EXHIBIT 10.23
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REGISTRATION RIGHTS AGREEMENT
by and between
TRAILER BRIDGE, INC.
and
TRANSPORTATION RECEIVABLES 1992, LLC
Dated as of May 23, 2002
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TABLE OF CONTENTS
Page
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ARTICLE I
DEMAND REGISTRATIONS..........................................................1
1.1 Requests for Registration.......................................1
1.2 Limitations on Demand Registrations.............................2
1.3 Effective Registration Statement................................2
1.4 Priority on Demand Registrations................................2
1.5 Selection of Underwriters.......................................2
1.6 Other Registration Rights.......................................2
ARTICLE II
OTHER REGISTRATIONS............................................................3
2.1 Right to Piggyback...............................................3
2.2 Priority on Registrations........................................3
2.3 Other Registrations..............................................3
ARTICLE III
REGISTRATION PROCEDURES........................................................3
ARTICLE IV
REGISTRATION EXPENSES..........................................................7
4.1 Company's Fees and Expenses......................................7
4.2 Fees of Counsel to Stockholders..................................7
ARTICLE V
UNDERWRITTEN OFFERINGS.........................................................7
5.1 Demand Underwritten Offerings....................................7
5.2 Incidental Underwritten Offerings................................8
ARTICLE VI
INDEMNIFICATION................................................................8
6.1 Indemnification by the Company...................................8
6.2 Indemnification by Stockholders..................................9
6.3 Indemnification Procedures......................................10
6.4 Indemnification of Underwriters.................................11
6.5 Contribution....................................................11
6.6 Timing of Indemnification Payments..............................12
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ARTICLE VII
RULE 144......................................................................12
ARTICLE VIII
MERGERS, ETC..................................................................12
ARTICLE IX
DELIVERY OF INFORMATION FOR RULE 144A TRANSACTIONS............................13
ARTICLE X
Obligations of Stockholders...................................................13
ARTICLE XI
DEFINITIONS...................................................................13
ARTICLE XII
MISCELLANEOUS.................................................................15
12.1 No Inconsistent Agreements......................................15
12.2 Remedies........................................................15
12.3 Amendments and Waivers..........................................15
12.4 Successors and Assigns..........................................15
12.5 Notices.........................................................15
12.6 Headings........................................................16
12.7 Gender..........................................................16
12.8 Invalid Provisions..............................................16
12.9 Governing Law...................................................17
12.10 Counterparts....................................................17
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), dated as of
May 23, 2002, is by and between Trailer Bridge, Inc., a Delaware corporation
(the "Company"), and Transportation Receivables 1992, LLC (Transportation
Receivables 1992, LLC and any Transferee are collectively referred to herein as
the "Stockholders"). Capitalized terms used and not otherwise defined herein
have the respective meanings ascribed thereto in Article XI hereof.
ARTICLE I
DEMAND REGISTRATIONS
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1.1 Requests for Registration.
(a) Subject to Section 1.2 hereof, at any time and from time to time
on or after the date hereof, the Stockholders holding a majority of the
outstanding Registrable Securities (the "Majority Holder") may request
registration under the Securities Act of all or part of their Registrable
Securities, which registration shall be filed on Form S-1 or any similar long-
form registration available to the Company ("Long-Form Demand Registration").
Thereafter, the Company will use its best efforts to promptly effect the
registration of such Registrable Securities under the Securities Act on such
long form requested by the Majority Holder. The registration requested pursuant
to this Section 1.1 is referred to herein as a "Demand Registration.") Upon
receipt of a request for a Demand Registration, the Company will give prompt
written notice (in any event within three (3) Business Days after its receipt of
such request) of the request for a Demand Registration to all Stockholders not
making such request and will include in such Demand Registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within twenty-five (25) days after the receipt of the
Company's notice. The Majority Holder may, at any time prior to the effective
date of the registration statement relating to any Demand Registration, revoke
such Demand Registration request by providing written notice to the Company, in
which case the Majority Holder shall bear all expenses of such withdrawn
registration, including without limitation those set forth in Article IV hereof,
pro rata on the basis of the number of their Shares so included in the
registration request, and provided, further, that such registration shall not be
counted as a registration pursuant to Section 1.2. Notwithstanding the preceding
sentence, the Majority Holder may elect to have such withdrawn registration
count as a registration pursuant to Section 1.2, in which event the Company
shall bear such expense as set forth in Article IV relating to such withdrawn
registration.
