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Title: |
Registration Rights Agreement |
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2000 |
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77KB total |
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#358549 |
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REGISTRATION RIGHTS AGREEMENT
between
GENESEE & WYOMING INC.
and
THE 1818 FUND III, L.P.
_______________________________________
Dated December 12, 2000
_______________________________________
{PAGE}
TABLE OF CONTENTS
Page #
1. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Registration Under Securities Act, etc. . . . . . . . . . . . . . 1
2.1 Registration on Request . . . . . . . . . . . . . . . . . 1
2.2 Piggyback Registration . . . . . . . . . . . . . . . . . . 4
2.3 Shelf Registration . . . . . . . . . . . . . . . . . . . . 6
2.4 Registration Procedures . . . . . . . . . . . . . . . . . 7
2.5 Underwritten Offerings . . . . . . . . . . . . . . . . . . 11
2.6 Preparation; Reasonable Investigation . . . . . . . . . . 13
2.7 Limitations, Conditions and Qualifications to Obligations
under Registration Covenants . . . . . . . . . . . . . . . 13
2.8 Indemnification . . . . . . . . . . . . . . . . . . . . . 15
3. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4. Rule 144 and Rule 144A . . . . . . . . . . . . . . . . . . . . . . 20
5. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . 21
6. Nominees for Beneficial Owners . . . . . . . . . . . . . . . . . . 21
7. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9. Calculation of Percentage Interests in Registrable Securities . . 22
10. No Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . 22
11. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
12. Certain Distributions . . . . . . . . . . . . . . . . . . . . . . 23
13. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 23
15. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
16. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . 23
17. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
{PAGE}
REGISTRATION RIGHTS AGREEMENT, dated as of December __,
2000, between GENESEE & WYOMING INC., a Delaware corporation (the "Company"),
and THE 1818 FUND III, L.P., a Delaware limited partnership (the
"Purchaser").
1. Background. Pursuant to a Stock Purchase Agreement,
dated October 19, 2000, by and between the Company and the Purchaser (the
"Stock Purchase Agreement"), (i) the Purchaser has agreed to purchase from
the Company, and the Company has agreed to issue to the Purchaser, up to an
aggregate of 25,000 shares of 4.0% Senior Redeemable Convertible Preferred
Stock, Series A, $.01 par value per share (the "Preferred Stock"), for a
price per share of $1,000.00. The Preferred Stock is convertible, at the
option of the Purchaser, into Class A Common Stock. Capitalized terms used
herein but not otherwise defined shall have the meanings given them in the
Stock Purchase Agreement or in Section 3 hereof.
2. Registration Under Securities Act, etc.
2.1 Registration on Request.
(a) Request. Subject to Section
2.1(f), at any time following December 12, 2001, one or more holders (the
"Initiating Holders") of 25% or more of the total number of shares of Class A
Common Stock issued or issuable upon conversion or issued upon exchange of
the Preferred Stock that has been issued pursuant to the Stock Purchase
Agreement, may, upon written request (if such request involves an
underwritten offering, each such request shall specify the number of shares
to be included in such registration and the acceptable price range for the
shares to be included in such registration), require the Company to effect
the registration under the Securities Act of any Registrable Securities held
by such Initiating Holders. Should the Initiating Holders request
registration of the Preferred Stock that constitute Registrable Securities,
any legal expenses arising as a result of conforming the Preferred Stock for
public trading shall be divided equally between and paid by the Company and
the Initiating Holders. The Company promptly will give written notice of
such requested registration to all other holders of Registrable Securities
who are entitled to join in such registration. After December 12, 2001, the
Company will use its reasonable best efforts to effect, not later than 90
days after the end of the period in which each request for registration is
received (or, if the 90th day is not a business day, the first business day
thereafter), the registration under the Securities Act, including, by means
of a shelf registration on Form S-3 (or any successor form) pursuant to Rule
415 under the Securities Act if so requested in such request (but only if the
Company is then eligible to use such a shelf registration and if Form S-3 (or
such successor form) is then available to the Company), of
(i) the Registrable Securities
that the Company has been so requested to register by such Initiating
Holders, and
{PAGE}
(ii) all other Registrable
Securities that the Company has been requested to register by the
holders thereof (such holders together with the Initiating Holders
hereinafter are referred to as the "Selling Holders") by written
request given to the Company within 30 days after the giving of such
written notice by the Company of such registration, all to the extent
required to permit the disposition of the Registrable Securities so
to be registered.
(b) Registration Statement Form.
Registrations under this Section 2.1 shall be on such appropriate
registration form of the Commission as shall be reasonably selected by the
Company.
(c) Effective Registration Statement.
