EXHIBIT 10.5
EXECUTION COPY
SUBORDINATE REGISTRATION RIGHTS AGREEMENT
Dated as of September 10, 2001
by and between
IESI CORPORATION,
and
THE STOCKHOLDERS
TABLE OF CONTENTS
PAGE
1. DEFINITIONS...........................................................1
2. REQUESTED REGISTRATIONS...............................................3
3. PIGGYBACK REGISTRATION RIGHTS.........................................5
(a) Piggyback Registration Rights................................5
(b) Priority on Registrations....................................5
(c) Other Registrations..........................................6
4. RESTRICTIONS ON PUBLIC SALE BY PURCHASER..............................6
5. REGISTRATION PROCEDURES...............................................6
6. REGISTRATION EXPENSES.................................................8
7. INDEMNIFICATION; CONTRIBUTION.........................................9
(a) Indemnification by the Company...............................9
(b) Indemnification by the Selling Stockholders..................9
(c) Conduct of Indemnification Proceedings.......................9
(d) Contribution................................................10
8. RULE 144 SALES.......................................................10
9. MISCELLANEOUS........................................................11
(a) Listing Application.........................................11
(b) Damages.....................................................11
(c) Amendments and Waivers......................................11
(d) Notices.....................................................11
(e) Successors and Assigns......................................11
(f) Counterparts................................................11
(g) Headings....................................................11
(h) Governing Law...............................................11
(i) Severability................................................11
(j) Entire Agreement............................................11
(k) Attorneys' Fees.............................................12
(l) No Inconsistent Agreements..................................12
(m) Enforcement.................................................12
(n) Government Approvals........................................12
(o) Certain Additional Matters..................................12
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SUBORDINATE REGISTRATION RIGHTS AGREEMENT
This
SUBORDINATE REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT"),
dated as of September 10, 2001 (the "EFFECTIVE DATE"), is made and entered into
by and among IESI Corporation, a Delaware corporation (the "COMPANY"), and the
stockholders named on the signature pages hereto (collectively, the
"STOCKHOLDERS").
WITNESSETH:
WHEREAS, certain stockholders of the Company entered into a
Registration Rights Agreement, dated as of May 22, 1998 (the "ORIGINAL
AGREEMENT"), which was made in connection with the second Amended and Restated
Stockholders' Agreement dated as of even date therewith by and between the
Company and the stockholders of the Company, and the Stock Purchase Agreement of
even date therewith between the Company and the purchasers named therein;
WHEREAS, certain stockholders of the Company entered into an Amended
and Restated Registration Rights Agreement, dated as of December 15, 1998 (the
"AMENDED AGREEMENT"), which was made in connection with the third Amended and
Restated Stockholders' Agreement dated as of even date therewith by and between
the Company, the stockholders of the Company and a certain warrant holder, and
the Stock Purchase Agreement of even date therewith between the Company and the
purchasers named therein;
WHEREAS, certain stockholders of the Company entered into an Amended
and Restated Registration Rights Agreement, dated as of June 30, 1999 (the
"SECOND AMENDED AGREEMENT"), which was made in connection with the fourth
Amended and Restated Stockholders' Agreement dated as of even date therewith by
and between the Company, the stockholders of the Company and a certain warrant
holder, and the Stock Purchase Agreement of even date therewith between the
Company and the purchasers named therein;
WHEREAS, the Company has entered into a Stock Purchase Agreement,
dated September 10, 2001 and anticipates entering into a subsequent Stock
Purchase Agreement on or before December 31, 2001 (collectively, the "FOURTH
PURCHASE AGREEMENT"), with certain parties hereto, pursuant to which on the
Closing Date (as defined in each Fourth Purchase Agreement), the Company shall
issue and deliver shares of Series D Convertible Preferred Stock to each
purchaser thereof on the terms and conditions provided in the Fourth Purchase
Agreement;
WHEREAS, the Company will use its best efforts to obtain the
signatures of all parties to the New Registration Rights Agreement (as defined
below) which amends and restates the Original Agreement, the Amended Agreement
and the Second Amended Agreement;
WHEREAS, until such New Registration Rights Agreement becomes
effective, the Stockholders and the Company desire to enter into this Agreement
on the terms and conditions set forth below;
NOW THEREFORE, in consideration of the mutual agreements set forth
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. DEFINITIONS.
Except as set forth below, or as otherwise defined in this Agreement,
all capitalized terms shall have the meanings ascribed to them below:
"Act" means the Securities Act of 1933, as amended, or any other
federal statute in effect from time to time corresponding to such Act, and the
rules and regulations promulgated thereunder, all as the same shall be in effect
at the time.
"Advice" is defined in the last paragraph of Section 5.
