EXHIBIT 4.1
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made
and entered into as of October 8, 1997, by and among The FINOVA Group Inc., a
Delaware corporation ("FINOVA", or the "Company"), Belgravia Capital
Corporation, a California corporation (the "Holder"), X.X. Xxxxxxx, an
individual on his own behalf and in his capacity as trustee for Xxxxxx X. Xxxxx
and Xxxxxxx X. Xxxxxxxx ("Xxxxxxx"), Xxxxxxx Program LLC, a California limited
liability company (the "LLC") and Xxxxxx Financial, Inc., a Delaware corporation
("Xxxxxx").
WHEREAS, the Holder acquired the Acquisition Shares and may
acquire the Additional Stock Payment Shares and the Contingent Shares (each as
defined below), in connection with the acquisition (the "Acquisition") of
substantially all of the assets of the Holder, by the Company, pursuant to the
terms of an Asset Purchase Agreement, dated as of October 8, 1997 (the
"Acquisition Agreement"), by and among the Company, Holder and Xxxxxxx;
WHEREAS, the Holder has transferred or may transfer certain of
the Acquisition Shares to Xxxxxxx and may transfer certain of the Additional
Stock Payment Shares and the Contingent Shares, to the LLC, Xxxxxxx and Xxxxxx;
and
WHEREAS, pursuant to the terms of the Acquisition Agreement,
the Company has agreed to grant to the Holder, and, to the extent the Holder has
or may transfer shares to them, Xxxxxxx, Xxxxxx and the LLC, the registration
rights provided for herein.
NOW, THEREFORE, the parties hereto, in consideration of the
foregoing, the mutual covenants and agreements set forth in the Acquisition
Agreement and hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, agree as follows:
1. Certain Definitions. Capitalized terms used herein without
definition shall have the meaning given to such terms in the Acquisition
Agreement. As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Acquisition Shares" shall mean the shares of FINOVA
Common Stock issued by the Company to the Holder at the Closing of the
transactions contemplated by the Acquisition Agreement, some of which have been
transferred to the LLC, Xxxxxxx and Xxxxxx.
"Acquisition Share Shelf Registration Statement" has
the meaning set forth in Section 2(a).
"Additional Stock Payment Shares" shall mean the
shares of FINOVA Common Stock issued by the Company to the Holder as payment of
all or any part of the Additional Stock Payment Amount.
"Contingent Shares" shall mean the shares of the
FINOVA Common Stock issued by the Company to the Holder as an Earn-Out Payment
or Additional Earn-Out Payment
pursuant to Section 1.8 of the Acquisition Agreement, some of which may be
transferred by the Holder to Xxxxxxx, the LLC and/or to Xxxxxx.
"Contingent Share Shelf Registration Statement" has
the meaning set forth in Section 2(a)(v)(B).
"CP Rate" shall mean, for any calendar month, the
rate published by Bloomberg on the first business day of such month, for
commercial paper rated A-1/P-1 and having a maturity of 30 days.
"Deficiency" has the meaning set forth in Section
2(a)(ii).
"Effective Date" has the meaning set forth in Section
2(a)(ii).
"Effective Date Value" has the meaning set forth in
Section 2(a)(ii).
"Form S-3" means the Form S-3 authorized for use by
the SEC to register securities issued by publicly traded companies and any
similar form subsequently prescribed by the SEC as the successor to Form S-3.
"Market Value" of Acquisition Shares, Additional
Stock Payment Shares or Contingent Shares shall mean the average unweighted
closing sale price of such shares on the New York Stock Exchange (or such other
securities exchange as the FINOVA Common Stock may then be traded, if not traded
on the New York Stock Exchange) (as adjusted for any stock splits or dividends)
for the twenty (20) trading days ending with the business day prior to the
calculation date.
"Person" shall mean an individual or a corporation,
partnership, limited liability company, association or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Prospectus" shall mean any prospectus included in a
Shelf Registration Statement, or a registration statement with respect to an
underwritten offering in which the Holder, the LLC, Xxxxxxx or Xxxxxx
participates, as contemplated by Section 4(b), including any resale prospectus
and any preliminary prospectus, and any amendment or supplement thereto, and in
each case including all material incorporated by reference therein.
"Registration Expenses" shall mean any and all
expenses incident to the performance of or compliance with this Agreement,
including, without limitation: (i) all applicable registration and filing fees
imposed by the SEC and such securities exchange or exchanges on which Common
Shares are then listed or The Nasdaq Stock Market ("Nasdaq") (ii) all fees and
expenses incurred in connection with compliance with state securities or "blue
sky" laws (including reasonable fees and disbursements of counsel for the
Company in connection with qualification of any of the Shares under any state
securities or blue sky laws and the preparation of a blue sky memorandum) and
compliance with the rules of the NASD; (iii) all expenses of any Persons in
preparing or assisting in preparing, printing and distributing the Shelf
Registration Statement, any Prospectus, certificates and other documents
relating to the performance of and
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compliance with this Agreement; (iv) all fees and expenses incurred in
connection with the listing, if any, of any of the Shares on any securities
exchange or exchanges pursuant to Section 3(i) hereof; (v) the fees and
disbursements of counsel for the Company and of the independent public
accountants of the Company, including the expenses relating to any special
audits or "cold comfort" letters required by or incident to such performance and
compliance; and (vi) the reasonable fees and disbursements of a single counsel
for the Holder and the LLC. Registration Expenses shall specifically exclude
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Shares by the Holder, Brandes, the LLC or Xxxxxx.