(b) The Majority Holder may request that the Company prepare and
file with the Securities and Exchange Commission (the "SEC") a registration
statement for an offering to be made on a delayed or continuous basis pursuant
to Rule 415 of the Securities Act (a "Shelf Registration") registering the
resale from time to time by the Stockholders of all or part of their Registrable
Securities (the "Initial Shelf Registration"). The registration statement shall
be on an appropriate form, at the Company's discretion, permitting registration
of such Registrable Securities for resale by the Stockholders. If the Initial
Shelf Registration or any Subsequent Shelf Registration ceases to be effective
for any reason at any time, the Company shall use its best efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof,
and in any event shall, within forty-five (45) days of such cessation of
effectiveness, amend the Shelf Registration in a manner reasonably expected to
obtain the withdrawal of the order suspending the effectiveness thereof, or to
promptly file an additional Shelf Registration covering all of the Registrable
Securities (a "Subsequent Shelf Registration").
1.2 Limitations on Demand Registrations. The Stockholders, as a
group, shall be entitled to (i) two (2) Long-Form Demand Registrations, and
(ii) or at any time when the Company qualifies for the use of Form S-3,
unlimited registrations on Form S-3, including pursuant to Rule 415 under the
Securities Act, provided that (a) aggregate expected proceeds of each such
registration exceed $1,000,000, and (b) the Company shall not be obligated to
effect a registration on Form S-3 more than once in any twelve (12) month
period.
1.3 Effective Registration Statement.
(a) A Demand Registration requested pursuant to Section 1.1 of this
Agreement shall not be deemed to have been effected: (i) unless a registration
statement with respect thereto has become effective; (ii) if after it has become
effective, such registration is interfered with by any stop order, injunction or
other order or requirement of the SEC or other governmental agency or court for
any reason, and the Registrable Securities covered thereby have not been sold;
or (iii) if the conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with such registration are not
satisfied by reason of (x) a failure by, or inability of, the Company to satisfy
any thereof, or (y) the occurrence of an event outside the control of the
Stockholders.
(b) A Demand Registration requested pursuant to Section 1.1(a) of
this Agreement shall not be deemed to have been effected for purposes of this
Agreement if the Stockholders are not able to register and sell at least 75% of
the amount of Registrable Securities requested to be included in such
registration.
1.4 Priority on Demand Registrations. The Company will not include
any Other Securities in a Demand Registration that is an underwritten offering
if the managing underwriters advise the Company in writing that in their opinion
the number of Registrable Securities to be registered exceeds the number of
securities which can be sold in such offering within a price range acceptable to
the Majority Holder.
1.5 Selection of Underwriters. The Majority Holder shall have the
right to select the underwriters and the managing underwriters to administer a
Demand Registration, provided that such underwriters and managing underwriters
shall be reasonably acceptable to the Company.
1.6 Other Registration Rights. Except as otherwise provided in this
Agreement, the Company may grant to any Person the right to request the Company
to register any Equity Securities of the Company, or any securities convertible,
exchangeable or exercisable for or into such securities ("Other Securities");
provided, however, that all such registration rights shall not be inconsistent
with the registration rights held by the Stockholders.
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ARTICLE II
OTHER REGISTRATIONS
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2.1 Right to Piggyback. Whenever the Company proposes to register
any of its securities under the Securities Act, and the registration form to be
used may be used for the registration of Registrable Securities (a "Piggyback
Registration"), the Company will give prompt written notice (in any event within
three (3) Business Days after its receipt of notice of any exercise of other
demand registration rights) to the Stockholders of its intention to effect such
a registration and will include in such registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein within twenty-five (25) days after the receipt of the Company's notice.
The Stockholders shall be entitled to "piggyback" registration rights on all
registrations of the Company, except registrations for employee plans or
transactions pursuant to Rule 145 under the Securities Act; provided that this
right of the Stockholders shall be subject to the rights of the Company and its
underwriters in the event of any public offering to reduce or exclude the number
of shares proposed to be registered due to market conditions. The registration
rights granted under this Agreement may be freely transferred to any Transferee,
provided that such Transferee expressly agrees in writing to be subject to and
bound by the terms and provisions of this Agreement.
2.2 Priority on Registrations. If a Piggyback Registration is an
underwritten registration on behalf of holders of the Company's securities, and
the managing underwriters advise the Company in writing that in their opinion
the number of securities requested to be included in such registration exceeds
the number which can be sold in such offering at a price acceptable to the
holders of the Company's securities, the Company will include in such
registration: (i) first, the securities requested to be included therein by the
holders requesting such registration, if any; (ii) second, up to all of the
Registrable Securities requested to be included in such registration; and (iii)
third, if all of the Registrable Securities so requested are so included, up to
all of the Other Securities requested to be included in such registration. The
Company hereby agrees that whenever it grants piggyback rights to any holder of
its securities, such holder's piggyback rights will not be inconsistent with the
piggyback rights granted to the Stockholders under this Article II.
