Exhibit 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
October 2, 2000, is entered into by and among Alliance Capital Management
Holding L.P., a Delaware limited partnership ("Holding"), Xxxxxxx X. Xxxxxxxxx
Inc., a Delaware corporation ("Xxxxxxxxx"), and SCB Partners Inc., a New York
Corporation ("SCB Partners").
PRELIMINARY STATEMENTS
WHEREAS, in connection with the consummation of the transactions
contemplated by the Amended and Restated Acquisition Agreement, dated as of
October 2, 2000 (the "Acquisition Agreement"), among Holding, Alliance Capital
Management L.P., a Delaware limited partnership ("Capital"), Alliance Capital
Management LLC, Xxxxxxxxx, Xxxxxxxxx Technologies Inc., SCB LLC, SCB Partners
and Xxxxxxx X. Xxxxxxxxx & Co., LLC, SCB Partners and Xxxxxxx X. Xxxxxxxxx &
Co., LLC have acquired units representing limited partnership interests of
Capital ("Capital Units").
WHEREAS, the Acquisition Agreement contemplates that Xxxxxxxxx and SCB
Partners will enter into this Agreement to provide for certain registration
rights with respect to units representing limited partnership interests of
Holding ("Holding Units") issuable in exchange for Capital Units acquired as of
the date hereof.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreement and covenants hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Certain Definitions.
1.1 Terms Defined in this Section. For purposes of this Agreement,
the following terms have the following meanings:
"Business Day" means any day other than a Saturday, Sunday, or
other day on which commercial banking institutions in New York, New York are
required or authorized by law to remain closed.
"Demand Period" means each successive 365-day period beginning two
years from the date hereof.
"Equitable" means The Equitable Life Assurance Society of the
United States, a New York stock life insurance corporation.
"Exchange Act" means the Securities Exchange Act of 1934, or any
successor federal statute, and the rules and regulations of the SEC promulgated
thereunder, in each case as amended from time to time.
"Holding Indemnified Parties" means Holding, its officers,
directors, employees and agents, and each Person, if any, who controls Holding
within the meaning of either the Securities Act or the Exchange Act, and the
officers and directors of the foregoing parties.
"Indemnified Party" means a Person claiming a right to
indemnification pursuant to Article 6 of this Agreement.
"Indemnifying Party" means a Person required to provide
indemnification pursuant to Article 6 of this Agreement.
"Losses" means any losses, claims, damages, or liabilities, and
any related legal or other fees and expenses.
"Permitted Transferee" shall mean any entity in which Xxxxxxxxx
beneficially owns, directly or indirectly, 100% of the equity interests.
"Person" means any individual, corporation, partnership, limited
partnership, limited liability partnership, limited liability company, trust,
association, organization, or other entity.
"Prospectus" means the prospectus included in a Registration
Statement as of the date it becomes effective under the Securities Act and, in
the case of references to the Prospectus as of a date subsequent to the
effective date of the Registration Statement, as amended or supplemented as of
such date, including all documents incorporated by reference therein, each as
amended, and each applicable prospectus supplement relating to the offering and
sale of any of the Registrable Securities pursuant to such Registration
Statement.
"Registrable Securities" means:
(i) the Holding Units issued or issuable in exchange for
Capital Units acquired pursuant to the Acquisition Agreement, and
(ii) any securities of Holding or its successors issued or
issuable with respect to any units referred to in paragraph (i) whether by way
of conversion, exchange, dividend, or stock split, other distribution or
otherwise or in connection with a combination of shares, recapitalization,
merger, consolidation, or other reorganization or otherwise.
Securities that are Registrable Securities will cease to be Registrable
Securities:
(i) when a registration statement with respect to the sale of
such securities has become effective under the Securities Act and such
securities have been disposed of in accordance with such registration statement,
(ii) when such securities shall have been sold pursuant to
Rule 144 or Rule 145 (or any successor provisions) under the Securities Act or
in any other transaction in which the applicable purchaser does not receive
"restricted securities" (as that term is defined for purposes of Rule 144 under
the Securities Act),
(iii) on the first date on which such securities can be sold
without regard to the volume and manner of sale limitations set forth in Rule
144 (or any successor provision),
(iv) when such securities cease to be outstanding,
-2-
(v) when such securities have been transferred to a
transferee who has not agreed in writing to be bound by the terms and conditions
of this Agreement,
(vi) when such securities cease to be of a class of
securities that is listed and traded on a national securities exchange or the
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation System, or
(vii) ten years from the date hereof except for securities
covered by a Demand Registration prior to the expiration of such ten year period
with respect to which such securities shall cease to be Registrable Securities
ten years and 90 days from the date hereof.
"Registration Statement" means a registration statement (including
the related Prospectus) of Holding under the Securities Act on Form S-3 or any
successor thereto or if Holding is not eligible to use such form, then Form S-1
or any successor thereto. The term "Registration Statement" shall also include
all exhibits, financial statements, and schedules and all documents incorporated
by reference in such Registration Statement when it becomes effective under the
Securities Act, and in the case of the references to the Registration Statement
as of a date subsequent to the effective date, as amended or supplemented as of
such date.
"SEC" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act or the Exchange Act.
"Securities Act" means the Securities Act of 1933, or any
successor federal statute, and the rules and regulations of the SEC promulgated
thereunder, in each case as amended from time to time.
"Selling Unitholder" means any Unitholder whose Registrable
Securities are included at the request of such Unitholder in any Registration
Statement pursuant to Article 2 or Article 3.
"Third-Party Demand Unitholder" means any Person having the right
to require that Holding effect a registration under the Securities Act of
securities owned by such Person, other than pursuant to this Agreement, and any
other Person exercising incidental rights of registration pursuant to the
agreement under which such first Person has the right to require registration.
"Unitholder" means Xxxxxxxxx and any Permitted Transferee:
(i) to whom any Registrable Securities or any rights to
acquire any Registrable Securities are transferred by any Person that was,
immediately prior to such transfer, a Unitholder,
(ii) who continues to hold such Registrable Securities or the
right to acquire such Registrable Securities,
(iii) to whom the transferring Unitholder has assigned any of
its rights under this Agreement, in whole or in part, in accordance with the
provisions of Section 7.6 of this Agreement with respect to such Registrable
Securities, and
-3-
(iv) who has executed a counterpart hereof in connection with
the transfer of such Registrable Securities.
"Unitholder Representative" means Xxxxxxxxx.
"Unitholder Indemnified Parties" means each Selling Unitholder,
its officers, directors, members and partners, each Person (if any) who controls
such Selling Unitholder within the meaning of either the Securities Act or the
Exchange Act, and the officers, directors, members and partners of the foregoing
parties.
