EXHIBIT 10.20
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
This Amended and Restated Registration Rights Agreement (the
"Agreement") dated this 13th day of May, 1997, by and between SMART CHOICE
AUTOMOTIVE GROUP, INC., a Florida corporation (the "Company") and SIRROM CAPITAL
CORPORATION, a Tennessee corporation (together with any subsequent assignees or
transferees of capital stock of the Company or rights thereto subject to the
provisions hereof, the "Holder").
WITNESSETH:
WHEREAS, the Company and Holder entered into a Registration Rights
Agreement dated March 13, 1997 (the "Registration Rights Agreement"),
simultaneously with the delivery by the Company to the Holder of the Company's
Convertible Senior Promissory Note dated March 13, 1997 in the principal amount
of $3,500,000 (the "Initial Note"), pursuant to the provisions of that certain
Loan Agreement, dated as of March 13, 1997, between the Company, as borrower,
and Holder, as lender (the "Initial Loan Agreement"), and the terms of the
Initial Note provide that the outstanding principal balance thereof is
convertible into shares of common stock, par value $.01 per share, of the
Company (the "Common Stock") at the option of the holder of the Initial Note;
WHEREAS, simultaneously with the delivery of the Initial Note, each of
Xxxxxx Smart Choice Finance Trust, a Florida trust, and Xxxxxx Smart Choice
Finance Trust, a Florida trust (hereinafter individually or collectively
referred to as the "Grantor"), granted Holder, pursuant to certain Stock Option
Agreements dated March 13, 1997 (collectively, the "Stock Option Agreement"), by
and among the Company, Holder and the respective Grantor, an option (the
"Option") to purchase 150,000 shares, for an aggregate of 300,000 shares, of
Common Stock owned by Grantor (the shares of Common Stock transferred or
transferable upon exercise of this Option hereinafter referred to as the "Option
Shares");
WHEREAS, the Company has requested that the Holder extend a further
loan to the Company in the amount of four million and no/100ths Dollars
($4,000,000.00), which loan is to be evidenced by a Convertible Senior
Promissory Note of even date herewith (the " May Note") and pursuant to the
terms of the Loan Agreement dated May 13, 1997 (the "May Loan Agreement"), and
the May Note provides that the outstanding principal balance thereof shall be
convertible into shares of Common Stock at the option of the holder of the May
Note; and
WHEREAS, as a further inducement to Holder to make the loan pursuant to
the May Loan Agreement, the Company has agreed to amend and modify the rights of
Holder under, and to amend and restate, the Registration Rights Agreement.
NOW, THERFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree, amend and restate the Registration
Rights Agreement as follows:
Section 1. REQUESTED REGISTRATION.
(a) DEMAND RIGHT. If at any time on or after the first anniversary of
the date of this Agreement the Company shall receive from the Holder a written
request that the Company effect any registration with respect to Registrable
Securities (as defined in Section 11 hereof) in an offering to be firmly
underwritten by underwriters selected by the Holder (subject to the consent of
the Company, which consent will not be unreasonably withheld), the Company will
as soon as practicable, use its best efforts to effect such registration
(including, without limitation, filing post-effective amendments, appropriate
qualifications under applicable blue sky or other state securities laws, and
appropriate compliance with the Securities Act) 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. The Company shall only be required
to effect, pursuant to this Section 1, three (3) registrations of Registrable
Securities.
(b) PROVISO. The Company shall not be obligated to effect, or to take
any action to effect, any such registration pursuant to this Section 1:
(i) 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;
(ii) during the period starting with the date fifteen (15)
days prior to the Company's good faith estimate of the date of filing
of, and ending on a date ninety (90) days after the effective date of,
a Company-initiated registration, provided that the Company is actively
employing in good faith all reasonable efforts to cause such
registration statement to become effective; or
(iii) if the market value of the number of shares of Common
Stock requested to be included in each registration pursuant to this
Section 1 does not exceed $3,000,000 as of the date of Holder's request
pursuant to Subsection (a) hereof.