2.3 Other Registrations. If the Company previously has filed a
registration statement for a Long-Form Demand Registration with respect to
Registrable Securities pursuant to Article I of this Agreement, and if such
previous registration has not been withdrawn or abandoned, the Company will not
file or cause to be effected any other registration of any of its equity
securities or securities convertible, exchangeable or exercisable for or into
its equity securities under the Securities Act (except on Form S-4 or S-8 or any
successor form), at the request of any holder or holders of such securities
other than the holders of the Registrable Securities, until a period of at least
six (6) months have elapsed from the effective date of such previous
registration.
ARTICLE III
REGISTRATION PROCEDURES
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Whenever the Majority Holder has requested that any Registrable
Securities be registered pursuant to this Agreement, the Company will use its
best efforts to effect the
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registration and the sale of such Registrable Securities in accordance with the
intended method of registration thereof, and pursuant thereto the Company will
as expeditiously as possible or, in the case of clause (q) below, will not:
(a) promptly prepare and file with the SEC a registration statement
with respect to such Registrable Securities (such registration statement to
include all information which the Majority Holder shall reasonably request) and
use its best efforts to promptly cause such registration statement to become
effective, provided, that at least five days before filing a registration
statement or prospectus or any amendments or supplements thereto, the Company
will (i) furnish to counsel selected by the Majority Holder copies of all such
documents proposed to be filed, and the Company shall not, in the case of a
Demand Registration, file any such documents to which such counsel shall have
objected on the grounds that such document does not comply in all material
respects with the requirements of the Securities Act or of the rules or
regulations thereunder; and (ii) notify the selling Stockholders of (x) any
request by the SEC to amend such registration statement or amend or supplement
any prospectus or (y) any stop order issued or threatened by the SEC, and take
all reasonable actions required to prevent the entry of such stop order or to
remove it if entered;
(b) (i) promptly prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary (A) in the case of a Long-Form Demand
Registration, to keep such registration statement effective for a period of not
less than 180 days (except that such 180-day period shall be (I) shortened to
the extent that all shares are sold thereunder, or (II) extended (x) by the
length of any period that a stop order or similar proceeding is in effect which
prohibits the distribution of the Registrable Securities, and (y) by the number
of days during the period from and including the date on which each seller of
Registrable Securities shall have received a notice delivered pursuant to clause
(f) below until the date when such seller shall have received a copy of the
supplemented or amended prospectus contemplated by clause (f) below), and (B) in
the case of a Shelf Registration, keep such registration statement continually
effective, or (ii) comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement;
(c) as soon as reasonably possible, furnish to the selling
Stockholders, without charge, such number of conformed copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus
and prospectus supplement and, in each case, including all exhibits) and such
other documents as the selling Stockholders may reasonably request, all in
conformity with the requirements of the Securities Act, in order to facilitate
the disposition of the Registrable Securities owned by the selling Stockholders;
(d) use its reasonable best efforts promptly to register or qualify
the Registrable Securities under such other securities or blue sky laws of such
jurisdictions as the selling Stockholders shall reasonably request, to keep such
registration or qualification in effect for so long as such registration
statement remains in effect and to do any and all other acts and things which
may be reasonably necessary or advisable to enable the selling Stockholders to
consummate the disposition in such jurisdictions of the Registrable Securities,
provided,
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however, that the Company will not be required to (i) qualify generally to do
business as a foreign corporation in any jurisdiction where it would not
otherwise be required to qualify but for this clause (d), (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of process
in any such jurisdiction;
(e) furnish to the selling Stockholders a signed copy, addressed to
the selling Stockholders (and the underwriters, if any) of an opinion of counsel
for the Company or special counsel to the selling Stockholders, dated the
effective date of such registration statement (and, if such registration
statement includes an underwritten public offering, dated the date of the
closing under the underwriting agreement), reasonably satisfactory in form and
substance to counsel selected by the holders of a majority of the Shares,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) as are customarily covered in
opinions of issuer's counsel delivered to the underwriters in underwritten
public offerings, and such other legal matters as the selling Stockholders (or
the underwriters, if any) may reasonably request;
(f) promptly notify the selling Stockholders, at a time when a
prospectus relating to the Registrable Securities is required to be delivered
under the Securities Act, of the Company's becoming aware that the prospectus
included in such registration statement, as then in effect, contains an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, and, at the request of
the selling Stockholders, promptly prepare and furnish the selling Stockholders
a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made;