A registration requested pursuant to this Section 2.1 shall not be deemed to
have been effected:
(i) Subject to Section 2.7,
unless a registration statement with respect thereto has become
effective and remained effective in compliance with the provisions of
the Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement until the earlier
of (x) such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by
the seller or sellers thereof set forth in such registration
statement and (y) 180 days after the effective date of such
registration statement, except with respect to any registration
statement filed pursuant to Rule 415 under the Securities Act, in
which case the Company shall use its best efforts to keep such
registration statement effective until 80% of the Registrable
Securities included in such registration statement shall cease to be
Registrable Securities,
(ii) if after it has become
effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other
governmental agency or court for any reason not attributable to the
Selling Holders and has not thereafter become effective, or
(iii) if the conditions to
closing specified in the underwriting agreement, if any, entered into
in connection with such registration are not satisfied or waived,
other than by reason of a failure on the part of the Selling Holders
2
{PAGE}
provided, however, that in each of the foregoing cases, if a registration
statement has not become effective due to the failure of a Selling Holder to
perform its obligations under this agreement or in the event the Selling
Holders withdraw or do not pursue the request for registration, then such
registration shall be deemed to have been effected, except under
circumstances described in Section 2.7.
(d) Selection of Underwriters. If a
requested registration pursuant to this Section 2.1 involves an underwritten
offering, the underwriter or underwriters of each underwritten offering of
the Registrable Securities so to be registered shall be selected by the
Selling Holders of more than 50% of each class of Registrable Securities to
be included in such registration and shall be reasonably acceptable to the
Company.
(e) Priority in Requested Registration.
If the managing underwriter of any underwritten offering shall advise the
Company (and the Company shall so advise each Selling Holder of Registrable
Securities requesting registration in writing of such advice) that, in its
opinion, the number of securities requested to be included in such
registration exceeds the number that can be sold in such offering within a
price range acceptable to the Initiating Holders (as specified in their
request for registration), the Company, except as provided in the following
sentence, will include in such registration, to the extent of the number and
type that the Company is so advised can be sold in such offering, Registrable
Securities requested to be included in such registration and securities held
by Unirail, LLC and entitled to registration rights pursuant to the
Registration Rights Agreement, dated September 30, 1999, between the Company
and Unirail, LLC, pro rata among the Selling Holders requesting such
registration and Unirail, LLC, on the basis of the estimated gross proceeds
from the sale thereof. If the total number of Registrable Securities
requested to be included in such registration cannot be included as provided
in the preceding sentence, holders of Registrable Securities requesting
registration thereof pursuant to Section 2.1, representing not less than
33-1/3% of the Registrable Securities with respect to which registration has
been requested and constituting not less than 66-2/3% of the Initiating Holders,
shall have the right to withdraw the request for registration by giving
written notice to the Company within 20 days after receipt of such notice by
the Company and, in the event of such withdrawal, such request shall not be
counted for purposes of the requests for registration to which holders of
Registrable Securities are entitled pursuant to Section 2.1 hereof. In
connection with any such registration to which this Section 2.1(e) is
applicable, no securities other than Registrable Securities or securities
held by Unirail, LLC and entitled to registration rights pursuant to the
Registration Rights Agreement, dated September 30, 1999, between the Company
and Unirail, LLC, shall be covered by such registration.
3
{PAGE}
(f) Limitations on Registration on
Request. Notwithstanding anything in this Section 2.1 or Section 2.3 to the
contrary, in no event will the Company be required to (i) effect, in the
aggregate, more than two registrations, or three registrations if the
Purchaser has purchased Preferred Stock from the Company pursuant to the
Stock Purchase Agreement for an aggregate purchase price of at least
$20,000,000, pursuant to this Section 2.1 or Section 2.3(d) (in respect of an
underwritten "take-down"), or (ii) effect more than one registration pursuant
to this Section 2.1 or Section 2.3(d) (in respect of an underwritten "take-
down") within the twelve-month period occurring immediately subsequent to the
effectiveness (within the meaning of Section 2.1(c)) of a registration
statement filed pursuant to this Section 2.1 or Section 2.3(d) (in respect of
an underwritten "take-down").
(g) Redesignation. In the case of
Registrable Securities which are not Class A Common Stock, upon the request
of holders of 51% of all such Registrable Securities to be covered by such
registration or if advised by the managing underwriter of such offering, the
Company shall reissue the Registrable Securities in denominations suitable
for public trading (by depositary share arrangements or otherwise).
(i) Expenses. The Company will pay all
Registration Expenses (except for any (x) underwriting commissions or
discounts or (y) legal expenses for conforming Preferred Stock which shall be
paid as set forth in Section 2.1(a)) in connection with any registration
requested pursuant to this Section 2.1.