"Agreement" is defined in the preamble.
"Amended Agreement" is defined in the second recital.
"Class B Stock" means the Class B Nonvoting Common Stock, par value
$.01 per share, of the Company.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Act.
"Common Stock" means the shares of the Class A Voting Common Stock,
par value $.01 per share, of the Company.
"Company" is defined in the preamble.
"Effective Date" is defined in the preamble.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar federal statute in effect from time to time corresponding to such
Exchange Act, and the rules and regulations promulgated thereunder, all as the
same shall be in effect at the time.
"Fourth Purchase Agreement" is defined in the fourth recital.
"HSR" is defined in Section 9(n).
"Initiating Holder" means any Stockholder, group of Stockholders, or
their assignees who in the aggregate own beneficially at least fifteen percent
(15%) of the Registrable Common Stock.
"New Registration Rights Agreement" is defined in Section 9(o).
"Notices" is defined in Section 3(a).
"Original Agreement" is defined in the first recital.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Preferred Stock" shall mean the Series A Preferred Stock, the Series
B Preferred Stock, the Series C Preferred Stock and the Series D Preferred
Stock.
"Register" means to register under the Act and applicable state
securities laws for the purpose of effecting a public sale of securities.
"Registrable Common Stock" means the Common Stock presently owned by
each Stockholder, and any additional shares of Common Stock acquired by any
Stockholder after the Effective Date, including Common Stock received upon any
conversion of shares of Preferred Stock into shares of Common Stock, any shares
of Common Stock received upon exercise of any warrants to purchase Common Stock,
any Common Stock issued in respect of shares of Common Stock upon any stock
split, stock dividend, recapitalization or other similar events and any shares
of Class B Stock of the Company held by a Stockholder, PROVIDED, that the holder
of the Class B Stock requesting registration shall agree to convert such Class B
Stock requested to be registered into Common Stock immediately upon
effectiveness of the requested registration statement; and PROVIDED FURTHER,
that Common Stock or Class B Stock held by a Stockholder shall cease to be
Registrable Common Stock, when (i) such Common Stock or Class B Stock is sold
pursuant to a registration statement filed under the Act or pursuant to Rule 144
under the Act, or (ii) the Company delivers to such Stockholder an opinion of
counsel satisfactory to such
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Stockholder, to the effect that such Common Stock may be publicly offered
without registration under the Act without restriction under Rule 144 or
otherwise. For purposes of this Agreement, a Person shall be deemed to be a
holder of Registrable Common Stock whenever such Person has the right to acquire
Registrable Common Stock (upon conversion or exercise), whether or not such
acquisition has actually been effected.
"Registration Expenses" is defined in Section 6.
"Registration Right Effective Date" means the first date after the
date of closing of the first public offering of Common Stock Registered with the
Commission under the Act that Stockholders or the Company can sell Common Stock
without violating or requesting a waiver of any agreements entered into by the
Company and/or any Stockholder and the underwriter(s) for such first public
offering of Common Stock.
"Second Amended Agreement" is defined in the third recital.
"Selling Expenses" means all underwriting discounts and selling
commissions applicable to the sale of the Registrable Common Stock.
"Selling Stockholder" means a Stockholder requesting registration of
Common Stock under this Agreement.
"Series A Preferred Stock" shall mean shares of the Series A
convertible preferred stock of the Company, par value $1.00 per share.
"Series B Preferred Stock" shall mean shares of the Series B
convertible preferred stock of the Company, par value $1.00 per share.
"Series C Preferred Stock" shall mean shares of the Series C
convertible preferred stock of the Company, par value $1.00 per share.
"Series D Preferred Stock" shall mean shares of the Series D
convertible preferred stock of the Company, par value $1.00 per share.
"Stockholders" is defined in the preamble.