(g) cause all of the Registrable Securities to be listed or quoted,
and to continue to be listed or quoted on the national securities exchange, the
Nasdaq National Market or the Nasdaq Small-Cap Market, on which the Common Stock
of the Company is then listed, if the listing of such Registrable Securities is
then permitted under the rules of such exchange or The NASDAQ Stock Market;
(h) provide a transfer agent and registrar for all of the
Registrable Securities not later than the effective date of such registration
statement;
(i) enter into such customary arrangements and take all such other
actions as the selling Stockholders or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of the Registrable
Securities;
(j) make available for inspection by the selling Stockholders, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by the selling
Stockholders or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information
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reasonably requested by any selling Stockholder, underwriter, attorney,
accountant or agent in connection with such registration statement, in
each case pursuant to confidentiality agreements reasonably acceptable to the
Company, as appropriate;
(k) cause the Company's officers to make presentations to potential
purchasers of the Registrable Securities, as reasonably requested by the holders
of a majority of the Shares or any underwriter participating in any disposition
pursuant to such registration statement;
(l) subject to other provisions hereof, use its best efforts to
cause the Registrable Securities to be registered with or approved by such other
governmental agencies or authorities or self-regulatory organizations as may be
necessary to enable the holders of a majority of the Shares to consummate the
disposition of the Registrable Securities;
(m) in the case of an underwritten offering, use its reasonable best
efforts to obtain a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an underwritten
offering, dated the date of the closing under the underwriting agreement),
signed by the independent public accountants who have certified the Company's
financial statements, addressed to the selling Stockholders, and to the
underwriters, if any, covering substantially the same matters with respect to
such registration statement (and the prospectus included therein) and with
respect to events subsequent to the date of such financial statements, as are
customarily covered in accountants' letters delivered to the underwriters in
underwritten public offerings of securities and such other financial matters as
the selling Stockholders (or the underwriters, if any) may reasonably request;
(n) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC and make available to its security holders, in
each case as soon as practicable, an earnings statement covering a period of at
least twelve months, beginning after the effective date of the registration
statement, which earning statement shall satisfy the provisions of Section 11(a)
of the Securities Act;
(o) permit the selling Stockholders to participate in the
preparation of any registration statement covering Registrable Securities and to
include therein material, furnished to the Company in writing, which in the
reasonable judgment of the holders of a majority of the Shares should be
included and which is reasonably acceptable to the Company;
(p) use every reasonable effort to obtain the lifting at the
earliest possible time of any stop order suspending the effectiveness of any
registration statement or of any order preventing or suspending the use of any
preliminary prospectus;
(q) at any time file or make any amendment to a registration
statement, or any amendment of or supplement to a prospectus (including
amendments of the documents incorporated by reference into the prospectus), of
which Stockholders or the managing underwriters shall not have previously been
advised and furnished a copy or to which the Stockholders, the managing
underwriters, or counsel for the Stockholders or for the underwriters shall
reasonably object; and
(r) enter into and perform its obligations under an underwriting
agreement and make such representations and warranties (subject to appropriate
disclosure schedule exceptions)
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to Stockholders and the underwriters, if any, in form, substance and scope as
are customarily made by issuers to underwriters and selling holders, as the case
may be, in underwritten public offerings of substantially the same type.
ARTICLE IV
REGISTRATION EXPENSES
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4.1 Company's Fees and Expenses. All expenses incident to the
Company's performance of or compliance with this Agreement, including without
limitation, all registration and filing fees, fees and expenses incident to the
Company's or the Stockholders' performance of or compliance with a Shelf
Registration pursuant to this Agreement and to the Transaction Documents
(whether or not any of the registration statements become effective), fees and
expenses of compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses, fees and expenses for listing or quoting the
Registrable Securities on each securities exchange or The NASDAQ Stock Market on
which similar securities issued by the Company are then listed or quoted, and
fees and disbursements of counsel for the Company, any transfer agent and all
independent certified public accountants, underwriters (excluding discounts and
selling commissions and fees and expenses) and other Persons retained by the
Company in connection with any Demand Registration or any Piggyback Registration
(all such expenses being herein called "Registration Expenses"), will be paid by
the Company. The underwriting discounts and commissions relating to the sale of
Registrable Securities will be borne and paid by the selling Stockholders.
4.2 Fees of Counsel to Stockholders. In connection with any
registration hereunder, the Company shall pay the reasonable fees and expenses
of one legal counsel selected by the holders of a majority of the Shares.