"SEC" shall mean the Securities and Exchange
Commission or any successor entity.
"Securities Act" shall mean the Securities Act of
1933, as amended from time to time.
"Shares" shall mean, collectively, the Acquisition
Shares, the Contingent Shares and the Additional Stock Payment Shares issued to
the Holder pursuant to the Acquisition Agreement and any equity securities
issued or issuable directly or indirectly with respect to the Shares issued to
the Holder, the LLC, Xxxxxxx or Xxxxxx by way of stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. Nothing in this Agreement shall xxxxx
Xxxxxxx, the LLC or Xxxxxx the right to receive Shares, which right shall be a
matter of consent solely between the Holder and such persons.
"Shelf Registration Statements" shall mean,
collectively, the Acquisition Share Shelf Registration Statement and any
Additional Stock Payment Shelf Registration Statement or Contingent Share Shelf
Registration Statement, and any other registration statement as filed by the
Company pursuant to Section 2(a) of this Agreement.
2. Registration Under the Securities Act.
(a) (i) Subject to Section 6(b) below, the Company
shall file a registration statement on Form S-3 or an amendment to an existing
registration statement on Form S-3, either of which may include shares of the
FINOVA Common Stock for resale by other Company stockholders (the "Acquisition
Share Shelf Registration Statement"), registering the Acquisition Shares for
resale by the Holder, the LLC, Xxxxxxx and Xxxxxx and shall use its commercially
reasonable efforts to cause the Acquisition Share Shelf Registration Statement
to be declared effective by the SEC as soon as practicable thereafter, but in
any event no later than 120 days following the closing of the Acquisition;
provided that the Company shall have the option, in lieu of registering the
Acquisition Shares, to repurchase some or all of the Acquisition Shares from the
Holder, the LLC, Xxxxxxx, and/or Xxxxxx, as the case may be, at any time during
such 120 day period within five days following provision of written notice by
the Company to each such party from which the Company intends to repurchase
Acquisition Shares, for an amount of cash equal to $77,537,641 multiplied by a
fraction, the numerator of which is the number of Acquisition Shares to be
repurchased and the denominator of which is the total number of
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Acquisition Shares originally issued, plus simple interest on such amount from
the Closing Date to the date of payment at a rate equal to the CP Rate in effect
from time to time for such period.
(ii) If the Market Value as of the Effective Date
of the Acquisition Shares not repurchased is less than an amount equal to (A)
$77,537,641, multiplied by (B) a fraction, the numerator of which is the number
of Acquisition Shares covered by the Acquisition Shelf Registration Statement at
the Effective Date (as defined below), and the denominator of which is the total
number of Acquisition Shares originally issued (the "Effective Date Value"), on
the date the Acquisition Share Shelf Registration Statement is declared
effective by the SEC (the "Effective Date"), the Company shall issue to the
Holder within three business days of the Effective Date a number of shares of
the FINOVA Common Stock that has a Market Value as of the Effective Date equal
to the difference between (x) the Effective Date Value and (y) the Market Value
as of the Effective Date of the Acquisition Shares not repurchased (the
"Deficiency") and include such shares in the Acquisition Share Shelf
Registration Statement. Alternatively, the Company may, at its option, pay to
the Holder or its designee cash in the amount of the Deficiency.
(iii) If the Acquisition Shelf Registration
Statement has not been declared effective by the SEC on the 120th day following
the closing of the Acquisition and the Company has not repurchased all of the
Acquisition Shares by such date, the Company shall, upon notice from the Holder,
the LLC, Xxxxxxx, and/or Xxxxxx (which notice(s) may be delivered prior to such
120th day), repurchase any Acquisition Shares subject to such a valid notice for
an amount of cash equal to $77,537,641 multiplied by a fraction, the numerator
of which is the number of Acquisition Shares to be repurchased pursuant to this
Section 2(a)(iii) and the denominator of which is the total number of
Acquisition Shares originally issued, plus simple interest on such amount for
the 120 day period at the CP Rate in effect from time to time during such
period.
(iv)(A) The Company shall cause any Additional
Stock Payment Shares issued by the Company to the Holder pursuant to the terms
of the Acquisition Agreement to be issued pursuant to a post-effective amendment
to an effective registration under the Securities Act within two business days
of the Additional Stock Payment Amount Date, or, if there is no such effective
registration on such date, the Company shall cause such shares to be issued
pursuant to an effective registration within 120 days of such date.
(B) Notwithstanding the foregoing, if there
is a Suspension Event occurring at the time of issuance of the Additional Stock
Payment Shares, in lieu of delivering to the Holder Additional Stock Payment
Shares registered under the Securities Act, the Company may give notice to the
Holder of the Suspension Event and deliver to the Holder Additional Stock
Payment Shares issued without registration under the Securities Act and file as
soon as practicable thereafter a registration statement on Form S-3 or an
amendment to an existing registration statement on Form S-3, either of which may
include shares of FINOVA Common Stock for resale by other Company stockholders
(the "Additional Stock Payment Shelf Registration Statement"), registering the
Additional Stock Payment Shares for resale by the Holder, Brandes, the LLC and
Xxxxxx. The Company shall use its commercially reasonable efforts to cause the
Additional Stock Payment Shelf Registration Statement to be declared effective
by
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the SEC as soon as practicable thereafter, but in any event no later than 120
days following issuance of those shares; provided that the Company shall have
the option, in lieu of registering the Additional Stock Payment Shares, to
repurchase some or all of the Additional Stock Payment Shares from the Holder,
Brandes, the LLC, and Xxxxxx at any time during such 120 day period within five
days following the provision of written notice by the Company to Holder,
Brandes, the LLC, and/or Xxxxxx, for an amount of cash equal to the Additional
Stock Payment Amount with respect to which the Additional Stock Payment Shares
were issued multiplied by a fraction, the numerator of which is the number of
Additional Stock Payment Shares to be repurchased pursuant to this Section
2(a)(iv)(B) and the denominator of which is the total number of Additional Stock
Payment Shares issued, plus simple interest on such amount from the date of
issuance to the date of payment at the CP Rate in effect from time to time
during such period.
