Exhibit 10.8
Conformed Copy
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NA HOLDING CORPORATION
REGISTRATION AND PARTICIPATION AGREEMENT
Dated as of March 30, 1998
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TABLE OF CONTENTS
(Not Part of Agreement)
Page
1. Background.............................................................. 1
2. Definitions............................................................. 3
3. Registration............................................................ 9
3.1. Registration on Request........................................... 9
(a) Requests..................................................... 9
(b) Obligation to Effect Registration............................ 9
(c) Registration Statement Form.................................. 10
(d) Expenses..................................................... 11
(e) Inclusion of Other Securities................................ 12
(f) Effective Registration Statement............................. 12
(g) Pro Rata Allocation.......................................... 12
3.2. Incidental Registration........................................... 13
3.3. Registration Procedures........................................... 16
3.4. Underwritten Offerings............................................ 22
(a) Underwritten Offerings Exclusive............................. 22
(b) Underwriting Agreement....................................... 22
(c) Selection of Underwriters.................................... 23
(d) Incidental Underwritten Offerings............................ 23
(e) Hold Back Agreements......................................... 24
3.5. Preparation; Reasonable Investigation............................. 25
3.6. Other Registrations............................................... 25
3.7. Indemnification................................................... 26
(a) Indemnification by the Company............................... 26
(b) Indemnification by the Sellers............................... 28
(c) Notices of Claims, etc....................................... 29
(d) Other Indemnification........................................ 30
(e) Other Remedies............................................... 30
(f) Officers and Directors....................................... 31
(g) Indemnification Payments..................................... 31
4. Participation Rights.................................................... 31
(a) Procedures for Qualifying Sales.............................. 31
(b) Qualifying Sale Defined...................................... 33
(c) Exclusion from Qualifying Sale............................... 33
5. Investors' Rights to Purchase Additional Capital Stock ................. 34
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Page
(a) CD&R Sale.................................................... 34
(b) Offer Procedures............................................. 34
6. Miscellaneous........................................................... 36
6.1. (a) Rule 144..................................................... 36
(b) Legend on Stock Certificates................................. 36
6.2. Amendments and Waivers............................................ 37
6.3. Nominees for Beneficial Owners.................................... 37
6.4. Successors, Assigns and Transferees............................... 38
6.5. Notices........................................................... 38
6.6. No Inconsistent Agreements........................................ 40
6.7. Remedies; Attorneys' Fees......................................... 40
6.8. Stock Splits, etc................................................. 40
6.9. Term ............................................................ 41
6.10. Severability..................................................... 41
6.11. Headings......................................................... 41
6.12. Counterparts..................................................... 41
6.13. Governing Law.................................................... 41
6.14. No Third Party Beneficiaries..................................... 42
6.15. Consent to Jurisdiction.......................................... 42
6.16. Waiver of Jury Trial............................................. 42
6.17. Entire Agreement................................................. 42
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REGISTRATION AND PARTICIPATION AGREEMENT
REGISTRATION AND PARTICIPATION AGREEMENT, dated as of March 30,
1998, among NA Holding Corporation, a Delaware corporation (the "Company"), and
Xxxxxxx, Dubilier & Rice Fund V Limited Partnership, a Cayman Islands exempted
limited partnership (together with any successor investment vehicle managed by
Xxxxxxx, Dubilier & Rice, Inc., the "CD&R Fund").
1. Background. (a) NA Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of the Company ("NA Acquisition") is
party to a Stock Purchase Agreement, dated as of January 9, 1998, as amended
from time to time (the "Purchase Agreement"), with Norfolk Southern Corporation,
a Virginia corporation ("Norfolk Southern") and a Preferred Shares Stock
Purchase Agreement, dated as of January 9, 1998 (the "Preferred Stock Purchase
Agreement"), with X.X. Xxxxxx Ventures Corporation, a Delaware corporation
("X.X. Xxxxxx Ventures"), pursuant to which NA Acquisition has agreed to acquire
all of the capital stock of North American Van Lines, Inc., a Delaware
corporation ("NAVL") from Norfolk Southern and X.X. Xxxxxx Ventures (such
transactions are collectively referred to herein, as the "Acquisition").
(b) In connection with the Acquisition, the Company is or will be
party to (i) a Stock Subscription Agreement, dated as of the date hereof (the
"Fund Stock Subscription Agreement"), between the Company and the CD&R Fund,
pursuant to which the Company has agreed to issue 615,050 shares of its Common
Stock (as hereinafter defined) to the CD&R Fund, (ii) separate Management Stock
Subscription Agreements, dated as of the date hereof (the "Management Stock
Subscription Agreements"), between the Company and certain senior executives or
key employees of the Company or one of it subsidiaries (the "Management
Purchasers") pursuant to which the Company has agreed to issue up to an
aggregate of 34,950 shares of its Common Stock and (iii) a Capital Call
Agreement, dated as of the date hereof, pursuant to which the Company has agreed
to issue and sell additional shares of its Common Stock to the CD&R Fund under
the terms specified therein (the "Capital Call Agreement").
(c) The Company may in the future issue or sell shares of Common
Stock to certain key executives and employees of the Company or one of its
subsidiaries (the "Subsequent Management Purchasers") pursuant to appropriate
forms of stock subscription agreements (the "Subsequent
Stock Subscription Agreements") or grant options to purchase additional shares
of Common Stock to Management Purchasers, Subsequent Management Purchasers or
certain non-employee directors or other purchasers (the "Subsequent Purchasers")
pursuant to appropriate forms of stock option agreements, plans or arrangements
(the "Subsequent Stock Option Agreements"). The Company may in the future issue
or sell shares of Common Stock to (i) certain Individual Investors (as
hereinafter defined) pursuant to appropriate forms of stock subscription
agreements (the "Individual Investor Stock Subscription Agreements", (ii)
Subsequent Purchasers pursuant to appropriate forms of stock subscription
agreements (the "Director Stock Subscription Agreements") and has adopted an
option plan, and may in the future adopt additional option plans, that will
permit executive officers and certain employees of the Company and its
subsidiaries to acquire shares of Common Stock, or (iii) certain Agents (as
hereinafter defined) pursuant to appropriate forms of stock subscription
agreements (the "Agent Stock Subscription Agreements").
(d) The Management Purchasers, the Subsequent Management Purchasers,
the Subsequent Purchasers and any trusts holding shares of Common Stock or
options to purchase shares of Common Stock for the benefit of relatives of any
Management Purchaser, Subsequent Management Purchaser or Subsequent Purchaser
who is an employee or director of the Company or one of its subsidiaries are
referred to herein collectively as the "Management Investors". The Fund Stock
Subscription Agreement, the Capital Call Agreement, the Management Stock
Subscription Agreements, the Individual Investor Stock Subscription Agreements,
the Director Stock Subscription Agreements, the Agent Stock Subscription
Agreements and the Subsequent Stock Option Agreements are referred to herein
collectively as the "Stock Subscription Agreements".
(e) This Agreement shall become effective as of the date hereof with
respect to any Registrable Securities (as hereinafter defined) upon the issuance
or sale of Common Stock to any party pursuant to any Stock Subscription
Agreement (as defined hereinafter) that provides such Common Stock shall be
Registrable Securities, it being understood that, with respect to Registrable
Securities to be issued in the future, any Stock Subscription Agreement will
provide that the shares of Common Stock sold thereunder are entitled to rights
and subject to the obligations created hereunder, provided that such issuance or
sale shall have been consented to in writing by the Board of Directors of the
Company (the "Board").