ARTICLE V
UNDERWRITTEN OFFERINGS
----------------------
5.1 Demand Underwritten Offerings. If requested by the underwriters
for any underwritten offerings of Registrable Securities pursuant to a Demand
Registration, the Company will enter into an underwriting agreement with such
underwriters for such offering, such agreement to be reasonably satisfactory in
substance and form to the Company, the selling Stockholders, and the
underwriters, and to contain such representations and warranties by the Company
and such other terms as are generally included in agreements of this type,
including, without limitation, indemnities customarily included in such
agreements. The selling Stockholders may be a party to such underwriting
agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of the selling Stockholders and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of the selling
Stockholders. The Company shall cooperate with the selling Stockholders in order
to limit, to the extent within the Company's control, any representations or
warranties to, or agreements with, the Company or the underwriters to be made by
the selling Stockholders only to those representations, warranties or agreements
regarding the selling Stockholders, the
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Registrable Securities and the selling Stockholders' intended method of
distribution and any other representation required by law.
5.2 Incidental Underwritten Offerings. If the Company at any time
proposes to register any of its securities under the Securities Act as
contemplated by Article II of this Agreement and such securities are to be
distributed by or through one or more underwriters, the Company will, if
requested by the Stockholders as provided in Article II of this Agreement,
arrange for such underwriters to include all of the Registrable Securities to be
offered and sold by Stockholders, subject to the limitations set forth in
Article II hereof, among the securities to be distributed by such underwriters.
The selling Stockholders shall be a party to the underwriting agreement between
the Company and such underwriters, and may, at the option of the holders of a
majority of the Shares, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
the selling Stockholders and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of the selling Stockholders. The Company shall
cooperate with the selling Stockholders in order to limit any representations or
warranties to, or agreements with, the Company or the underwriters to be made by
the selling Stockholders only to those representations, warranties or agreements
regarding the selling Stockholders, the Registrable Securities and the selling
Stockholders' intended method of distribution and any other representation
required by law.
ARTICLE VI
INDEMNIFICATION
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6.1 Indemnification by the Company. The Company agrees to indemnify
and hold harmless, to the extent permitted by law, each of the holders of any
Shares, each other Person, if any, who controls such holder of Shares within the
meaning of the Securities Act or the Exchange Act, and each of their respective
directors, agents, general partners and officers, as follows:
(i) against any and all loss, liability, claim, damage and
expense arising out of or based upon an untrue statement or alleged
untrue statement of a material fact contained in any registration
statement (or any amendment or supplement thereto), including all
documents incorporated therein by reference, or in any preliminary
prospectus or prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense to the extent of the aggregate amount paid in settlement of any
litigation, investigation or proceeding by any governmental agency
or body, commenced or threatened, or of any claim whatsoever based
upon any such untrue statement or omission or any such alleged
untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
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(iii) subject to Section 6.3, against any and all expense
incurred by them in connection with investigating, preparing or
defending against any litigation, investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission or any such
alleged untrue statement or omission, to the extent that any such
expense is not paid under clause (i) or (ii) above;
provided, that this indemnity does not apply to any loss, liability, claim,
damage or expense incurred by any holder of Shares to the extent arising out of
an untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the Company by or on behalf of such holder of Shares expressly for use in the
preparation of any registration statement (or any amendment or supplement
thereto), including all documents incorporated therein by reference, or in any
preliminary prospectus or prospectus (or any amendment or supplement thereto);
and provided further, that the Company will not be liable to any holder of
Shares under the indemnity agreement in this Section 6.1, with respect to any
preliminary prospectus or the final prospectus or the final prospectus as
amended or supplemented, as the case may be, to the extent that any such loss,
liability, claim, damage or expense of such controlling Person or holder of
Shares results from the fact that such holder of Shares sold Shares knowingly to
a Person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final prospectus or of the final
prospectus as then amended or supplemented, whichever is most recent, if the
Company had previously and timely furnished copies thereof to such holder of
Shares and had advised such holder of Shares in writing of such holder's
obligation to send or give such copies to such Person or class of Persons, and
provided further, that the Company will not be liable to any holder of Shares
under the indemnity agreement in this Section 6.1, with respect to a sale by
such holder of Shares after such time as the Company, upon the written advice of
counsel to the Company, a copy of which shall be provided to each holder of
Shares, provides written notice that a registration statement requires an
amendment or supplement and has requested in writing that the holders of Shares
cease to sell under such registration statement if, and only if, such loss,
liability, claim, damage or expense of such controlling Person or holder of
Shares both (x) results from the fact that such holder of Shares knowingly sold
Registrable Securities under such registration statement after receipt of such
written request and (y) arises out of an actual or alleged misstatement or
omission of a material fact in the registration statement that the Company has
determined requires amendment or supplement, but only if the actual or alleged
misstatement or omission could reasonably have been corrected by the Company as
part of the amendment or supplement; following the issuance of such a written
request, the Company shall, as promptly as reasonably practicable (in accordance
with the terms of this Agreement) amend or supplement such registration
statement so that it may be used to effect sales of Registrable Securities
thereafter, and shall notify such controlling Person or holder of Shares thereof
in writing, and shall provide holders of Shares with copies of the corrected
final prospectus, at which time the aforesaid written request to cease the use
thereof shall terminate. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such holder of Shares or
any such director, officer, general partner, agent, or other controlling Person
and shall survive the transfer of such securities by such holder of Shares.
