Exhibit 10.36
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of November 6, 1995 between
AUTOTOTE CORPORATION, a Delaware corporation (the "Company"), and HARTFORD STOCK
FUND and HARTFORD ADVISERS FUND (together, the "Funds").
Concurrently with the execution and delivery hereof, the parties have
entered into an Agreement dated as of the date hereof (the "PIK Agreement"),
pursuant to which the Company has agreed to pay the interest due on each of
August 15, 1995 and February 15, 1996 on the Company's outstanding 5-1/2%
Convertible Subordinated Debentures due 2001 (the "Debentures") by issuing
shares of its Class A Common Stock, $.01 par value ("Class A Stock"), in lieu of
cash, all upon the terms and subject to the conditions provided therein. To
induce the Funds to enter into the PIK Agreement, the Company has agreed to
provide the registration rights set forth in this Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions.
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As used in this Agreement, the following capitalized terms shall have
the following meanings:
BT Shares: Shares of common stock of the Company issued or issuable
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pursuant to the warrants heretofore issued to Bankers Trust Company and others
pursuant to a Warrant Agreement dated as of September 14, 1995.
Business Day: Each day that is not a Saturday or Sunday or a day on
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which banks located in the City of New York are authorized or required to be
closed.
Commission: The Securities and Exchange Commission.
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Exchange Act: The Securities Exchange Act of 1934, as amended.
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Holders: The Funds (so long as they continue to hold Registrable
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Securities) and any subsequent transferee of Registrable Securities to which the
registration rights granted hereunder are assigned in accordance with Section
3(c).
Interest Shares: (i) Shares of Class A Stock issued by the Company
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to the Funds in satisfaction of interest due on August 15, 1995 or February 15,
1996 on the Debentures, and (ii) any securities issued by the Company with
respect to any of the securities referred to in clause (i) above or this clause
(ii) by way of stock dividend or stock split or in connection with a combination
of shares, recapitalization, merger, consolidation or other reorganization or
otherwise.
Person: An individual, partnership, corporation, joint venture,
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trust, estate, unincorporated organization, or a government or agency or
political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement, as
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amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such prospectus.
Registrable Securities: Any Interest Shares until (i) one or more
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registration statements covering such Interest Shares have become effective
under the Securities Act and such Interest Shares have been disposed of pursuant
to such effective registration statement, (ii) such Interest Shares have been
sold under circumstances in which all of the applicable conditions of Rule 144
(or any similar provisions then in force) under the Securities Act are met or
under which such Interest Shares may be sold pursuant to Rule 144(k), (iii) such
Interest Shares may be sold pursuant to Rule 144(k), or (iv) the Company has
delivered a new certificate or other evidence of ownership for such Interest
Shares not bearing any legend relating to restrictions on transfer and such
Interest Shares may be resold without subsequent registration under the
Securities Act, or (v) such Interest Shares shall have ceased to be outstanding.
Registration Expenses: See Section 2(e).
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Registration Statement: Any registration statement of the Company
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relating to the registration for resale of Registrable Securities pursuant to
the registration statement, which is filed pursuant to the provisions of this
Agreement, including the Prospectus included therein, all amendments and
supplements thereto.
Securities Act: The Securities Act of 1933, as amended.
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Suspension Period: See Section 2(a)(v).
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2. Registration Rights.