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2. Definitions. For purposes of this Agreement, the following terms
have the following respective meanings:
"Acquisition": See Section 1.
"Affiliate": With respect to any Person, any other Person directly
or indirectly Controlling, Controlled by or under common Control with such first
Person, provided that any director or member of management or other employee of
the Company or any of its subsidiaries shall not be deemed to be an Affiliate of
the CD&R Fund.
"Agent": independently owned moving companies that have entered into
contractual arrangements with NAVL to provide a portion of hauling to support
the interstate moving services of the NAVL.
"Business Day": A day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required to close.
"CD&R": Xxxxxxx, Dubilier & Rice, Inc., a Delaware corporation.
"CD&R Fund": See Section 1.
"CD&R Sale": See Section 4(a).
"Common Stock": The common stock, par value $.01 per share of the
Company.
"Company": See the introduction to this Agreement.
"Control": The power to direct the affairs of a Person by reason of
ownership of voting stock, by control or otherwise.
"Director Stock Subscription Agreements": See Section 1.
"Excess Number": See Section 4(b).
"Exchange Act": The Securities Exchange Act of 1934, as amended, or
any successor Federal statute, and the rules and regulations thereunder which
shall be in effect at the time. Any reference to a particular section thereof
shall include a reference to the corresponding section, if any, of any successor
Federal statute, and the rules and regulations thereunder.
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"Fund Stock Subscription Agreement": See Section 1.
"Individual Investors": Directors or senior executives of
corporations in which entities managed or sponsored by Xxxxxxx, Dubilier & Rice,
Inc. have or have had investments.
"Individual Investor Stock Subscription Agreement": See Section 1.
"Management Investors": See Section 1.
"Management Purchasers": See Section 1.
"Management Stock Subscription Agreements": See Section 1.
"NA Acquisition": See Section 1(a).
"NASD": National Association of Securities Dealers, Inc.
"NASDAQ": The NASD Automated Quotation System.
"NAVL": See Section 1(a).
"Offer": See Section 5(a).
"Offered Securities": See Section 5(b).
"Person": Any natural person, firm, partnership, association,
corporation, company, trust, business trust, governmental entity or other entity
and any successor (by merger or otherwise) of such entity.
"Proportionate Share": See Section 5(b).
"Public Market": A "Public Market" for the Company's Common Stock
shall be deemed to have been established at such time as 30% of the Common Stock
(on a fully diluted basis) has been sold to the public pursuant to an effective
registration statement under the Securities Act or pursuant to Rule 144.
"Public Offering": An underwritten public offering of Common Stock
led by at least one underwriter of nationally recognized standing.
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"Qualifying Number": 30,753 shares of Common Stock (excluding any
sales or transfers by the CD&R Fund to Management Investors and Individual
Investors)
"Qualifying Sale": See Section 4(b).
"Registrable Securities": (a) any shares of Common Stock issued
pursuant to any Stock Subscription Agreement, including upon exercise of options
granted pursuant to the Subsequent Stock Option Agreements, that provides that
such Common Stock shall be Registrable Securities, except for any such Common
Stock issued pursuant to an effective registration statement under the
Securities Act on Form X-0, Xxxx X-0, Form S-1 or any successor form to any
thereof (unless such Common Stock is held by a Management Investor who is an
Affiliate of the Company), (b) any shares of Common Stock issued pursuant to the
terms of, and under the circumstances set forth in, Section 5, and (c) any
securities issued or issuable with respect to any Common Stock referred to in
the foregoing clauses (i) upon any conversion or exchange thereof, (ii) by way
of stock dividend or stock split, (iii) in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or (iv)
otherwise, in all cases subject to the penultimate paragraph of Section 3.3. As
to any particular Registrable Securities, once issued, such securities shall
cease to be Registrable Securities when (A) a registration statement (other than
a Special Registration pursuant to which such securities were issued by the
Company to a Management Investor who is an Affiliate of the Company) 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) such securities shall have been
distributed to the public in reliance upon Rule 144, (C) subject to the relevant
provisions of the Company's Certificate of Incorporation and the Stock
Subscription Agreement pursuant to which such securities shall have been issued,
such securities shall have been otherwise transferred, new certificates for such
securities not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent disposition of such securities shall not
require registration or qualification of such securities under the Securities
Act or any similar state law then in force, (D) except for purposes of Sections
4 and 5, such securities have been held, or deemed, by virtue of tacking holding
periods as contemplated by Rule 144, to be held for a period of two years by a
Person who is not an Affiliate of the Company, (E) such securities shall have
ceased to be outstanding, (F) except for purposes of Sections 4 and 5, with
respect to any such securities
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acquired by a Management Investor pursuant to the exemption from the
registration requirements of the Securities Act contained in Rule 701 (or any
successor provision) thereunder, at any time following the date the Company
registers a class of equity securities under Section 12 of the Exchange Act or
(G) the Company shall have registered the Common Stock under Section 12 of the
Exchange Act and such securities are held by a Person who is not an Affiliate of
the Company; provided that (x) for purposes of clauses (D) and (G) above, (1)
securities held by a Person who was not an Affiliate of the Company at the time
of the event specified in such clauses but who thereafter becomes an Affiliate
of the Company shall be and remain Registrable Securities for so long as such
Person is an Affiliate of the Company and (2) securities held by a Person who
was an Affiliate of the Company at the time of the event specified in such
clauses shall remain Registrable Securities for only so long as such Person
remains an Affiliate of the Company and (y) with respect to any securities that
were formerly Registrable Securities the Board of Directors may, under such
circumstances as it deems appropriate, designate such securities as Registrable
Securities for purposes of this Agreement.
"Registration Expenses": All expenses incident to the Company's
performance of its obligations under or compliance with Section 3, including,
but not limited to, all registration and filing fees, all fees and expenses of
complying with securities or blue sky laws, all fees and expenses associated
with listing securities on exchanges or NASDAQ, all fees and other expenses
associated with filings with the NASD (including, if required, the fees and
expenses of any "qualified independent underwriter" and its counsel), all
printing expenses, the fees and disbursements of counsel for the Company and of
its independent public accountants, and the expenses of any special audits made
by such accountants required by or incidental to such performance and compliance
and the fees and disbursements of one law firm (but not more than one) retained
by the holders holding a majority (by number of shares) of the Registrable
Securities but not including any underwriting discounts or commissions or any
transfer taxes payable in respect of the sale of Registrable Securities by the
holders thereof.
"Requisite Percentage of Stockholders": The holder or holders of at
least (a) as to the initial request under Section 3.1, 50% (by number of shares)
of the Registrable Securities held at the time outstanding or (b) as to any
other request, 20% (by number of shares) of the Registrable Securities at the
time outstanding.
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"Rule 144": Rule 144 (or any successor provision) under the
Securities Act.
"Rule 144A": Rule 144A (or any successor provision) under the
Securities Act.
"Sale Notice": See Section 4(a).
"Securities Act": The Securities Act of 1933, as amended, or any
successor Federal statute, and the rules and regulations thereunder which shall
be in effect at the time. Any reference to a particular section thereof shall
include a reference to the corresponding section, if any, of any successor
Federal statute, and the rules and regulations thereunder.
"Securities and Exchange Commission": The Securities and Exchange
Commission or any other Federal agency at the time administering the Securities
Act or the Exchange Act.