2.2 Piggyback Registration.
(a) Right to Include Registrable
Securities. Following December 12, 2001, if the Company at any time proposes
to register any shares of Common Stock or any securities convertible into
Common Stock under the Securities Act by registration on any form other than
Forms S-4 or S-8, whether or not for sale for its own account, it will each
such time give prompt written notice to all holders of Registrable Securities
of its intention to do so and of such holders' rights under this Section 2.2.
Upon the written request of any such holder (a "Requesting Holder") made as
promptly as practicable and in any event within 10 days after the receipt of
any such notice, the Company will use its reasonable best efforts to effect
the registration under the Securities Act of all Registrable Securities that
the Company has been so requested to register by the Requesting Holders
thereof; provided that should a holder fail to provide timely notice to the
Company as to whether it wishes to participate in a registration, such holder
will forfeit any rights to participate in the registration with respect to
such proposed offering; provided, further, that prior to the effective date
of the registration statement filed in connection with such registration,
4
{PAGE}
immediately upon notification to the Company from the managing underwriter of
the price at which such securities are to be sold, if such price is below the
price that any Requesting Holder shall have indicated to be acceptable to
such Requesting Holder, the Company shall so advise such Requesting Holder of
such price, and such Requesting Holder shall then have the right to withdraw
its request to have its Registrable Securities included in such registration
statement; and, provided, further, that if, at any time after giving written
notice of its intention to register any securities and prior to the effective
date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or
to delay registration of such securities, the Company may, at its election,
give written notice of such determination to each Requesting Holder of
Registrable Securities and (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from any obligation
of the Company to pay the Registration Expenses in connection therewith),
without prejudice, however, (but subject to Section 2.7) to the rights of any
holder or holders of Registrable Securities entitled to do so to cause such
registration to be effected as a registration under Section 2.1, and (ii) in
the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in
registering such other securities. No registration effected under this
Section 2.2 shall relieve the Company of its obligation to effect any
registration upon request under Section 2.1. As between the Company and the
Requesting Holders, the Company shall be entitled to select the underwriters
in connection with any registration pursuant to this Section 2.2.
(b) Priority in Piggyback Registra-
tions. If the managing underwriter of any underwritten offering shall inform
the Company of its opinion that the number or type of Registrable Securities
requested to be included in such registration would materially adversely
affect the timing, price or distribution of such offering, and the Company
has so advised the Requesting Holders in writing, then the Company will
include in such registration, to the extent of the number and type that the
Company is so advised can be sold in (or during the time of) such offering,
first, all securities proposed by the Company to be sold for its own account,
second, such securities requested to be included in such registration by such
Persons having exercised "demand" registration rights pursuant to written
agreements with the Company in respect of such registration that require that
their securities be included in such registration, third, such Registrable
Securities requested to be included in such registration and (i) such
securities held by Robert Wheeler and entitled to registration rights
pursuant to the Stock Option Agreement, dated April 15, 1999, between the
Company and Robert Wheeler, (ii) such securities held by Geoffrey Chambers
and entitled to registration rights pursuant to the Stock Option Agreement,
dated April 15, 1999, between the Company and Geoffrey Chambers and (iii)
5
{PAGE}
such securities held by Unirail, LLC and entitled to registration rights
pursuant to the Registration Rights Agreement, dated September 30, 1999,
between the Company and Unirail, LLC, pro rata among the foregoing on the
basis of the estimated proceeds from the sale thereof, and fourth, all other
securities proposed to be registered.
(c) Expenses. The Company will pay all
Registration Expenses in connection with any registration effected pursuant
to this Section 2.2.
2.3 Shelf Registration
(a) Filing and Effectiveness of Shelf
Registration. Promptly following December 12, 2001, if requested by holders
of at least 25% of the Registrable Securities, if the Company is eligible to
use Form S-3 (or such successor form) the Company shall file an "evergreen"
shelf registration statement pursuant to Rule 415 under the Securities Act
(the "Shelf Registration") on Form S-3 (or any successor form) solely with
respect to (i) the Registrable Securities and (ii) to the extent requested,
securities held by Unirail, LLC and entitled to registration rights pursuant
to the Registration Rights Agreement, dated September 30, 1999, between the
Company and Unirail, LLC. The Company shall use its reasonable best efforts
to have the Shelf Registration declared effective as soon as reasonably
practicable after such filing, and shall use its reasonable best efforts to
keep the Shelf Registration effective and updated, from the date such Shelf
Registration is declared effective until such time as 80% of the Registrable
Securities included in such registration statement shall cease to be
Registrable Securities.
