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Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of April 5, 2000, between FA,
Inc. d/b/a FA of Delaware (the "INVESTOR") and National Auto Credit, Inc., a
Delaware corporation (the "COMPANY").
RECITALS
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WHEREAS, the Investor, an indirect wholly owned subsidiary of Reading
Entertainment, Inc., a Delaware corporation (the "PARENT"), has received or will
receive shares (the "SHARES") of Common Stock, par value $0.05 per share, of the
Company (the "COMMON STOCK"), in the amount and subject to the conditions set
forth in the Purchase Agreement, dated as of April 5, 2000, among, the Investor,
the Parent and the Company (the "PURCHASE AGREEMENT");
WHEREAS, the Company has agreed to grant the Investor certain
registration rights with respect to the Shares; and
WHEREAS, the Company and the Investor desire to define the registration
rights of the Investor on the terms and subject to the conditions herein set
forth.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms have the respective
meanings set forth below:
"COMMISSION" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"HOLDER" shall mean any holder of Registrable Securities.
"INITIATING HOLDER" shall mean any Holder or Holders of Registrable
Securities aggregating at least 25% of the aggregate number of shares of Common
Stock held by all Holders.
"PERSON" shall mean an individual, partnership, joint-stock company,
corporation, limited liability company, trust or unincorporated organization,
and a government or agency or political subdivision thereof.
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"REGISTER," "REGISTERED" and "REGISTRATION" shall mean a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement.
"REGISTRABLE SECURITIES" shall mean the Shares and any additional
shares of Common Stock of the Company issued as a dividend or other distribution
with respect to, or in exchange for or in replacement of, the Shares, until, in
the case of any such securities, (i) a registration statement covering such
securities has been declared effective by the Commission and such securities
have been disposed of pursuant to such effective Registration Statement or (ii)
such securities have been disposed of in open market transactions pursuant to
Rule 144 under the Securities Act (or similar rule then in effect).
"REGISTRATION EXPENSES" shall mean all expenses incurred by the Company
in compliance with Sections 2(a) and (b) hereof, excluding Selling and Legal
Expenses, but including, without limitation, all registration and filing fees,
printing expenses, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company).
"SECURITY" and "SECURITIES" shall have the meaning set forth in Section
2(1) of the Securities Act.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"SELLING AND LEGAL EXPENSES" shall mean (x) all underwriting and
selling discounts, fees and commissions applicable to the sale of Registrable
Securities and (y) all reasonable fees and disbursements of counsel retained by
the Holders of the Registrable Securities to be included in a particular
registration.
2. REGISTRATION RIGHTS
(a) REQUESTED REGISTRATION.
(i) REQUEST FOR REGISTRATION. If the Company shall receive
from an Initiating Holder, at any time after September 30, 2000, a
written request that the Company effect any registration with respect
to all or a part of the Registrable Securities, the Company will:
(A) promptly, but in any event within ten (10)
business days of the receipt of such request, give written
notice of the proposed registration, qualification or
compliance to all other Holders; and
(B) as soon as reasonably practicable, but in any
event within 60 days following the receipt of such request,
file a registration statement on an
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appropriate form with the Commission and use its reasonable
best efforts to effect such registration (including, without
limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued
under the Securities Act) as may be so requested and as would
permit or facilitate the sale and distribution of all or such
portion of such Registrable Securities as are specified in
such request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in
such request as are specified in a written request received by
the Company within 10 business days after written notice from
the Company is given under Section 2(a)(i)(A) above; PROVIDED
that the Company shall not be obligated to effect, or take any
action to effect, any such registration pursuant to this
Section 2(a):
(v) in any particular jurisdiction in which the
Company would be required to execute a general consent to
service of process in effecting such registration,
qualification or compliance, unless the Company is already
subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or
regulations thereunder;
(w) with respect to a request for registration of
Shares, after the Company has effected one (1) such
registration pursuant to this Section 2(a) requested by an
Initiating Holder and such registration has been declared or
ordered effective and the sales of such Registrable Securities
shall have closed;
(x) if the Registrable Securities requested by all
Holders to be registered pursuant to such request do not have
an anticipated aggregate public offering price (before any
underwriting discounts and commissions) of at least
$1,000,000;
(y) if at the time of any request to register
Registrable Securities, the Company is engaged or intends to
engage in an acquisition, financing or other material
transaction which, in the good faith determination of the
Board of Directors of the Company, would be adversely affected
by the requested registration to the material detriment of the
Company, or the Board of Directors of the Company determines
in good faith that the registration would require the
disclosure of material information that the Company has a bona
fide business purpose for preserving as confidential, and that
the Company is not otherwise required by applicable securities
laws or regulations to disclose, in which event, the Company
may, at its option, direct that such request be delayed for a
period not in excess of sixty days from the date of the
determination by the Board of Directors, as the case may be,
such right to delay a request to be exercised by the Company
not more than once in any twelve-month period; or
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(z) with respect to Holders who are officers,
directors or employees of the Company, if at the time of any
request to register Registrable Securities, directors,
officers, or employees of the Company are not permitted to
offer or sell securities in accordance with the Company's
policies.