(C) If any Additional Stock Payment Shares
have not been registered by the 120th day following their issuance and the
Company has not repurchased them pursuant to Section 2(a)(iv)(B), the Company
shall, upon notice from the Holder, the LLC, Xxxxxxx, and/or Xxxxxx (which
notice(s) may be delivered prior to such 120th day) repurchase such shares for
an amount of cash equal to the Additional Stock Payment Amount with respect to
which the Additional Stock Payment Shares were issued multiplied by a fraction,
the numerator of which is the number of Additional Stock Payment Shares to be
repurchased and the denominator of which is the total number of Additional Stock
Payment Shares issued, plus simple interest on such amount for the 120 day
period at the CP Rate in effect from time to time during such period.
(v)(A) The Company shall cause each installment
of Contingent Shares, if any, issued by the Company to the Holder pursuant to
the terms of the Acquisition Agreement to be issued pursuant to an effective
registration under the Securities Act within two business days of any Earn-Out
Payment Date, which registration will contemplate the transfer by the Holder to
Xxxxxxx, the LLC and/or Xxxxxx of a portion of such shares.
(B) Notwithstanding the foregoing, if there
is a Suspension Event occurring at the time of issuance of any Contingent
Shares, in lieu of delivering to the Holder Contingent Shares registered under
the Securities Act, the Company may give notice to the Holder of the Suspension
Event and deliver to the Holder Contingent Shares issued without registration
under the Securities Act and file as soon as practicable thereafter a
registration statement on Form S-3 or an amendment to an existing registration
statement on Form S-3, either of which may include shares of FINOVA Common Stock
for resale by the Company stockholders (in each case, a "Contingent Share Shelf
Registration Statement"), registering the Contingent Shares for resale by the
Holder, the LLC, Xxxxxxx and Xxxxxx. The Company shall use its commercially
reasonable efforts to cause each Contingent Share Shelf Registration Statement
to be declared effective by the SEC as soon as practicable thereafter, but in
any event no later than 120 days following issuance of such shares; provided
that the Company shall have the option, in lieu of registering the Contingent
Shares, to repurchase some or all of the Contingent Shares to which a particular
Contingent Share Shelf Registration Statement which has not become effective
relates from the Holder, the LLC, Xxxxxxx and Xxxxxx at any time during such 120
day period within five days following the provision of written notice by the
Company to Holder, the LLC, Xxxxxxx and/or Xxxxxx, for an amount of cash equal
to the Earn-Out Payment and/or the Additional Earn-Out Payment with respect to
which such Contingent Shares were issued
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multiplied by a fraction, the numerator of which is the number of such
Contingent Shares to be repurchased and the denominator of which is the total
number of such Contingent Shares issued, plus simple interest on such amount
from the date of issuance to the date of payment at the CP Rate in effect from
time to time during such period.
(C) If any Contingent Shares have not been
registered by the 120th day following their issuance and the Company has not
repurchased them pursuant to Section 2(a)(v)(B), the Company shall, upon notice
from the Holder, the LLC, Xxxxxxx and/or Xxxxxx (which notice(s) may be
delivered prior to such 120th day), repurchase such shares for an amount of cash
equal to the Earn-Out Payment and/or the Additional Earn-Out Payment with
respect to which the Contingent Shares were issued multiplied by a fraction, the
numerator of which is the number of Contingent Shares to be repurchased and the
denominator of which is the total number of Contingent Shares issued, plus
simple interest on such amount for the 120-day period at the CP Rate in effect
from time to time during such period.
(vi) The Company agrees to use its commercially
reasonable efforts to keep the Acquisition Share Shelf Registration Statement
and any Contingent Share Shelf Registration Statement and Additional Stock
Payment Registration Statement continuously effective (and to include a
Prospectus at all times meeting the requirements of the Securities Act) for a
period of one year from the original issuance of the Shares covered thereby
(such period is referred to as the "Shelf Period").
(b) In the event that the Company repurchases the
Acquisition Shares or any Contingent Shares or Additional Stock Payment Shares
from the Holder, the LLC, Xxxxxxx, and/or Xxxxxx pursuant to Section 2(a)(iii),
(iv)(C), or (v)(C), the Company shall pay on the date that is 120 days following
the Closing Date or the issuance of Additional Stock Payment Shares or
Contingent Shares, as applicable (or such earlier day as may be agreed by the
Company and the Holder) to the Holder, on behalf of the Holder, the LLC,
Xxxxxxx, and/or Xxxxxx, an amount equal to the applicable repurchase amount in
cash by wire transfer of immediately available funds denominated in U.S. dollars
to an account designated in a notice delivered by the Holder to the Company at
least two business days prior to the payment date for each such repurchase,
against delivery by the Holder, the LLC, Xxxxxxx, and/or Xxxxxx, as applicable,
of certificates evidencing the Shares so repurchased registered in the names of
the Holder, the LLC, Xxxxxxx, and/or Xxxxxx, as applicable, duly endorsed by the
Holder, the LLC, Xxxxxxx, and/or Xxxxxx, as applicable, for transfer or
accompanied by assignments duly executed by the Holder, the LLC, Xxxxxxx, and/or
Xxxxxx.