1.2 Terms Defined Elsewhere in this Agreement. For purposes of
this Agreement, the following terms have the meanings set forth in the sections
indicated:
Term Section
---- -------
Capital Units Preamble
Delaying Event Section 2.5(a)
Demand Registration Section 2.1
Demand Request Section 2.2(a)
Demanding Unitholders Section 2.2(a)
Incidental Registration Section 3.1(a)
Minimum Condition Section 2.2(c)
Proposed Sale Notice Section 4.6
Registration Expenses Section 5.1
Sale Period Section 2.5(b)
1.3 Terms Generally. The definitions in this Agreement shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context requires, any pronoun includes the corresponding masculine, feminine,
and neuter forms. The words "include," "includes," and "including" are not
limiting. Any reference in this Agreement to a "day" or number of "days"
(without the explicit qualification of "Business") shall be interpreted as a
reference to a calendar day or number of calendar days. If any action or notice
is to be taken or given on or by a particular calendar day, and such calendar
day is not a Business Day, then such action or notice shall be deferred until,
or may be taken or given on, the next Business Day.
2. Demand Registration.
2.1 Demand Registration. At any time on or after two (2) years
after the date hereof but not later than ten (10) years after the date hereof,
the Unitholders (through the Unitholder Representative, as described below)
shall have the right to require that Holding register under the Securities Act
the offer or sale of all or a portion of the Registrable Securities held by the
Unitholders on the terms and subject to the conditions and limitations set forth
herein. The registration of Registrable Securities under the Securities Act in
accordance with this Article 2 is referred to in this Agreement as a "Demand
Registration." The number of Demand Registrations to which the Unitholders
collectively shall be entitled shall not exceed one (1) per Demand Period.
-4-
2.2 Procedure for Unitholder Representative; Procedures for Demand
Registrations.
(a) The Unitholder Representative may initiate a Demand
Registration pursuant to this Section 2.2(a) by furnishing Holding and each
Unitholder with a written notice ("Demand Request") specifying (i) the number of
Registrable Securities the Unitholders desire to have registered, which must be
an amount at least equal to the Minimum Condition, (ii) the Unitholders
intending to register their Registrable Securities, (iii) the respective amount
of Registrable Securities intended to be registered by each such Unitholder, and
(iv) the intended method or methods of distribution of all such Registrable
Securities by such Unitholders. The Unitholders whose Registrable Securities are
included in the Demand Request are referred to as the "Demanding Unitholders."
(b) If the number of Registrable Securities that the
Unitholder Representative desires to have registered, as specified in the Demand
Request, does not satisfy the Minimum Condition, then Holding will have no
obligation to effect a Demand Registration in response to such Demand Request.
(c) The "Minimum Condition" means that the number of
Registrable Securities that the Unitholder Representative desires to have
registered, as specified in the Demand Request, of not less than 1,000,000
Holding Units (such number to be adjusted equitably to account for any stock
dividend, stock split (including a reverse stock split) or similar transaction)
or, if less, all of the Registrable Securities.
(d) Following the effectiveness of a Registration Statement
filed in connection with a Demand Registration, Holding will not be required to
file a Registration Statement for a subsequent Demand Registration within twelve
months after the date on which it received the Demand Request pursuant to
Section 2.2(a) for the immediately preceding Demand Registration.
(e) As soon as reasonably practicable after receipt of a
Demand Request (which satisfies the Minimum Condition), and, in the case of a
Registration Statement on Form S-3, as soon as reasonably practicable but not
later than 45 days after receipt of a Demand Request (which satisfies the
Minimum Condition), subject to Section 2.5, Holding will file with the SEC and
use its reasonable best efforts to cause to become effective as promptly as
practicable a Registration Statement that covers the Registrable Securities
requested to be registered in the Demand Request; provided that Holding's
obligations with respect to any such Registration Statement shall terminate if
the securities requested to be registered in the Demand Request cease to be
Registrable Securities. Subject to the provisions of Section 2.4 below, each
Registration Statement may also include securities to be sold for the account of
Holding, for Unitholders who do not participate as Demanding Unitholders but who
exercise their rights under Article 3 below, or for any other unitholder of
Holding. If at the time of receipt of a Demand Request Holding is subject to the
periodic reporting obligations of the Exchange Act, then Holdings shall, if
requested by the Unitholder Representative, use its reasonable best efforts to
cause any Registration Statement filed pursuant to this Article 2 to be a shelf
registration statement.
-5-
2.3 Underwriters.
(a) The Unitholder Representative shall have the right to
select the lead book running managing underwriter for any underwritten public
offering in connection with a Demand Registration, which lead managing
underwriter shall be reasonably acceptable to Holding. Holding hereby agrees
that as of the date hereof Xxxxxxx Xxxxx & Co. is reasonably acceptable to
Holding.
(b) Each Demanding Unitholder electing to participate in a
Demand Registration involving an underwritten public offering shall, as a
condition to participation in such underwritten offering, enter into and perform
its obligations under an underwriting agreement or other similar arrangement in
customary form with the lead underwriter of such offering.
(c) The maximum number of marketed underwritten offerings
during any Demand Period shall be one (1) and the maximum number of underwritten
"block" offerings during any Demand Period shall be one (1).
2.4 Limitation on Inclusion of Registrable Securities.
(a) If the book running managing underwriter of any
underwritten public offering, including a "block" offering by Unitholders, in
connection with a Demand Registration determines in good faith that the
aggregate number of Registrable Securities to be offered exceeds the number of
shares that could be sold without having an adverse effect on such offering
(including the price at which the Registrable Securities may be sold), then the
number of Registrable Securities to be offered for the accounts of the Demanding
Unitholders in such offering shall be reduced or limited on a pro rata basis,
based on the respective numbers of Registrable Securities requested to be
included in such offering by the Demanding Unitholders, to the extent necessary
to reduce the total number of shares to be included in such offering to the
amount recommended by the book running managing underwriter; provided, however,
that if such registration includes securities other than Registrable Securities
of the Demanding Unitholders (whether for the account of Holding or for any
unitholder of Holding not exercising rights under Section 2.2), such reduction
or limitation shall be made:
(i) first, from securities held by Persons who are not
Unitholders, Holding or affiliates of Holding,
(ii) second, from securities being offered for the
account of Holding or its affiliates, allocated between Holding and such other
Persons as Holding may determine; and
(iii) third, from the number of Registrable Securities
requested to be included in such offering by the Demanding Unitholders, on a pro
rata basis, based on the number of Registrable Securities requested to be
included in the registration by each Demanding Unitholder.
(b) The Unitholder Representative may elect not to proceed
with the registration if less than 75% of the Registrable Securities requested
to be registered by each of
-6-
the Demanding Unitholders are included in such registration. If the Unitholder
Representative elects not to proceed with the registration pursuant to this
Section 2.4(b), the Registration Statement for such registration shall be
promptly withdrawn, and if the Unitholder Representative so elects and the
Demanding Unitholders pay all reasonable out-of-pocket Registration Expenses
incurred by Holding in connection with such Registration Statement, a Demand
Registration shall not be deemed to have been effected for purposes of this
Agreement (including the limitations on the number of Demand Registrations set
forth in Section 2.1 above). If the Unitholder Representative elects not to
proceed with the registration pursuant to this Section 2.4(b) and the Demanding
Unitholders do not pay all reasonable out-of-pocket Registration Expenses
incurred by Holding in connection with such Registration Statement, a Demand
Registration shall be deemed to have been effected for purposes of this
Agreement (including the limitations on the number of Demand Registrations set
forth in Section 2.1 above).