The registration statement filed pursuant to the request of an
Initiating Holder may, subject to the provisions of Section 2(a)(ii)
below, include other securities, other than Registrable Securities, of
the Company which are held by the other stockholders ("OTHER
STOCKHOLDERS") of the Company.
The Holders holding a majority of the Registrable Securities
requested to be registered may, at any time prior to the effective date
of the registration statement relating to such registration, revoke
such request, without liability to the Company, such Holders, any of
the other Holders or the Other Stockholders, by providing a written
notice to the Company revoking such request, PROVIDED that such revoked
request shall count against the registrations available to the Holders
pursuant to Section 2(a)(w) unless such Holders pay the costs and
expenses associated with such revoked request.
(ii) UNDERWRITING. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means
of an underwriting, they shall so advise the Company as a part of their
request made pursuant to Section 2(a). If shares held by Other
Stockholders are requested by such Other Stockholders to be included in
any registration pursuant to this Section 2, the Company shall
condition such inclusion on their acceptance of the further applicable
provisions of this Section 2. The Initiating Holders whose Registrable
Securities are to be included in such registration and the Company
shall (together with all Other Stockholders proposing to distribute
their securities through such underwriting) enter into an underwriting
agreement in customary form with the representative of the underwriter
or underwriters selected for such underwriting by such Initiating
Holders and reasonably acceptable to the Company. Notwithstanding any
other provision of this Section 2(a), if the representative advises the
Holders in writing that marketing factors (including, without
limitation, pricing considerations) require a limitation on the number
of shares to be underwritten or a limitation on the inclusion of shares
held by directors and officers of the Company, the securities of the
Company held by Other Stockholders shall be excluded from such
registration to the extent so required by such limitation. If, after
the exclusion of such shares, further reductions are still required,
the Registrable Securities of the Company held by each Holder other
than the Initiating Holders shall be excluded from such registration to
the extent so required by such limitation. Thereafter, if still further
reductions are required, the number of Registrable Securities included
in the registration by each Initiating Holder shall be reduced on a pro
rata basis (based on the number of Registrable Securities held by such
Initiating Holder), by such minimum number of Registrable Securities as
is necessary to comply with such request. No Registrable Securities or
any other securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in
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such registration. If any Other Stockholder who has requested inclusion
in such registration as provided above disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written
notice to the Company, the underwriter and the Initiating Holders. The
securities so withdrawn shall also be withdrawn from registration. If
the underwriter has not limited the number of Registrable Securities or
other securities to be underwritten, the Company and officers and
directors of the Company may include its or their securities for its or
their own account in such registration if the representative so agrees
and if the number of Registrable Securities and other securities which
would otherwise have been included in such registration and
underwriting will not thereby be limited.
(iii) OTHER REGISTRATION RIGHTS. The Company shall not grant
any registration rights inconsistent with the provisions of this
Section 2(a) and in granting any demand registration rights hereafter
shall provide that the Holders shall have the right to notice of the
exercise of any such demand registration right and to participate in
such registration on a pro rata basis.
(b) COMPANY REGISTRATION.
(i) If the Company shall determine to register any of its
equity securities either for its own account or for any Other
Stockholders, other than a registration relating solely to employee
benefit plans, or a registration relating solely to a Commission Rule
145 transaction, or a registration on any registration form which does
not permit secondary sales, the Company will:
(A) promptly give to each of the Holders a written
notice thereof; and
(B) include in such registration (and any related
qualification under blue sky laws or other compliance), and in
any underwriting involved therein, all the Registrable
Securities specified in a written request or requests, made by
the Holders within fifteen (15) days after receipt of the
written notice from the Company described in clause (A) above,
except as set forth in Section 2(b)(ii) below.
The Company may terminate, in its sole and absolute
discretion, any registration described in this Section 2(b) at any time
prior to the effectiveness of the applicable registration statement.