6.2 Indemnification by Stockholders. In connection with any
registration statement in which Stockholders are participating, each such holder
of Shares agrees to
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indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 6.1 of this Agreement), to the extent permitted by law, the
Company and its directors, officers and controlling Persons, and their
respective directors, officers and general partners, against any and all loss,
liability, claim, damage and expense arising out of or based upon any statement
or alleged statement in or omission or alleged omission from such registration
statement, any preliminary, final or summary prospectus contained therein, or
any amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such holder of
Shares, specifically stating that it is for use in the preparation of such
registration statement, preliminary, final or summary prospectus or amendment or
supplement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company, or such holder of Shares,
as the case may be, or any of their respective directors, officers, controlling
Persons or general partners and shall survive the transfer of such securities by
such holder of Shares. The obligations of each holder of Shares pursuant to this
Section 6.2 are to be several and not joint. With respect to each claim pursuant
to this Section 6.2, each such holder of Shares' maximum liability under this
Section 6.2 shall be limited to an amount equal to the net proceeds actually
received by such holder of Shares (after deducting any underwriting discount and
expenses) from the sale of Registrable Securities being sold pursuant to such
registration statement or prospectus by such holder of Shares.
6.3 Indemnification Procedures. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding involving a claim referred to in Section 6.1 or Section 6.2 of
this Agreement, such indemnified party will, if a claim in respect thereof is to
be made against an indemnifying party, give written notice to the latter of the
commencement of such action; provided, that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under Section 6.1 or Section 6.2 of this Agreement except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
the indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified,
to the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof, unless a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, or the indemnified
parties may have defenses that are different from or additional to those of the
indemnifying party, in which case the indemnifying party shall not be liable for
the fees and expenses of more than one separate counsel for all indemnified
parties in any jurisdiction in connection with any one action or separate but
similar or related actions. An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel in any jurisdiction for all parties
indemnified by such indemnifying party with respect to such claim, unless a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the reasonable fees and expenses of
such additional counsel or counsels. The indemnifying party will not, without
the prior written consent of each indemnified party, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or
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proceeding in respect of which indemnification may be sought hereunder (whether
or not such indemnified party or any Person who controls such indemnified party
is a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of such indemnified
party from all liability arising out of such claim, action, suit or proceeding.
Notwithstanding anything to the contrary set forth herein, and without limiting
any of the rights set forth above, in any event any party will have the right to
retain, at its own expense, counsel with respect to the defense of a claim. Each
indemnified party shall furnish such information regarding itself or the claim
in question as an indemnifying party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
6.4 Indemnification of Underwriters. The Company and each holder of
Shares shall provide for the foregoing indemnity in any underwriting agreement
with respect to any required registration or other qualification of securities
under any Federal or state law or regulation of any governmental authority.
6.5 Contribution. If the indemnification provided for in Sections
6.1 and 6.2 of this Agreement is unavailable or insufficient to hold harmless an
indemnified party under such Sections, then each indemnifying party shall
contribute to the amount paid or payable to such indemnified party as a
result of the losses, claims, damages or liabilities referred to in Section 6.1
or Section 6.2 of this Agreement in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand, and the
indemnified party on the other, in connection with statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations, including, without limitation, the
relative benefits received by each party from the offering of the securities
covered by such registration statement, the parties' relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted and the opportunity to correct and prevent any statement or omission.