(b) Supplements and Amendments;
Expenses. The Company shall supplement or amend, if necessary, the Shelf
Registration, as required by the instructions applicable to such registration
form or by the Securities Act or as reasonably required by the holders of (or
any underwriter for) more than 50% of the Registrable Securities if such
holders have been advised by counsel that such amendment or supplement is
required to comply with the Securities Act and the Company shall furnish to
the holders of the Registrable Securities to which the Shelf Registration
relates copies of any such supplement or amendment prior to its being used
and/or filed with the Commission. The Company shall pay all Registration
Expenses in connection with the Shelf Registration, whether or not it becomes
effective, and whether all, none or some of the Registrable Securities are
sold pursuant to the Shelf Registration. In no event shall the Shelf
Registration include securities other than Registrable Securities and
securities held by Unirail, LLC and entitled to registration rights pursuant
to the Registration Rights Agreement, dated September 30, 1999, between the
6
{PAGE}
Company and Unirail, LLC, unless holders of more than 66-2/3% of the
Registrable Securities consent to such inclusion.
(c) Effective Shelf Registration
Statement. A Shelf Registration pursuant to this Section 2.3 shall not be
deemed to have been effected unless a Shelf Registration has become effective
and remained effective in compliance with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities and until
such time as 80% of the Registrable Securities included in such Shelf
Registration have been disposed of under the Shelf Registration.
(d) Underwritten Shelf "Take-Down". It
is expressly agreed and understood that for purposes of this Agreement any
subsequent underwritten "take-down" with respect to the Shelf Registration
shall constitute a registration for purposes of Section 2.1 and shall be
counted toward the number of registrations required to be effected by the
Company under Section 2.1(f); provided, however, that any subsequent "take-
downs" with respect to the Shelf Registration which are not underwritten
shall not constitute a registration for purposes of Section 2.1 and shall not
be counted toward the number of registrations required to be effected by the
Company under Section 2.1(f). The Company shall not be required to effect a
registration pursuant to Section 2.1 if the Company shall at the time have
effective a Shelf Registration pursuant to which the holders that requested
such registration could effect the disposition of such holders' Registrable
Securities in the manner requested.
(e) Limitation on Shelf Registrations.
Notwithstanding anything in this Section 2.3 to the contrary, in no event
shall the Company be required to effect more than one Shelf Registration
pursuant to this Section 2.3.
2.4 Registration Procedures. Subject to
Section 2.7, if and whenever the Company is required to effect the
registration of any Registrable Securities under the Securities Act as
provided in Sections 2.1, 2.2, and 2.3, the Company will, as expeditiously as
possible:
(i) use its reasonable best efforts to
prepare and (within 90 days after the end of the period within which
requests for registration may be given to the Company or in any event
as soon thereafter as is reasonably practicable) file with the
Commission the requisite registration statement to effect such
registration on any form for which the Company then qualifies and
which counsel for the Company shall deem appropriate and available
for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution
7
{PAGE}
thereof, and thereafter use its reasonable best efforts to cause such
registration statement to become effective; provided, however, the
Company will effect such registration statement on a Form S-3 and
pursuant to Rule 415 if the Company is eligible to use Form S-3 and
if requested by the Initiating Holders; and, provided, further, that
the Company may discontinue any registration of its securities that
are not Registrable Securities (and, under the circumstances
specified in Section 2.2(a), its securities that are Registrable
Securities) at any time prior to the effective date of the
registration statement relating thereto;
(ii) use its reasonable best efforts to
prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities covered
by such registration statement until the earlier of (a) such time as
all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or
sellers thereof set forth in such registration statement and (b) 180
days after the effective date of such registration statement, except
with respect to any registration statement filed pursuant to Rule 415
under the Securities Act if the Company is eligible to file a
registration statement on Form S-3, in which case the Company shall
use its best efforts to keep the registration statement effective and
updated, from the date such registration statement is declared
effective until such time as 80% of the Registrable Securities
included in such registration statement cease to be Registrable
Securities;
(iii) furnish to each seller of
Registrable Securities covered by such registration statement, such
number of conformed copies of such registration statement and of each
such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any
summary prospectus) 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, as such seller may
reasonably request;
(iv) use its reasonable best efforts (x)
to register or qualify all Registrable Securities and other
securities covered by such registration statement under such other
securities or blue sky laws of such States of the United States of
8
{PAGE}
America where an exemption is not available and as the sellers of
Registrable Securities covered by such registration statement shall
reasonably request, (y) to keep such registration or qualification in
effect for so long as such registration statement remains in effect
and (z) to take any other action that 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 or keep
such qualification in effect in any jurisdiction wherein it would not
but for the requirements of this subdivision (iv) be obligated to be
so qualified or to consent to general service of process or subject
itself to taxation in any such jurisdiction;
(v) 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 seller or
sellers of Registrable Securities to enable the seller or sellers
thereof to consummate the disposition of such Registrable Securities;