2. REQUESTED REGISTRATIONS.
(a) If on any three occasions on or after the earlier of the date of the
Company's initial public offering or June 25, 2004, the Company shall receive
from one or more Initiating Holders a written request that the Company effect
the registration of Registrable Common Stock representing at least fifteen
percent (15%) of the Registrable Common Stock then outstanding or issuable (or
any lesser percentage if the reasonably anticipated aggregate price to the
public of the Registrable Common Stock to be included in such registration would
exceed $5 million), in connection with a firm commitment underwriting managed by
a nationally recognized underwriter, the Company will:
(i) promptly give written notice of the proposed registration to all
other Stockholders; and
(ii) as soon as practicable, use all commercially reasonable efforts
to effect such registration as may be so requested and as would permit or
facilitate the sale and distribution of such portion of such Registrable Common
Stock as are specified in such request, together with such portion of the
Registrable Common Stock of any Stockholder or Stockholders joining in such
request as are specified in a written request given within thirty days after
receipt of such written notice from the Company. If the underwriter managing the
offering advises the Stockholders who have requested inclusion of their
Registrable Common Stock in such registration that marketing considerations
require a
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limitation on the number of shares offered, such limitation shall be imposed PRO
RATA among such Stockholders who requested inclusion of Registrable Common Stock
in such registration according to the number of Registrable Common Stock owned
by each of such Stockholders. Neither the Company nor any other Person
(excluding Stockholders) may include shares in a registration effected under
this Section 2 without the consent of the Stockholders holding a majority of the
shares of Registrable Common Stock sought to be included in such registration if
the inclusion of shares by the Company or the other Persons would, in the
judgment of the managing underwriter, limit the number of shares of Registrable
Common Stock sought to be included by the Stockholders or reduce the offering
price thereof. No registration initiated by Initiating Holders hereunder shall
count as a registration under this Section 2: (1) unless and until it shall have
been declared effective, and (2) if such Initiating Holders fail to Register and
sell at least 67% of the Registrable Common Stock requested to be included in
such registration by such Initiating Holders in their initial registration
request relating to such registration.
(b) Notwithstanding the provisions of subparagraph (a) of this Section 2,
the Company shall not be obligated to take any action to effect any registration
pursuant thereto:
(i) Within the 120-day period immediately following the effective
date of the registration statement pertaining to the first underwritten public
offering of securities of the Company for its own account (other than a
registration relating solely to a transaction under Rule 145 under the Act or a
registration relating solely to employee benefit plans);
(ii) After the Company has effected three registrations pursuant to
this Section 2, and such registrations have been declared or ordered effective
and have not been withdrawn or suspended during the first 90 days after such
registrations have been declared or ordered effective; or
(iii) If at the time of the request, the Initiating Holders could sell
all of the Registrable Common Stock requested to be Registered under Rule 144
without restrictions.
(c) The holders of a majority of the Common Stock included in any
registration requesting registration under this Section 2 shall have the right
to select the investment banker(s) and manager(s) to administer the offering,
subject to the Company's approval, which shall not be unreasonably withheld,
provided that, unless the Company otherwise consents, the lead investment banker
shall be from one of the ten firms, which in the immediately preceding calendar
year managed the ten highest volumes of equity security offerings or a firm that
has previously managed or administered (alone or with others) an equity security
offering for the Company.
(d) Except for the rights to request the Company to Register any equity
securities of the Company granted to certain stockholders of the Company under
the Second Amended Agreement, the Company shall not grant to any Persons any
rights to request the Company to Register any equity securities of the Company,
or any securities convertible or exchangeable into or exercisable for such
securities, unless such rights are expressly designated as subordinate and
junior to (including, without limitation, rights with respect to underwriter
cutbacks or similar limitations) those granted hereunder.
(e) In the event any holder of Registrable Common Stock is participating
in an underwritten offering pursuant to a registration effected under Section 2
or 3 hereof, such holder shall be party to the applicable underwriting agreement
and shall provide customary representations, warranties and other agreements,
and shall be responsible for its pro rata share of any underwriting fees,
commissions or discounts payable to the underwriters.
(f) If the Company (i) shall furnish to the Initiating Holders a
certificate, signed by the President of the Company, stating that the Board of
Directors has in good faith adopted a resolution stating that it would be
inimical to the best interests of the stockholders for a public offering to
proceed,
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(ii) desires to postpone filing a registration statement in order to be able to
include in such filing audited year-end financing statements prepared in the
ordinary course of preparing its annual report to stockholders (including on
form 10-K or such other applicable form), or (iii) gives notice to the
Initiating Holders, within thirty (30) days of the receipt of a request given
pursuant to Section 2(a), that it is engaged or has fixed plans to engage in an
initial firmly underwritten registered public offering within thirty (30) days
of the notice date, then the Company may delay a requested registration for not
more than 90 days, provided that such delay may be invoked on not more than two
occasions and on not more than one occasion within any twelve-month period.
3. PIGGYBACK REGISTRATION RIGHTS
(a) PIGGYBACK REGISTRATION RIGHTS. If at any time after the Registration
Right Effective Date the Company proposes to Register any of the Common Stock
under the Act for sale, either for its own account or the account of a
Stockholder, for cash (other than a registration on Form ▇-▇, ▇-▇ or any similar
form), it will serve written notice of such proposed registration to the
Stockholders at least 30 days before the anticipated filing date, which notice
shall include the number of shares of Common Stock the Company or other security
holder proposes to Register and, if known, the proposed underwriter. Written
notices served by the Company pursuant to the preceding sentence of this Section
3(a) shall be referred to hereinafter as "NOTICES." Subject to the restrictions
and in accordance with the procedures set forth below, the Company will use its
best efforts to include in any registration to which a Notice relates all
Registrable Common Stock with respect to which the Company has received written
requests for inclusion therein within 20 days after the receipt of the Notice.