The relative fault shall be determined by 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 relates to information
supplied by the indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statements or omission. The parties hereto agree that it
would not be just and equitable if contributions pursuant to this Section 6.5
were to be determined by pro rata or per capita allocation (even if the selling
Stockholders were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the first sentence of this Section 6.5. The amount paid to an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this Section 6.5 shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim (which shall be
limited as provided in Section 6.3 of this Agreement if the indemnifying party
has assumed the defense of any such action in accordance with the provisions
thereof) which is the subject of this Section 6.5. Promptly after receipt by an
indemnified party under this Section 6.5 of notice of the commencement of any
action against such party in respect of which a claim for contribution may be
made against an indemnifying party under this Section 6.5, such indemnified
party shall notify the indemnifying party in writing of the commencement thereof
if the notice specified in Section 6.3 of this Agreement has not been given with
respect to such action; provided, that the omission to so notify the
indemnifying party shall not relieve the
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indemnifying party from any liability which it may otherwise have to any
indemnified party under this Section 6.5, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. The
Company and each Stockholder agree with each other and the underwriters of the
Registrable Securities, if requested by such underwriters, that (i) the
underwriters' portion of such contribution shall not exceed the underwriting
discount and (ii) the amount of such contribution by each Stockholder shall not
exceed an amount equal to the net proceeds actually received by such Stockholder
from the sale of Registrable Securities in the offering to which the losses,
liabilities, claims, damages or expenses of the indemnified parties relate. 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.
6.6 Timing of Indemnification Payments. The indemnification
required by this Article VI shall be made (i) by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or expenses are incurred, and (ii) upon determination of liability by a
court of competent jurisdiction whether or not such judgment is appealed, with
respect to loss, damage or liability; provided, however, that, upon a final
judgment not subject to appeal, to the effect that such indemnification is
without merit or is otherwise not required to be paid by the Company, then the
periodic payments made by the Company pursuant to this Section 6.6 shall be
promptly refunded within thirty (30) days of notice of such final judgment.
ARTICLE VII
RULE 144
--------
The Company covenants that it will file the reports required to be filed
by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder (or, if the Company is not required to
file such reports, it will, upon the request of the Majority Holder, make
publicly available other information), and it will take such further action as
the Majority Holder may reasonably request, all to the extent required from time
to time to enable Stockholders to sell shares of Registrable Securities without
registration under the Securities Act within the limitation of the exemption
provided by (i) Rule 144 or Rule 144A under the Securities Act, as such Rules
may be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of the Majority Holder, the
Company will deliver to Stockholders a written statement as to whether it has
complied with such requirements.
ARTICLE VIII
MERGERS, ETC.
-------------
The Company shall not, directly or indirectly, enter into any merger,
consolidation, or reorganization in which the Company shall not be the surviving
corporation unless the proposed surviving corporation shall, prior to such
merger, consolidation, or reorganization, agree in writing to assume the
obligations of the Company under this Agreement, and for that purpose references
hereunder to "Registrable Securities" shall be deemed to be
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references to the securities that the Stockholders would be entitled to receive
in exchange for Registrable Securities under any such merger, consolidation, or
reorganization.
ARTICLE IX
DELIVERY OF INFORMATION FOR RULE 144A TRANSACTIONS
--------------------------------------------------
If a Stockholder proposes to transfer any Preferred Stock or Registrable
Securities pursuant to Rule 144A under the Securities Act (as in effect from
time to time), the Company agrees to provide (upon the request of such
Stockholder or the prospective Transferee) to such Stockholder and (if
requested) to the prospective Transferee any financial or other information
concerning the Company which is required to be delivered by the Stockholder to
any Transferee of such Registrable Securities pursuant to such Rule 144A,
subject to confidentiality provisions, if applicable.
ARTICLE X
Obligations of Stockholders
---------------------------
10.1 Each selling Stockholder shall furnish to the Company such
information regarding such selling Stockholder and the distribution proposed by
such selling Stockholders as the Company may reasonably request in writing and
as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.
10.2 Upon receipt of any notice from the Company pursuant to clause
(f) of Article III hereof, each selling Stockholder will discontinue disposition
of Registrable Securities until receipt of the copies of the supplemented or
amended prospectus contemplated by clause (f) and, if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such Stockholder's possession of the
prospectus relating to such Registrable Securities at the time of receipt of
such notice.
ARTICLE XI
DEFINITIONS
-----------
As used in this Agreement, the following defined terms shall have the
meanings set forth below:
"Business Day" means a day other than Saturday, Sunday or any day on
which banks in the State of New York are authorized or obligated to close.
"Certificate of Designations" means the Certificate of Designations
relating to the Preferred Stock.
"Common Stock" means the Company's Common Stock, par value $0.01 per
share.
"Company" means Trailer Bridge, Inc., a Delaware corporation, its
successors and assigns.
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"Equity Securities" means, as of any given time, the Company's then
outstanding securities that are entitled to vote in connection with the election
of the Company's Board of Directors generally, in the aggregate, and currently
means the Common Stock and Preferred Stock, which are the only currently
authorized and outstanding voting securities of the Company, taken together.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Person" means any individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Preferred Stock" means the Company's Series A Convertible Preferred
Stock, par value $.01 per share, which Series A Preferred Stock is convertible
into shares of Common Stock.