(vi) in the case of an underwritten or
"best efforts" offering, furnish at the effective date of such
registration statement to each seller of Registrable Securities, and
each such seller's underwriters, if any, a signed counterpart of:
(x) an opinion of counsel for
the Company, dated the effective date of such registration
statement and, if applicable, the date of the closing under
the underwriting agreement, and
(y) a "comfort" letter signed
by the independent public accountants who have certified the
Company's financial statements included or incorporated by
reference in such registration statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in
the case of the accountants' comfort letter, with respect to events
subsequent to the date of such financial statements, as are customa-
rily covered in opinions of issuer's counsel and in accountants'
comfort letters delivered to the underwriters in underwritten public
offerings of securities and, in the case of the accountants' comfort
letter, such other financial matters, and, in the case of the legal
9
{PAGE}
opinion, such other legal matters, as the underwriters may reasonably
request;
(vii) cause representatives of the
Company to participate in any "road show" or "road shows" reasonably
requested by any underwriter of an underwritten or "best efforts"
offering of any Registrable Securities; provided that such offering
relates to at least 25% of the Registrable Securities;
(viii) notify each seller of Registrable
Securities covered by such registration statement at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any
event as a result of which, the prospectus included in such registra-
tion 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 not
misleading, in the light of the circumstances under which they were
made, and at the request of any such seller 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 not misleading in the light
of the circumstances under which they were made;
(ix) otherwise use its reasonable best
efforts to comply with all applicable rules and regulations of the
Commission, and, if required, make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months,
beginning with the first full calendar month after the effective date
of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 promulgated thereunder, and promptly furnish to each such
seller of Registrable Securities a copy of any amendment or
supplement to such registration statement or prospectus;
(x) provide and cause to be maintained
a transfer agent and registrar (which, in each case, may be the
Company) for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of
such registration; and
10
{PAGE}
(xi) use its reasonable best efforts to
list all Registrable Securities covered by such registration
statement on the NASDAQ or any national securities exchange on which
Registrable Securities of the same class covered by such registration
statement are then listed and, if no such Registrable Securities are
so listed, on the NASDAQ or any national securities exchange on which
the Class A Common Stock is then listed.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to promptly furnish in writing to the Company
such information regarding such seller and the distribution of such
securities as the Company may from time to time reasonably request in
writing; provided, that any such information or questionnaires shall be given
or made by a seller of Registrable Securities without representation or
warranty of any kind whatsoever except representations with respect to the
identity of such seller, such seller's Registrable Securities and such
seller's intended method of distribution or any other representations
required by applicable law.
Each holder of Registrable Securities agrees by acquisition
of such Registrable Securities that, upon receipt of any notice from the
Company of the happening of any event of the kind described in subdivision
(viii) of this Section 2.4, such holder will forthwith discontinue such
holder's disposition of Registrable Securities pursuant to the registration
statement relating to such Registrable Securities until such holder's receipt
of the copies of the supplemented or amended prospectus contemplated by
subdivision (viii) of this Section 2.4 and, if so directed by the Company,
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such holder's possession of the prospectus
relating to such Registrable Securities current at the time of receipt of
such notice.
2.5 Underwritten Offerings.
(a) Requested Underwritten Offerings.
If requested by the underwriters for any underwritten offering by holders of
Registrable Securities pursuant to a registration requested under Section
2.1, the Company will use its reasonable best efforts to enter into an
underwriting agreement with such underwriters for such offering, such
agreement to be reasonably satisfactory in substance and form to a majority
of such holders and the underwriters and to contain such representations and
warranties by the Company and such other terms as are generally prevailing in
agreements of that type, including, without limitation, indemnities to the
effect and to the extent provided in Section 2.8. The holders of the
Registrable Securities proposed to be sold by such underwriters will
reasonably cooperate with the Company in the negotiation of the underwriting
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{PAGE}
agreement. Such holders of Registrable Securities to be sold by such
underwriters shall be parties to such underwriting agreement and may, at
their option, require that any or all of the representations and warranties
by, and the other agreements on the part of, the Company to and for the
benefit of such underwriters shall also be made to and for the benefit of
such holders of Registrable Securities and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such holders of
Registrable Securities. No holder of Registrable Securities shall be
required to make any representations or warranties to, or agreements with,
the Company other than representations, warranties or agreements regarding
the absence of litigation against the holder in respect of its intended
distribution of Registrable Securities, the identity of such holder, such
holder's due organization and good standing, such holder's authority to
execute and deliver the underwriting agreement, such holder's Registrable
Securities (including title and absence of liens) and such holder's intended
method of distribution or any other representations required by applicable
law.