Nothing set forth in this Section 3 shall obligate the Company to file any
registration statement unless the Board of Directors approves such filing.
(b) PRIORITY ON REGISTRATIONS.
(i) Notwithstanding the provisions of Section 3(a) hereof, in the
case of an underwritten offering, the managing underwriter or underwriters of
the registration may limit the number of shares of Common Stock included in the
underwritten offering if, in its or their opinion, the number of shares of
Common Stock requested to be sold in such underwritten offering exceeds the
number that can be sold without materially adversely affecting the price at
which such securities could be sold. In the event the number is to be so limited
in the underwritten offering, a sufficient number of shares of Common Stock
shall be eliminated to reduce the total amount of shares of Common Stock to be
included in such underwritten offering to the amount recommended by such
underwriter. In reducing the amount of shares of Common Stock to be included in
such underwritten offering, the Company will include in such underwritten
offering (A) first, all shares of Common Stock the Company proposes to sell, (B)
second, all Registrable Common Stock beneficially owned by any Stockholder
requested to be included in the underwritten offering and shares of Common Stock
requested to be included by other holders of Common Stock, who are stockholders
on the date hereof and who have registration rights in respect thereof PARI
PASSU with the registration rights granted hereby, reduced PRO RATA according to
the number of shares of Common Stock beneficially owned by each such
stockholder; and (C) third, other shares of Common Stock requested to be
included in such registration.
(ii) The Company shall use its best efforts to enable the Registrable
Common Stock of the Stockholders, if inclusion in an underwritten offering is
properly requested, to be included in such underwritten offering; PROVIDED,
HOWEVER, that the Company will not be required to pay any Selling Expenses with
respect to the sale of such Registrable Common Stock. If such Selling
Stockholder's Registrable Common Stock is not included in the underwritten
offering, the Company shall nonetheless use its best efforts to enable such
Selling Stockholder's Registrable Common Stock to be sold in accordance with the
intended methods of distribution without inclusion in the underwriting, subject
to the provision contained in the preceding sentence.
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(c) OTHER REGISTRATIONS. If the Company has previously filed a
registration statement with respect to Registrable Common Stock pursuant to
Section 2, and if such previous registration has not been withdrawn or
abandoned, the Company shall not announce, file or cause to be effected any
other registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (except on Form S-8 or any successor form), whether on its own behalf or at
the request of any holder or holders of such securities, until a period of at
least 90 days has elapsed from the effective date of such previous registration.
4. RESTRICTIONS ON PUBLIC SALE BY PURCHASER.
To the extent not inconsistent with applicable law, the Selling
Stockholders agree not to effect any public sale or distribution of Common Stock
(including Registrable Common Stock not included in an underwritten offering
pursuant to Section 3(b)(ii) above) or a similar security of the Company or any
securities convertible into or exchangeable or exercisable for such securities,
during the seven days prior to, and during the 90-day period beginning on, the
effective date of such registration statement (except as part of such
registration), if and to the extent requested in writing (with reasonable prior
notice), by (i) the Company in the case of a non-underwritten public offering by
the Company, (ii) or the managing underwriter or underwriters in the case of an
underwritten public offering. The Company may impose stop-transfer instructions
with respect to its Common Stock subject to the restrictions in this Section 4
until the end of such 90-day period.