Upon such termination, the Company's obligations under this Section
2(b) with respect to such terminated registration shall terminate.
(ii) UNDERWRITING. If the registration of which the Company
gives notice is for a registered public offering involving an
underwriting, the Company shall so advise each of the Holders as a part
of the written notice given pursuant to Section 2(b)(i)(A). In such
event, the right of each of the Holders to registration pursuant to
this Section 2(b) shall be conditioned upon such Holders' participation
in such underwriting and the inclusion of such Holders' Registrable
Securities in the underwriting to the extent
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provided herein. The Holders whose shares are to be included in such
registration shall (together with the Company and the Other
Stockholders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for
underwriting by the Company. Notwithstanding any other provision of
this Section 2(b), if the representative determines that marketing
factors require a limitation on the number of shares to be underwritten
or a limitation on the inclusion of shares held by directors and
officers of the Company, the representative may (subject to the
allocation priority set forth below) limit the number of Registrable
Securities to be included in the registration and underwriting to not
less than twenty five percent (25%) of the total number of shares to be
included in such underwritten offering, subject to the Company's
compliance with any registration obligations to any Demanding Holders
(as hereinafter defined) participating in such registration. The
Company shall so advise all holders of securities requesting
registration, and the number of shares of securities that are entitled
to be included in the registration and underwriting shall be allocated
in the following manner: The securities of the Company held by
officers, directors and Other Stockholders (other than Registrable
Securities and other than securities held by holders who by contractual
right demanded such registration ("DEMANDING HOLDERS")) shall be
excluded from such registration and underwriting to the extent required
by such limitation, and, if a limitation on the number of shares is
still required, the number of shares that may be included in the
registration and underwriting by each of the Holders other than the
Demanding Holders shall be excluded from such registration to the
extent so required by such limitation. Thereafter, if still further
reductions are required, the number of shares included in the
registration by each of the Demanding Holders shall be reduced, on a
pro rata basis (based on the number of shares held by such Demanding
Holders), by such minimum number of shares as is necessary to comply
with such limitation. If any of the Holders or any officer, director or
Other Stockholder disapproves of the terms of any such underwriting, he
may elect to withdraw therefrom by written notice to the Company and
the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from
such registration.
(iii) NUMBER AND TRANSFERABILITY. Each of the Holders shall be
entitled to have its shares included in two registrations pursuant to
this Section 2(b); provided, however, that notwithstanding anything to
the contrary contained herein, the Holders shall not be entitled to
have their shares registered in the first registered public offering of
the Company occurring within six months of the Closing Date.
(c) EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Section 2 shall be borne by the Company, and all Selling and Legal Expenses
shall be borne by the Holders of the securities so registered pro rata on the
basis of the number of their shares so registered; provided, however, that if,
as a result of the withdrawal of a request for registration by any of the
Holders, as applicable, the registration statement does not become effective,
the Holders and Other Stockholders requesting registration may elect to bear the
Registration Expenses
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(pro rata on the basis of the number of their shares so included in the
registration request, or on such other basis as such Holders and Other
Stockholders may agree), in which case such registration shall not be counted as
a registration pursuant to Section 2(a)(i)(B)(w).