"Special Registration": (a) The registration of shares of equity
securities and/or options or other rights in respect thereof to be offered to
directors, members of management, employees, consultants or sales agents,
distributors or similar representatives of the Company or its direct or indirect
Subsidiaries or senior executives of Persons controlled by an Affiliate of the
Company or (b) the registration of equity securities and/or options or other
rights in respect thereof solely on Form S-4 or S-8 or any successor form.
"Stock Subscription Agreements": See Section 1.
"Subsequent Management Purchasers": See Section 1.
"Subsequent Purchasers": See Section 1.
"Subsequent Stock Option Agreements": See Section 1.
"Subsequent Stock Subscription Agreements": See Section 1.
"Subsidiary": With respect to any Person, any corporation or Person,
a majority of the outstanding voting stock or other equity interests of which is
owned, directly or indirectly, by that Person.
3. Registration.
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3.1. Registration on Request.
(a) Requests. Subject to the provisions of Section 3.6, at any time
or from time to time the Requisite Percentage of Stockholders shall have the
right to make one or more written requests that the Company effect the
registration under the Securities Act of all or part of the Registrable
Securities of the holder or holders making such request, which requests shall
specify the intended method of disposition thereof by such holder or holders.
(b) Obligation to Effect Registration. Upon receipt by the Company
of any request for registration pursuant to Section 3.1(a), the Company will
promptly give written notice of such requested registration to all holders of
Registrable Securities, and thereupon will use its best efforts to effect the
registration under the Securities Act of
(i) the Registrable Securities which the Company has been so
requested to register pursuant to Section 3.1(a), and
(ii) all other Registrable Securities which the Company has been
requested to register by the holders thereof by written request given to
the Company within 30 days after the Company has given such written notice
(which request shall specify the intended method of disposition of such
Registrable Securities),
all to the extent required to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered. Notwithstanding the preceding sentence:
(x) the Company shall not be required to effect a registration
requested pursuant to Section 3.1 if the aggregate number of Registrable
Securities referred to in clauses (i) and (ii) of this Section 3.1(a)
included in such registration shall be less than 20% of the Registrable
Securities at the time outstanding; and
(y) if the Board of Directors of the Company (the "Board")
determines in its good faith judgment, after consultation with a firm of
nationally recognized underwriters, that there will be an adverse effect
on a then contemplated initial public offering of the Common Stock, the
Requisite Percentage of Stockholders shall be given notice of such fact
and shall be deemed to have withdrawn such request and such registration
shall
8
not be deemed to have been effected or requested pursuant to this Section
3.1.
(c) Registration Statement Form. Each registration requested
pursuant to this Section 3.1 shall be effected by the filing of a registration
statement on Form S-1, Form S-2 or Form S-3 (or any other form which includes
substantially the same information as would be required to be included in a
registration statement on such forms as presently constituted), unless the use
of a different form is (i) required by law or (ii) permitted by law and agreed
to in writing by holders holding at least a majority (by number of shares) of
the Registrable Securities as to which registration has been requested pursuant
to this Section 3.1. At any time after the Company has issued and sold any
shares of its capital stock registered under an effective registration statement
under the Securities Act, or after the Company shall have registered any class
of equity securities pursuant to Section 12 of the Exchange Act, it will use its
best efforts to qualify for registration on Form S-2 or Form S-3 (or any other
comparable form hereinafter adopted).
(d) Expenses. The Company will pay all Registration Expenses in
connection with the first three registrations which are effected as requested
under Section 3.1(a). The Registration Expenses in connection with each other
registration, if any, requested under this Section 3.1 shall be apportioned
among the holders whose Registrable Securities are then being registered, on the
basis of the respective amounts (by number of shares) of Registrable Securities
then being registered by them or on their behalf. However, in the case of all
registrations requested under Section 3.1(a), the Company shall pay all amounts
in respect of (i) any allocation of salaries of personnel of the Company and its
Subsidiaries or other general overhead expenses of the Company and its
Subsidiaries or other expenses for the preparation of financial statements or
other data normally prepared by the Company and its Subsidiaries in the ordinary
course of its business, (ii) the expenses of any officers' and directors'
liability insurance, (iii) the expenses and fees for listing the securities to
be registered on each exchange on which similar securities issued by the Company
are then listed or, if no such securities are then listed on an exchange
selected by the Company and (iv) all fees associated with filings required to be
made with the NASD (including, if applicable, the fees and expenses of any
"qualified independent underwriter" and its counsel as may be required by the
rules and regulations of the NASD). Notwithstanding the provisions of this
section 3.1(d) or of Section 3.2, each seller of Registrable Securities shall
pay
9
all Registration Expenses to the extent required to be paid by such seller by
applicable law.
(e) Inclusion of Other Securities. The Company shall not register
securities (other than Registrable Securities) for sale for the account of any
Person other than the Company in any registration requested pursuant to Section
3.1(a) unless permitted to do so by the written consent of holders holding at
least a majority (by number of shares) of the Registrable Securities proposed to
be sold in such registration.
(f) Effective Registration Statement. A registration requested
pursuant to Section 3.1(a) will not be deemed to have been effected unless it
has become effective for the period specified in Section 3.3(b). Notwithstanding
the preceding sentence, a registration requested pursuant to Section 3.1(a)
which does not become effective after the Company has filed a registration
statement with respect thereto solely by reason of the refusal to proceed of the
holder or holders of Registrable Securities requesting the registration shall be
deemed to have been effected by the Company at the request of such holder or
holders.
(g) Pro Rata Allocation. If the holders of a majority (by number of
shares) of the Registrable Securities for which registration is being requested
pursuant to Section 3.1(a) determine, based on consultation with the managing
underwriters or, in an offering which is not underwritten, with an investment
banker, that the number of securities to be sold in any such offering should be
limited due to market conditions or otherwise, all holders of Registrable
Securities proposing to sell their securities in such registration shall share
pro rata in the number of securities being offered (as determined by the holders
holding a majority (by number of shares) of the Registrable Securities for which
registration is being requested in consultation with the managing underwriters
or investment banker, as the case may be) and registered for their account, such
sharing to be based on the number of Registrable Securities as to which
registration was requested by such holders, respectively.