5. REGISTRATION PROCEDURES.
Whenever any Registrable Common Stock is to be Registered pursuant to
Sections 2 or 3 hereof, the Company will use its best efforts to effect the
registration and the sale of such Registrable Common Stock in accordance with
the intended method of disposition of the Selling Stockholders as quickly as
practicable, and in connection with any such request, the Company will as
expeditiously as possible:
(a) prepare and file with the Commission a registration statement which
includes the Registrable Common Stock and use its best efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company shall furnish to the counsel selected by the holders of a majority
of the Registrable Common Stock covered by such registration statement copies of
all such documents proposed to be filed, which documents shall be subject to the
review and comments of such counsel);
(b) prepare and file with the Commission such amendments and
post-effective amendments to the registration statement and prospectus used in
connection therewith as may be necessary to keep the registration statement
effective for a period of not less than 120 days (or such shorter period as
shall be necessary to permit the Selling Stockholders to complete the
distribution of the Registrable Common Stock to which such registration
statement relates in accordance with their intended methods of distribution) and
to comply with the provisions of the Act and the rules and regulations
thereunder with respect to the disposition of all Registrable Common Stock
covered by the registration statement for the period required to effect the
distribution thereof, but in no event shall the Company be required to do so for
a period of more than 120 days following the effective date of such registration
statement;
(c) furnish to the Selling Stockholders and the underwriter or
underwriters, if any, and to counsel to the Selling Stockholders and
underwriters, without charge, such number of conformed copies of the
registration statement and any post-effective amendment thereto, upon request,
and such number of copies of the prospectus (including each preliminary
prospectus) and any amendments or supplements thereto, and any documents
incorporated by reference therein, as the Selling Stockholders or such
underwriter(s) may reasonably request in order to facilitate the disposition of
the Registrable Common
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Stock being sold by the Selling Stockholders (it being understood that the
Company consents to the use of the prospectus and any amendment or supplement
thereto by the Selling Stockholders and the underwriter or underwriters, if any,
in connection with the offering and sale of the Registrable Common Stock covered
by the prospectus or any amendment or supplement thereto);
(d) notify the Selling Stockholders and the underwriters, if any, at any
time when a prospectus relating thereto is required to be delivered under the
Act, when the Company becomes aware of the happening of any event as a result of
which any prospectus included in such registration statement (as then in effect)
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading and, as promptly as possible
thereafter, prepare and file with the Commission and furnish a supplement or
amendment to such prospectus so that, as thereafter delivered to the Selling
Stockholders of such Registrable Common Stock, such prospectus will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(e) on or prior to the date on which the registration statement is
declared effective, use its best efforts to Register or qualify the Registrable
Common Stock covered by the registration statement for offer and sale under the
securities or blue sky laws of each state and other jurisdiction of the United
States as the Selling Stockholders or underwriter requests in writing, and to
cooperate with the Selling Stockholders, the underwriter or underwriters, if
any, and their counsel, in connection therewith; to use its best efforts to keep
each such registration or qualification effective, including through new
filings, or amendments or renewals, during the period such registration
statement is required to be kept effective and to do any and all other acts or
things necessary or advisable to enable the disposition in all such
jurisdictions of the Registrable Common Stock covered by the applicable
registration statement; provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process in suits other than those arising out of such registration in any such
jurisdiction where it is not then so subject;
(f) cooperate with the Selling Stockholders and the managing underwriter
or underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing the Common Stock
to be sold under the registration statement, and enable such Common Stock to be
in such denominations and Registered in such names as the managing underwriter
or underwriters, if any, or the Selling Stockholders may request;
(g) enter into such customary agreements (including an underwriting
agreement in customary form which, if requested by an underwriter, will contain
customary contribution provisions on the part of the Company) and take all such
other actions (including, without limitation, delivery of customary legal
opinions and officers' certificates) as the Selling Stockholders reasonably
request in order to expedite or facilitate the disposition of such Registrable
Common Stock;
(h) make available for inspection and copying by any underwriter
participating in any disposition pursuant to such registration statement, and
any attorney, accountant or other agent retained by any such underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration
statement, as shall be reasonably necessary to enable it to exercise its due
diligence responsibility;
(i) use its best efforts to obtain a "cold comfort" letter from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by "cold comfort" letters as the Selling
Stockholders or the underwriter reasonably request;
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(j) otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, and make generally available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months beginning with the first day of the Company's
first full calendar quarter after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder;
(k) permit any holder of Registrable Common Stock which holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling Person of the Company, to participate in the preparation of such
registration or comparable statement; and
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in such registration statement for sale in any
jurisdiction, the Company shall use its best efforts to obtain the withdrawal of
such order.
The Selling Stockholders, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 5(d) hereof, will
immediately discontinue disposition of the Registrable Common Stock until the
Selling Stockholders' receipt of the copies of the supplemented or amended
prospectus contemplated by Section 5(d) and copies of any additional or
supplemental filings which are incorporated by reference in the prospectus, or
until the Selling Stockholders are advised in writing (the "ADVICE") by the
Company that the use of the prospectus may be resumed, and, if so directed by
the Company, the Selling Stockholders will, or will request the managing
underwriter or underwriters if any to, deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in the Selling
Stockholders' possession, of the prospectus covering such Registrable Common
Stock current at the time of receipt of such notice. In the event the Company
shall give any such notice, the time periods mentioned in Section 5(b) shall be
extended by the number of days during the period from and including the date of
the giving of such notice to and including the date when the Selling
Stockholders shall have received (x) the copies of the supplemented or amended
prospectus contemplated by Section 5(d) and copies of any additional or
supplemental filings which are incorporated by reference in the prospectus, or
(y) the Advice.