(b) Piggyback Underwritten Offerings.
If the Company proposes to register any of its securities under the
Securities Act as contemplated by Section 2.2 and such securities are to be
distributed by or through one or more underwriters, the Company will, if
requested by any Requesting Holder of Registrable Securities, use its
reasonable best efforts to arrange for such underwriters to include all the
Registrable Securities to be offered and sold by such Requesting Holder among
the securities of the Company to be distributed by such underwriters, subject
to the provisions of Section 2.2(b). The holders of Registrable Securities
to be distributed by such underwriters shall be parties to the underwriting
agreement between the Company and such underwriters and may, at their option,
require that any or all of the representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such holders of Registrable
Securities. No holder of Registrable Securities shall be required to make
any representations or warranties to, or agreements with, the Company or the
underwriters other than representations, warranties or agreements regarding
the absence of litigation against the holder in respect of its intended
distribution of Registrable Securities, the identity of such holder, such
holder's due organization and good standing, such holder's authority to
execute and deliver the underwriting agreement, such holder's Registrable
Securities (including title and absence of liens) and such holder's intended
method of distribution or any other representations required by applicable
law.
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(c) Underwriting Discounts and
Commission. The holders of Registrable Securities sold in any offering
pursuant to Section 2.5(a) or Section 2.5(b) shall pay all underwriting
discounts and commissions of the underwriter or underwriters with respect to
the Registrable Securities sold thereby.
2.6 Preparation; Reasonable Investigation. In
connection with the preparation and filing of each registration statement
under the Securities Act pursuant to this Agreement, the Company will give
the holders of Registrable Securities registered under such registration
statement, their underwriters, if any, and their respective counsel the
opportunity to review such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such reasonable access to its
books and records and such opportunities to discuss the business of the
Company with its officers and the independent public accountants who have
certified its financial statements as shall be necessary, in the opinion of
such holders' and such underwriters' respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act; provided,
however that (A) such holders, underwriters and counsel agree in writing to
keep all non-public information confidential and to use such information only
in accordance with applicable law and (B) unless the disclosure of such
information is necessary to avoid or correct a material misstatement or
omission in the registration statement or the release of such information is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, the Company shall not be required to provide any information
pursuant to this Section 2.6 if (i) the Company is advised by counsel for the
Company, that to do so would cause the Company to forfeit an attorney-client
privilege that was applicable to such information or (ii) if either (A) the
Company has requested and been granted from the Commission confidential
treatment of such information contained in any filing with the Commission or
documents provided supplementally or otherwise or (B) the Company reasonably
determines in good faith that such information is confidential and so
notifies the holders in writing unless prior to furnishing any such
information with respect to clause (ii) such holders and their
representatives agree to enter into a confidentiality agreement in customary
form and subject to customary exceptions.
2.7 Limitations, Conditions and Qualifications
to Obligations under Registration Covenants. The Company shall be entitled
to (A) postpone, for a reasonable period of time (but not exceeding an
aggregate of 90 days within any 360 day period), the filing or updating of
any registration statement otherwise required to be prepared and filed by it
pursuant to Section 2.1 or (B) take such actions that would result in holders
of Registrable Securities not being able to offer or sell Registrable
Securities pursuant to registration for a reasonable period of time, if (i)
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the Company determines, in its good faith judgment, that such registration or
offering would (x) require the disclosure of material information for which
the Company or any of its subsidiaries has a bona fide business reason for
preserving as confidential (provided that the period for which holders of
Registrable Securities shall not be able to offer or sell Registrable
Securities pursuant to registration in accordance with this Section
2.7(B)(i)(x) shall not exceed 15 days within any 360 day period) or (y)
interfere with any material financing, acquisition, corporate reorganization
or other material transaction involving the Company or any of its affiliates
(provided that the period for which holders of Registrable Securities shall
not be able to offer or sell Registrable Securities pursuant to registration
in accordance with this Section 2.7(B)(i)(y), together with any period under
Section 2.7(B)(i)(x), shall not exceed 90 days in any 360 day period) or (ii)
if (A) the effective date of any registration statement would otherwise be at
least 45 calendar days, but fewer than 90 calendar days, after the end of the
Company's fiscal year and (B) the Securities Act requires the Company to
include audited financials as of the end of such fiscal year, the Company may
delay the effectiveness of such registration statement for such period as is
reasonably necessary to include therein the audited financial statements for
such fiscal year (but in no event shall the Company delay more beyond 90
calendar days after the Company's fiscal year), and, in each case, promptly
gives the holders of Registrable Securities requesting registration thereof
written notice of such determination, containing a general statement of the
reasons for such postponement or such actions, as the case may be, and an
approximation of the anticipated delay; provided, that the number of days of
any actual Suspension Period (as hereinafter defined) shall be added on to
the end of the periods specified in Section 2.1(c)(i) or 2.4(ii). Any such
period during which the Company is excused from filing, updating or keeping
the registration statement effective and usable for offers and sales of