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(a) Demand Registration Rights. (i) At any time prior to December
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31, 1998, the Holders of more than 40% of all of the Interest Shares then
outstanding may make a written request to the Company for registration of
Registrable Securities under the Securities Act with the Commission (or any
successor entity) for a public offering of Registrable Securities (a "Demand
Registration"). The Holders shall have the right, in the aggregate, to one
Demand Registration of all or any part of their Registrable Securities (which
Demand Registration may be on Form S-2 or S-3 or other short-forms if the
Company then qualifies for such short form registration); provided, however,
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that the Company shall not be required to effect a registration pursuant to this
Section 2(a)(i) with respect to any Registrable Securities unless the request
for registration covers Registrable Securities representing at least 40% of all
Registrable Securities then outstanding and held by the Holders. Whenever the
Company shall receive a request for a Demand Registration, the Company will
promptly give notice of such registration to all Holders and shall as
expeditiously as is reasonable, use its best efforts to effect the registration
under the Securities Act of the Registrable Securities with respect to which the
Company has received written requests for inclusion therein within 15 days after
such notice is given. All requests made pursuant to this Section 2(a)(i) will
specify the number of shares of Registrable Securities to be registered and will
also specify the intended methods of disposition thereof.
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(ii) A registration initiated as a Demand Registration shall not be
deemed a Demand Registration (i) until a registration statement with respect
thereto has become effective and has remained effective for the period of time
in which the Company is required to keep such registration statement effective
under this Agreement (without giving effect to any Suspension Period), provided,
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however, that a registration that does not become effective after the Company
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has filed a registration statement with respect thereto solely by reason of the
refusal to proceed of the Holders shall be deemed to have been effected by the
Company, (ii) if after such registration statement has become effective, such
registration statement is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court for
any reason and, as a result thereof, the offering of Registrable Securities is
terminated prior to the sale thereof, unless prior thereto the Holders had a
period of 30 consecutive days during which they were permitted to sell their
Registrable Securities pursuant to such registration statement, or (iii) if
after such registration statement has become effective, the Company exercises
any of its rights under Section 2(a)(v), unless after giving effect to any
termination of a Suspension Period the Holders had a period of 30 consecutive
days during which they were permitted to sell their Registrable Securities
pursuant to such registration statement.
(iii) If the Holders so elect, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. In any such underwritten offering, the investment banker
or investment bankers and manager or managers that will administer the offering
will be selected by the Holders of a majority of the Registrable Securities
included in such offering; provided, that such investment bankers and managers
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must be reasonably acceptable to the Company.
(iv) The Company may delay the filing of a registration statement for
up to 120 days if, at the time of a request for registration under Section
2(a)(i), (A) the Company is a party to a transaction involving the purchase,
sale, conversion or issuance of securities of the Company (other than a
transaction which is specifically not prohibited in Rule 10b-6 promulgated by
the Commission under the Exchange Act), (B) in the good faith judgment of the
Company's Board of Directors, there is material undisclosed information
concerning the Company or any subsidiary of the Company which has not been
disclosed to the general public for bona fide business reasons, or (C) financial
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statements required to be included or incorporated in the registration statement
have not been prepared or are otherwise not available. In addition, the Company
shall not be obligated to honor any such request for registration under Section
2(a)(i) at any time starting with the date 30 days prior to the Company's good
faith estimate of the date of filing of, and ending on the date 120 days
following the effective date of, a registration statement in connection with a
bona fide public offering. The Company shall promptly notify the Holders of any
delay in such filing, the reasons for such delay and proposed length of such
delay.
(v) The Company may suspend the effectiveness of any registration
statement or, without suspending such effectiveness, instruct the Holders that
no sales of Registrable Securities included in such registration statement may
be made (and the Holders shall forthwith discontinue disposition of any such
Registrable Securities) if, in the Company's good faith judgment, the Company
would be required to disclose any actions taken or proposed to be taken by the
Company, which disclosure would have a material adverse effect on the Company or
on
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such actions (a "Suspension Period") by providing the Holders with notice of
such Suspension Period and the reasons therefor. The Company shall use its best
efforts to provide such notice a reasonable number of days prior to the
commencement of a Suspension Period, provided that in any event the Company
shall provide such notice no later than the commencement of such Suspension
Period. The Suspension Period shall not exceed 120 days in any consecutive 365-
day period, provided that no more than one Suspension Period may be commenced in
any such 365-day period. The Company shall give prompt notice to the Holders of
the termination of any Suspension Period.