6. REGISTRATION EXPENSES.
(a) The Company will bear all expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
all Commission and securities exchange or National Association of Securities
Dealers, Inc. registration and filing fees, fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with determination of eligibility for investment and blue
sky qualifications of the Registrable Common Stock), printing expenses,
messenger and delivery expenses, internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), fees and disbursements of counsel for the Company
and its independent certified public accountants (including the expenses of any
special audit or "cold comfort" letters required by or incident to such
performance), reasonable fees and disbursements of counsel for the Selling
Stockholders, securities acts liability insurance (if the Company elects to
obtain such insurance), the reasonable fees and expenses of any special experts
retained by the Company in connection with such registration, fees and expenses
of other Persons retained by the Company (all such expenses being referred to
herein as "REGISTRATION EXPENSES").
(b) In connection with up to three demand registrations pursuant to
Section 2 hereof, the Company shall reimburse the holders of Registrable Common
Stock included in such registration for the reasonable fees (not exceeding
$15,000 for each registration) and disbursements of one counsel chosen by the
holders of a majority of the Registrable Common Stock included in such
registration.
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7. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify,
protect and hold harmless, to the full extent permitted by law, the Selling
Stockholders, its officers, directors, partners, employees and agents, and any
agent or investment adviser of any thereof, and each Person who controls any
such Person (within the meaning of the Act), against all losses, claims,
damages, liabilities and expenses arising out of or based on any untrue or
allegedly untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof 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 under which they were made, not
misleading, or any violation by the Company of the Act or the Exchange Act or
securities act of any state or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with the registration of Registrable Common Stock hereunder, except
to the extent, and only to the extent, that the same are caused by or contained
in any information which any Selling Stockholder furnished in writing to the
Company expressly for use therein or by a Selling Stockholder's failure to
deliver to a purchaser of securities a copy of the registration statement,
prospectus or preliminary prospectus or any amendments thereof or supplements
thereto at a time when such Selling Stockholder is required by the Act to do so
after the Company has furnished such Selling Stockholder with a sufficient
number of copies of the same. In connection with an underwritten offering, the
Company will indemnify, protect and hold harmless the underwriters thereof,
selling brokers, dealer managers, and similar securities industries
professionals, their officers, directors, employees, agents and each Person who
controls any such Person (within the meaning of the Act) to the same extent as
provided above with respect to the indemnification of the Selling Stockholders.
(b) INDEMNIFICATION BY THE SELLING STOCKHOLDERS. In connection with any
registration statement in which a Selling Stockholder is participating, such
Selling Stockholder will furnish to the Company in writing such customary
information with respect to such Selling Stockholder as the Company reasonably
requests for use in connection with any such registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto and
agrees to indemnify, to the extent permitted by law, the Company, its directors,
employees, agents, officers, and each Person who controls the Company (within
the meaning of the Act) against all losses, claims, damages, liabilities and
expenses arising out of or based on any untrue or allegedly untrue statement of
a material fact contained in any registration statement, prospectus or
preliminary prospectus or any amendment thereof 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 the light of the
circumstances under which they were made, not misleading, to the extent, but
only to the extent, that such untrue statement or omission is caused by or
contained in any information which such Selling Stockholder furnished in writing
to the Company expressly for use therein or by such Selling Stockholder's
failure to deliver to a purchaser of securities a copy of the registration
statement, prospectus, or preliminary prospectus or any amendments thereof or
supplements thereto at a time when such Selling Stockholder is required by the
Act to do so after the Company has furnished such Selling Stockholder with a
sufficient number of copies of the same. In no event shall the liability of such
Selling Stockholder hereunder be greater in amount than the dollar amount of the
net proceeds received by such Selling Stockholder upon the sale of the
Registrable Common Stock giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such Person of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which such Person will claim indemnification or contribution
pursuant to this Agreement, but the failure to give such notice shall not
relieve the indemnifying party of its obligations hereunder except to the extent
the indemnifying party has been prejudiced as a consequence, and, unless in the
reasonable judgment of such indemnified party a conflict of interest may exist
between such
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indemnified party and the indemnifying party with respect to such claim, permit
the indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to such indemnified party. Whether or not such defense
is assumed by the indemnifying party, the indemnifying party will not be subject
to any liability for any settlement made without its consent (but such consent
will not be unreasonably withheld or delayed). No indemnifying party will
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 of such
claim or litigation. If the indemnifying party is not entitled to, or elects not
to, assume the defense of a claim, it will not be obligated to pay the fees and
expenses with respect to such claim of more than one counsel for the indemnified
party with respect to which a claim has been asserted (which fees and expenses
will be paid as they are billed to the indemnified party) unless in the
reasonable judgment of such indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim, in which event the indemnifying party shall be obligated
to pay the fees and expenses of such additional counsel or counsels as shall be
necessary to eliminate such conflicts in connection with the representation of
indemnified parties, such fees and expenses to be paid as they are billed to the
indemnified party.