3.2. Incidental Registration. If the Company at any time proposes to
register any of its equity securities (as defined in the Exchange Act) under the
Securities Act (other than pursuant to Section 3.1 or pursuant to a Special
Registration), whether or not for sale for its own account, and the registration
form to be used may be used for the registration of Registrable Securities, it
will each such time give prompt written notice to all holders of Regis-
10
trable Securities of its intention to do so and of such holders' rights under
this Section and, upon the written request of any holder of Registrable
Securities given to the Company within 30 days after the Company has given any
such notice (which request shall specify the Registrable Securities intended to
be disposed of by such holder and the intended method of disposition thereof),
the Company will use its best efforts to effect the registration under the
Securities Act of all Registrable Securities which the Company has been so
requested to register by the holders thereof, to the extent required to permit
the disposition (in accordance with the intended methods thereof as aforesaid)
of the Registrable Securities so to be registered, provided that:
(a) if such registration shall be in connection with the initial
public offering of Common Stock, the Company shall not include any
Registrable Securities in such proposed registration if the Board shall
have determined, after consultation with the managing underwriters for
such offering, that it is not in the best interests of the Company to
include any Registrable Securities in such registration, provided that, if
the Board makes such a determination, the Company shall not include in
such registration any securities not being sold for the account of the
Company;
(b) 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 such securities,
the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities or other securities
that was previously notified of such registration and, thereupon, shall
not register any Registrable Securities in connection with such
registration (but shall nevertheless pay the Registration Expenses in
connection therewith), without prejudice, however, to the rights of any
holder or holders of Registrable Securities to request that a registration
be effected under Section 3.1;
(c) if the Company shall be advised in writing by the managing
underwriters (or, in connection with an offering which is not
underwritten, by an investment banker) (and the Company shall so advise
each holder of Registrable Securities requesting registration of such
advice) that in their or its opinion the number of securities requested to
be included in such registra-
11
tion (whether by the Company, pursuant to this Section 3.2 or pursuant to
any other rights granted by the Company to a holder or holders of its
securities to request or demand such registration or inclusion of any such
securities in any such registration) exceeds the number of such securities
which can be sold in such offering,
(i) the Company shall include in such registration the number
(if any) of Registrable Securities so requested to be included which
in the opinion of such underwriters or investment banker, as the
case may be, can be sold and shall not include in such registration
any securities (other than securities being sold by the Company,
which shall have priority in being included in such registration) so
requested to be included other than Registrable Securities unless
all Registrable Securities requested to be so included are included
therein, and
(ii) if in the opinion of such underwriters or investment
banker, as the case may be, some but not all of the Registrable
Securities may be so included, all holders of Registrable Securities
requested to be included therein shall share pro rata in the number
of shares of Registrable Securities included in such public offering
on the basis of the number of Registrable Securities requested to be
included therein by such holders, provided that, in the case of a
registration initially requested or demanded by a holder or holders
of securities other than Registrable Securities, the holders of the
Registrable Securities requested to be included therein and the
holders of such other securities shall share pro rata (based on the
number of shares if the requested or demanded registration is to
cover only Common Stock and, if not based on the proposed offering
price of the total number of securities included in such public
offering requested to be included therein),
and the Company shall so provide in any registration agreement hereinafter
entered into with respect to any of its securities; and
(d) if prior to the effective date of the registration statement
filed in connection with such registration, the Company is informed by the
managing underwriter (or, in connection with an offering which is not
12
underwritten, by an investment banker) that the price at which such
securities are to be sold is a price below that price which the Requesting
Holders shall have indicated to be acceptable, the Company shall promptly
notify the Requesting Holders of such fact, and each such Requesting
Holder shall have the right to withdraw its request to have its
Registrable Securities included in such registration statement.
The Company will pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to this Section
3.2. No registration effected under this Section 3.2 shall relieve the Company
from its obligation to effect registrations upon request under Section 3.1.
3.3. Registration Procedures. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 3.1 and 3.2, the
Company will promptly:
(a) subject to clauses (x) and (y) of Section 3.1(b), prepare and
file with the Securities and Exchange Commission a registration statement
with respect to such securities, make all required filings with the NASD
and use best efforts to cause such registration statement to become
effective;
(b) prepare and file with the Securities and Exchange Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith and such other documents 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 securities covered by such registration statement until such time as
all of such 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, but in no event for a period of more than
six months after such registration statement becomes effective;
(c) furnish to counsel (if any) selected by the holders of a
majority (by number of shares) of the Registrable Securities covered by
such registration statement copies of all documents proposed to be filed
with the Securities and Exchange Commission in connection with such
registration, which documents will be subject to the review of such
counsel;
13
(d) furnish to each seller of such securities, without charge, such
number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case, including all exhibits and
documents filed therewith (other than those filed on a confidential
basis), except that the Company shall not be obligated to furnish any
seller of securities with more than two copies of such exhibits and
documents), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and any
summary prospectus) in conformity with the requirements of the Securities
Act, and such other documents, as such seller may reasonably request in
order to facilitate the disposition of the securities owned by such
seller;
(e) use its best efforts (x) to register or qualify the securities
covered by such registration statement under such other securities or blue
sky laws of such jurisdictions as each seller shall request, (y) to keep
such registration or qualification in effect for so long as such
registration statement remains in effect and (z) to do any and all other
acts and things which may be necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the securities
owned by such seller, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified, subject
itself to taxation in any jurisdiction wherein it is not so subject, or
take any action which would subject it to general service of process in
any jurisdiction wherein it is not so subject;
(f) in connection with an underwritten public offering only, furnish
to each seller a signed counterpart, addressed to the sellers, of
(i) an opinion of counsel for the Company experienced in
securities law matters, dated the effective date of the registration
statement, and
(ii) a "comfort" letter signed by the independent public
accountants who have issued an audit report on the Company's
financial statements included in the registration statement, subject
to such seller having executed and delivered to the independent
public accountants such certificates and documents as such
accountants shall reasonably request and provided that such
accountants shall be permitted by the standards applicable to
certi-
14
fied public accountants to deliver a "comfort" letter to such
seller,
covering substantially the same matters with respect to the registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public offerings of securities;
(g)(i) notify each holder of Registrable Securities covered by such
registration statement if such registration statement, at the time it or
any amendment thereto became effective, (x) contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading
upon discovery by the Company of such material misstatement or omission or
(y) upon discovery by the Company of the happening of any event as a
result of which the Company believes there would be such a material
misstatement or omission, and, as promptly as practicable, prepare and
file with the Securities and Exchange Commission a post-effective
amendment to such registration statement and use best efforts to cause
such post-effective amendment to become effective such that such
registration statement, as so amended, shall not contain 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, and (ii) notify each holder 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, if the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading upon discovery by the Company of such material
misstatement or omission or upon discovery by the Company of the happening
of any event as a result of which the Company believes there would be a
material misstatement or omission, and, as promptly as is practicable,
prepare and furnish to such holder 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
15
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(h) otherwise use its best efforts to comply with all applicable
rules and regulations of the Securities and Exchange Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement of the Company complying with the provisions of Section
11(a) of the Securities Act and Rule 158 under the Securities Act;
(i) notify each seller of any securities covered by such
registration statement (i) when such registration statement, or any
post-effective amendment to such registration statement, shall have become
effective, or any amendment of or supplement to the prospectus used in
connection therewith shall have been filed, (ii) of any request by the
Securities and Exchange Commission to amend such registration statement or
to amend or supplement such prospectus or for additional information,
(iii) of the issuance by the Securities and Exchange Commission of any
stop order suspending the effectiveness of such registration statement or
of any order preventing or suspending the use of any preliminary
prospectus, and (iv) of the suspension of the qualification of such
securities for offering or sale in any jurisdiction, or of the institution
of any proceedings for any of such purposes;
(j) use its best efforts (i) (A) to list such securities on any
securities exchange on which the Common Stock is then listed or, if no
Common Stock is then listed, on an exchange selected by the Company, if
such listing is then permitted under the rules of such exchange or (B) if
such listing is not practicable or the Board determines that quotation as
a NASDAQ National Market System security is preferable, to secure
designation of such securities as a NASDAQ "national market system
security" within the meaning of Rule 11Aa2-1 under the Exchange Act and
(ii) to provide and cause to be maintained a transfer agent and registrar
for such Registrable Securities not later than the effective date of such
registration statement; and
(k) use every reasonable effort to obtain the lifting of any stop
order that might be issued suspending the effectiveness of such
registration statement or of any order preventing or suspending the use of
any preliminary prospectus, provided that if the Company is
16
unable to obtain the lifting of any such stop order in connection with a
registration pursuant to Section 3.1(a), the request for registration
shall not be deemed exercised for purposes of determining whether such
registration has been effected for purposes of Section 3.1(a) or (d).