(c) DEFERRAL OF REGISTRATION. The Company shall file a registration
statement covering the Registrable Securities so requested to be registered as
soon as practicable after receipt of the request or requests of the Holder;
PROVIDED, HOWEVER, that if (i) in the good faith judgment of the Board of
Directors of the Company, such registration would be materially detrimental to
the Company because there exist bona fide financing, acquisition or other
activities of the Company and the Board of Directors of the Company concludes,
as a result, that it is essential to defer the filing of such registration
statement at such time, and (ii) the Company shall furnish to the Holder a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be materially
detrimental to the Company for such
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registration statement to be filed in the near future and that it is,
therefore, essential to defer the filing of such registration statement, then
the Company shall have the right to defer such filing (except as provided in
subsection (b)(ii) above) for a period of not more than ninety (90) days after
receipt of the request of the Holder, and, provided further, that the Company
shall not defer its obligation in this manner more than once in any
twelve-month period.
The registration statement filed pursuant to the request of the Holder
may, subject to the provisions of Sections 1(b) and 8 hereof, include other
securities of the Company, with respect to which registration rights have been
granted, and may include securities of the Company being sold for the account of
the Company, provided that all the Registrable Shares for which the Holder has
requested registration shall be covered by such registration statement before
any other securities are included.
(d) PROCEDURES. In any registration pursuant to this Section 1, if the
Company shall request inclusion of securities to be sold for its own account, or
if other persons entitled to incidental registrations shall request inclusion in
such registration, the Holder shall offer to include such securities in the
underwriting and may condition such offer on the acceptance by the Company or
such other persons of the further applicable provisions of this Agreement. The
Company shall (together with all such other persons 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 the Holder, which underwriters are reasonably
acceptable to the Company. Notwithstanding any other provision of this Section,
if the representative of the underwriters advises the Holder of the need for an
Underwriter's Cutback, the number of shares to be included in the underwriting
or registration shall be allocated as set forth in Section 8 hereof. If a person
who has requested inclusion in such registration as provided in this Section
1(e) does not agree to the terms of any such underwriting, such person shall be
excluded therefrom by written notice from the Company, the underwriter or the
Holder, and the securities owned by such person(s) shall be withdrawn from
registration (the "WITHDRAWN SECURITIES"). If there are any Withdrawn Securities
and if there was an Underwriter's Cutback, then the Company, if permitted by the
underwriter, shall offer to all holders who have retained rights to include
securities in the registration the right to include additional securities in the
registration in an aggregate amount equal to the number of Withdrawn Securities
that would have been included in the registration after giving effect to the
Underwriter's Cutback had such securities not been withdrawn, with such shares
to be allocated among such holders requesting additional inclusion in accordance
with Section 8.
Section 2. "PIGGYBACK" REGISTRATION.
(a) NOTICE AND PROCEDURES. If the Company at any time after the date of
this Agreement proposes to register any of its securities under the Securities
Act (other than in connection with a merger or pursuant to Form S-8 or other
comparable form not available for registering the Registrable Securities for
sale to the public), the Company shall request that the managing underwriter (if
any) of such stock offering include the Registrable Securities in the
registration statement for the public offering in such registration. If such
managing underwriter agrees to include the Registrable Securities in the
registration statement relating to such stock offering, the Company shall at
such time give prompt written notice to the Holder of its intention to effect
such registration and of the Holder's right under such proposed registration,
and upon the request of the Holder
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delivered to the Company within twenty (20) days after giving such notice
(which request shall specify the Registrable Securities intended to be disposed
of by the Holder), the Company shall include such Registrable Securities held
by the Holder requested to be included in such registration; PROVIDED, HOWEVER,
that:
(i) If, at any time after giving such written notice of the
Company's intention to register any of the Holder's Registrable
Securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to file the registration statement wherein
the Registrable Securities are being registered or to delay the
registration of such Registrable Securities, at its sole election, the
Company may give written notice of such determination to the Holder and
thereupon shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (but not
from its obligation to pay Registration Expenses in connection
therewith or to register the Registrable Securities in a subsequent
registration); and in the case of a determination to delay a
registration, the Company shall thereupon be permitted to delay
registering any Registrable Securities for the same period as the delay
in respect of securities being registered for the Company's own
account.