(c) The Company shall pay all Registration Expenses
in connection with a registration pursuant to this Agreement.
(d) The number of Acquisition Shares, Additional
Stock Payment Shares or Contingent Shares, as applicable, required to be
registered by the Company under Section 2 shall be reduced during any period in
which a claim or claims with respect to Losses, in the reasonable estimation of
the Company aggregating at least $5,000,000 ("Material Claims") are outstanding
against Holder for indemnification under Article 7 of the Acquisition Agreement.
The amount of such reduction shall be equal to the number of Acquisition Shares
or Contingent
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Shares, as applicable, having a Market Value as of the Effective Date or an
Earn-Out Payment Date, as applicable, equal to the amount of such Material
Claims.
(e) The amount paid by the Company to repurchase some
or all of the Acquisition Shares from the Holder, Brandes, the LLC and/or Xxxxxx
shall be reduced by an amount (the "Offset Amount") equal to any unpaid Losses
for which the Company has made a claim for indemnification under the Acquisition
Agreement; provided that if the Holder disputes the Company's indemnification
claim, the parties shall submit such dispute to arbitration pursuant to the
Acquisition Agreement, and if it is subsequently finally determined in such
arbitration that the Company is not entitled to some or all of any Offset
Amount, the Company shall pay to the Holder within ten business days of the date
of any such determination, the portion of the Offset Amount to which the Company
is not entitled, with simple interest thereon from the 120th day following the
Closing at the CP Rate in effect from time to time.
(f) Xxxxxx'x rights under this Section 2 shall
terminate with respect to any Shares sold or otherwise transferred by Xxxxxx
without the prior consent of the Company.
3. Registration Procedures. In connection with the obligations
of the Company under Section 2 hereof, in the event that the Company files any
Shelf Registration Statement, it shall:
(a) prepare and file with the SEC, within the time
period set forth in Section 2 hereof, and use its commercially reasonable
efforts to have declared effective by the SEC, the Shelf Registration
Statements, which shall (i) be available for public resale of the Shares by the
Holder, the LLC, Xxxxxxx, and/or Xxxxxx, and (ii) comply as to form in all
material respects with the requirements of the applicable form and include all
financial statements required by the SEC to be filed therewith;
(b) furnish to the Holder, Brandes, Xxxxxx and the
LLC any such Shelf Registration Statement no later than two days following its
filing with the SEC, which, in any event will be no later than two business days
prior to the effective date of such Shelf Registration Statement;
(c) (i) use its commercially reasonable efforts to
prepare and file with the SEC such amendments to the Shelf Registration
Statements as may be necessary to keep them effective for the applicable
periods; (ii) cause any Prospectus to be amended or supplemented as required and
to be filed as required by Rule 424 or any similar rule that may be adopted
under the Securities Act; (iii) respond as promptly as practicable to any
comments received from the SEC with respect to the Shelf Registration Statements
or any amendments thereto; and (iv) comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by the Shelf
Registration Statements during the applicable period in accordance with the
intended method or methods of distribution by the Holder, the LLC, Xxxxxxx and
Xxxxxx;
(d) furnish to the Holder, the LLC, Xxxxxxx and
Xxxxxx, upon request and without charge, as many copies of any Prospectus and
any amendment or supplement thereto
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as the Holder, the LLC, Xxxxxxx or Xxxxxx may reasonably request in order to
facilitate the public sale or other disposition of the Shares;
(e) use its commercially reasonable efforts to
register or qualify the Shares under all applicable state securities or blue sky
laws of such jurisdictions in the United States and its territories and
possessions as the Holder, the LLC, Xxxxxxx or Xxxxxx may reasonably request in
writing and keep such registration or qualification effective during the period
the Shelf Registration Statement is required to be kept effective; provided,
however, that in connection therewith, the Company shall not be required to (i)
qualify as a foreign corporation to do business or to register as a broker or
dealer in any such jurisdiction where it would not otherwise be required to
qualify or register but for this Section 3(e), (ii) subject itself to taxation
in any such jurisdiction with respect to such registration or qualification, or
(iii) file a general consent to service of process in any such jurisdiction;
(f) notify the Holder, the LLC, Xxxxxxx and Xxxxxx
promptly and, if requested by the Holder, the LLC, Xxxxxxx or Xxxxxx, confirm in
writing, (i) when the Shelf Registration Statements and any post-effective
amendments thereto have become effective, (ii) when any amendment or supplement
to a Prospectus has been filed with the SEC, except for an amendment via
incorporation by reference of subsequent filings under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), (iii) of the issuance by the SEC
or any state securities authority of any stop order suspending the effectiveness
of the Shelf Registration Statements or any part thereof or the initiation of
any proceedings for that purpose, (iv) if the Company receives any notification
with respect to the suspension of the qualification of the Shares for offer or
sale in any jurisdiction or the initiation of any proceeding for such purpose,
and (v) of the happening of any event during the periods the Shelf Registration
Statements are effective as a result of which (A) the Shelf Registration
Statements contain any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or (B) a Prospectus as then amended or supplemented
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(g) use commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of the Shelf Registration
Statements by the SEC or any state securities authority as promptly as possible;
(h) furnish to the Holder, the LLC, Xxxxxxx or Xxxxxx
upon request, without charge, at least one conformed copy of the Shelf
Registration Statements and any post-effective amendments thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
(i) cooperate with the Holder, the LLC, Xxxxxxx and
Xxxxxx to facilitate the timely preparation and delivery of certificates
representing Shares to be sold and not bearing any Securities Act legend and
enable certificates for such Shares to be issued for such numbers of Shares and
registered in such names as the Holder, the LLC, Xxxxxxx or Xxxxxx may
reasonably request;
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(j) use its commercially reasonable efforts to cause
all Shares to be listed on any securities exchange on which the Shares are then
listed, or included on Nasdaq if the Shares are then so included; and
(k) use its commercially reasonable efforts to make
available adequate current public information about the Company as contemplated
by Rule 144(c) promulgated under the Securities Act.