2.5 Delay of Filing or Sales.
(a) Holding shall have the right, exercisable by giving
written notice signed by an executive officer of Holding of the exercise of such
right to the Unitholder Representative, subject to Section 2.5(b), at any time
and from time to time and specifying that it is pursuant to this Section 2.5, to
delay filing or the declaration of effectiveness of a Registration Statement or
to require the applicable Selling Unitholders not to sell any Registrable
Securities pursuant to an effective Registration Statement for up to two periods
of sixty days per Demand Period, which may be consecutive, each beginning on the
date on which such notice is given, or such shorter period of time as may be
specified in such notice or in a subsequent notice delivered by Holding to such
effect if Holding shall determine, in its good faith judgment, that it is not in
the best interest of Holding (1) to proceed with such filing or request for
effectiveness or to allow such sale at such time, or (2) to permit offerings
given priority pursuant to Section 2.8 (any such notice, a "Delaying Event"). In
order for the exercise of the right pursuant to clause (1) set forth in the
immediately preceding sentence to be valid, Holding shall prohibit sales of
Capital Units and Holding Units by its directors and executive officers and any
other holders of registration rights with respect to such securities for so long
as sales of Units by Unitholders are prohibited by this Section 2.5.
(b) Holding covenants and agrees that notwithstanding any
other provision of this Agreement during each Demand Period Unitholders will be
provided at least 60 days, including not less than one period of 30 consecutive
days, during which Unitholders will be permitted to offer or sell Registrable
Securities pursuant to an effective Registration Statement under Article 2
hereof (each such 60-day period, a "Sale Period"). The parties hereto agree that
it shall not be a violation of this Agreement if during a Demand Period the
Unitholders do not have 60 days (including one period of 30 consecutive days)
during which they can offer or sell Registrable Securities if the reason
therefor is the failure of the Unitholders to timely deliver a Proposed Sale
Notice, Demand Request or Resumption Notice, but such 60 day requirement will
only be shortened by the number of days by which the related Proposed Sale
Notice, Demand Request or Resumption Notice, as the case may be, was not timely.
Unless it has given a notice pursuant to Section 2.5(a), Holding will not be
deemed to have exercised its rights pursuant to Section 2.5(a) with respect to
any day on which no Registration Statement relating to Registrable Securities is
effective. The Unitholders may not offer or sell any
-7-
Registrable Securities registered pursuant to this Agreement on more than 60
days during any Demand Period.
(c) If Holding postpones its obligations under this Agreement
by reason of a Delaying Event as described in Section 2.5(a), any Selling
Unitholder will have the right to withdraw its Registrable Securities from the
applicable Demand Registration or Incidental Registration, by giving notice to
Holding at any time following delivery of Holding's notice pursuant to Section
2.5(a) and if Selling Unitholders withdraw their Registrable Securities
following delivery of such notice, a Demand Registration shall not be deemed to
have been effected for purposes of this Agreement.
(d) The Unitholder Representative may not deliver a Demand
Request pursuant to the first sentence of Section 2.2(a) during the period of
any postponement pursuant to Section 2.5(a) until Holding notifies the
Unitholder Representative of the end of such Delaying Event or the expiration of
the period described in Section 2.5(a).
(e) Holding shall have the right, exercisable by giving
notice of the exercise of such right to the applicable Selling Unitholders, to
delay filing or the declaration of effectiveness of a Registration Statement
during any period in which, as a result of Holding's failure to satisfy the
conditions in Rule 3-01(c) of Regulation S-X, Holding is required to include in
the Registration Statement audited financial statements of Holding prior to the
date on which such audited financial statements would normally have been
prepared in accordance with Holding's past practices and the SEC's periodic
reporting requirements.
(f) The Unitholder Representative may, from time to time,
deliver to Holding a notice that the Unitholders have elected to suspend offers
or sales (such notice, a "Suspension Notice") pursuant to an effective
Registration Statement. Upon delivery of such Notice, the Unitholders shall
suspend making offers or sales under such Registration Statement until such time
as the Unitholder Representative has delivered a notice to Holding that the
Unitholders have elected to resume making offers or sales (a "Resumption
Notice"), which Resumption Notice shall in no event be delivered earlier than 6
Business Days prior to the commencement of the Demand Period immediately
following the Demand Period in which such Suspension Notice was delivered and
which shall be delivered not less than 6 Business Days nor more than 30 Business
Days prior to the resumption of offers or sales under an effective Registration
Statement. The parties agree that the delivery of a Suspension Notice shall toll
the running of the Sale Period until the earlier of (i) the resumption of offers
or sales under an effective Registration Statement or (ii) the effectiveness of
a new Registration Statement following a Demand Request.
2.6 Withdrawal.
(a) If (i) a Registration Statement filed pursuant to this
Article 2 does not remain effective under the Securities Act for the period
specified in Section 2.7(a) due to a stop order, injunction, or other order of
the SEC or other governmental agency, (ii) the Demanding Unitholders have not
sold at least 75% of their Registrable Securities registered under such
Registration Statement and (iii) such Registration Statement was not filed with
the SEC as an offering to be made on a delayed or continuous basis pursuant to
Rule 415 under the
-8-
Securities Act, then the Demanding Unitholders may elect to withdraw such
Registration Statement by written notice to Holding; and, in such an event, such
registration shall not be deemed to have been a Demand Registration for purposes
of the limitations on the number of Demand Registrations contained in Section
2.1, and Holding shall bear the Registration Expenses incurred in connection
with such registration unless a Unitholder is reasonably determined to have
caused the issuance of such stop order, injunction or other order of the SEC.
(b) Each Selling Unitholder may, no less than five Business
Days before any Registration Statement becomes effective, withdraw some or all
of its Registrable Securities from inclusion in the Registration Statement. If
such withdrawals result in the Minimum Condition not being satisfied, then
Holding may withdraw such Registration Statement unless the remaining Demanding
Unitholders agree to include additional Registrable Securities in the
registration such that the Minimum Condition would be satisfied. If Holding
withdraws a Registration Statement pursuant to this Section 2.6(b), the
Demanding Unitholders shall bear the Registration Expenses incurred by Holding
in connection with such registration.
(c) If Holding withdraws a Registration Statement pursuant to
Section 2.6(b), then the requested registration shall be deemed to have been a
Demand Registration for purposes of the limitations on the number of Demand
Registrations contained in Section 2.1 unless
(i) at the time of a Unitholder's withdrawal of
Registrable Securities pursuant to Section 2.6(b), there has been a material
adverse change in the operating results, financial condition, or business of
Holding that was not publicly known at the time that the Minimum Condition was
originally satisfied; or
(ii) Holding has postponed its obligations under this
Agreement by reason of a Delaying Event as described in Section 2.5(a).