The Company may require each seller of any securities as to which
any registration is being effected to furnish 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 and as shall be required by law
in connection therewith. Each such holder agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such holder not materially
misleading.
The Company agrees not to file or make any amendment to any
registration statement with respect to any Registrable Securities, or any
amendment of or supplement to the prospectus used in connection therewith, which
refers to any seller of any securities covered thereby by name, or otherwise
identifies such seller as the holder of any securities of the Company, without
the consent of such seller, such consent not to be unreasonably withheld, except
that no such consent shall be required for any disclosure that is required by
law.
By acquisition of Registrable Securities, each holder of such
Registrable Securities shall be deemed to have agreed that upon receipt of any
notice from the Company pursuant to Section 3.3(g), such holder will promptly
discontinue such holder's disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until such holder
shall have received, in the case of clause (i) of Section 3.3(g), notice from
the Company that such registration statement has been amended, as contemplated
by Section 3.3(g), and, in the case of clause (ii) of Section 3.3(g), copies of
the supplemented or amended prospectus contemplated by Section 3.3(g). If so
directed by the Company, each holder of Registrable Securities will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies, in such holder's possession of the prospectus covering such Registrable
Securities at the time of receipt of such notice. In the event that the Company
shall give any such notice, the period mentioned in Section 3.3(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 each seller of any
Registrable Securities covered by such
17
registration statement shall have received the copies of the supplemented or
amended prospectus contemplated by Section 3.3(g).
3.4. Underwritten Offerings. The provisions of this Section 3.4 do
not establish additional registration rights but instead set forth procedures
applicable, in addition to those set forth in Sections 3.1 through 3.3, to any
registration which is an underwritten offering.
(a) Underwritten Offerings Exclusive. Whenever a registration
requested pursuant to Section 3.1 is for an underwritten offering, only
securities which are to be distributed by the underwriters may be included in
the registration.
(b) Underwriting Agreement. If requested by the underwriters for any
underwritten offering by holders of Registrable Securities pursuant to a
registration requested under Section 3.1(a), the Company shall enter into an
underwriting agreement with such underwriters for such offering, such agreement
to be reasonably satisfactory in substance and form to the holders of a majority
(by number of shares) of the Registrable Securities to be covered by such
registration and to the underwriters and to contain such representations and
warranties by the Company and such other terms and provisions as are customarily
contained in agreements of this type, including, but not limited to, indemnities
to the effect and to the extent provided in Section 3.7, provisions for the
delivery of officers' certificates, opinions of counsel and accountants'
"comfort" letters and hold-back arrangements. The holders of Registrable
Securities to be distributed 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 agreements on the part of, the
Company to and for the benefit of such underwriters 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 shall also be conditions precedent to the obligations of
such holders of Registrable Securities. In the event that any condition to the
obligations under any such underwriting agreement are not met or waived, and
such failure to be met or waived is not attributable to the fault of the selling
stockholders requesting a demand registration pursuant to Section 3.1(a), such
request for registration shall not be deemed exercised for purposes of
determining whether such registration has been effected for purposes of Section
3.1(a) or (d). No holder of Registrable Securities shall be required by the
Company to make any representations
18
or warranties to, or agreements with, the Company or the underwriters other than
as set forth in Sections 3.4(e) and 3.7(b), representations, warranties or
agreements regarding such holder and such holder's intended method of
distribution and any other representations required by applicable law.
(c) Selection of Underwriters. Whenever a registration requested
pursuant to Section 3.1(a) is for an underwritten offering, the Company will
have the right to select the managing underwriters to administer the offering,
which managing underwriters shall be underwriters of nationally recognized
standing. If the Company at any time proposes to register any of its securities
under the Securities Act for sale for its own account and such securities are to
be distributed by or through one or more underwriters, the Company will have the
right to select the managing underwriters to administer the offering at least
one of which shall be an underwriter of nationally recognized standing.
(d) Incidental Underwritten Offerings. Subject to the provisions of
the proviso to the first sentence of Section 3.2, if the Company at any time
proposes to register any of its equity securities under the Securities Act
(other than pursuant to Section 3.1 or pursuant to a Special Registration),
whether or not for its own account, and such securities are to be distributed by
or through one or more underwriters, the Company will give prompt written notice
to all holders of Registrable Securities of its intention to do so and, if
requested by any holder of Registrable Securities, will use its best efforts to
arrange for such underwriters to include the Registrable Securities to be
offered and sold by such holder among those to be distributed by such
underwriters. 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 the underwriters under such
underwriting agreement shall also be conditions precedent to the obligations of
such holders of Registrable Securities. No such holder of Registrable Securities
shall be required by the Company to make any representations or warranties to,
or agreements with, the Company or the underwriters other than as set forth in
Sections 3.4(e) and 3.7(b), representations, warranties or agreements regarding
such holder and such holder's intended
19
method of distribution and any other representations required by applicable law.
(e) Hold Back Agreements. If and whenever the Company proposes to
register any of its equity securities under the Securities Act, whether or not
for its own account (other than pursuant to a Special Registration), or is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act pursuant to Section 3.1 or 3.2, each holder
of Registrable Securities agrees by acquisition of such Registrable Securities
not to effect (other than pursuant to such registration) any public sale or
distribution, including, but not limited to, any sale pursuant to Rule 144 or
Rule 144A, of any Registrable Securities, any other equity securities of the
Company or any securities convertible into or exchangeable or exercisable for
any equity securities of the Company for 180 days after, and during the 20 days
prior to, the effective date of such registration and the Company agrees to
cause each holder of any equity security, or of any security convertible into or
exchangeable or exercisable for any equity security, of the Company purchased
from the Company at any time other than in a Public Offering to enter into a
similar agreement with the Company. The Company further agrees not to effect
(other than pursuant to such registration or pursuant to a Special Registration)
any public sale or distribution, or to file any registration statement (other
than such registration or a Special Registration) covering any, of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the 20 days prior to, and for 180 days after, the
effective date of such registration if required by the managing underwriter.
3.5. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement registering Registrable
Securities under the Securities Act, the Company will give the holders of such
Registrable Securities so to be registered and their underwriters, if any, and
their respective counsel and accountants the opportunity to participate in the
preparation of such registration statement, each prospectus included therein or
filed with the Securities and Exchange Commission, and each amendment thereof or
supplement thereto, and will give each of them such 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 issued audit reports on
its financial statements as shall be necessary, in the opinion of such holders'
and such underwriters' respective counsel, to con-
20
duct a reasonable investigation within the meaning of the Securities Act.
3.6. Other Registrations. If and whenever the Company is required to
use its best efforts to effect the registration of any Registrable Securities
under the Securities Act pursuant to Section 3.1 or 3.2, and if such
registration shall not have been withdrawn or abandoned, the Company shall not
be obligated to and shall not file any registration statement with respect to
any of its securities (including Registrable Securities) under the Securities
Act (other than a Special Registration), whether of its own accord or at the
request or demand of any holder or holders of such securities, until a period of
six months shall have elapsed from the effective date of such previous
registration; and the Company shall so provide in any registration rights
agreement with respect to any of its equity securities.