(ii) If the managing underwriter in such a stock offering
shall advise the Company that it declines to include a portion of all
of the Registrable Securities requested by the Holder to be included in
the registration statement, then distribution of all or a specified
portion of the Registrable Securities shall be excluded from such
registration statement. In such event the Company shall given the
Holder prompt notice of the number of shares of Registrable Securities
excluded from such registration at the request of the managing
underwriter. No such exclusion shall reduce the securities being
offered by the Company for its own account to be included in such
registration statement.
(b) OPTION TO INCLUDE REGISTRABLE SECURITIES IN OFFERING. The Holder,
subject to the provisions of Section 2(a) hereof shall have the option to
include his Registrable Securities in the registration statement, relating to
such stock offering. The Company shall not be required to include any of the
Holder's Registrable Securities in the registration statement relating to an
underwritten offering of the Company's securities unless the Holder accepts the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (provided such terms are usual and customary for
selling stockholders) and the Holder agrees to execute and/or deliver such
documents in connection with such registration as the Company or the managing
underwriter may reasonably request.
(c) The Company may, in its sole discretion and without the consent of
the Holder, withdraw such registration statement and abandon the proposed
offering in which the Holder had requested to participate, but such abandonment
shall not preclude subsequent request for registration pursuant to Section 2(a).
(d) LOCK UP AGREEMENTS. If requested in writing by the Company and an
underwriter of Common Stock for the Company, the Holder shall agree not to sell
or otherwise transfer or dispose of any shares of Common Stock of the Company
held by the Holder (other than those included in the registration statement) for
a period following the effective date of a registration statement of the
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Company filed under the Securities Act, PROVIDED that all officers and
directors of the Company and all other holders of rights to registration of any
other security of the Company enter into similar agreements identical in terms
to that of the Holder (except for the holders of Public Warrants, the holder of
the Underwriter's Unit Purchase Option and the non-officer and non-director
Selling Shareholders referenced in the Company's Post-Effective Amendment No.
2 to the Registration Statement No. 33-96520-A).
Section 3. REGISTRATION ON FORM S-3.
(a) If at any time on or after the second anniversary of the date of
this Agreement, after the Company has qualified for the use of Form S-3, in
addition to the rights contained in the foregoing provisions of this Agreement,
the holders of Registrable Securities shall have the right to request
registrations on Form S-3 or any comparable or successor form. Each such request
shall be in writing and shall state the number of shares of Registrable
Securities to be disposed of and the intended methods of disposition of such
shares by the Holder (including whether such resales are to be made on a
continuous basis pursuant to Rule 415), PROVIDED, HOWEVER, that the Company
shall not be obligated to effect any such registration if (i) the Holder
proposes to sell Registrable Securities on Form S-3 at an aggregate price to the
public of less than $500,000, or (ii) in the event that the Company shall
furnish the certification described in paragraph 1(b)(ii) or 1(c) (but subject
to the limitations set forth therein), or (iii) the Company will be required to
obtain an audit (other than for its normal year-end audit) for such registration
to become effective. The Company shall only be required to effect one (1)
registration of Registrable Securities pursuant to this Section 3 in each
calendar year.
(b) If a request complying with the requirements of Section 3 hereof is
delivered to the Company, the provisions of Section 1(b)(i) and (ii) hereof
shall apply to such registration. If the registration is for an underwritten
offering, the provisions of Section 1(d) hereof shall also apply to such
registration.
Section 4. EXPENSES OF REGISTRATION.
(a) COMPANY EXPENSE. All Registration Expenses incurred in connection
with any registration, qualification or compliance pursuant to Sections 1, 2,
and 3 hereof, shall be borne by the Company; PROVIDED, HOWEVER, that Holder
shall bear the Registration Expenses for any registration proceeding begun
pursuant to Section 1 and subsequently withdrawn by the Holder registering
shares therein, unless such withdrawal is based upon (A) material adverse
information relating to the Company that is different from the information known
or available (upon request from the Company or otherwise) to the Holder at the
time of its request for registration under Section 1, or (B) material adverse
changes in the financial markets which result in a significant decline in the
public market price for the Company's Common Stock of at least twenty percent
(20%) from the date such registration proceeding is begun to the date of such
withdrawal.
(b) SELLING EXPENSES. All Selling Expenses relating to securities so
registered shall be borne by the Holder pro rata on the basis of the number of
shares of securities so registered on its behalf.