4. Certain Agreements of the Holder, the LLC, Xxxxxxx and
Xxxxxx.
(a) Each of the Holder, the LLC, Xxxxxxx and Xxxxxx
agrees to furnish to the Company in writing such information regarding the
Holder, the LLC, Xxxxxxx and Xxxxxx, as applicable, and their proposed
distribution of Shares as the Company may from time to time reasonably request
in connection with the preparation of the Shelf Registration Statements or any
registration statement as contemplated by Section 4(b) of this Agreement or the
registration or qualification of the Shares under state securities or blue sky
laws, and report to the Company within ten (10) days after the end of each month
all sales or other dispositions of Shares made by them during such month.
(b) To the extent timely notified in writing by the
Company or the managing underwriters, each of the Holder, the LLC, Xxxxxxx and
Xxxxxx agrees, if requested by the Company in the case of a Company initiated
non-underwritten offering or if requested by the managing underwriter or
underwriters in an underwritten offering initiated by the Company or by a
shareholder of the Company pursuant to demand registration rights, not to effect
any public sale or distribution of any Shares (including a sale pursuant to Rule
144 under the Securities Act) during the ten (10) day period prior to, and
during the one hundred twenty (120) day period beginning on, the date of
effectiveness of each Company initiated offering made pursuant to a registration
statement, provided that the Holder, the LLC and Xxxxxx shall be entitled to
participate in an underwritten offering pro rata with all other holders of
shares of Common Stock to be included in any such registration, if, in the
reasonable opinion of the managing underwriter of any such underwritten
registration such shares may be included in such registration without having an
adverse effect on the marketability or the price of any shares of the FINOVA
Common Stock proposed to be offered in such underwritten registration and each
of the Holder, the LLC, Xxxxxxx or Xxxxxx, as applicable, agrees to enter into
an underwriting agreement with such underwriters containing such representations
and warranties by the Holder, the LLC, Xxxxxxx, and/or Xxxxxx, as applicable,
and such terms and provisions, including without limitation, provisions with
respect to indemnification and contribution, as are customarily contained in
underwriting agreements and deliver customary opinions of counsel and closing
certificates.
(c) The Holder, the LLC and Xxxxxxx agree that they
will not, in the aggregate, sell a number of Shares in any week that is greater
than 20% of the average weekly trading volume of the Shares for the prior week,
other than pursuant to block trades through brokers approved by the Company or
in privately negotiated transactions effected other than on a national
securities exchange.
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5. Indemnification; Contribution.
(a) Indemnification by the Company. The Company
agrees to indemnify and hold harmless the Holder, the LLC, Xxxxxxx and Xxxxxx as
follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to which the Holder, the LLC,
Xxxxxxx and Xxxxxx may become subject under the Securities Act, other federal or
state laws or otherwise (A) that arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in Shelf
Registration Statements or any registration statement as contemplated by Section
4(b) of this Agreement or any amendments thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (B) that arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in any Prospectus or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading or (C) that arise out of or are based upon any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law, which
violation or alleged violation arises out of the Shelf Registration Statements
or Prospectuses or any registration statement as contemplated by Section 4(b) of
this Agreement;
(ii) against any loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or alleged untrue statement, any omission or alleged
omission, if such settlement is effected with the written consent of the
Company, which consent shall not be unreasonably withheld; and
(iii) subject to the limitations set forth in
Section 5(c), against any expense (including reasonable fees and disbursements
of counsel) reasonably incurred in investigating, preparing or defending against
any litigation, investigation or proceeding by any governmental agency or body,
commenced or threatened, in each case whether or not a party, or any claim
whatsoever based upon any such untrue statement or alleged untrue statement,
omission or alleged omission that relates to the sale by the Holder, the LLC,
Xxxxxxx or Xxxxxx under Shelf Registration Statements or any registration
statement as contemplated by Section 4(b) of this Agreement, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above;
provided, however, that the indemnity provided pursuant to this Section 5(a)(i),
(ii) and (iii) shall not apply to the Holder, the LLC, Xxxxxxx or Xxxxxx, as
applicable, with respect to any loss, liability, claim, damage or expense that
arises out of or is based upon (1) any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with information furnished to the Company by the Holder, the LLC,
Xxxxxxx or Xxxxxx, as applicable, for use in the Shelf Registration Statements
or any other registration statement contemplated by this Agreement or any
amendment thereto or a Prospectus or any amendment or
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supplement thereto, or (2) trades made by the Holder, the LLC, Xxxxxxx or Xxxxxx
in violation of Section 6(a) below.