2.7 Effectiveness of Registration Statement.
(a) In connection with any Demand Registration pursuant to
Section 2.2, subject to Section 2.5, Holding will use its best efforts to
prepare and file with the SEC any amendments and supplements to the Registration
Statement and the Prospectus used in connection therewith, and to take any other
actions, that may be necessary to keep the Registration Statement and the
Prospectus effective, current, and in compliance with the provisions of the
Securities Act, until the earlier of (1) the date that is ten years plus 90 days
from the date hereof and (2) (A) in the case of a Registration Statement on Form
S-1 (or any equivalent successor thereto), the sooner of (i) the sale of all of
the Registrable Securities covered by such Registration Statement in accordance
with the intended methods of distribution thereof or (ii) the 180th day
following the effective date of such Registration Statement and (B) in the case
of a Registration Statement on Form S-3, the sale of all Registrable Securities
covered by such Registration Statement in accordance with the intended methods
of distribution thereof.
(b) A Demand Registration shall not be deemed to have been
effected for purposes of this Agreement (including the limitations on the number
of Demand Registrations set forth in Section 2.1 above) until the earlier of (i)
the Registration Statement
-9-
therefor being declared effective under the Securities Act by the SEC and having
remained effective for a Sale Period or (ii) the receipt by Holding of a
Suspension Notice.
2.8 Priority of Holding and Employees, Officers and Directors of
Capital. An offering of Holding Units by Holding and sales of Holding Units by
the employees, officers and directors of Capital shall have priority over any
public offering of Registrable Securities by the Unitholders pursuant to Article
2 hereof.
3. Incidental Registration.
3.1 Notice of Incidental Registration.
(a) Subject to Section 3.1(b), if Holding at any time after
the date hereof proposes to register under the Securities Act any securities of
the same class as any of the Registrable Securities (whether in an underwritten
public offering or otherwise and whether or not for the account of Holding or
for any unitholder of Holding, including Selling Unitholders registering
Registrable Securities in a Demand Registration pursuant to Section 2.2), in a
manner that would permit the registration under the Securities Act of
Registrable Securities for sale to the public, Holding will give written notice
to the Unitholder Representative of its intention to do so not later than ten
days prior to the anticipated filing date of the applicable Registration
Statement. If the proposed registration is intended to be a Demand Registration,
Holding shall give the notice described in the preceding sentence only to those
Unitholders that did not previously elect to become Demanding Unitholders
pursuant to Section 2.2 with respect to such registration. Any Unitholder may
elect to participate in such registration on the same basis as the planned
method of distribution contemplated by the proposed registration by delivering
written notice of its election to Holding within five days after its receipt of
Holding's notice pursuant to this Section 3.1(a). A Unitholder's election
pursuant to this Section 3.1(a) must (i) specify the amount of Registrable
Securities desired to be included in such registration by such Unitholder and
(ii) include any other information that Holding reasonably requests be included
in such registration statement. Upon its receipt of a Unitholder's election
pursuant to this Section 3.1(a), Holding will, subject to Section 3.2, use its
reasonable best efforts to include in such registration all Registrable
Securities requested to be included. Any registration of Registrable Securities
pursuant to this Article 3 is referred to as an "Incidental Registration."
(b) Holding shall have no obligation under this Article 3
with respect to any registration effected pursuant to a registration statement
on Form S-4 (or any other registration statement registering units issued in a
merger, consolidation, acquisition, or similar transaction) or Form S-8 or any
successor or comparable forms, or a registration statement filed in connection
with an exchange offer or any offering of securities solely to Holding existing
unitholders or otherwise pursuant to a dividend reinvestment plan, stock
purchase plan, or other employee benefit plan.
3.2 Limitation on Inclusion of Registrable Securities; Priorities.
If the proposed method of distribution in connection with an Incidental
Registration is an underwritten public offering and the lead managing
underwriter thereof determines in good faith that the amount of securities to be
included in such offering would adversely affect such offering (including an
adverse effect on the price at which the securities proposed to be registered
may be sold), the
-10-
amount of securities to be offered may be reduced or limited to the extent
necessary to reduce the total number of securities to be included in such
offering to the amount recommended by the lead managing underwriter as follows:
(a) in connection with an offering initiated by Holding, if
securities are being offered for the account of other Persons (including any
Unitholders) such reduction shall be made:
(i) first, from the securities intended to be offered by
such other Persons (including any Unitholders), on a pro rata basis, based on
the number of Registrable Securities and other securities that are requested to
be included in such offering; and
(ii) last, from the number of securities to be offered
for the account of Holding;
(b) in connection with an offering initiated by a Third-Party
Demand Unitholder, such reduction shall be made:
(i) first, from securities held by Persons who are not
Unitholders, Third-Party Demand Unitholders, or other unitholders entitled under
any agreements between them and Holding to participate pari passu with the
Selling Unitholders in such Incidental Registration;
(ii) second, from the number of Registrable Securities
requested to be included in such offering by the Selling Unitholders and any
other unitholders entitled under any agreements between them and Holding to
participate pari passu with the Selling Unitholders in such Incidental
Registration, on a pro rata basis, based on the number of Registrable Securities
and other securities which are requested to be included in the registration; and
(iii) last, from securities being offered by the
Third-Party Demand Unitholders.
(c) For purposes of Section 3.2(b), the rights of the
Unitholders shall rank pari passu with the incidental rights of Equitable and
any of its affiliates (except to the extent that such other unitholders,
including Equitable or any of its affiliates, are Third-Party Demand
Unitholders).
3.3 Delay or Withdrawal of Registration. Holding may, without the
consent of any Unitholder, delay, suspend, abandon, or withdraw any proposed
registration in which any Unitholder has requested inclusion of Unitholder's
Registrable Securities pursuant to this Article 3.
3.4 Withdrawal by Selling Unitholder. Each Selling Unitholder may,
no less than five Business Days before the anticipated commencement of the
applicable road show, withdraw some or all of its Registrable Securities from
inclusion in the Registration Statement. No such withdrawal shall relieve any
withdrawing Selling Unitholder of its obligation to pay expenses incurred solely
with respect to such withdrawn Registrable Securities.
-11-
3.5 Underwriters; Underwriting Agreement. In connection with any
Incidental Registration involving an underwritten public offering of securities
for the account of Holding or a Third-Party Demand Unitholder, (a) the managing
and lead underwriters shall be selected by Holding, unless otherwise provided in
any agreement between Holding and any Third-Party Demand Unitholder, and (b)
each Selling Unitholder electing to participate in the Incidental Registration
shall, as a condition to Holding's obligation under this Article 3 to include
such Selling Unitholder's Registrable Securities in such Incidental
Registration, enter into and perform its obligations under an underwriting
agreement or other similar arrangement in customary form with the managing
underwriter of such offering.
4. Obligations with Respect to Registration.
4.1 Obligations of Holding. Whenever Holding is obligated by the
provisions of this Agreement to effect the registration of any Registrable
Securities under the Securities Act, subject to Section 2.5, Holding shall:
(a) Subject to the provisions of Section 4.2, use its
reasonable best efforts to cause the applicable Registration Statement to become
effective as promptly as practicable, and to prepare and file with the SEC any
amendments and supplements to the Registration Statement and to the Prospectus
used in connection therewith as may be necessary to keep the Registration
Statement and the Prospectus effective, current, and in compliance with the
provisions of the Securities Act, during the periods when Holding is required by
this Agreement to keep the Registration Statement effective and current.