Registrable Securities is referred to herein as a "Suspension Period". A
Suspension Period shall commence on and include the date that the Company
gives notice that the registration statement is no longer effective or the
prospectus included therein is no longer usable for offers and sales of
Registrable Securities and shall end on the date on which each seller of
Registrable Securities covered by the registration statement either receives
copies of the supplemented or amended prospectus contemplated by Section
2.4(viii) hereof or is advised in writing by the Company that the use of the
prospectus may be resumed. Notwithstanding anything to the contrary in this
Section 2.7, in no event shall Suspension Periods be in effect for more than
an aggregate of 90 days in any 360 day period. If the Company shall so
postpone the filing of a registration statement, holders of Registrable
Securities requesting registration thereof pursuant to Section 2.1,
representing not less than 33-1/3% of the Registrable Securities with respect
to which registration has been requested and constituting not less than 66-2/3%
of the Initiating Holders, shall have the right to withdraw the request for
registration by giving written notice to the Company within 30 days after
14
{PAGE}
receipt of the notice of postponement and, in the event of such withdrawal,
such request shall not be counted for purposes of the requests for
registration to which holders of Registrable Securities are entitled pursuant
to Section 2.1 hereof.
2.8 Indemnification.
(a) Indemnification by the Company.
The Company will, and hereby does, indemnify and hold harmless, in the case
of any registration statement filed pursuant to Section 2.1, 2.2 or 2.3, each
seller of any Registrable Securities covered by such registration statement
and each other Person, if any, who participates as an underwriter in the
offering or sale of such securities and each other Person, if any, who
controls such seller or any such underwriter within the meaning of the
Securities Act, and their respective directors, officers, partners, members,
agents and affiliates against any losses, claims, damages or liabilities,
joint or several, to which such seller or underwriter or any such director,
officer, partner, member, agent, affiliate or controlling person may become
subject under the Securities Act or otherwise, including, without limitation,
the reasonable fees and expenses of legal counsel (including those incurred
in connection with any claim for indemnity hereunder), insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made,
not misleading, and the Company will reimburse such seller or underwriter and
each such director, officer, partner, member, agent, affiliate and
controlling Person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or alleged untrue state-
ment or omission or alleged omission made in such registration statement, any
such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such seller or underwriter, as
the case may be, specifically stating that it is for use in the preparation
thereof; and provided further, that the Company shall not be liable to any
Person who participates as an underwriter in the offering or sale of
Registrable Securities or any other Person, if any, who controls such under-
15
{PAGE}
writer within the meaning of the Securities Act, or, to the extent required
by law, Selling Stockholder, in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding, in respect thereof)
or expense arises out of such Person's or Selling Stockholder's, as the case
may be, failure to send or give a copy of the final prospectus, as the same
may have been supplemented or amended, to the Person asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to
such Person if such statement or omission was corrected in such final
prospectus and such Person or Selling Stockholder, as the case may be, was
required by law to send or give a copy of a prospectus to the Person making
such assertions. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such seller or any
such director, officer, partner, member, agent or controlling person and
shall survive the transfer of such securities by such seller.
(b) Indemnification by the Sellers. As
a condition to including any Registrable Securities in any registration
statement, the Company shall have received an undertaking satisfactory to it
from the prospective seller of such Registrable Securities, to indemnify and
hold harmless (in the same manner and to the same extent as set forth in
Section 2.8(a)) the Company, and each director of the Company, each officer
of the Company and each other Person, if any, who participates as an
underwriter in the offering or sale of such securities and each other Person
who controls the Company or any such underwriter within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such seller
specifically stating that it is for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement; provided, however, that the liability of
such indemnifying party under this Section 2.8(b) shall be limited to the
amount of the net proceeds received by such indemnifying party in the
offering giving rise to such liability. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly
after receipt by an indemnified party of notice of the commencement of any
action or proceeding (including any governmental investigation) involving a
claim referred to in Section 2.8(a) or (b), such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party, give
16
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written notice to the latter of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 2.8, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it may wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that
any indemnified party may, at its own expense, retain separate counsel to
participate in such defense. Notwithstanding the foregoing, in any action or
proceeding in which both the Company and an indemnified party is, or is
reasonably likely to become, a party, such indemnified party shall have the
right to employ separate counsel at the Company's expense and to control its
own defense of such action or proceeding if, in the reasonable opinion of
counsel to such indemnified party, (a) there are or may be legal defenses
available to such indemnified party or to other indemnified parties that are
different from or additional to those available to the Company or (b) any
conflict or potential conflict exists between the Company and such
indemnified party that would make such separate representation advisable;
provided, however, that in no event shall the Company be required to pay fees
and expenses under this Section 2.8 for more than one firm of attorneys in
any jurisdiction in any one legal action or group of related legal actions.