3.7. Indemnification.
(a) Indemnification by the Company. In the event of any registration
of any Registrable Securities under the Securities Act pursuant to Section 3.1
or 3.2, the Company will and hereby does indemnify and hold harmless each seller
of such securities, its directors, officers, and employees, each other person
who participates as an underwriter, broker or dealer in the offering or sale of
such securities and each other person, if any, who controls such seller or any
such participating person within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any and all losses,
claims, damages or liabilities, joint or several, to which such seller or any
such director, officer, employee, participating person or controlling person may
become subject under the Securities Act or otherwise (including, without
limitation, the reasonable fees and expenses of legal counsel incurred in
connection with any claim for indemnity hereunder), insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a 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 related thereto, or
any amendment or supplement thereto, or (ii) any omission or alleged omission to
state a fact required to be stated in any such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement or necessary to make the statements therein not misleading; and the
Company will reimburse such seller and each such direc-
21
tor, officer, employee, participating person 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 that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or expense arises out of
or is based upon an untrue statement or 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 such seller or participating
person expressly for use in the preparation thereof and provided, further, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission in
the prospectus, if such untrue statement or alleged untrue statement or omission
or alleged omission is completely corrected in an amendment or supplement to the
prospectus and the seller of Registrable Securities thereafter fails to deliver
such prospectus as so amended or supplemented prior to or concurrently with the
sale of Registrable Securities to the person asserting such loss, claim, damage,
liability or expense after the Company had furnished such seller with a
sufficient number of copies of the same or if the seller received notice from
the Company of the existence of such untrue statement or alleged untrue
statement or omission or alleged omission and the seller continued to dispose of
Registrable Securities prior to the time of the receipt of either (A) an amended
or supplemented prospectus which completely corrected such untrue statement or
omission or (B) a notice from the Company that the use of the existing
prospectus may be resumed. 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, employee, participating person or controlling person and
shall survive the transfer of such securities by such seller.
(b) Indemnification by the Sellers. In the event of any registration
of any Registrable Securities under the Securities Act pursuant to Section 3.1
or 3.2, each of the prospective sellers of such securities will indemnify and
hold harmless the Company, each director of the Company, each officer of the
Company who shall sign such registration statement, each other person who
participates as an underwriter, broker or dealer in the offering or sale of such
securities and each other person, if any, who controls the Company or any such
participating person within the meaning of Section 15 of the Securities Act or
Section 20 of the
22
Exchange Act, against any and all losses, claims, damages or liabilities, joint
or several, to which the Company or any such director, officer, employee,
participating person or controlling person may become subject under the
Securities Act or otherwise (including, without limitation, the reasonable fees
and expenses of legal counsel incurred in connection with any claim for
indemnity hereunder), insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a fact contained in, or any
omission or alleged omission to state a fact with respect to such seller
required to be stated 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 related thereto, or any
amendment or supplement thereto, if such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company by such seller expressly for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement; and the seller will reimburse the Company and each such
director, officer, employee, participating person 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 that the liability of each such seller will be in
proportion to and limited to the net amount received by such seller (after
deducting any underwriting discount and expenses) from the sale of Registrable
Securities pursuant to such registration statement. 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, participating person 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 involving a
claim referred to in the preceding paragraphs of this Section 3.7, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party hereunder, give written notice to the latter of the
commencement of such action, provided that the failure of any indemnified party
to give notice as provided therein shall not relieve the indemnifying party of
its obligations under the preceding paragraphs of this Section 3.7. In case any
such action is brought against an indemnified party, the indemnifying party will
be entitled to participate therein and to assume the defense thereof, jointly
with any other indemnifying party similarly
23
notified to the extent that it may wish, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof, provided that if such indemnified party and the indemnifying
party reasonably determine, based upon advice of their respective independent
counsel, that a conflict of interest may exist between the indemnified party and
the indemnifying party with respect to such action and that it is advisable for
such indemnified party to be represented by separate counsel, such indemnified
party may retain other counsel, reasonably satisfactory to the indemnifying
party, to represent such indemnified party, and the indemnifying party shall pay
all reasonable fees and expenses of such counsel. No indemnifying party, in the
defense of any such claim or litigation, shall, except with the consent of such
indemnified party, which consent shall not be unreasonably withheld, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
(d) Other Indemnification. Indemnification similar to that specified
in the preceding paragraphs of this Section 3.7 (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 such Registrable
Securities under any Federal or state law or regulation of governmental
authority other than the Securities Act.
(e) Other Remedies. If for any reason the foregoing indemnity under
Section 3.7(a) or (b) is unavailable, or is insufficient to hold harmless an
indemnified party, other than by reason of the exceptions provided therein, then
the indemnifying party and the indemnified party under Section 3.7(a) or (b)
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and the indemnified party on the other or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, or
provides a lesser sum to the indemnified party than the amount hereinafter
calculated, in such proportion as is appropriate to reflect not only the
relative fault of the indemnifying party on the one hand and the indemnified
party
24
on the other but also the relative benefits received by the indemnifying party
and the indemnified party from the offering of Registrable Securities (taking
into account the portion of the proceeds of the offering realized by each such
party) as well as any other relevant equitable considerations. 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. Any party's obligation to
contribute pursuant to this Section 3.7(e) is several (in proportion to the
relative value of their Registrable Securities covered by a registration
statement) and not joint with the obligations of any other party. No party shall
be liable for contribution under this Section 3.7(e) except to the extent and
under such circumstances as such party would have been liable to indemnify under
this Section 3.7 if such indemnification were enforceable under applicable law.
(f) Officers and Directors. As used in this Section 3.7, the terms
"officers" and "directors" shall include the partners of the holders of
Registrable Securities which are partnerships.
(g) Indemnification Payments. The indemnification and contribution
required by this Section 3.7 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; provided that in the
event it is ultimately determined that any amounts so paid were not subject to
indemnification or contribution hereunder, the recipient thereof shall promptly
return such amounts to payor thereof.
4. Participation Rights. So long as any Registrable Securities
remain outstanding and a Public Market has not been established with respect to
the Common Stock, the CD&R Fund hereby agrees not to make any sale or transfer
of Common Stock owned by the CD&R Fund which would constitute a Qualifying Sale,
except pursuant to the following provisions of this Section 4:
(a) Procedures for Qualifying Sales. At least 30 days prior to
making any Qualifying Sale, the CD&R Fund will deliver a written notice (the
"Sale Notice") to the Company and the other holders of Registrable Securities.
The Sale Notice will fully disclose the identity of the prospective transferee
and the terms and conditions of the proposed Qualifying Sale, including the
number of shares of Common Stock that the prospective transferee is willing to
purchase and the intended consummation date of such Qualifying Sale.
25
The CD&R Fund agrees not to consummate any Qualifying Sale until at least 30
days after the related Sale Notice has been given to each holder of Registrable
Securities, unless the CD&R Fund shall have received a notice from each holder
of Registrable Securities indicating whether or not such holder has elected to
participate in such Qualifying Sale and the number of shares of Common Stock to
be sold by each such holder so electing to participate has been finally
determined pursuant hereto prior to the expiration of such 30-day period. Each
holder of Registrable Securities may elect to participate in the contemplated
Qualifying Sale by giving written notice to the CD&R Fund and the Company within
30 days after the CD&R Fund has given the related Sale Notice to such holder. If
a holder of Registrable Securities elects to participate, such holder will be
entitled to sell in the contemplated Qualifying Sale, at the same price and on
the same terms and conditions as set forth in the related Sale Notice, an amount
of Registrable Securities equal to the product of (i) the quotient determined by
dividing (A) the percentage of Registrable Securities then held by such holder
of Registrable Securities so electing to participate by (B) the aggregate
percentage of Registrable Securities represented by the Registrable Securities
then held by the CD&R Fund and all holders of Registrable Securities so electing
to participate and (ii) the number of shares of Registrable Securities such
transferee has agreed to purchase in the contemplated sale (or in the case of a
"Qualifying Sale" within the meaning of clause (ii) of Section 4(b), the Excess
Number of shares which such transferee has agreed to purchase), unless all such
holders otherwise agree themselves to a different allocation. If such right to
participate in a Qualifying Sale shall not have been exercised prior to the
expiration of the 30-day period, then at any time during the 90 days following
the expiration of the 30-day period, subject to extension for not more than an
additional 60 days to the extent reasonably required to comply with applicable
laws in connection with such purchase, the CD&R Fund may sell to the prospective
transferee the number of shares of Common Stock and at the price and on the
terms and conditions indicated in the Sale Notice. Upon receipt of a Sale
Notice, the Company will provide the CD&R Fund with a current list of holders of
Registrable Securities and their addresses.