(b) Piggy-Back Registration. If, at any time or from time to time
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prior to December 31, 1998 while any Registrable Securities are outstanding, the
Company proposes to register any of its equity securities or debt securities
convertible into its equity securities (whether for its own or others' account)
to be offered for cash or cash equivalents in a public offering under the
Securities Act (other than by a registration statement on Form S-8 or any other
form that does not include substantially the same information as would be
required in a form for the general registration of securities or that would not
be available for registration of Registrable Securities), the Company shall, as
expeditiously as is reasonably possible (but in no event later than 30 days
prior to any such registration), give notice to the Holders of the Company's
intention to effect such registration. If, within 15 days after receipt of such
notice, any Holder submits a written request to the Company specifying the
Registrable Securities such Holder proposes to sell or otherwise dispose of (a
"Piggy-Back Registration"), the Company shall include the number of shares of
Registrable Securities specified in such Holder's request in such registration
statement and the Company shall use its best efforts to effect the registration
under the Securities Act of such Registrable Securities to the extent requisite
to permit the proposed sale or other disposition thereof, provided, however,
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that if, at any time after giving 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 not to
register or to delay registration of such securities, the Company shall give
notice of such determination to the Holders and, thereupon, (i) in the case of a
determination not to register any securities, the Company shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (but not from any obligation of the Company to pay the Registration
Expenses in connection therewith), and (ii) in the case of a determination to
delay registering any securities, the Company shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in
registering such other securities; and, provided, further, that if, after any
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such registration statement has been declared effective, the Company reasonably
determines that it would be required to disclose any actions taken or proposed
to be taken by the Company, which disclosure would have a material adverse
effect on the Company or on such actions, the Company shall, subject to
discontinuance of sales of all other securities covered by the registration
statement, be entitled to suspend the effectiveness of such registration
statement, or without suspending such effectiveness, to request that each Holder
forthwith discontinue the disposition of such Registrable Securities and each
such Holder agrees that it will discontinue the disposition of such Registrable
Securities pursuant to such registration statement (so long as the disposition
of all other such securities is also discontinued) and thereupon the Company
shall be relieved of its obligation under this Section 2(b) with respect to such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith to the extent provided in Section 2(e)). Any Holder
participating in an underwritten offering pursuant to this Section 2(b) shall,
if required by the managing underwriter or underwriters of
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such offering, enter into an underwriting agreement in a form customary for
underwritten offerings of the same general type as such offering.
No Holder shall have the right to include any Registrable Securities
in a registration statement initiated as a Piggy-Back Registration under this
Section 2(b) unless (i) such securities are of the same class and type as the
Registrable Securities being registered, and (ii) if such Piggy-Back
Registration is an underwritten offering, the Company or such Person, as
applicable, agree in writing to sell their securities on the same terms and
conditions as apply to the Registrable Securities being sold.
(c) Reduction of Offering. Notwithstanding anything contained
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herein, if, in the opinion of the managing underwriter or underwriters of an
offering described in Section 2(a) or (b), the size of the offering that the
Holders, the Company or any other Person intends to make or the kind or
combination of securities that the Holders, the Company and any other Persons
intend to include in such offering are such that the success of the offering
would be materially and adversely affected by inclusion of the Registrable
Securities requested to be included, including if marketing factors require a
limitation of the number of Registrable Securities to be underwritten, then:
(i) in the case of a Demand Registration, the amount of any Class A
Stock proposed to be offered shall be reduced or excluded from the offering
as follows:
If shares of common stock of the Company issued or issuable pursuant
to the warrants heretofore issued to Xxxxxx Brothers Finances S.A. and
Pilgrim Prime Rate Trust (such warrants, the "Xxxxxx Warrants," and
such shares, the "Xxxxxx Shares") are proposed to be included in the
underwriting as a result of the exercise of incidental registration
rights previously granted under the Xxxxxx Warrants, then the number
of shares that shall be included in the underwriting shall be
allocated as follows: (A) one Xxxxxx Share shall be included for each
share held by the Holders and all other holders of common stock of the
Company possessing registration rights whose shares are to be included
in the underwriting and any shares to be sold for the account of the
Company (collectively, the "Non-Xxxxxx Shares") until either the limit
is reached or all the Xxxxxx Shares are included in the underwriting
(so that an equal number of Xxxxxx Shares and Non-Xxxxxx Shares are
included in the underwriting pursuant to this clause (A)), and (B) any
excess shares up to such limitation shall be Non-Xxxxxx Shares. In
allocating Non-Xxxxxx Shares under clauses (A) and (B) of the
immediately preceding sentence, or if no Xxxxxx Shares are proposed to
be included in the underwriting, the amount allocated shall be such
that each holder of Non-Xxxxxx Shares (including any Holder) may
include in the underwriting that portion of the amount to be allocated
which the number of shares proposed to be included by such holder
bears to the aggregate number of shares proposed to be included by
holders of all Non-Xxxxxx Shares.