(d) REGISTRATION PROCEDURES. In the case of each registration effected
by the Company pursuant to this Section 2, the Company will keep the Holders
holding Registrable Securities requested to be included in such registration
("PARTICIPATING HOLDERS") advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company will:
(i) furnish to each Participating Holder, and to any
underwriter before filing with the Commission, copies of any
registration statement (including all exhibits) and any prospectus
forming a part thereof and any amendments and supplements thereto
(including, upon request, all documents incorporated or deemed
incorporated by reference therein) prior to the effectiveness of such
registration statement and including each preliminary prospectus, any
summary prospectus or any term sheet (as such term is used in Rule 434
under the Securities Act)) and any other prospectus filed under Rule
424 under the Securities Act, which documents, other than exhibits and
documents incorporated or deemed incorporated by reference, will be
subject the review of the Participating Holders and any such
underwriter for a period of at least five business days, and the
Company shall not file any such registration statement or such
prospectus or any amendment or supplement to such registration
statement or prospectus to which any Participating Holder or any such
underwriter shall reasonably object within five business days after the
receipt thereof; a Participating Holder or such underwriter(s), if any,
shall be deemed to have reasonably objected to such filing only if the
registration statement, amendment, prospectus or supplement, as
applicable, as proposed to be filed, contains a material misstatement
or omission;
(ii) furnish to each Participating Holder and to any
underwriter, such number of conformed copies of the applicable
registration statement and of each amendment and supplement thereto (in
each case including all exhibits) and such number of copies of the
prospectus forming a part of such registration statement (including
each preliminary prospectus, any summary prospectus or any term sheet
(as such term is used in Rule 434 under the Securities Act)) and any
other prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents, including without limitation documents incorporated or
deemed to be incorporated by reference prior to the effectiveness of
such registration, as each of the Participating Holders or any such
underwriter, from time to time may reasonably request;
(iii) to the extent practicable, promptly prior to the filing
of any document that is to be incorporated by reference into any
registration statement or prospectus forming a part thereof subsequent
to the effectiveness thereof, and in any event no later than the date
such document is filed with the Commission, provide copies of such
document to the Participating Holders, if requested, and to any
underwriter, make
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representatives of the Company available for discussion of such
document and other customary due diligence matters;
(iv) make available at reasonable times for inspection by the
Participating Holders, any underwriter participating in any disposition
pursuant to such registration and any attorney or accountant retained
by the Holders or any such underwriter, all financial and other
records, pertinent corporate documents and properties of the Company
and cause the officers, directors and employees of the Company to
supply all information reasonably requested by the Participating
Holders and any such underwriters, attorneys or accountants in
connection with such registration subsequent to the filing of the
applicable registration statement and prior to the effectiveness of the
applicable registration statement, subject to the execution of a
customary confidentiality agreement;
(v) use its reasonable best efforts (x) to register or qualify
all Registrable Securities and other securities covered by such
registration under such other securities or blue sky laws of such
States of the United States of America where an exemption is not
available and as the sellers of Registrable Securities covered by such
registration shall reasonably request, (y) to keep such registration or
qualification in effect for so long as the applicable registration
statement remains in effect, and (z) to take any other action which may
be reasonably necessary or advisable to enable such sellers to
consummate the disposition in such jurisdictions of the securities to
be sold by such sellers, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where it is not so qualified, or to
subject itself to taxation in any such jurisdiction, or to execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to
service in such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations thereunder;
(vi) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with
or approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the
Company and counsel to the Participating Holders of Registrable
Securities to enable the Holders thereof to consummate the disposition
of such Registrable Securities in accordance with the plan of
distribution described in the applicable registration statement;
(vii) promptly notify each Holder of Registrable Securities
covered by a registration statement (A) upon discovery that, or upon
the happening of any event as a result of which, the prospectus forming
a part of such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, (B) of the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or the
initiation of proceedings for that purpose, (C) of any request by the
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Commission for (1) amendments to such registration statement or any
document incorporated or deemed to be incorporated by reference in any
such registration statement, (2) supplements to the prospectus forming
a part of such registration statement or (3) additional information,
(D) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of
any of the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, and at the request of
any such Holder promptly prepare and furnish to it a reasonable number
of copies of a supplement to or an amendment of such prospectus as may
be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(viii) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of any such
registration, or the lifting of any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for
sale in any jurisdiction;
(ix) if requested by a Participating Holder, or any
underwriter, subject to receipt of any required information from such
Holder or underwriter, promptly incorporate in such registration
statement or prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as the Participating Holder
and any underwriter may reasonably request to have included therein,
including, without limitation, information relating to the "plan of
distribution" of the Registrable Securities, information with respect
to the number of shares of Registrable Securities being sold to such
underwriter, the purchase price being paid therefor and any other terms
of the offering of the Registrable Securities to be sold in such
offering and make all required filings of any such prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(x) furnish to the Participating Holders, addressed to them,
an opinion of counsel for the Company, dated the date of the closing
under the underwriting agreement, if any, or the date of effectiveness
of the registration statement if such registration is not an
underwritten offering, and use its reasonable best efforts to furnish
to the Participating Holders, addressed to them, a "cold comfort"
letter signed by the independent certified public accountants who have
certified the Company's financial statements included in such
registration, covering substantially the same matters with respect to
such registration (and the prospectus included therein) and, in the
case of such accountants' letter, with respect to events subsequent to
the date of such financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities and such
other matters as the Participating Holders may reasonably request;
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(xi) provide promptly to the Participating Holders upon
request any document filed by the Company with the Commission pursuant
to the requirements of Section 13 and Section 15 of the Exchange Act;
and
(xii) use its reasonable best efforts to cause all Registrable
Securities included in any registration pursuant hereto to be listed on
each securities exchange on which securities of the same class are then
listed or, if not then listed on any securities exchange, to be
eligible for trading in any over-the-counter market or trading system
in which securities of the same class are then traded.