(d) CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in this Section 7 is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Company and the Selling Stockholders, shall contribute to the
losses, claims, damages, liabilities and expenses described herein, in such
proportions so that the portion thereof for which any Selling Stockholder shall
be responsible shall be limited to the portion determined by a court or the
parties to any settlement to arise out of or to be based on any untrue statement
of material fact contained in a registration statement, prospectus, or
preliminary prospectus, or any amendment thereof or supplement thereto or any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading, caused by or contained in any
information which such Selling Stockholder furnished in writing to the Company
expressly for use therein or by such Selling Stockholder's failure to deliver to
a purchaser of securities a copy of the registration statement, prospectus or
preliminary prospectus or any amendments or supplements thereto at a time when
such Selling Stockholder is required by the Act to do so after the Company has
furnished such Selling Stockholder with a sufficient number of copies of the
same, and the Company shall be responsible for the balance (subject to any other
rights the Company may have against any other selling holder the securities of
which were included in such registration statement, preliminary prospectus,
prospectus, amendment or supplement); PROVIDED, that the liability of such
Selling Stockholder shall in no event exceed the net proceeds from the
Registrable Common Stock sold by it thereunder. The Company and the Selling
Stockholder agree that it would not be just and equitable if their respective
obligations to contribute were to be determined by pro rata allocation, by
reference to the proceeds realized by them or in any manner which does not take
into account the equitable considerations set forth in this Section 7(d).
8. RULE 144 SALES.
The Company shall file the reports required to be filed by it under
the Exchange Act and the rules and regulations promulgated thereunder, and will
take such further action as any Stockholder may reasonably request, all to the
extent required from time to time to enable such Stockholder to sell Registrable
Common Stock (subject to Section 2(a)(ii)) without registration under the Act
within the limitation of the exemptions provided by Rule 144, provided that
nothing contained in this Section 8 shall require the Company to file or make
available any reports or information that it is not otherwise required to file
or make available under the Exchange Act. Upon the written request of any
Stockholder, the Company shall deliver to such Stockholder a written statement
as to whether it has complied with such requirements.
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9. MISCELLANEOUS.
(a) LISTING APPLICATION. If shares of Common Stock shall be listed on a
national securities exchange or NASDAQ, the Company shall, at its expense,
include in its listing application all of the shares of the Common Stock then
owned by any Stockholder.
(b) DAMAGES. The Company recognizes and agrees that the holder of
Registrable Common Stock shall not have an adequate remedy if the Company fails
to comply with the provisions of this Agreement, and that damages will not be
readily ascertainable, and the Company expressly agrees that in the event of
such failure, any holder of Registrable Common Stock shall be entitled to seek
specific performance of the Company's obligations hereunder and that the Company
will not oppose an application seeking such specific performance.
(c) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless the Company has consented thereto and the Company has obtained the
written consent of the Stockholders holding at least 70% of the Registrable
Common Stock.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by telecopier, registered or certified
mail (return receipt requested), postage prepaid to the parties at their
respective addresses as reflected in the Company's records. Notices sent by mail
shall be effective five days after mailing; notices sent by telecopier shall be
effective when receipt is acknowledged; and notices sent by courier guaranteeing
next day delivery shall be effective on the next business day after timely
delivery to the courier.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties; provided,
that, no Person, other than the Stockholders, who acquire shares of Registrable
Common Stock in a transaction Registered under the Securities Act or effected
without registration pursuant to Rule 144 under the Securities Act shall have
any rights or be entitled to any benefit hereunder in respect of such
Registrable Common Stock.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of
New York.
(i) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the
Stockholders shall be enforceable to the fullest extent permitted by law.
(j) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties, and supersedes all prior agreements or understandings,
whether written or oral, among the parties, with respect to the subject matter
hereof.
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(k) ATTORNEYS' FEES. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof or thereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
(l) NO INCONSISTENT AGREEMENTS. Neither the Company nor any Stockholder
will on or after the date of this Agreement enter into any agreement with
respect to the Common Stock which is inconsistent with the rights granted to the
Stockholders in this Agreement or otherwise conflicts with the provisions
hereof.
(m) ENFORCEMENT. It is specifically agreed and understood that monetary
damages would not adequately compensate the non-breaching parties for the breach
of this Agreement and this Agreement shall therefore be specifically
enforceable, and any breach or threatened breach of this Agreement shall be the
proper subject of a temporary or permanent injunction or restraining order,
without necessity of bond or other security.