(ii) in the case of a Piggy-Back Registration, the amount of any
Class A Stock proposed to be offered shall be reduced or excluded from the
offering as follows:
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(A) If the registration is initiated as a result of the exercise by a
holder of Xxxxxx Shares of demand registration rights ("Xxxxxx Demand
Rights"), then the number of shares to be included in the underwriting
shall be allocated as follows: (1) all Xxxxxx Shares to be sold shall
be included and (2) any additional shares to be included shall be
allocated pursuant to the last sentence of Section 2(c)(i) and (B) if
the registration is not initiated as a result of the exercise of
Xxxxxx Demand Rights, then the number of Non-Xxxxxx Shares of holders
not initiating the registration which may be included therein shall be
allocated as set forth in the last sentence of Section 2(c)(i),
subject to Section 2(c)(i)(A) if Xxxxxx Shares are included as a
result of the exercise of incidental registration rights relating
thereto; provided, that, in the case of clauses (A) and (B) of this
paragraph, if BT Shares are proposed to be included in the
registration as a result of the exercise of any registration rights
previously granted to the holders of BT Shares, all of such BT Shares
shall be included in any such registration before any Non-Xxxxxx
Shares held by the Holders.
(d) Registration Procedures. Whenever the Holders request that any
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Registrable Securities be registered pursuant to this Section 2, the Company
will, subject to the limitations otherwise provided in this Agreement, use its
best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof, and in
connection with any such request:
(i) The Company will prepare and file with the Commission a
registration statement on any form for which the Company then qualifies or
which counsel for the Company shall deem appropriate and which form shall
be available for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution thereof,
and use its best efforts to cause such filed registration statement to
become and remain effective for a period of not less than 120 days or, if
earlier, until all of such Registrable Securities have been disposed of,
subject to any Suspension Period which will suspend any remaining portion
of such 120-day period until termination of such Suspension Period.
(ii) The Company will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to
the Holders requesting registration of Registrable Securities and each
underwriter, if any, of the Registrable Securities covered by such
registration statement copies of such registration statement as proposed to
be filed, and thereafter furnish to the Holders requesting registration of
Registrable Securities and underwriter, if any, such number of copies of
such registration statement, each amendment and supplement thereto (in each
case including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as the Holders
requesting registration of Registrable Securities or underwriter may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Holders.
(iii) After the filing of the registration statement, the Company
will promptly notify the Holders of any stop order issued or threatened by
the Commission and xxxx
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all reasonable actions required to prevent the entry of such stop order or
to remove it if entered.
(iv) The Company will use its best efforts to register or qualify the
Registrable Securities under such other securities or blue sky laws of such
jurisdictions in the United States as the Holders requesting registration
of Registrable Securities reasonably (in light of such Holders' intended
plan of distribution) request and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the registration
statement; provided that the Company will not be required to (A) qualify
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generally to do business in any jurisdiction where it would not otherwise
be required to qualify but for this paragraph (iv), (B) subject itself to
taxation in any such jurisdiction or (C) consent to general service of
process in any such jurisdiction.
