been requested hereunder and the shares of Common
Stock, if
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any, as to which registration has been requested pursuant to the piggy-back
registration rights granted under the FSA Registration Rights Agreement and the
LLCP 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 (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 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 LLCP 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 desires to sell or
which other shareholders of the Company desire to sell, exceeds the Maximum
Number of Shares, then the Company shall include in such registration: (i)
first, the shares of Common Stock for the account of persons having demand
registration rights under the LLCP Registration Rights Agreement 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 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
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, (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, if any, 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, 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 LLCP 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: (i) 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, (ii) second, to the extent the Maximum Number of Shares has
not been reached under the foregoing clause (i), 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 LLCP 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,
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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, (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, if any, 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, 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) Form S-3 is not available for
such offering; (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, (v) the Company has effected eight registrations pursuant to
this Section 2.3 or (vi) the Company has effected two registrations pursuant to
this Section 2.3 during the 12 month period prior to the date on which the
registration statement relating to such registration is anticipated to be
declared effective. The Company shall use its best efforts to maintain each
registration statement under this Section 2.3 effective for 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 the SFSC Warrant 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 the SFSC Warrant or any portion thereof, the holders
of such Registrable Securities may require that the Underwriter or Underwriters
purchase (and exercise) the SFSC Warrant or any portion thereof rather than
require the holders of the Registrable Securities to exercise the SFSC Warrant
or portion thereof in connection with such registration unless the Underwriters
inform such holders that such a purchase and exercise of the SFSC 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 the SFSC Warrant agreed to by the Underwriter or Underwriters,
including, without limitation, issuing the Common Stock issuable upon the
exercise of the SFSC 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.
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3.1 Filings; Information. If and whenever the Company is required to
effect the registration of any Registrable Securities under the 1933 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 60 days after receipt of a
request for a Demand Registration pursuant to Section 2.1, with the Commission 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 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 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 Commission 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 1933 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 Commission 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 Commission (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 Commission 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 Commission a registration
statement or prospectus or any amendment or supplement 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
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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 1933 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
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 Commission and the 1933 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 1933 Act and Rule 158 thereunder.
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(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 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 1933 Act pursuant to Sections 2.
4. INDEMNIFICATION AND CONTRIBUTION.
4.1 Indemnification by the Company. The Company agrees to indemnify and
hold harmless (i) each of the Stanwich Parties and each holder of Registrable
Securities and (ii) the respective officers, employees, affiliates, directors,
partners, members and agents of, and each person, if any, who controls, Stanwich
or any holder of Registrable Securities within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act (each, a "Stanwich Indemnified Party"),
from and against any loss, claim, damage or liability and any action in respect
thereof to which any Stanwich Indemnified Party may become subject under the
1933 Act or the 1934 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
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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 Stanwich Indemnified Party for any legal and other expenses
incurred by such Stanwich 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.
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 1933 Act or Section
20 of the 1934 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
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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 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 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
50 UNDERWRITING AND DISTRIBUTION.
5.1 Rule 144. The Company covenants that it shall file any reports
required to be filed by it under the 1933 Act and the 1934 Act and shall take
such further action as the holders of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holders to
sell Registrable Securities without registration under the 1933 Act within the
limitation of the exemptions provided by Rule 144 or Rule 144A under the 1933
Act, as such Rules may be amended from time to time, or any similar Rule or
regulation hereafter adopted by the Commission.
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 the
date hereof 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 1933 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.
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60 MISCELLANEOUS.
6.1 Other Registration Rights. The Company represents and warrants that,
except as provided in the LLCP 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 the date
of this Agreement, the Company shall not, without the prior written consent of
the holders of a majority of the Registrable Securities, (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 to
hereunder, or (iii) amend the LLCP 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.
6.2 Successors and Assigns. The rights and obligations of the Stanwich
Parties 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 Stanwich:
c/o Stanwich Partners, Inc.
One Stamford Landing
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Xxxxx:
c/o Stanwich Partners, Inc.
One Stamford Landing
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to any assignee of either of the Stanwich Parties:
At such assignee's address as shown on the books of the
Company.
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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 Stanwich, Poole, such assignee or the
Company, as the case may be, may specify by written notice given in accordance
with this Section.
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,
either of the Stanwich Parties 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 either of the Stanwich Parties 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 and the rights and
obligations arising hereunder shall be governed by, and construed and enforced
in accordance with, the laws of the State of California applicable to contracts
made and performed in such state, without regard to principles thereof regarding
conflicts of laws.
6.10 Termination of Prior Registration Rights Agreements. This Agreement
supersedes and replaces the Old Registration Rights (as such term is defined in
the Restructure Agreement) relating to or covering the Shares.
70 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
COMMERCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
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EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, AND UNDERSTANDING THEY ARE WAIVING A CONSTITUTIONAL RIGHT, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER IN CONTRACT, TORT, OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO, THIS
AGREEMENT, THE PURCHASE AGREEMENT AND/OR ANY RELATED AGREEMENT OR THE
TRANSACTIONS COMPLETED HEREBY OR THEREBY.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Consolidated
Registration Rights Agreement to be executed and delivered by their duly
authorized representatives as of the date first above written.
THE COMPANY: STANWICH:
CONSUMER PORTFOLIO SERVICES, STANWICH FINANCIAL SERVICES CORP.,
INC., a California corporation a Rhode Island Corporation
By:_______________________________ By:_________________________________
Xxxxxxx X. Xxxxxxx, Xx., Xxxxxxx X. Xxxxxxx, Xx.
President President and Chief
Executive Officer
XXXXX:
By:_______________________________ ____________________________________
Xxxxxxx X. Xxxxx, Xxxx X. Xxxxx
Senior Vice President and Chief
Financial Officer
15