(b) Qualifying Sale Defined. The term "Qualifying Sale" shall mean
(i) any sale or transfer of Common Stock proposed to be made by the CD&R Fund at
any time after the CD&R Fund has sold or transferred in the aggregate at least
the Qualifying Number of the shares of Common Stock or (ii) in the event that
prior to the sale or transfer by the CD&R Fund of an aggregate of the Qualifying
Number of shares
26
of Common Stock, the CD&R Fund proposes to sell or transfer a number of shares
of Common Stock which when combined with any prior sales or transfers of such
shares by the CD&R Fund exceeds the Qualifying Number, the sale or transfer of a
number of shares (the "Excess Number") equal to the excess of (A) the sum of any
shares previously sold or transferred by the CD&R Fund and the aggregate number
of shares proposed to be sold or transferred in such contemplated sale, over (B)
the Qualifying Number of shares. In determining whether there is a "Qualifying
Sale," equitable adjustments shall be made to reflect any stock split, stock
dividend, stock combination, recapitalization or similar transaction.
(c) Exclusion from Qualifying Sale. The obligation of the CD&R Fund
and the rights of the holders of Registrable Securities pursuant to this Section
4 will not apply to any sale or transfer by the CD&R Fund pursuant to a
distribution to the public (whether pursuant to a registered Public Offering or
pursuant to Rule 144 or otherwise (but not pursuant to Rule 144A under the
Securities Act or any successor provision)). Any shares referred to, or covered
by any sale, transfer or distribution referred to, in the preceding sentence
shall not be included in the computation of "Qualifying Sale."
5. Investors' Rights to Purchase Additional Capital Stock.
(a) CD&R Sale. If at any time after the date of this Agreement and
prior to the establishment of a Public Market with respect to the Common Stock,
the Company shall propose to issue or sell any additional shares of its capital
stock (or any securities that may be exchanged for or converted into such
capital stock) to the CD&R Fund or any Affiliate of the CD&R Fund (a "CD&R
Sale"), the Company shall offer to each holder of Registrable Securities that is
an accredited investor (as such term is defined in Rule 501 of Regulation D
under the Securities Act) the right to purchase that number of additional shares
of the Company's capital stock (or such other security), on the same terms and
conditions as the proposed CD&R Sale, such that such holder would have the
opportunity to hold the same percentage of shares of the Company's capital stock
(on a fully diluted basis) after giving effect to the CD&R Sale, as such holder
held immediately prior thereto (an "Offer"). Notwithstanding the foregoing, none
of the following transactions shall constitute a CD&R Sale: the issuance by the
Company of any shares of its capital stock (or any securities that may be
exchanged for or converted into such capital stock) (A) pursuant to the
transactions described in Section 1, or (B) in exchange for Common Stock.
27
(b) Offer Procedures. The Company shall make an Offer by delivering
to each holder of Registrable Securities at least 30 Business Days' prior
written notice of the proposed CD&R Sale. Such notice will identify the class
and number of shares or amount of securities to be issued (the "Offered
Securities"), the proposed date of issuance and the price and other terms of the
issuance. Such notice will also include an offer to sell to each such holder
that number of the Offered Securities such that such holder would have the
opportunity to hold the same percentage of shares of the Company's capital stock
(on a fully diluted basis) after giving effect to the CD&R Sale, as such holder
held immediately prior thereto (such holder's "Proportionate Share"), at the
same price and on the same other terms as are proposed for such CD&R Sale, which
offer by its terms shall remain open for a period of 15 Business Days from the
date of receipt of such notice. Each such holder shall give notice to the
Company of its intention to accept an Offer prior to the end of the 15-Business
Day period of such Offer, setting forth such portion of the Offered Securities
which such holder elects to purchase. If any holder fails to subscribe for its
Proportionate Share of the Offered Securities, the other subscribing holders
shall be entitled to purchase such Offered Securities as are not subscribed for
by such holder in such proportion of the Offered Securities as they shall have
theretofore agreed to purchase until there are no unmet demands of subscribing
holders or all Offered Securities shall have been subscribed for. The Company
shall notify each holder five Business Days following the expiration of the
15-Business Day period described above of the amount of Offered Securities which
each such holder may purchase pursuant to the foregoing sentence, and each such
holder shall then have 10 Business Days from the delivery of such notice to
indicate such additional amount, if any, that such holder wishes to purchase.
Upon the closing of the CD&R Sale as to which the Company has given notice, such
holder shall purchase from the Company, and the Company shall sell to such
holders, the Offered Securities subscribed for by such holders on the terms
specified in the Offer, which shall be the same terms at which all other persons
or entities acquire such securities in connection with such sale or issuance. In
the event that such holders do not subscribe for all of the Offered Securities,
the Company shall have 30 Business Days from the end of the foregoing
15-Business Day or 30-Business Day period, whichever is applicable, to sell all
or any part of such Offered Securities as to which such holders have not
accepted an Offer to any other persons or entities, in all material respects on
terms and conditions that are no more favorable to such other persons or
entities or less favorable to the Company than those set forth in the Offer.
28
Any Offered Securities not purchased by such holders or other persons or
entities in accordance with this Section 5 may not be sold or otherwise disposed
of by the Company until they are again offered to such holders under the
procedures specified in this Section 5.
6. Miscellaneous.
6.1. (a) Rule 144. If the Company shall have filed a registration
statement pursuant to Section 12 of the Exchange Act or a registration statement
pursuant to the Securities Act relating to any class of equity securities (other
than a registration statement pursuant to a Special Registration), the Company
covenants that it will file the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
Securities and Exchange Commission thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any holder of
Registrable Securities, make publicly available such information as necessary to
permit sales pursuant to Rule 144), and will take such further action as any
holder of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell shares of Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144, as such rule may be amended from
time to time, or (b) any successor rule or regulation hereafter adopted by the
Securities and Exchange Commission.
(b) Legend on Stock Certificates. In addition to such other legends
as may be required by the Company's Certificate of Incorporation or any Stock
Subscription Agreement pursuant to which Registrable Securities are issued, each
certificate or certificates representing Registrable Securities shall bear the
following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ENTITLED TO THE
BENEFITS OF AND ARE BOUND BY THE OBLIGATIONS SET FORTH IN A
REGISTRATION AND PARTICIPATION AGREEMENT, DATED AS OF MARCH 30,
1998, AND ANY AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS THERETO,
AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY AND
NEITHER THIS CERTIFICATE NOR THE SHARES REPRESENTED BY IT ARE
ASSIGNABLE OR OTHERWISE TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF SUCH REGISTRATION AND PARTICIPATION AGREEMENT, A COPY
OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY."