(e) INDEMNIFICATION.
(i) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors and partners, and each
person controlling each of the Holders (within the meaning of the
Securities Act), with respect to each registration which has been
effected pursuant to this Section 2, and each underwriter, if any, and
each person who controls any underwriter, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any preliminary, final or summary
prospectus, offering circular or other document (including any related
registration statement, notification or the like, or any amendment or
supplement to any of the foregoing) incident to any such registration,
qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
any violation (or alleged violation) by the Company of the Securities
Act or the Exchange Act or any rule or regulation thereunder or of any
applicable state or common law applicable to the Company and relating
to action or inaction required of the Company in connection with any
such registration, qualification or compliance, and (subject to Section
2(e)(iii)) will reimburse each of the Holders, each of its officers,
directors and partners, and each person controlling each of the
Holders, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred
in connection with investigating and defending any such claim, loss,
damage, liability or action, provided that the Company will not be
liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue
statement or omission based upon and in conformity with written
information furnished to the Company by the Holders or underwriter and
stated to be specifically for use therein. The foregoing
indemnification shall remain in effect regardless of any investigation
by any indemnified party and shall survive any transfer or assignment
by a Holder of its Registrable Securities or of its rights pursuant to
this Agreement.
(ii) Each of the Holders will, if Registrable Securities held
by it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company,
each of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration
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statement, each person who controls the Company or such underwriter,
each Other Stockholder and each of their officers, directors, and
partners, and each person controlling such Other Stockholder against
all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged
untrue statement) made by such Holder of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) made by such Holder to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will
reimburse the Company and such directors, officers, partners, persons,
underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document
in reliance upon and in conformity with written information furnished
to the Company by such Holder and stated to be specifically for use
therein; PROVIDED, HOWEVER, that the obligations of each of the Holders
hereunder shall be limited to an amount equal to the net proceeds to
such Holder of securities sold pursuant to such registration statement
or prospectus.
(iii) Each party entitled to indemnification under Section
2(e) (the "INDEMNIFIED PARTY") shall give notice to the party required
to provide indemnification (the "INDEMNIFYING PARTY") promptly after
such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting
therefrom; provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld) and the Indemnified Party may
participate in such defense at such party's expense (unless the
Indemnified Party shall have reasonably concluded upon advice from
counsel that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which
case the reasonable fees and expenses of counsel shall be at the
expense of the Indemnifying Party), and provided further that the
failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this
Section 2 except to the extent the Indemnifying Party is materially
prejudiced thereby. No Indemnifying Party, in the defense of any such
claim or litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. Each Indemnified
Party shall promptly furnish such information regarding itself or the
claim in question as an Indemnifying Party may reasonably request in
writing and as shall be reasonably required in connection with the
defense of such claim and litigation resulting therefrom.
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(iv) If the indemnification provided for in this Section 2(e)
is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or
expense referred to herein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on
the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant
equitable considerations, provided, however, that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person
who was not guilty of any such fraudulent misrepresentation. The
relative fault of the Indemnifying Party and of the Indemnified Party
shall be determined by reference to, among other things, whether the
untrue (or alleged untrue) statement of a material fact or the omission
(or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, no Holder will be required to contribute
any amount pursuant to this paragraph (e) in excess of the total price
at which the Registrable Securities of such Holder were offered to the
public (less underwriting discounts and commissions, if any).
(v) The foregoing indemnity agreement of the Company and
Holders is subject to the condition that, insofar as they relate to any
loss, claim, liability or damage made in a prospectus, preliminary
prospectus or other offering document but eliminated or remedied in an
amended prospectus, preliminary prospectus or other offering document
delivered to an underwriter or Holder, as applicable (the "FINAL
PROSPECTUS"), such indemnity agreement shall not inure to the benefit
of (A) any underwriter if a copy of the Final Prospectus was furnished
to the underwriter and was not furnished to the person asserting the
loss, liability, claim or damage at or prior to the time such action is
required by the Securities Act or (B) in circumstances where no
underwriter is acting as such in the offer and sale in question, any
Holder who (1) either directly or through its agent provided the
preliminary prospectus to the Person asserting the loss, liability,
claim or damage, (2) was furnished with a copy of the Final Prospectus,
and (3) did not furnish or cause to be furnished the Final Prospectus
to the Person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the Securities Act.