(v) The Company will immediately notify the Holders, at any time when
a prospectus relating thereto is required to be delivered under the
Securities Act, of 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 not misleading and promptly make available to the
Holders any such supplement or amendment.
(vi) The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as
are reasonably required in order to expedite or facilitate the disposition
of such Registrable Securities.
(vii) The Company will make available for inspection by the Holders
requesting registration of Registrable Securities, any underwriter
participating in any disposition pursuant to such registration statement
and any attorney, accountant or other professional retained by such Holders
or underwriter (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any Inspectors in connection with such registration
statement. Records that the Company determines, in good faith, to be
confidential and which it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors unless (A) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in such
registration statement or (B) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction. Each Holder agrees that information obtained by it as a
result of such inspections shall be deemed confidential and shall not be
used by it as the basis for any market transactions in the securities of
the Company or its Affiliates unless and until such is made generally
available to the public.
(viii) The Company will furnish to the Holders requesting
registration of Registrable Securities and to each underwriter, if any, a
signed counterpart, addressed
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to such Holders or underwriter, of (i) an opinion or opinions of counsel to
the Company and (ii) a comfort letter or comfort letters from the Company'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.
(ix) The Company will otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission, and make available
to the Holders, as soon as reasonably practicable, an earnings statement
covering a period of 12 months, beginning within three months after the
effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act.
(x) The Company will (at its own expense) use its best efforts to
cause all such Registrable Securities to be listed on each securities
exchange or automated inter-dealer quotation system, as the case may be, on
which similar securities issued by the Company are then listed, if the
listing of such Registrable Securities is then permitted by the rules of
such exchange or system.
The Company may require the Holders requesting registration of
Registrable Securities to promptly furnish in writing to the Company such
information regarding the distribution of the Registrable Securities as the
Company may from time to time reasonably request and such other information as
may be legally required in connection with such registration.
The Holders agree that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 2(d)(iii) or (v),
the Holders will forthwith discontinue disposition of any Registrable Securities
registered pursuant to this Section 2 pursuant to the registration statement
covering such Registrable Securities until any such stop order (if entered) has
been removed or the Holders' receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2(d)(v), and, if so directed by the
Company, the Holders will deliver to the Company all copies, other than
permanent file copies then in such Holders' possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice. If the Company shall give such notice, the Company shall extend the
period during which such registration statement shall be maintained effective
(including the period referred to in Section 2(d)(i)) by the number of days
during the period from and including the date of the giving of notice pursuant
to Section 2(d)(iii) or (v), as the case may be, to the date when the Company
shall have removed any stop order that has been entered or the date that the
Company shall make available to the Holder a prospectus supplemented or amended
to conform with the requirements of Section 2(d)(v), as the case may be.
(e) Registration Expenses. In connection with any registration
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statement required to be filed hereunder, the Company shall pay the following
registration expenses incurred in connection with the registration hereunder
(the "Registration Expenses"): (i) all registration and filing fees and expenses
(including filings made with the National Association of Securities Dealers
Inc.), (ii) fees and expenses of compliance with federal securities and state
blue sky or securities laws; (iii) expenses of printing; (iv) fees and
disbursements of counsel for the Company; (v) all application and filing fees in
connection with listing the Registrable Securities on a national securities
exchange or automated quotation system pursuant to the requirements
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hereof; (vi) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any "cold comfort" or
"agreed upon procedures" letters required by or incident to such performance);
and (vii) internal expenses of the Company (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, and the fees and expenses
of any Person, including special experts, retained by the Company. The Company
shall have no obligation to pay any underwriting fees, discounts or commissions
attributable to the sale of Registrable Securities, or any out-of-pocket
expenses of Holders selling Registrable Securities under this Section 2 (or any
of the agents who manage any Holder's account).