(b) Within a reasonable time not to exceed four Business Days
prior to filing a Registration Statement or Prospectus or any amendment or
supplement thereto (other than any amendment or supplement in the form of a
filing that Holding makes pursuant to the Exchange Act), furnish to the
Unitholder Representative and each underwriter, if any, of the Registrable
Securities covered by such Registration Statement copies of such Registration
Statement or Prospectus as proposed to be filed, which documents will be subject
to the reasonable review and comments of the Selling Unitholders (and their
respective counsel) during such period, and Holding will not file any
Registration Statement or any Prospectus or any amendment or supplement thereto
if such Selling Unitholder reasonably objects in writing on a timely basis (such
objection shall be given within four Business Days from the date the Unitholder
Representative receives such Registration Statement, amendment, Prospectus or
supplement), unless Holding is advised in writing by its outside counsel that
such Registration Statement or amendment thereto or any Prospectus or supplement
thereto is required to be filed by applicable law. Thereafter, Holding will
furnish to each Selling Unitholder and each underwriter, if any, upon request
such number of copies of such Registration Statement, each amendment and
supplement thereto (in each case including, if requested in writing, all
exhibits thereto and any documents incorporated by reference), the Prospectus
included in such Registration Statement (including each preliminary Prospectus),
and such other documents as such Selling Unitholder or underwriter may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Selling Unitholder.
(c) After the filing of the Registration Statement, promptly
notify the Unitholder Representative of the effectiveness thereof and of any
stop order issued or threatened
-12-
by the SEC and take all reasonable actions required to prevent the entry of such
stop order or to remove it at the earliest possible moment if entered and
promptly notify the Unitholder Representative of the lifting or withdrawal of
any such order, and, in the case of a Demand Registration, notify the Unitholder
Representative of any comments by the SEC with respect to such Registration
Statement or any document incorporated by reference therein, if any.
(d) Promptly notify each Selling Unitholder holding
Registrable Securities covered by the applicable Registration Statement at any
time when a Prospectus relating thereto is required to be delivered under the
Securities Act, of (i) the determination that a Delaying Event exists or (ii)
the occurrence of an event requiring the preparation of a supplement or
amendment to such Prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading (provided that the timely
filing of a report under the Exchange Act which is incorporated by reference in
the Registration Statement and related Prospectus that amends or supplements the
related Prospectus so that as thereafter delivered to purchasers of such
Registrable Securities, such Prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, shall constitute effective notice
under clause (ii) above; and provided further, that such notice may be the same
notice delivered pursuant to Section 2.5(a); and provided further that notice of
an event of the type referred to in clause (ii) above (without notice of the
nature or details of such event) shall constitute effective notice under clause
(ii) above. In the event of an occurrence described in clause (ii) above,
Holding shall, subject to the provisions of this Agreement regarding the
existence of a Delaying Event, promptly prepare and furnish to such Selling
Unitholder such supplement to or an amendment of such Prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
Prospectus will not contain any untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading.
(e) Enter into customary agreements (including an
underwriting agreement in customary form including customary representations and
warranties and indemnification provisions) and perform its obligations under any
such agreements and shall take such other actions as are reasonably required in
order to expedite or facilitate the disposition of such Registrable Securities.
(f) In connection with the registration or offering of
Registrable Securities, make available for inspection by the Unitholder
Representative on behalf of any Selling Unitholder covered by such Registration
Statement, the lead book running managing underwriter selected by the Unitholder
Representative pursuant to Section 2.3 participating in any disposition pursuant
to such Registration Statement, and any attorney, accountant, or other
professional retained by any such Selling Unitholder or underwriter, all
financial and other records, pertinent corporate documents, and properties of
Holding as shall be reasonably necessary to enable them to exercise their due
diligence responsibility in connection therewith, and cause Holding's officers,
directors, and employees to make reasonably available for inspection all
information reasonably requested by any of such Persons in connection with such
-13-
Registration Statement; provided, however, that such Persons shall first agree
in writing with Holding that any information that is reasonably and in good
faith determined by Holding to be confidential shall be kept confidential by
such persons and shall be used solely for the purposes of exercising rights
under this Agreement, unless (i) disclosure of such information is required by
court or administrative order or is necessary to respond to inquiries of
regulatory authorities or, (ii) such information becomes generally available to
the public other than as a result of a disclosure or failure to safeguard by any
such Person and provided, further, that Holding shall not be required to
disclose any information subject to the attorney-client or attorney work product
privilege if and to the extent such disclosure would constitute a waiver of such
privilege unless such disclosure is necessary to avoid or correct a material
misstatement or omission in any Registration Statement, subject to Section
2.5(a).
(g) Furnish, in the case of an underwritten public offering,
to each underwriter a signed counterpart of (i) an opinion or opinions of
in-house counsel or outside counsel, as are customarily requested by lead
underwriters, to Holding addressed to such underwriters (on which opinion each
such underwriter shall be entitled to rely), (ii) a comfort letter or comfort
letters from Holding's independent public accountants, each in customary form
and covering such matters of the type customarily covered by opinions or comfort
letters, as the case may be, as the managing underwriter therefor reasonably
requests, and (iii) deliver such documents or certificates as may be reasonably
requested by the lead underwriter to evidence the satisfaction of any customary
conditions contained in the underwriting agreement.
(h) Use reasonable best efforts to register or qualify the
Registrable Securities covered by a Registration Statement under the securities
or blue sky laws of such United States jurisdictions as the Unitholder
Representative shall reasonably request, and do any and all other acts and
things which may be necessary to enable each Selling Unitholder to consummate
the disposition in such jurisdictions of such Registrable Securities in
accordance with the method of distribution described in such Registration
Statement; provided, however, that Holding shall not be required (i) to qualify
to do business as a foreign corporation in any jurisdiction where it is not
otherwise required to be so qualified, (ii) to conform its capitalization or the
composition of its assets at the time to the securities or blue sky laws of such
jurisdiction, (iii) to take any action that would subject it to service of
process under the laws of any jurisdiction other than as to matters and
transactions relating to the Registration Statement, in any jurisdiction where
it is not now so subject, (iv) to subject itself to taxation in any jurisdiction
where it has not theretofore done so, or (v) to register or qualify the
Registrable Securities under such securities or blue sky laws prior to the
effective date of any such Registration Statement unless an earlier registration
or qualification is required by such securities or blue sky laws.
(i) Use its reasonable best efforts to (i) cause such
Registrable Securities covered by a Registration Statement to be listed on the
principal exchange or exchanges or qualified for trading on the principal
over-the-counter market or listed on the automated quotation market on which
securities of the same class and series as the Registrable Securities are then
listed, traded, or quoted upon the sale of such Registrable Securities pursuant
to such Registration Statement and (ii) provide a transfer agent and registrar
for such Registrable Securities covered by such Registration Statement not later
than the effective date of such Registration Statement.
-14-
(j) (i) In connection with a transfer of Registrable
Securities make information available to the Unitholders and their respective
transferees information relating to Holding so as to satisfy the requirements of
Rule 144 under the Securities Act (or any successor or corresponding rule) and
(ii) file with the SEC all reports and other documents required of Holding under
the Securities Act and the Exchange Act in a timely manner.