No indemnifying party shall be liable for any settlement of any action or
proceeding effected without its written consent, which consent shall not be
unreasonably withheld unless the indemnifying party shall have agreed in
writing in a form satisfactory to the indemnified party to pay any amount
(and not challenge an indemnified party's right to indemnification under this
Section 2.8) required to be paid to settle a claim, in which case the
indemnifying party may grant or withhold its consent in its sole discretion.
No indemnifying party shall, without the prior written consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation or which requires action
other than the payment of money by the indemnifying party.
(d) Contribution. If the indemnifica-
tion provided for in this Section 2.8 shall for any reason be held by a court
to be unavailable to an indemnified party under Section 2.8(a) or (b) hereof
in respect of any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under Section 2.8(a) or
(b), the indemnified party and the indemnifying party under Section 2.8(a) or
(b) shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
17
{PAGE}
investigating the same, including those incurred in connection with any claim
for indemnity hereunder), (i) in such proportion as is appropriate to reflect
the relative fault of the Company and the prospective sellers of Registrable
Securities covered by the registration statement which resulted in such loss,
claim, damage or liability, or action or proceeding in respect thereof, with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action or proceeding in respect thereof, as well as
any other relevant equitable considerations or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as shall be appropriate to reflect the relative benefits received
by the Company and such prospective sellers from the offering of the
securities covered by such registration statement; provided, however, that
for purposes of this clause (ii), the relative benefits received by the
prospective sellers shall be deemed not to exceed the amount of proceeds
received by such prospective sellers. 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. Such prospective sellers' obligations to con-
tribute as provided in this Section 2.8(d) are several in proportion to the
relative value of their respective Registrable Securities covered by such
registration statement and not joint. In addition, no Person shall be
obligated to contribute hereunder any amounts in payment for any settlement
of any action or claim effected without such Person's consent, which consent
shall not be unreasonably withheld.
(e) Other Indemnification. Indemnifi-
cation and contribution similar to that specified in the preceding
subdivisions of this Section 2.8 (with appropriate modifications) shall be
given by the Company and each seller of Registrable Securities with respect
to any required registration or other qualification of securities under any
federal or state law or regulation of any governmental authority other than
the Securities Act.
(f) Indemnification Payments. The
indemnification and contribution required by this Section 2.8 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
3 Definitions. As used herein, unless the context
otherwise requires, the following terms have the following respective
meanings:
"Certificate of Designation" means the Certificate of
Designation of the Series A Preferred Stock.
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"Class A Common Stock" means the Class A Common Stock of the
Company, par value $.01 per share, and having one vote per share.
"Class B Common Stock" means the Class B Common Stock of the
Company, par value $.01 per share, and having ten votes per share.
"Commission" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Class A Common Stock and the
Class B Common Stock, and each other class of capital stock of the Company
into which such stock is reclassified or reconstituted.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any other similar Federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Securities Exchange Act of 1934, as
amended, shall include a reference to the comparable section, if any, of any
such similar Federal statute.
"Person" means any individual, firm, corporation,
partnership, limited liability company, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind, and shall include
any successor (by merger or otherwise) of any such entity.
"Registrable Securities" means (i) any shares of Class A
Common Stock issued or issuable upon conversion or exchange of the Preferred
Stock, (ii) if the Purchaser has purchased Preferred Stock from the Company
pursuant to the Stock Purchase Agreement for an aggregate purchase price of
at least $25,000,000, the Preferred Stock and (iii) any Related Registrable
Securities. As to any particular Registrable Securities, once issued, such
securities shall cease to be Registrable Securities when (a) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (b) they shall
have been sold as permitted by Rule 144 (or any successor provision) under
the Securities Act and the purchaser thereof does not receive "restricted
securities" as defined in Rule 144, (c) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting
further transfer shall have been delivered by the Company and subsequent
public distribution of them shall not, in the opinion of counsel for the
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