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Section 5. REGISTRATION PROCEDURES. In the case of each registration
effected by the Company pursuant to this Agreement, the Company will use its
best efforts to:
(a) Prepare and file with the SEC a registration statement with respect
to the securities to be registered on such form as the Company deems appropriate
and is permitted or qualified to use, and shall use all reasonable efforts to
cause such registration statement to become and remain effective for a period of
ninety (90) days or until the Holder has completed the distribution described in
the registration statement relating thereto, whichever first occurs or, in the
case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, for such period as
shall be necessary to keep the registration statement effective until all such
Registrable Securities are sold;
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement;
(c) Furnish to the Holder, if any Registrable Securities are to be
included in a registration statement, at a reasonable time prior to the filing
thereof with the SEC, a copy of the registration statement (and each amendment
thereto) in the form the Company proposes to file same; and furnish such number
of prospectuses and other documents incident thereto, including any amendment of
or supplement to the prospectus, as the Holder from time to time may reasonably
request;
(d) Notify the Holder as a seller of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and prepare and furnish to such seller 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 shares,
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 not misleading or incomplete in the light of the
circumstances then existing;
(e) Cause all such Registrable Securities registered pursuant hereunder
to be listed on each securities exchange on which similar securities issued by
the Company are then listed; and provide a transfer agent and registrar for all
the securities registered pursuant to such registration statement and a CUSIP
number for all such Registrable Securities, in each case not later than the
effective date of such registration;
(f) Otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC, and make available to its security holders, as soon
as reasonably practicable, an earnings statement covering the period of at least
twelve months, but not more than eighteen (18) months,
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beginning with the first month after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act; and
(g) In connection with any underwritten offering pursuant to a
registration statement filed pursuant to Section 1 or 3 hereof, the Company and
Holder will enter into an underwriting agreement containing customary
underwriting provisions so as to effect the offer and sale of the Common Stock.
Section 6. INDEMNIFICATION.
(a) The Company will indemnify the Holder, each of its officers,
directors and partners, and each person controlling the Holder within the
meaning of Section 15 of the Securities Act, with respect to which registration
has been effected pursuant to this Agreement, and each underwriter, if any, and
each person who controls within the meaning of Section 15 of the Securities Act
any underwriter, against all expenses, claims, losses, damages, and liabilities
(or actions, proceedings, or settlements in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus (including any related registration statement,
notification, or the like) incident to any registration under this Agreement, 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 by the Company of the Securities Act or any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration, and
will reimburse the Holder, each of its officers, directors, partners, and each
person controlling the Holder, 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 or settling 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 written information furnished to the Company by the Holder
or underwriter and stated to be specifically for use therein. It is agreed that
the indemnity agreement contained in this Section shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld).
(b) In connection with the registration or sale by the Holder of shares
of Registrable Securities pursuant to this Agreement, the Holder will indemnify
the Company, each of its directors, officers, partners, and each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, 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 such registration statement or prospectus, or 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, and will reimburse the
Company and such directors, officers, partners, underwriters, or control person
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 or
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prospectus, in reliance upon and in conformity with written information
furnished to the Company by the Holder, and stated to be specifically for use
therein; PROVIDED, HOWEVER, that the obligations of the Holder hereunder shall
not apply to amounts paid in settlement of any such claims, losses, damages, or
liabilities (or actions in respect thereof (if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld); and PROVIDED that in no event shall any indemnity under this
Section exceed the gross proceeds from the offering received by the Holder.
(c) Each party entitled to indemnification under this Section (the
"Indemnified Party") shall give notice to the party or parties 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 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 be unreasonably withheld), and the Indemnified Party
may participate in such defense at such party's expense, 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,
to the extent such failure is not prejudicial. 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
that 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 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 defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 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 therein,
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 that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations. 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 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.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control.
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Section 7. INFORMATION BY HOLDER. The Holder shall furnish to the
Company in writing and in a timely manner (which shall mean not sooner than two
(2) business days after the receipt by Holder of such request) such information
regarding the Holder and the distribution proposed by the Holder as the Company
or underwriters may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification, or compliance
referred to in this Agreement.