(f) Indemnification and Contribution. (i) The Company agrees to
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indemnify and hold harmless each Holder and each Person, if any, who controls
such Holder within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses (including, without limiting the foregoing but subject to Section
6(c) hereof, the reasonable legal and other expenses incurred in connection with
any action, suit or proceeding or any claim asserted) arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary Prospectus, or arising out of or based upon 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 in the case of the Prospectus, not
misleading, except insofar as such losses, claims, damages, liabilities, or
expenses arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission based upon information (i) relating to such
Holder, furnished in writing to the Company by or on behalf of such Holder
expressly for use therein or (ii) made in any preliminary Prospectus if a copy
of the Prospectus (as amended or supplemented) was not sent or given by or on
behalf of the Holder to the Person asserting any such loss, claim, damage or
liability or obtaining such judgment at or prior to the written confirmation of
the sale of the Registrable Securities as required by the Act, and the
Prospectus (as so amended or supplemented) would have corrected such untrue
statement or omission; provided, however, that the Company shall have furnished
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copies of such Prospectus (as so amended or supplemented) to the Holder in
compliance with Section 2(d)(iii).
(ii) As a condition to the inclusion of its Registrable Securities in
any Registration Statement pursuant to this Agreement, each Holder thereof will
furnish to the Company in writing, promptly after receipt of a request therefor,
such information as the Company may reasonably request for use in connection
with any Registration Statement, Prospectus or preliminary prospectus and agrees
to indemnify and hold harmless, the Company and its directors, its officers who
sign such Registration Statement, and any Person controlling the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the
same extent as the indemnity from the Company to each Holder and Persons
controlling such Holder, but only with reference to information relating to such
Holder furnished in writing by or on behalf of such Holder expressly for use in
such Registration Statement or the Prospectus or any preliminary Prospectus
included therein. In case any action shall be brought against the Company, any
of its directors, any such officer, or any such controlling Person based on the
Registration Statement, the Prospectus or any preliminary prospectus and in
respect of which indemnity may be sought against one or more of the Holders,
such Holders shall have the rights
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and duties given to the Company (except that if the Company as provided in
Section 2(f)(iii) shall have assumed the defense thereof such Holders shall not
be required to do so, but may employ separate counsel therein and participate in
the defense thereof but the fees and expenses of such counsel shall be at such
Holders' expense) and the Company and its directors, any such officers, and any
such controlling Person shall have the rights and duties given by Section
2(f)(iii). In no event shall the liability of any selling Holder hereunder be
greater than the gross proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
(iii) In case any action or proceeding shall be brought against any
Holder or any Person controlling such Holder, based upon the Registration
Statement, the Prospectus or any preliminary prospectus, or any amendment or
supplement thereto, and with respect to which indemnity may be sought against
the Company, such Holder or such Person controlling such Holder shall promptly
notify the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Holder and
payment of all reasonable fees and expenses relating thereto. Such Holder and
such Persons controlling such Holder shall have the right to employ separate
counsel in any such action or proceeding and participate in the defense thereof,
but the fees and expenses of such counsel shall be at such Holder's expense
unless (i) the employment of such counsel has been specifically authorized in
writing by the Company, (ii) the Company has not assumed the defense and
employed counsel reasonably satisfactory to such Holder within 15 days after
notice of any such action or proceeding, or (iii) the named parties to any such
action or proceeding (including any impleaded parties) include both a Holder or
any Person controlling such Holder and the Company and such Holder or any Person
controlling such Holder shall have been advised by such counsel that there may
be one or more legal defenses available to such Holder or Person controlling
such Holder that are different from or additional to those available to the
Company (in which case the Company shall not have the right to assume the
defense of such action or proceeding on behalf of such Holder or controlling
Person, it being understood, however, that the Company shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys for all such Holders and controlling Persons, which
firm shall be designated in writing by the Holders of a majority of the
Registrable Securities. The Company shall not be liable for any settlement of
any such action effected without the written consent of the Company, but if
settled with the written consent of the Company, which consent shall not be
unreasonably withheld, or if there is a final judgment for the plaintiff, the
Company agrees to indemnify and hold harmless such Holder and all Persons
controlling such Holder from and against any loss or liability by reason of such
settlement or judgment.