(k) Make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least
twelve months, but not more than eighteen months, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act (provided that
Holding shall not be deemed in violation of this paragraph so long as it files
customary quarterly reports with the SEC for such period).
(l) Subject to the exceptions covered in clauses (i) through
(v) of subsection (h) hereof, use its reasonable best efforts to cause such
Registrable Securities covered by such Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the holder or holders thereof to consummate the disposition
of such Registrable Securities.
(m) Use its reasonable best efforts, subject to the other
duties and responsibilities of Holding's senior executive officers, to make
available one or more senior executive officers of Holding (the selection of
whom shall be in Holding's sole discretion) to participate with the Selling
Unitholders and any underwriters in any "road show" (which shall not involve
presentations at more than two cities) that may be reasonably requested by the
Unitholders' Representative in connection with the distribution of Registrable
Securities, pursuant to a Demand Registration; provided, however, the number of
"road shows" that the Unitholders shall collectively be entitled to require
Holding to participate in pursuant to such requests shall be one per Demand
Period.
(n) If requested by the managing underwriter or any Selling
Unitholder named in a Registration Statement, promptly incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriter or such Selling Unitholder reasonably requests to be
included therein as is required by applicable law or as is necessary so that the
Registration Statement does not include an untrue statement of a material fact
or omit to state a material fact with respect to such holder or such holder's
planned method of distribution, including, without limitation, with respect to
the number of Registrable Securities being sold by such Selling Unitholder to
such underwriter, the purchase price being paid therefor by such underwriter and
with respect to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
prospectus supplement or post-effective amendment as soon as practicable after
being notified of the matters incorporated in such prospectus supplement or
post-effective amendment.
(o) Cooperate with the Selling Unitholder and the managing
underwriter to facilitate the timely preparation and delivery of certificates
(not bearing any restrictive legends) representing securities to be sold under
the Registration Statement, and enable such securities to be in such
denominations and registered in such names as the managing underwriter or such
Selling Unitholder may request.
-15-
(p) Cooperate with each Selling Unitholder and each
underwriter participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be made with
the NASD.
4.2 Selling Unitholders' Obligations. Holding's obligations under
this Agreement to a Selling Unitholder shall be conditioned upon such Selling
Unitholder's compliance with the following:
(a) Such Selling Unitholder shall cooperate with Holding in
connection with the preparation of the Registration Statement, and for so long
as Holding is obligated to keep the Registration Statement effective, such
Selling Unitholder will provide to Holding, in writing, for use in the
Registration Statement, all information regarding such Selling Unitholder, its
intended method of disposition of the applicable Registrable Securities, and
such other information as Holding may reasonably request. Subject to Holding
providing the Unitholder Representative with a copy of any Registration
Statement or prospectus or amendment or supplement thereto in the form in which
it is proposed to be filed not less than four Business Days prior to such
filing, and so long as such Registration Statement or prospectus or amendment or
supplement thereto does not contain any statement or omission with respect to
which the Unitholder Representative has objected in writing prior to the
applicable filing, any sale of any Registrable Securities by a Selling
Unitholder shall constitute a representation and warranty by such Selling
Unitholder that the information relating to such Selling Unitholder and its plan
of distribution is as set forth in the Prospectus delivered by such Selling
Unitholder in connection with such disposition, that such Prospectus does not as
of the time of such sale contain any untrue statement of a material fact
relating to or provided by such Selling Unitholder or its plan of distribution
and that such Prospectus does not as of the time of such sale omit to state any
material fact relating to or provided by such Selling Unitholder or its plan of
distribution necessary to make the statements in such Prospectus provided by
such Selling Unitholder, in the light of the circumstances under which they were
made, not misleading.
(b) Such Selling Unitholder agrees that, upon receipt of any
notice from Holding of the happening of any event of the kind described in
Section 4.1(d), such Selling Unitholder will discontinue its offering and sale
of Registrable Securities pursuant to the applicable Registration Statement
until such Selling Unitholder's receipt of either (i) notice from Holding that a
Delaying Event no longer exists (but for no longer than the end of the 60 or
120-day period described in Section 2.5) or (ii) the copies of the supplemented
or amended Prospectus contemplated by Section 4.1(d), and, in either case, if so
directed by Holding, such Unitholder will deliver to Holding all copies in its
possession of the most recent Prospectus covering such Registrable Securities at
the time of receipt of such notice. In the event Holding shall give any such
notice, the periods mentioned in Section 2.7(a) shall be extended by the number
of days during the period from and including the date of the giving of such
notice pursuant to Section 4.1(d) to and including the date when Holding shall
make readily available to each holder of Registrable Securities covered by such
Registration Statement a copy of the supplemented or amended prospectus
contemplated by Section 4.1(d).
4.3 Underwriting Agreement. Neither Holding nor any other Person
may participate in any underwritten public offering in connection with a Demand
Registration or an Incidental Registration unless such Person (i) agrees to sell
its securities on the basis provided in
-16-
any underwriting arrangements approved by the Person or Persons selecting the
lead managing underwriters for such offering and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements, and
other documents reasonably required under the terms of such underwriting
arrangements and this Agreement.
4.4 Holdback by Holding. Holding agrees not to engage in any
public or private sale or distribution by it of any securities of the same class
or series as the Registrable Securities or securities convertible into, or
exchangeable or exercisable for, or the value of which relates to or is based
upon, such securities (other than issuances of Capital Units to Equitable or any
of its affiliates) during the ten days prior to, and during the 45-day period
beginning on, the effective date of any Registration Statement (or, in the case
of an offering pursuant to Rule 415 under the Securities Act, the commencement
of such offering to the public of such Registrable Securities) filed with
respect to any underwritten public offering of Registrable Securities pursuant
to a Demand Registration to the extent the lead book running managing
underwriter for such offering advises Holding in writing that a public sale or
distribution during such 45-day period (including a sale pursuant to Rule 144
under the Securities Act) of Registrable Securities by Holding other than
pursuant to the public offering contemplated by such Registration Statement
would materially adversely impact such underwritten public offering), except as
part of such registration; provided, however, that the limitation set forth in
this Section 4.4 shall not apply: (a) to registrations by Holding on Form S-4 or
any other registration of shares issued in a merger, consolidation, acquisition,
or similar transaction or on Form S-8, or any successor or comparable forms, or
a registration statement filed in connection with an exchange offer of
securities of Holding made solely to Holding's existing unitholders or otherwise
pursuant to a dividend reinvestment plan, stock purchase plan, or other employee
benefit plan; (b) to sales by Holding upon exercise or exchange, by the holder
thereof, of options, warrants or convertible securities; (c) to any employee
benefit plan (if necessary to allow such plan to fulfill its funding obligations
in the ordinary course); or (d) to any registration effected as a shelf
registration under Rule 415 of the Securities Act. This Section 4.4 shall not
limit any public sale or distribution of any securities of Holding by any
Third-Party Demand Unitholder or any Person having the right to require that
Holding include its securities in any registration initiated by any Third-Party
Demand Unitholder.