Section 8. ALLOCATION OF REGISTRATION OPPORTUNITIES. In any
circumstance in which all of the Registrable Securities and other shares Common
Stock of the Company with registration rights (the "OTHER Shares") requested to
be included in a registration on behalf of the Holder or other selling
stockholders cannot be so included as a result of limitations of the aggregate
number of shares of Registrable Securities and Other Shares that may be so
included, the number of shares of Registrable Securities and Other Shares that
may be so included shall be allocated among the Holder and the other selling
stockholders requesting inclusion of shares pro rata on the basis of the number
of shares of Registrable Securities and Other Shares that would be held by the
Holder and such other selling stockholders. If the Holder or any other selling
stockholder does not request inclusion of the maximum number of shares of
Registrable Securities and Other Shares allocated to it pursuant to this
procedure, the remaining portion of its allocation shall be reallocated among
those requesting holders of Registrable Securities and other selling
stockholders whose allocations did not satisfy their requests pro rata on the
basis of the number of shares of Registrable Securities and Other Shares which
would be held by such holders and other selling stockholders, and this procedure
shall be repeated until all of the shares of Registrable Securities and Other
Shares which may be included in the registration on behalf of the Holder and
other selling stockholders have been so allocated. The Company shall not limit
the number of Registrable Securities to be included in a registration pursuant
to this Agreement in order to include shares held by stockholders with no
registration rights or to include in that registration shares of stock issued to
employees, officers, directors, or consultants pursuant to the Company's stock
option plan.
Section 9. MOST FAVORED NATION STATUS. The Company covenants and agrees
with the Holder that if it hereafter grants to any person rights to registration
with respect to securities of the Company on terms which are more favorable than
the rights of Holder hereunder, then the Company shall automatically extend such
rights to Holder and such further rights to registration shall be deemed to have
been incorporated into this Agreement as if such fully set forth herein.
Section 10. SURVIVAL OF RIGHTS; TERMINATION OF REGISTRATION RIGHTS.
This Agreement shall be binding upon and inure to the benefit of any subsequent
holder of either of the Notes or the Option, and the provisions of this
Agreement shall survive the payment in full and/or the conversion of the Note or
the exercise of the Option. The right of any holder of either of the Notes, the
Option or any Registrable Securities to request registration or inclusion in any
registration pursuant to this Agreement shall terminate on such date as all
shares of Registrable Securities held or entitled to be held upon conversion by
such holder shall equal less than one-quarter of one percent (00.25%) of the
Company's outstanding Common Stock.
Section 11. DEFINITIONS. Unless the context otherwise requires, the
terms hereinafter set forth when sued herein shall have the following meanings
and the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined:
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"AFFILIATE" shall mean any Person (a) which directly or indirectly
through one or more intermediaries controls, or is controlled by , or is under
common control with, the Company, (b) which beneficially owns or holder 5% or
more of any class of the Voting Stock of the Company or (c) 5% or more of the
Voting Stock (or in the case of a Person which is not a corporation, 5% or more
of the equity interest) of which is beneficially owned or held by the Company or
a Subsidiary. The term "control" means take possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of Voting Stock, by contract or
otherwise.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday, or
other day on which banks in Tennessee are authorized to close.
"CONVERSION SHARES" shall mean the shares of Common Stock issued or
issuable upon conversion of either of the Notes, in whole or in part.
"HOLDER" shall mean Sirrom Capital Corporation or any of its
wholly-owned subsidiaries, or any other holders of either of the Notes, the
Option or any other Registrable Securities, provided that, in order to exercise
rights to request registration under Section 1, any such person shall hold in
the aggregate not less than twenty five percent (25%) of the shares of Common
Stock received or receivable upon conversion of the initial aggregate principal
amount of the Initial Note or the May Note, as the case may be.
"NOTES" shall mean the Initial Note and the May Note.
"OPTION SHARES" shall mean the shares of Common Stock transferred or
transferable upon exercise of the Option, in whole or in part.
"PERSON" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political subdivision
thereof.
"REGISTER," "REGISTERED" and "REGISTRATION" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement and such other action as might be required with respect
to registration, qualification or compliance under applicable state securities
laws.