"Purchase Price" means the purchase price per share for the Preferred
Stock as set forth in the Securities Purchase Agreement.
"Registrable Securities" means any shares of Common Stock issued or
issuable upon conversion of the Preferred Stock purchased by the Stockholders
pursuant to the Securities Purchase Agreement or held by any Transferee, and any
securities issued or issuable to the Stockholders with respect to such Common
Stock by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable Securities, such
securities will cease to be Registrable Securities when they (i) have been
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them or (ii) been sold to the public
pursuant to an exemption from registration under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Securities Purchase Agreement" means the Securities Purchase Agreement,
dated as of May 10, 2002, by and between the Company and Transportation
Receivables 1992, LLC.
"Shares" means the shares of Registrable Securities to be registered on
a registration statement filed with the SEC in connection with any Demand
Registration or any Piggyback Registration.
"Subsequent Shelf Registration" has the meaning set forth in Section
1.1(b) hereof.
"Transaction Documents" means the Securities Purchase Agreement and the
Certificate of Designations.
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"Transferee" means any party to whom the Preferred Stock or Registrable
Securities are transferred pursuant to an exemption from registration under the
Securities Act, other than in a public offering.
ARTICLE XII
MISCELLANEOUS
-------------
12.1 No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with the
rights granted to the Stockholders in this Agreement.
12.2 Remedies. In the event of a breach by any party to this
Agreement of its obligations under this Agreement, any party injured by such
breach, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The parties agree that the provisions of this
Agreement shall be specifically enforceable, it being agreed by the parties that
the remedy at law, including monetary damages, for breach of any such provision
will be inadequate compensation for any loss and that any defense in any action
for specific performance that a remedy at law would be adequate is waived.
12.3 Amendments and Waivers. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement will be
effective against the Company or any holder of Registrable Securities, unless
such modification, amendment or waiver is approved in writing by the Company and
the Majority Holder. The failure of any party to enforce any of the provisions
of this Agreement will in no way be construed as a waiver of such provisions and
will not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
12.4 Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of the
Stockholders or the holders of Registrable Securities are also for the benefit
of, and enforceable by, any subsequent holder of Registrable Securities.
12.5 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or sent by nationally
recognized overnight courier service to the parties at the addresses or
facsimile numbers below or on the signature pages hereto:
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(i) If to Stockholders, to their respective addresses as
listed in the Company's transfer books, with a copy to:
Transportation Receivables 1992, LLC
c/o Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
(ii) If to the Company, to:
Trailer Bridge, Inc.
00000 Xxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Chief Executive Officer
All such notices, requests and other communications will (x) if delivered
personally to the address as provided in this Section 11.6(a), be deemed given
upon delivery, (y) if delivered by facsimile transmission to the facsimile
number as provided in this Section 11.6(a), be deemed given upon receipt and (z)
if delivered by nationally recognized overnight courier service in the manner
described above to the address as provided in this Section 11.6(a), be deemed
given on the Business Day following the day it was sent (in each case regardless
of whether such notice, request or other communication is received by any other
Person to whom a copy of such notice is to be delivered pursuant to this Section
11.6(a)). Any party may from time to time change its address, facsimile number
or other information for the purpose of notices to that party by giving notice
specifying such change to the other parties hereto.
12.6 Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
12.7 Gender. Whenever the pronouns "he" or "his" are used herein they
shall also be deemed to mean "she" or "hers" or "it" or "its" whenever
applicable. Words in the singular shall be read and construed as though in the
plural and words in the plural shall be construed as though in the singular in
all cases where they would so apply.
12.8 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid or unenforceable, and if the rights or obligations of any
party hereto under this Agreement will not be materially and adversely affected
thereby, (i) such provision will be fully severable, (ii) this Agreement will be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, (iii) the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom and
(iv) in lieu of such illegal, invalid or unenforceable provision, there will be
added automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.
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12.9 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to a contract
executed and performed in such State without giving effect to the conflicts of
laws principles thereof.
12.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
[signature page to follow]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
TRAILER BRIDGE, INC.
By: /s/ Xxxxx X. Xxxx
--------------------------------------
Name: Xxxxx X. Xxxx
Title: President and Chief Operating
Officer
TRANSPORTATION RECEIVABLES 1992, LLC
By The Estate of X. X. XxXxxx, Member
By: /s/ Xxxx X. XxXxxx
--------------------------------------
Name: Xxxx X. XxXxxx
Title: Co-Executor
By: /s/ X. Xxxxxxxx Meyercord
--------------------------------------
Name: X. Xxxxxxxx Xxxxxxxxx
Title: Co-Executor