4.5 Holdback by Unitholders. Except pursuant to Article 3 hereof,
or as otherwise permitted by Holding, and subject to Section 2.5(b), Unitholders
shall not be permitted to engage in any public or private sale or distribution
of Registrable Securities during the 15-day period prior to and during the
90-day period beginning on the closing date of an underwritten offering of units
of Holding pursuant to any registration by Holding during a Demand Period (such
period, a "Unitholder Holdback Period").
4.6 Notice to Holding of Proposed Sale. A Unitholder shall provide
written notice to Holding of not less than six Business Days nor more than
thirty Business Days of its intention to consummate a sale under this Agreement
(such notice, a "Proposed Sale Notice").
5. Expenses of Registration.
5.1 Registration Expenses. For purposes of this Agreement, the
term "Registration Expenses" means all expenses incurred by Holding in
connection with the
-17-
registration of the Registrable Securities pursuant to this Agreement other than
those expenses referred in section 5.3 including, without limitation, the
following:
(a) registration, application, filing, listing, transfer
(including transfer agent), and registrar fees,
(b) NASD fees and fees and expenses of registration or
qualification of Registrable Securities under state securities or blue sky laws,
(c) printing expenses (or comparable duplication expenses),
delivery charges, and escrow fees,
(d) fees and disbursements of counsel for Holding,
(e) fees and expenses for independent certified public
accountants retained by Holding (including the expenses of any comfort letters
or costs associated with the delivery by independent certified public
accountants of a comfort letter or comfort letters),
(f) fees and expenses of any special experts retained by
Holding in connection with such registration;
(g) fees and disbursements of underwriters and broker-dealers
customarily paid by issuers or holders of securities, and
(h) fees and expenses of listing the Registrable Securities
on a securities exchange or over-the-counter market.
5.2 Selling Unitholder Expenses. Each Selling Unitholder shall pay
all of its expenses incurred in connection with any Demand Registration or
Incidental Registration, including, without limitation, all stock transfer fees
or expenses (including the cost of all transfer tax stamps), if any, all
underwriting or brokerage discounts and commissions and all fees and
disbursements of counsel for Selling Unitholder attributable to the distribution
of the Registrable Securities of such Selling Unitholder included in such
registration.
5.3 Internal Expenses of Holding. Notwithstanding any other
provision of this Agreement, Holding shall be obligated to bear all internal
expenses of Holding in connection with any Demand Registration or Incidental
Registration (including all salaries and expenses of its officers and employees
performing accounting and legal functions and related expenses).
5.4 Reimbursement of Holding Expenses. Except as otherwise
provided by Section 2.4(b) and Section 2.6(b), subject to Section 5.3, in
connection with any Demand Registration pursuant to Article 2 hereof, the
Selling Unitholders shall reimburse Holding for the following expenses incurred
in connection therewith, pro rata based on the aggregate number of units of such
Selling Unitholders included in such Demand Registration in relation to the
aggregate number of units of all unitholders included in such Demand
Registration (a) 100% of SEC filing fees and; (b) 50% of all reasonable
Registration Expenses and 50% of all other reasonable out-of-pocket costs paid
by Holding. All other Registration Expenses shall be borne by Holding.
-18-
6. Indemnification.
6.1 By Holding. Holding agrees to indemnify and hold harmless each
Unitholder Indemnified Party from and against any Losses to which such
Unitholder Indemnified Party may become subject under the Securities Act, the
Exchange Act, state securities or blue sky laws, common law or otherwise,
insofar as such Losses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the applicable Registration Statement or Prospectus, 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, and, subject to
Section 6.3, Holding will reimburse each such Unitholder Indemnified Party for
any reasonable fees and expenses of outside legal counsel for such Unitholder
Indemnified Parties, or other expenses reasonably incurred by them, as incurred,
in connection with investigating or defending any such claims; provided,
however, that Holding will not indemnify or hold harmless any Unitholder
Indemnified Party from or against any Losses (including any related expenses) to
the extent such Losses (including any related expenses) arise out of or are
based upon an untrue statement, omission or allegation thereof from such
Registration Statement or Prospectus which was made in reliance upon and in
conformity with written information provided by or on behalf of any Selling
Unitholder expressly for use or inclusion in the applicable Registration
Statement or Prospectus. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Unitholder
Indemnified Parties and shall survive the transfer of such securities by the
Selling Unitholders.
6.2 By Selling Unitholders. Each Selling Unitholder, severally and
not jointly, agrees to indemnify and hold harmless each Holding Indemnified
Party from and against any Losses, to which such Holding Indemnified Party may
become subject, insofar as such Losses (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the applicable Registration Statement or the
Prospectus, 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, if
such untrue statement, omission or allegation thereof was made in reliance upon
and in conformity with written information provided by or on behalf of such
Selling Unitholder or any Person who controls such Selling Unitholder expressly
for use or inclusion in the applicable Registration Statement or Prospectus;
provided, however, that with respect to the plan of distribution information
provided by or on behalf of a Selling Unitholder, the parties hereto agree that
a Selling Stockholder will only be responsible hereunder for the plan of
distribution information provided by or on behalf of such Selling Unitholder or
any Person who controls such Selling Unitholder expressly for use or inclusion
in the applicable Registration Statement or Prospectus. Such indemnity shall
remain in full force and effect regardless of any investigation by or on behalf
of the Holding Indemnified Parties, and shall survive the transfer of such
securities by the Selling Unitholder.
6.3 Procedures. Each Indemnified Party shall give notice to each
Indemnifying Party promptly after such Indemnified Party has actual knowledge of
any claim as to which indemnity may be sought, and the Indemnifying Party may
participate at its own expense in the defense, or if it so elects, assume the
defense of any such claim and any action or proceeding resulting therefrom,
including the employment of counsel and the payment of all expenses;
-19-
provided that such counsel shall be reasonably satisfactory to the Indemnified
Party. The failure of any Indemnified Party to give notice as provided in this
Section 6.3 shall not relieve the Indemnifying Party from its obligations to
indemnify such Indemnified Party, except to the extent the Indemnified Party's
failure to so notify does not materially prejudice the Indemnifying Party's
ability to defend against such claim, action, or proceeding. If the Indemnifying
Party elects to assume the defense in any action or proceeding, the Indemnified
Party shall have the right to employ separate counsel in such action or
proceeding and to participate in the defense thereof, but such Indemnified Party
shall pay the fees and expenses of such separate counsel unless (a) the
Indemnifying Party has agreed to pay such fees and expenses, (b) the named
parties to any such action or proceeding (including any impleaded parties)
include such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that representation of both parties by
the same counsel would create an actual or potential conflict of interest
between such Indemnified Party and the Indemnifying Party in the conduct of the
defense of such action (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not assume the
defense of such action or proceeding on such Indemnified Party's behalf) or (c)
the Indemnifying Party shall not have employed counsel reasonably satisfactory
to the Indemnified Party to represent the Indemnified Party within a reasonable
time after notice of the institution of such claim. It is understood that the
Indemnifying Party shall not, in respect of the legal expenses of any
Indemnified Party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Indemnified Parties and
that all such fees and expenses shall be reimbursed as they are incurred. Such
separate firm shall be designated in writing by, in the case of parties
indemnified pursuant to Section 6.1, the Selling Unitholders holding a majority
of the Registrable Securities covered by the applicable Registration Statement
and, in the case of parties indemnified pursuant to Section 6.2, Holding. The
Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Party agrees to
indemnify the Indemnified Party from and against any losses by reason of such
settlement or judgment. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of the Indemnified Party (which
consent will not be unreasonably withheld), consent to entry of any judgment, or
enter into any settlement of any pending or threatened claim or litigation
unless such consent to the entry of judgment or settlement (i) includes as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability on claims that are the subject
matter of such proceeding and (ii) does not include a statement as to an
admission of fault, culpability or a failure to act by or on behalf of the
Indemnified Party.