(b) Indemnification by the Holder. The Holder agrees
to indemnify and hold harmless the Company and its directors and officers,
including each director of the Company and each officer of the Company who
signed any Shelf Registration Statement or any registration statement with
respect to an underwritten offering in which the Holder participates, as
contemplated by Section 4(b) of this Agreement, and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act, to
the same extent as the indemnity contained in Section 5(a) hereof, but only
insofar as such loss, liability, claim, damage or expense arises out of or is
based upon (i) any untrue statement or alleged untrue statement or omission or
alleged omission made in the Shelf Registration Statements or any registration
statement with respect to an underwritten offering in which the Holder
participates, as contemplated by Section 4(b) of this Agreement or any amendment
thereto or a Prospectus or any amendment or supplement thereto in reliance upon
and in conformity with information prepared and furnished to the Company by the
Holder for use therein or (ii) trades made by the Holder in violation of Section
6(a) below; provided, that, in the case of the Holder's obligation set forth in
this Section 5(b) relating to Section 5(a)(ii) above, such settlement must be
effected with the written consent of the Holder, which consent shall not be
unreasonably withheld.
(c) Indemnification by the LLC. The LLC agrees to
indemnify and hold harmless the Company and its directors and officers,
including each director of the Company and each officer of the Company who
signed any Shelf Registration Statement or any registration statement with
respect to an underwritten offering in which the LLC participates, as
contemplated by Section 4(b) of this Agreement, and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act, to
the same extent as the indemnity contained in Section 5(a) hereof, but only
insofar as such loss, liability, claim, damage or expense arises out of or is
based upon (i) any untrue statement or alleged untrue statement or omission or
alleged omission made in the Shelf Registration Statements or any registration
statement with respect to an underwritten offering in which the LLC
participates, as contemplated by Section 4(b) of this Agreement or any amendment
thereto or a Prospectus or any amendment or supplement thereto in reliance upon
and in conformity with information prepared and furnished to the Company by the
LLC for use therein or (ii) trades made by the LLC in violation of Section 6(a)
below; provided, that, in the case of the LLC's obligation set forth in this
Section 5(c) relating to Section 5(a)(ii) above, such settlement must be
effected with the written consent of the LLC, which consent shall not be
unreasonably withheld.
(d) Indemnification by Xxxxxxx. Xxxxxxx agrees to
indemnify and hold harmless the Company and its directors and officers,
including each director of the Company and each officer of the Company who
signed any Shelf Registration Statement or any registration statement with
respect to an underwritten offering in which Xxxxxxx participates, as
contemplated by Section 4(b) of this Agreement, and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act, to
the same extent as the indemnity contained in Section 5(a) hereof, but only
insofar as such loss, liability, claim, damage or expense arises out of or is
based upon (i) any untrue statement or alleged untrue statement or omission or
alleged omission made in the Shelf Registration Statements or any registration
statement with respect to
11
an underwritten offering in which Xxxxxxx participates, as contemplated by
Section 4(b) of this Agreement or any amendment thereto or a Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with
information prepared and furnished to the Company by Xxxxxxx for use therein or
(ii) trades made by Xxxxxxx in violation of Section 6(a) below; provided, that,
in the case of Xxxxxxx' obligation set forth in this Section 5(d) relating to
Section 5(a)(ii) above, such settlement must be effected with the written
consent of Xxxxxxx, which consent shall not be unreasonably withheld.
(e) Indemnification by Xxxxxx. Xxxxxx agrees to
indemnify and hold harmless the Company and its directors and officers,
including each director of the Company and each officer of the Company who
signed any Shelf Registration Statement or any registration statement with
respect to an underwritten offering in which Xxxxxx participates, as
contemplated by Section 4(b) of this Agreement, and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act, to
the same extent as the indemnity contained in Section 5(a) hereof, but only
insofar as such loss, liability, claim, damage or expense arises out of or is
based upon (i) any untrue statement or alleged untrue statement or omission or
alleged omission made in the Shelf Registration Statements or any registration
statement with respect to an underwritten offering in which Xxxxxx participates,
as contemplated by Section 4(b) of this Agreement or any amendment thereto or a
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with information prepared and furnished to the Company by Xxxxxx for
use therein or (ii) trades made by Xxxxxx in violation of Section 6(a) below;
provided, that, in the case of the Xxxxxx'x obligation set forth in this Section
5(e) relating to Section 5(a)(ii) above, such settlement must be effected with
the written consent of Xxxxxx, which consent shall not be unreasonably withheld.