"REGISTRATION EXPENSES" shall mean all expenses incurred in effecting
any registration pursuant to this Agreement, including, without limitation, all
registration, qualification, and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses
(including counsel fees), expenses of any special audits incident to or required
by any such registration and the reasonable fees and reasonable disbursements of
counsel for the Holder, as a selling stockholder, but shall not include (a)
Selling Expenses, (b) fees and expenses of any regular audit, (c) listing fees
on a stock exchange or the NASDAQ national market, (d) fees of transfer agents
and registrars and (e) costs of insurance, it being understood that the Company
shall pay all of clauses (b) through (e) hereof.
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"REGISTRABLE SECURITIES" shall mean all (i) Conversion Shares, (ii)
Option Shares and (iii) other shares of Common Stock held by the Holder;
PROVIDED, HOWEVER, that Registrable Securities shall not include any shares of
Common Stock which have previously been registered under the Securities Act.
"RULE 144" shall mean Rule 144 as promulgated by the SEC under the
Securities Act, as such Rule may be amended from time to time, or any similar
successor rule that may be promulgated by the SEC.
"RULE 145" shall mean Rule 145 as promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the SEC.
"SECURITY" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale of Registrable
Securities.
"UNDERWRITER'S CUTBACK" shall mean a reduction in the number of shares
to be included in any underwritten offering as the result of receipt of written
notice from the representative of the underwriters to the effect that advise
marketing factors require a limitation on the number of shares to be
underwritten.
"VOTING STOCK" shall mean Securities of any class or classes the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
Section 11. ARTICLE AND SECTION HEADINGS. Numbered and titled article
and section headings are for convenience only and shall not be construed as
amplifying or limiting any of the provisions of this Agreement.
Section 12. NOTICE. Any and all notices, elections or demands permitted
or required to be made under this Agreement shall be in writing, signed by the
party giving such notice, election or demand and shall be delivered personally,
telecopied, telexed, or sent by certified mail or overnight via nationally
recognized courier service (such as Federal Express), to the other party at the
address set forth below, or at such other address as may be supplied in writing
and of which receipt has been acknowledged in writing. The date of personal
delivery or telecopy or two (2) business days after the date of mailing (or the
next business day after delivery to such courier service), as the case may be,
shall be the date of such notice, election or demand. For the purposes of this
Agreement:
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The Address of Holder is: Sirrom Capital Corporation
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy No. (000) 000-0000
with a copy to: Xxxxxxxx & Xxx, PLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx I. N. XxXxxxxx, Esq.
Telecopy No. (000) 000-0000
The Address of Company is: Smart Choice Automation Group, Inc.
P. O. Xxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: President
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxxxxx Traurig
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
Section 13. SEVERABILITY. If any provisions(s) of this Agreement or the
application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
Section 14. ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties hereto concerning the subject matter hereof, and
all oral discussions and prior agreement are merged herein.
Section 15. GOVERNING LAW AND AMENDMENTS. This Agreement shall be
construed and enforced under the laws of the State of Tennessee applicable to
contracts to be wholly performed in such State. No amendment or modification
hereof shall be effective except in a writing executed by each of the parties
hereto.
Section 16. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and be different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.
Section 17. JURISDICTION AND VENUE. The Company and Grantor hereby
consent to the jurisdiction of the courts of the State of Tennessee and the
United States District Court for the
00
Xxxxxx Xxxxxxxx xx Xxxxxxxxx, as well as to the jurisdiction of all courts
from which an appeal may be taken from such courts, for the purpose of any
suit, action or other proceeding arising out of any of its obligations arising
under this Agreement or with respect to the transactions contemplated hereby,
and expressly waives any and all objections it may have as to venue in any of
such courts.
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
date first above written.
COMPANY:
SMART CHOICE AUTOMOTIVE GROUP, INC.
a Florida corporation
By: /s/ XXXXX XXXX XXXXXXXXXX, JR.
--------------------------------
Xxxxx Xxxx Xxxxxxxxxx, Jr.
Assistant Vice President
HOLDER:
SIRROM CAPITAL CORPORATION,
a Tennessee corporation
By: /s/ XXXXX XXXXXX
--------------------------------
Xxxxx Xxxxxx
Vice President
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