(n) GOVERNMENT APPROVALS. Notwithstanding anything to the contrary
contained in this Agreement, the Company and any holder of Preferred Stock or
Class B Stock, as applicable, shall use their best efforts to make any filings
with any governmental body, or obtain any approvals of any governmental body
(including those in connection with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended from time to time (the "HSR Act")) required prior to or
in connection with any conversion of any such stock within a reasonable period
of time. Any conversion shall be delayed to the extent necessary to allow such
filings to be made and such approvals to be obtained. In the event that any such
approvals cannot be obtained, the Company shall not, nor shall it have the
obligation to, convert any Preferred Stock or Class B Stock into Registrable
Common Stock. The costs and expenses (including reasonable attorneys' fees)
associated with any filing or approval required (including those in connection
with the HSR Act) shall be paid by the Company.
(o) CERTAIN ADDITIONAL MATTERS. The Company shall use its best efforts to
obtain the signatures of all parties to the Amended and Restated Registration
Rights Agreement substantially in the form attached hereto as EXHIBIT A (the
"New Registration Rights Agreement"), it being understood and agreed that such
New Registration Rights Agreement will not become effective until all such
signatures are obtained. For the period beginning on the date hereof and ending
on the 60th day after the date hereof, all rights granted to the stockholder
parties to this Agreement shall be, if applicable, subordinate to the rights
granted to the stockholder parties under the Second Amended Agreement. If by the
60th day after the date hereof, the Company has not obtained the signatures of
all parties to the New Registration Rights Agreement, then the Company shall
cause those parties who signed the New Registration Rights Agreement to execute
the Side Letter, dated the 61st day after the date hereof, attached hereto as
EXHIBIT B. If at any time the Company obtains the signatures of all parties to
the New Registration Rights Agreement, the Company shall cause the Second
Amended Agreement and the parties hereto shall cause this Agreement to be
terminated and the New Registration Rights Agreement shall become effective and
supersede this Agreement and the Second Amended Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
ADDRESSES: COMPANY:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ IESI CORPORATION
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ a Delaware corporation
Attn: President
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ By:
-------------------------------------
Name:
-----------------------------------
with a copy to Title:
----------------------------------
IESI Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Secretary
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ IESI CAPITAL V LLC,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ a Mississippi limited liability company
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. TC CARTING II, L.L.C.,
Suite 350 a Delaware limited liability company
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ By: TC Management Partners IV, L.L.C.,
its Managing Member
By:
------------------------------------
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. TC CARTING II, L.L.C.,
Suite 350 a Delaware limited liability company
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ By: TC Management Partners IV, L.L.C.,
its Managing Member
By:
----------------------------------
-15-
INDOSUEZ CAPITAL PARTNERS 2001, L.P.,
By: Indosuez ▇▇ ▇▇, Inc., its managing
general partners
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
-16-
EXHIBIT A
-17-
EXHIBIT B
SIDE LETTER
[IESI Capital V]
[TC Carting II]
[Indosuez Capital Partners 2001, L.P.]
The undersigned stockholders of IESI Corporation, a Delaware corporation
(the "Company"), are parties to the Amended and Restated Registration Rights
Agreement, dated June 30, 1999 (the "Existing Registration Rights Agreement") by
and between the undersigned stockholders and the Company. You and the Company
are parties to a
Subordinate Registration Rights Agreement, dated as of
September 10, 2001 (the "
Subordinate Registration Rights Agreement"). The
Subordinate Registration Rights Agreement contains a form of Registration Rights
Agreement (the "New Registration Rights Agreement") which has been executed by
the undersigned stockholder parties but has not become effective.
By execution of this letter, the undersigned stockholder parties agree to
(i) subordinate their rights and interests under Section 2 and 3(b) of the
Existing Registration Rights Agreement in an equitable manner and to the extent
required such that you and each stockholder party who executed the New
Registration Rights Agreement have, to the extent possible and without breaching
the Existing Registration Rights Agreement, the respective rights which would
have been in effect if the New Registration Rights Agreement had become
effective, (ii) extend to you, if applicable, the rights to request
registrations under Section 2 of the Existing Registration Rights Agreement to
the earlier of the Company's initial public offering or June 25, 2004, (iii)
amend or waive any provision of this Side Letter with the consent of the Company
and 70% of the Registrable Common Stock, in the aggregate, under the Existing
Registration Rights Agreement and the
Subordinate Registration Rights Agreement,
and (iv) be bound by the provisions of Section 9(n) of the New Registration
Rights Agreement as if it were in effect. The Company agrees to provide you with
the rights which you would have had if the New Registration Rights Agreement had
become effective but only to the extent that the grant of such rights does not
conflict with the Existing Registration Rights Agreement.
-18-