(f) Conduct of Indemnification Proceedings. Each
indemnified party shall give reasonably prompt written notice to each
indemnifying party of any action or proceeding commenced against it in respect
of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party (i) shall not relieve it from any liability that it may have
under the indemnity agreement provided in Section 5(a), (b), (c), (d) or (e)
above, unless and to the extent it did not otherwise learn of such action and
the lack of notice by the indemnified party materially prejudices the
indemnifying party or results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) shall not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided under Section 5(a), (b), (c), (d) or (e)
above. After receipt of such notice, the indemnifying party shall be entitled to
participate in and, at its option, jointly with any other indemnifying party so
notified, to assume the defense of such action or proceeding at such
indemnifying party's own expense with counsel chosen by such indemnifying party
and approved by the indemnified party or parties, which approval shall not be
unreasonably withheld; provided, however, that, if the defendants in any such
action or proceeding include both an indemnified party and an indemnifying party
and the indemnified party reasonably determines, upon advice of counsel, that a
conflict of interest exists or that there may be legal defenses available to it
or other indemnified parties that are different from or in addition to those
available to the indemnifying parties, then the indemnified parties shall be
entitled to counsel (which shall be limited to a single law firm, selected by
Holder if the Company is the indemnifying party, for all indemnified parties)
the reasonable fees and expenses of which shall be paid by the indemnifying
parties. If none of the indemnifying
12
parties assumes the defense of any such action or proceeding, after having
received the notice referred to in the first sentence of this paragraph, the
indemnifying parties will pay the reasonable fees and expenses of counsel (which
shall be limited to a single law firm for all indemnified parties) for the
indemnified parties. In such event, however, no indemnifying party will be
liable for any settlement effected without the written consent of such
indemnifying party, which consent shall not be unreasonably withheld. If one or
more of the indemnifying parties assumes the defense of any such action or
proceeding in accordance with this paragraph, such indemnifying party shall not
be liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action or proceeding except as set
forth in the proviso in the second sentence of this Section 5(f).
(g) Contribution.
(i) In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this Section 5 is for any reason held to be unenforceable although applicable in
accordance with its terms, the indemnifying parties shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the indemnified party, in
such proportion as is appropriate to reflect the relative fault of and benefits
to each indemnifying party and each indemnified party in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits to the indemnifying parties and indemnified parties shall
be determined by reference to, among other things, the total proceeds received
and to be received by each indemnifying party and indemnified party in
connection with the offering to which such losses, claims, damages, liabilities
or expenses relate. The relative fault of each indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, access to information and
opportunity to correct or prevent such action.
(ii) The parties hereto agree that it would not
be just or equitable if contribution pursuant to this Section 5(g) were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in Section 5(f)(i)
above.
(iii) Notwithstanding the foregoing, no Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section
5(g), each Person, if any, who controls the Holder, the LLC, Xxxxxxx or Xxxxxx,
within the meaning of Section 15 of the Securities Act and directors and
officers of the Holder, the LLC, Xxxxxxx or Xxxxxx, shall have the same rights
to contribution as the Holder, the LLC, Xxxxxxx or Xxxxxx, and each director of
the Company, each officer of the Company who signed the Shelf Registration
Statements or any registration statement relating to an underwritten offering in
which the Holder, the LLC, Xxxxxxx or Xxxxxx, participates, as contemplated by
Section 4(b) of this Agreement, and each Person, if any, who controls the
Company within the
13
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Company.
(h) Notwithstanding any term or condition to the
contrary, the liability of the Holder, the LLC, Xxxxxxx or Xxxxxx pursuant to
this Section 5 shall be limited to the gross proceeds received by the Holder,
the LLC, Xxxxxxx or Xxxxxx, respectively, as a result of the sale giving rise to
the liability.
(i) The obligations of the Company, the Holder, the
LLC, Xxxxxxx and Xxxxxx under this Section 5 shall survive the completion of any
offering of the Shares pursuant to any Shelf Registration Statement.
6. Suspension of Shelf Registration Requirement.
(a) Each of the Holder, the LLC, Xxxxxxx and Xxxxxx
agrees that he or it will not effect any sales of Shares pursuant to any Shelf
Registration Statement after he or it has received notice from the Company to
suspend sales as a result of the occurrence or existence of any Suspension Event
(as defined in Section 6(b) below) until such time as the Company provides
notice to such holder that all Suspension Events have ceased to exist. All such
information relating to a Suspension Event obtained by Holder, the LLC, Xxxxxxx
and Xxxxxx shall be kept confidential by the Holder, the LLC, Xxxxxxx, and
Xxxxxx, and shall not be used by the Holder, the LLC, Xxxxxxx, or Xxxxxx for any
purpose. The Company shall notify the Holder, the LLC, Xxxxxxx, and Xxxxxx
promptly after any Suspension Event occurs or ceases to exist to the extent he
or it continues to hold Shares and with respect to the cessation of a Suspension
Event, to the extent he or it has been provided notice of a Suspension Event. In
addition, each of the Holder, the LLC, Xxxxxxx and Xxxxxx agrees that he or it
will not effect any sales of Shares pursuant to the Shelf Registration
Statements after he or it has received notice from the Company to suspend sales
because the Registration Statements, any Prospectus or any supplement thereto
contains an untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, until the Company
notifies such holder that the misstatement or omission has been corrected.