29
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
HOLDBACK PROVISIONS CONTAINED IN SECTION 3.4 OF THE REGISTRATION AND
PARTICIPATION AGREEMENT AND IN THE COMPANY'S CERTIFICATE OF
INCORPORATION, WHICH PROVISIONS PROHIBIT ANY TRANSFER OF SUCH SHARES
DURING THE 20 DAYS PRIOR TO AND THE 180 DAYS AFTER THE EFFECTIVE
DATE OF ANY REGISTRATION STATEMENT (SUBJECT TO CERTAIN LIMITED
EXCEPTIONS) FILED BY THE COMPANY FOR ANY OF THE SHARES OF THE
COMPANY, WITHOUT REGARD TO THE APPLICABILITY OF RULE 144 OR RULE
144A UNDER THE SECURITIES ACT."
The Company agrees that it will not issue new certificates for shares formerly
representing Registrable Securities without a legend unless such shares have
been sold to the public pursuant to an effective registration statement under
the Securities Act or Rule 144.
6.2. Amendments and Waivers. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the holder or
holders of at least a majority of the shares of Registrable Securities. Each
holder of any Registrable Securities at the time or thereafter outstanding shall
be bound by any consent authorized by this Section 6.2, whether or not such
Registrable Securities shall have been marked to indicate such consent.
6.3. Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election and unless notice is otherwise
given to the Company by the record owner, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
6.4. Successors, Assigns and Transferees. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. In addition, and whether or not any express
30
assignment shall have been made, the provisions of this Agreement which are for
the benefit of, or are binding upon the parties hereto other than the Company
shall also be for the benefit of, binding upon and enforceable by any subsequent
holder of any Registrable Securities, subject to the provisions respecting the
minimum numbers or percentages of shares of Registrable Securities required in
order to be entitled to certain rights, or to take certain actions, contained
herein.
6.5. Notices. All notices, requests, demands or other communications
provided for hereunder shall be in writing and shall be deemed to have been duly
given to any party (a) when delivered personally (by courier service or
otherwise), (b) when delivered by telex and confirmed by receipt of the proper
telex answerback, (c) five days after being mailed by first class mail, postage
prepaid (registered or certified mail, return receipt requested), (d) when
receipt acknowledged, if telecopied, or (e) the next business day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next day
delivery, in each case to the applicable address set forth beneath its name on
the schedules hereto, or to such other address as such party may have designated
to the Company in writing, or if to any other holder of Registrable Securities
at the address of such holder in the stock record books of the Company, and if
to the Company or the CD&R Fund to the following addresses:
(i) if to the Company, to:
NA Holding Corporation
c/o North American Van Lines, Inc.
0000 X.X. XXX 00 Xxxx
P.O. Box 988
Ft. Xxxxx, Indiana 46801-0988
Attention: General Counsel
(ii) if to the CD&R Fund, to:
Xxxxxxx, Dubilier & Rice
Fund V Limited Partnership
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: General Partner
or at such other address or addresses as the Company or the CD&R Fund, as the
case may be, may have designated in writing to each holder of Registrable
Securities at the time outstanding. Copies of any notice or other communication
given under the Agreement shall also be given to:
31
Xxxxxxx, Dubilier & Rice, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
and
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxx X. Xxxx, Esq.
Any party may give any notice or other communication in connection herewith
using any other means (including, but not limited to, personal delivery,
messenger service, facsimile, telex or ordinary mail), but no such notice or
other communication shall be deemed to have been duly given unless and until it
is actually received by the individual for whom it is intended.
6.6. No Inconsistent Agreements. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the holders of Registrable Securities by this
Agreement.
6.7. Remedies; Attorneys' Fees. Each holder of Registrable
Securities, in addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of any provision of this Agreement and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate. In any action or proceeding brought to enforce any provision of this
Agreement, the successful party shall be entitled to recover reasonable
attorneys' fees in addition to its costs and expenses and other available
remedy.
6.8. Stock Splits, etc. Each party hereto agrees that it will vote
to effect a stock split (forward or reverse, as the case may be) with respect to
any Registrable Securities in connection with any registration of such
Registrable Securities hereunder, or otherwise, if the managing underwriter
shall advise the Company in writing (or, in connection with an offering that is
not underwritten, if an investment banker shall advise the Company in writing)
that in their or
32
its opinion such a stock split would facilitate or increase the likelihood of
success of the offering. Each party hereto agrees that any number of shares of
Common Stock referred to in this Agreement shall be equitably adjusted to
reflect any stock split, stock dividend, stock combination, recapitalization or
similar transaction.
6.9. Term. This Agreement shall be effective as of the date hereof
and shall continue in effect thereafter until the earliest of (a) its
termination by the consent of the parties hereto or their respective successors
in interest, (b) the date on which no Registrable Securities remain outstanding
and (c) the dissolution, liquidation or winding up of the Company.
6.10. Severability. If any provision of this Agreement is
inoperative or unenforceable for any reason, such circumstances shall not have
the effect of rendering the provision in question inoperative or unenforceable
in any other case or circumstance, or of rendering any other provision or
provisions herein contained invalid, inoperative, or unenforceable to any extent
whatsoever. The invalidity of any one or more phrases, sentences, clauses,
Sections or subsections of this Agreement shall not affect the remaining
portions of this Agreement.
6.11. Headings. The headings contained in this Agreement are for
purposes of convenience only and shall not affect the meaning or interpretation
of this Agreement.
6.12. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which
together constitute one and the same instrument.
6.13. Governing Law. This Agreement shall be governed in all
respects, including, but not limited to, as to validity, interpretation and
effect, by the internal laws of the State of New York without regard to
principles of conflicts of law.
6.14. No Third Party Beneficiaries. Except as provided in Sections
1(d), 3.7 and 6.4, nothing in this Agreement shall confer any rights upon any
Person other than the parties hereto and each such party's respective heirs,
successors and permitted assigns.
6.15. Consent to Jurisdiction. Each party irrevocably submits to the
exclusive jurisdiction of (a) the Supreme Court of the State of New York, New
York County, and (b) the United States District Court for the Southern District
of New
33
York, for the purposes of any suit, action or other proceeding arising out of
this Agreement or any transaction contemplated hereby (and agrees not to
commence any such suit, action or proceeding except in such courts). Each party
further agrees that service of any process, summons, notice or document by U.S.
registered mail to such party's respective address set forth above shall be
effective service of process for any such suit, action or proceeding. Each party
irrevocably and unconditionally waives any objection to the laying of venue of
any such suit, action or proceeding in (i) the Supreme Court of the State of New
York, New York County, and (ii) the United States District Court for the
Southern District of New York, that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.
6.16. Waiver of Jury Trial. Each party hereby waives, to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect of any suit, action or proceeding arising out of this Agreement or any
transaction contemplated hereby. Each party (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (b) acknowledges that it and the other
parties have been induced to enter into the Agreement by, among other things,
the mutual waivers and certifications in this Section 6.16.
6.17. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
34
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
NA HOLDING CORPORATION
By: /s/Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXXXXX, DUBILIER & RICE
FUND V LIMITED PARTNERSHIP
By: CD&R Associates V
Limited Partnership,
the general partner
By: CD&R Investment Associates II, Inc.
By: /s/Xxxxxx X. Xxxx, III
---------------------------------
Name: Xxxxxx X. Xxxx, III
Title: Chairman and Chief
Executive Officer
35