6.4 Contribution. To the extent the indemnification provided for
under this Article 6 is unavailable to an Indemnified Party hereunder or
insufficient to hold the Indemnified Party harmless under Section 6.1 or Section
6.2 above in respect of any Losses referred to therein for any reason other than
as specified therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party, on the one
hand, and such Indemnified Party, on the other, in connection with the
statements or omissions that resulted in such Losses. The relative fault of the
Indemnifying Party or Indemnified Party, as the case may be, shall be determined
by
-20-
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
has been made by, or relates to information supplied by (or that was failed to
be supplied by), such Indemnifying Party or Indemnified Party, such party's
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission. 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. The amount paid or payable by an Indemnified Party
as a result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, for purposes of this Section 6.4, subject to
the limitations set forth in Section 6.3, any legal or other fees or expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any claim or proceeding. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 6.4 were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to in this
paragraph.
If indemnification is available under this Section 6, the Indemnifying
Party shall indemnify each Indemnified Party to the full extent provided in
Sections 6.1 and 6.2 without regard to the relative fault of said Indemnifying
Party or Indemnified Party or any other equitable consideration provided for in
this Section 6.4.
6.5 Other Indemnification. Indemnification similar to that
specified in the preceding provisions of Section 6.1 (mutatis mutandis) shall be
given by Holding and each holder of Registrable Securities to the applicable
Indemnified Parties with respect to any required registration or other
qualification of securities under any federal or state law or regulation or
governmental authority other than the Securities Act.
7. Miscellaneous.
7.1 Notices.
(a) Subject to Section 7.1(b), all notices, requests,
demands, waivers, and other communications under this Agreement shall be in
writing by hand delivery, by registered or certified first-class mail, postage
prepaid, return receipt requested, sent by reliable overnight courier, or
facsimile transmission, in each case to the address or facsimile number
specified for the applicable party on Schedule A attached to this Agreement, or
to such other Person, address, or facsimile number as any party shall specify by
notice in writing to the other parties.
(b) Any notice or other communication to a party in
accordance with the provisions of this Agreement shall be deemed to have been
received (i) three Business Days after it is sent by certified or registered
mail, postage prepaid, return receipt requested, (ii) upon receipt when
delivered by hand or transmitted by facsimile (confirmation received), (iii) one
Business Day after it is sent by a reliable overnight courier service, with
acknowledgment of receipt requested or (iv) when receipt is acknowledged,
whether telecopied or otherwise (which acknowledgment may be via electronic
transmission, such as telecopier confirmation, e-mail receipt or otherwise), in
each case if received prior to 5 p.m. in the place of receipt and such day is a
Business Day in the place of receipt; otherwise, any such notice or other
communication
-21-
shall be deemed not to have been received until the next succeeding Business Day
in the place of receipt. Notwithstanding the preceding sentence, notice of
change of address shall be effective only upon actual receipt thereof.
(c) All such notices and communications given in accordance
with Section 7.1 shall be deemed to have been duly given even if the last
address or telecopier number given by a holder of Registrable Securities
pursuant to this Section 7.1 and Article 4 is not current.
7.2 Amendments and Waivers. Any provision of this Agreement,
including the provisions of this sentence, may not be amended modified or
supplemented and waivers or consents to departures from the provisions hereof
may not be given, unless Holding has obtained the written consent of holders of
a majority of the then outstanding Registrable Securities. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of holder of Registrable
Securities whose securities are being sold pursuant to a Registration Statement
and that does not directly or indirectly affect the rights of other holders of
Registrable Securities may be given by holders of at least a majority of the
then outstanding Registrable Securities being sold by such holders. No consent,
waiver, or similar act shall be effective unless in writing.
7.3 Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersedes all prior agreements and
understandings, oral and written, among the parties hereto with respect to the
subject matter hereof.
7.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
7.5 Governing Law. This Agreement shall be governed by and
interpreted in accordance with the internal laws of the State of New York,
without giving effect to principles of conflicts of laws thereof.
7.6 Assignment.
(a) Except as expressly provided in this Section 7.6, the
rights of the parties hereto cannot be transferred or assigned and any purported
assignment or transfer to the contrary shall be void ab initio.
(b) Notwithstanding Section 7.6(a) but subject to Section
7.6(c), a Unitholder may assign any of its rights under this Agreement without
the consent of Holding to any Person to whom such Unitholder transfers
Registrable Securities or rights to acquire Registrable Securities if, and only
if, such transferee is a Permitted Transferee.
(c) A Unitholder shall provide Holding with prior written
notice of any transfer of Registrable Securities to a transferee that has not
agreed in writing to be bound by the terms and conditions of this Agreement.
Such written notice shall include the identity of the transferee and the number
of securities being transferred, whereupon Holding may amend any
-22-
Registration Statement then in effect that includes such transferred Registrable
Securities of such Unitholder to remove such Registrable Securities from such
Registration Statement.
(d) No Person may be assigned any rights under this Agreement
unless Holding is given written notice by the assigning party at the time of
such assignment stating the name and address of the assignee, identifying the
securities of Holding as to which the rights in question are being assigned, and
providing a detailed description of the nature and extent of the rights that are
being assigned. Any assignee hereunder shall receive such assigned rights
subject to all the terms and conditions of this Agreement, including the
provisions of this Section 7.6. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
7.7 Binding Agreement. This Agreement will be binding upon and
inure to the benefit of the parties hereto and their successors and permitted
assigns. Except as set forth herein and by operation of law, no party to this
Agreement may assign or delegate all or any portion of its rights, obligations,
or liabilities under this Agreement without the prior written consent of each
other party to this Agreement.
[Signature page follows.]
-23
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Holding:
Alliance Capital Management Holding L.P.
By: Alliance Capital Management Corporation,
its general partner
By: /s/ Xxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
Xxxxxxxxx:
Xxxxxxx X. Xxxxxxxxx Inc.
By: /s/ Xxxx Xxxxx Xxxx
--------------------------
Name: Xxxx Xxxxx Xxxx
Title: Secretary
SCB Partners:
SCB Partners Inc.
By: /s/ Xxxx Xxxxx Xxxx
--------------------------
Name: Xxxx Xxxxx Xxxx
Title: Secretary
-24-
Schedule A
If to Holding:
Alliance Capital Management Holding L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: 000 000-0000
with a copy to
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: 000 000-0000
If to Xxxxxxxxx or to SCB Partners:
SCB Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx Xxxx
Facsimile: 212 756-4164
with a copy to
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxx
Facsimile: 000 000-0000
-25-