(iv) If the indemnification provided for in this Section 2(f) is
unavailable to an indemnified party under Sections 2(f)(i) or (ii) in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
each 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, claims, damages, liabilities and expenses in such proportion as
is appropriate to reflect the relative fault of the Company on the one hand and
the Holders on the other hand in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations; provided
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that no Holder shall be required to contribute an amount greater than the gross
proceeds received by such Holder with respect to the sale of Registrable
Securities giving rise to the indemnification obligation under this Section
2(f). The relative fault of the Company on the one hand and the Holders on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company on the one hand or
by the Holders on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or expenses shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim.
(v) The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 2(f) were determined by a pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in Section 2(f)(iv). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities and expenses referred to in Section 2(f)(iv) shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or proceeding. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
(g) Participation in Underwritten Registrations. Subject to the
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registration rights granted by the Company prior to the date hereof, no Person
may participate in any underwritten registration hereunder unless such Person
(i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Company and the Holders 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 these registration rights.
(h) Holdback Agreement. Each Holder whose Registrable Securities are
------------------
covered by a Registration Statement filed pursuant to this Section 2 agrees,
upon the request of the underwriter(s) in any underwritten offering permitted
pursuant hereto, not to effect any public sale or distribution of securities of
the Company of the same class as the securities or any security convertible into
or exchangeable or exercisable for such security, included in such Registration
Statement, including a sale pursuant to Rule 144 under the Securities Act
(except as part of such registration), during the 30-day period prior to, and
during the 90-day period beginning on, the closing date of any such underwritten
offering made pursuant to such Registration Statement, to the extent timely
notified in writing by the Company or such underwriter(s).
3. Miscellaneous
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(a) Amendments and Waivers. The provisions of this Agreement may not
----------------------
be amended, modified or supplemented, and waivers or consents to or departures
from the
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provisions hereof may not be given unless the Company has obtained the consent
of Holders of at least 50% of the then outstanding Registrable Securities.
(b) Notices. All notices and other communications provided for or
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permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier, or air courier
guaranteeing overnight delivery:
(i) if to a Holder, to the most current address of such Holder set
forth on the records of the Company; and
(ii) if to the Company, to Autotote Corporation, 000 Xxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Esq.,
with copies to Kronish, Lieb, Weiner & Xxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
(c) Successors and Assigns. The registration rights granted to the
----------------------
Funds pursuant to this Agreement shall not be for the benefit of, or enforceable
by, any subsequent holders of the Registrable Securities; provided, however,
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that the registration rights granted to the Funds pursuant to this Agreement may
be assigned to a transferee of Registrable Securities who signs a writing, in
form and substance satisfactory to the Company, making such transferee a party
to this Agreement. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the Company. Except as aforesaid, no Person
shall acquire or have any right under or by virtue of this Agreement.
(d) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(e) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York, without regard to the
conflicts of law principles thereof.
(g) Severability. If any one or more of the provisions contained
------------
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
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(h) Entire Agreement. This Agreement, together with the PIK Agreement
----------------
and the Debentures, is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Company with respect to the Registrable
Securities. This Agreement, together with the PIK Agreement and the Debentures,
supersedes all prior agreements and understandings between the parties with
respect to such subject matter (including the letter agreement dated September
28, 1995 between the Company and Wellington Management Company, on behalf of the
Funds).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
AUTOTOTE CORPORATION HARTFORD STOCK FUND
HARTFORD ADVISERS FUND
By
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Name: By: WELLINGTON MANAGEMENT COMPANY
Title:
By
---------------------------
Name:
Title:
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