(b) Notwithstanding anything to the contrary set
forth in this Agreement, the Company's obligation to file the Shelf Registration
Statements and make any filings with any state securities authority, to use its
commercially reasonable efforts to cause the Shelf Registration Statements or
any state securities filings to become effective, or to amend or supplement the
Shelf Registration Statement or any state securities filings shall be
temporarily suspended in the event of and during a Suspension Event. A
"Suspension Event" shall exist at such times (i) that the Company is not
eligible to use Form S-3 for the registration contemplated by Section 2(a)
hereof or (ii) as circumstances exist that the Company determines make it
impractical or inadvisable for the Company to file, amend or supplement a Shelf
Registration Statement or such filings or to cause the Shelf Registration
Statements or such filings to become effective (such circumstances to include,
without limitation, (A) the Company conducting an underwritten primary offering
and being advised by the underwriters that sale of Shares under the Shelf
Registration Statements would have a material adverse effect on the Company's
offering or (B) pending negotiations relating to, or consummation of, a
transaction material to the Company
14
or the occurrence of some other event (x) where any of the foregoing would
require disclosure under applicable securities laws of material information in
the Shelf Registration Statements (or any other document incorporated into a
Shelf Registration Statement by reference) or such state securities filings and
(y) as to which the Company has a bona fide business purpose for preserving
confidentiality or which renders the Company unable to comply with SEC
requirements). Suspension of the Company's obligations pursuant to this Section
6(b) shall continue only for so long as a Suspension Event or its effect is
continuing
7. Miscellaneous.
(a) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified, supplemented or waived, nor may consent to departures therefrom be
given, without the written consent of the Company, the Holder, Brandes, the LLC,
and, solely with respect to amendments or waivers affecting its rights under
this Agreement, Xxxxxx.
(b) Notices. Unless otherwise provided, all notices
or other communications required or permitted to be given to the parties hereto
shall be in writing and shall be deemed to have been given if personally
delivered, including personal delivery by facsimile, provided that the sender
receives telephonic or electronic confirmation that the facsimile was received
by the recipient and that such facsimile is followed the same day by mailing by
certified or registered mail, return receipt requested, first class postage
prepaid (a "Mailing"), upon receipt of courier delivery or the third day
following a Mailing, addressed as follows (or at such other address as the
addressed party may have substituted by notice pursuant to this Section 7(b):
(i) If to the Company:
The FINOVA Group Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
(ii) If to the Holder or Xxxxxxx:
x/x Xxxxxxxxx Xxxxxxx Xxxxxxxxxxx
00000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: X.X. Xxxxxxx
Facsimile: (000) 000-0000
15
(iii) If to the LLC:
Xxxxxxx Program LLC
x/x Xxxxxxxxx Xxxxxxx Xxxxxxxxxxx
00000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: X.X. Xxxxxxx
Facsimile: (000) 000-0000
(iv) If to Xxxxxx:
Xxxxxx Financial, Inc.
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
and Xxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
With a copy to:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx
and Xxxxxxx X.X. Xxxxxx
Facsimile: (000) 000-0000
or to such other address as any party may have furnished in writing to the other
parties in the manner provided above.
(c) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and the
respective successors and permitted assigns of the Company. This Agreement shall
not be assignable by the Holder, Heller, Brandes, or the LLC without the prior
written consent of the Company, which consent may be withheld at the Company's
sole discretion; provided, that Xxxxxx may assign its rights under this
Agreement to a single institution or accredited investor (within the meaning of
Regulation D of the Securities Act) with the prior written consent of the
Company, which consent shall not be unreasonably withheld. Any approved assignee
of the Holder, Heller, Brandes, or the LLC of Shares shall be required to agree
to be bound by the terms of this Agreement and shall be entitled to participate
in the Shelf Registration Statement only as of such time after the assignment
that the Company is otherwise amending the Shelf Registration Statement and such
amended Shelf Registration Statement becomes effective. A purchaser of Shares
shall not be deemed to be a successor or permitted assign for purposes of this
Agreement.
(d) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto 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
16
agreement. Any party may execute this Agreement by facsimile signature, and
shall provide promptly to all other parties an originally executed Agreement.
(e) Headings and Interpretation. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. In construing the meaning of this Agreement, no party
hereto shall be deemed the drafter of this Agreement and this Agreement shall be
construed according to its fair meaning and not strictly against any person as
the drafter hereof.
(f) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Arizona without
giving effect to the conflicts of law provisions thereof.
(g) Entire Agreement. This Agreement is intended by
the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior oral and written agreements and understandings and all
contemporaneous written agreements and understandings between the parties with
respect to such subject matter.
(h) Attorneys' Fees. In the event of any suit or
other proceeding to construe or enforce any provision of this Agreement, or
otherwise in connection with this Agreement, the prevailing party's or parties'
reasonable attorneys', accountants' and experts' fees, costs and disbursements
(in addition to all other amounts and relief to which such party or parties may
be entitled) shall be paid by the other party or parties to such suit or
proceeding.
(i) Default. If, because of the Company's breach or
default, the registration of the Shares is not completed pursuant to the
provisions hereof, the Holder, the LLC, Xxxxxxx and Xxxxxx shall not be entitled
to receive consequential or punitive damages arising out of such breach or
default.
(j) Persons Receiving Shares. The Holder shall notify
the Company in writing of the persons who will receive a portion of any
Acquisition Shares, Additional Stock Payment Shares, or Contingent Shares issued
to the Company under a Shelf Registration pursuant to this Agreement at least 60
days prior to the issuance of such Shares. Such notice shall include the amount
of Shares to be transferred to each person.
17
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
THE FINOVA GROUP INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Title: Senior Vice President
--------------------------------
BELGRAVIA CAPITAL CORPORATION
By:/s/ X.X. Xxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
"XXXXXXX"
/s/ X.X. Xxxxxxx
--------------------------------------
X.X. Xxxxxxx
XXXXXXX PROGRAM LLC
By:/s/ X.X. Xxxxxxx
-----------------------------------
Title: Manager
--------------------------------
XXXXXX FINANCIAL, INC.
By:/s/ Xxxxxx X. Xxx
-----------------------------------
Title: Vice President
--------------------------------
18