(vi) Any indemnification payments required to be made to an
Indemnified Party under this Section 2(e) shall be made as the related
claims, losses, damages, liabilities or expenses are incurred.
(f) INFORMATION BY THE HOLDERS. Each of the Holders holding securities
included in any registration shall furnish to the Company such information
regarding such Holder and the
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distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Section 2. No Investor shall be
required, in connection with any underwriting agreements entered into in
connection with any registration, to provide any information, representations or
warranties, or covenants with respect to the Company, its business or its
operations, and such Investor shall not be required to provide any
indemnification with respect to any registration statement except as
specifically provided for in Section 2(d)(ii) hereof.
(g) RULE 144 REPORTING.
With a view to making available the benefits of certain rules
and regulations of the Commission which may permit the sale of
restricted securities to the public without registration, the Company
agrees to:
(i) make and keep public information available as those terms
are understood and defined in Rule 144 under the Securities Act ("RULE
144"), at all times;
(ii) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act; and
(iii) so long as the Holder owns any Registrable Securities,
furnish to the Holder upon request, a written statement by the Company
as to its compliance with the reporting requirements of Rule 144 and of
the Securities Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other reports and
documents so filed as the Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing the Holder
to sell any such securities without registration.
(h) TERMINATION. The registration rights set forth in this Section 2
shall not be available to any Holder if, in the opinion of counsel to the
Company, all of the Registrable Securities then owned by such Holder could be
sold in any 120-day period pursuant to Rule 144(k) or at such time that no
Registrable Securities are outstanding. The Company will arrange for a provision
to the transfer agent for such shares of an opinion of counsel in connection
with any such sale under Rule 144. The Company shall use its reasonable best
efforts to comply with the requirements of Rule 144 as will enable the Holders
to make sales pursuant to Rule 144.
(i) ASSIGNMENT. The registration rights set forth in Section 2 hereof
may be assigned, in whole or in part, to any transferee of Registrable
Securities (who shall be considered thereafter to be a Holder and shall be bound
by all obligations and limitations of this Agreement).
(j) The Holders agree that, upon receipt of any notice from the Company
pursuant to Section 2(d)(vii), they shall immediately discontinue the
disposition of Registrable Securities
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pursuant to the registration statement applicable to such Registrable Securities
until they have received copies of the amended or supplemented prospectus as
described in Section 2(d)(vii). The Holders shall destroy all copies in their
possession of the registration statement and related materials covering such
Registrable Securities at the time of receipt of the Company's notice.
3. MISCELLANEOUS
(a) DIRECTLY OR INDIRECTLY. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(b) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.
(c) SECTION HEADINGS. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
(d) NOTICES.
(i) All communications under this Agreement shall be in
writing and shall be delivered by hand or by facsimile or mailed by
overnight courier or by registered or certified mail, postage prepaid:
(A) If to the Investor:
FA, Inc.
c/o Reading Entertainment, Inc.
One Penn Square West
00 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx, Executive Vice President
Facsimile: (000) 000-0000
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Copy to:
Potter Xxxxxxxx & Xxxxxxx LLP
Hercules Plaza
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Company:
National Auto Credit, Inc.
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxx, Chairman of the Board
Facsimile: (000) 000-0000
Copy to:
National Auto Credit, Inc.
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq., Vice President,
Secretary and General Counsel
Facsimile: (000) 000-0000
Any party may change its address for the purpose of this
Section by giving the other party written notice of its new address in
the manner set forth above.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand or facsimile, on the date of such delivery; if mailed
by courier, on the first business day following the date of such
mailing; and if mailed by registered or certified mail, on the third
business day after the date of such mailing.
(e) REPRODUCTION OF DOCUMENTS. This Agreement and all documents
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the parties
hereto by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and the parties hereto may destroy any
original document so reproduced. The parties hereto agree and stipulate that any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Investor in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties.
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(g) ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement constitutes
the entire understanding of the parties hereto and supersedes all prior
understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and the Holders holding a majority of the then
outstanding Registrable Securities.
(h) SEVERABILITY. In the event that any part or parts of this Agreement
shall be held illegal or unenforceable by any court or administrative body of
competent jurisdiction, such determination shall not effect the remaining
provisions of this Agreement which shall remain in full force and effect.
(i) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
[Signature page follows]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
INVESTOR:
FA, INC.
By:
--------------------------------
Name:
Title:
COMPANY:
NATIONAL AUTO CREDIT, INC.
By:
--------------------------------
Name:
Title:
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