Exhibit 4.2
AMERICAN RAILCAR INDUSTRIES, INC.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of January __, 2006, among the
parties listed on Schedule I hereto (the "Holders") and American Railcar
Industries, Inc., a Delaware corporation (the "Company").
R E C I T A L S
WHEREAS, the Company has filed a registration statement on Form S-1 (file
number 333-130284, as it may be amended from time to time, the "Initial
Registration Statement") with the Commission (as defined below) to effect a
proposed public offering of the Company's common stock;
WHEREAS, in order to enable the Company to proceed with the public
offering, the Holders have been required to consent to certain actions and to
make certain other accommodations;
WHEREAS, as an inducement to the Holders to permit the public offering,
the Company has agreed to grant the Holders certain registration rights;
WHEREAS, the Company and the Holders desire to define the registration
rights of the Holders on the terms and subject to the conditions herein set
forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following terms have the respective meaning
set forth below:
Affiliate: shall have the meaning set forth in Rule 144 promulgated under
the Securities Act (as currently in effect);
Commission: shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act;
Common Stock: shall mean the common stock of the Company, par value $0.01
per share;
Effective Date: shall mean the date of the first closing for the offering
contemplated by the Initial Registration Statement;
Exchange Act: shall mean the Securities Exchange Act of 1934, as amended
and the rules and regulations promulgated thereunder;
Foundation: shall mean the Foundation for a Greater Opportunity;
Foundation Stock Purchase Agreement: shall mean that certain Stock
Purchase Agreement executed as of December 8, 2005, as it may be amended from
time to time, entered into between Modal and the Foundation, pursuant to which
the Foundation has agreed to sell all of its shares of Common Stock to Modal,
subject to the terms and conditions set forth therein;
Holder: shall mean any holder of Registrable Securities;
Initial Holder: shall mean any of the persons initially listed on Schedule
1 to this Agreement;
Initial Registration Statement: shall have the meaning set forth in the
recitals;
Initial Underwriting Agreement: shall mean the underwriting agreement
entered into by the Company for the sale of shares pursuant to the offering
contemplated by the Initial Registration Statement;
Initiating Holder: shall mean any Holder or Holders who in the aggregate
are Holders of more than 50% of the then outstanding Registrable Securities;
Modal: shall mean Modal LLC, a Delaware limited liability company;
Person: shall mean an individual, partnership, limited liability company,
joint-stock company, corporation, trust or unincorporated organization, and a
government or agency or political subdivision thereof;
Register, Registered and Registration: shall mean to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean the Common Stock (together with any
securities issued or issuable in respect thereof by way of a dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise) owned by the Initial Holders
on the Effective Date, including without limitation the Common Stock to be
purchased by Modal from the Foundation as contemplated by the Foundation Stock
Purchase Agreement; provided, however, that any shares of Common Stock (or
securities which would otherwise be Registrable Securities), that are
transferred in a transaction pursuant to which the registration rights set forth
herein are not assigned or permitted to be assigned as set forth in Section 2(a)
below, shall cease to be Registrable Securities.
Registration Expenses: shall mean all expenses incurred by the Company in
compliance with Section 2(a), (b) and (c) hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and expenses of one counsel for all the
Holders, blue sky fees and expenses and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company, which shall be paid in any event by the
Company); provided, however, that Registration Expenses shall exclude Selling
Expenses;
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Security, Securities: shall have the meaning set forth in Section 2(1) of
the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as amended and the
rules and regulations promulgated thereunder; and
Selling Expenses: shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than the fees and
expenses of one counsel for all the Holders referenced in the definition of
Registration Expenses above.
SECTION 2. REGISTRATION RIGHTS
(a) Requested Registration.
(i) Request for Registration. If the Company shall receive from an
Initiating Holder, at any time after the Effective Date, subject to Section
(2)(j), if applicable, a written request that the Company effect any
registration with respect to more than 30% of the Registrable Securities, the
Company will:
(1) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(2) as soon as practicable, but in no event prior to the
time permitted under the Initial Underwriting Agreement, use its diligent best
efforts to effect such registration (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the Securities
Act) as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are specified in
a written request received by the Company within 10 business days after written
notice from the Company is given under Section 2(a)(i)(1) above; provided that
the Company shall not be obligated to effect, or take any action to effect, any
such registration pursuant to this Section 2(a):
(A) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in
effecting such registration, qualification or compliance,
unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities
Act or applicable rules or regulations thereunder;
(B) After the Company has effected two (2) such registrations
pursuant to this Section 2(a) and such registrations have been
declared or ordered effective and the sales of such
Registrable Securities shall have closed;
(C) If the Registrable Securities requested by all Holders to be
registered pursuant to such request do not have an anticipated
aggregate public
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offering price (before any underwriting discounts and
commissions) of not less than $5,000,000;
(D) During the period starting with the date forty-five (45) days
prior to the Company's good faith estimate of the date of
filing of, and ending on the date ninety (90) days (or in the
case of the offering contemplated by the Initial Public
Offering, such period of time as provided in the Initial
Underwriting Agreement) immediately following the effective
date of, any registration statement pertaining to securities
of the Company (other than a registration of securities in a
Rule 145 transaction, or a registration on any registration
form (including Form S-4) which does not permit secondary
sales, with respect to an employee benefit plan or with
respect to the Company's first registered public offering of
its stock); provided that the Company is actively employing in
good faith all reasonable efforts to cause such registration
statement to become effective;
(E) If the Company shall furnish to the Initiating Holders a
certificate signed by an officer of the Company stating that
in the good faith judgment of the Board of Directors it would
be significantly detrimental to the Company or its
stockholders for a registration statement to be filed or
securities to be offered, in which case the Company's
obligation to use its best efforts to comply with this Section
2 shall be deferred for a period not to exceed sixty (60) days
from the date of receipt of written request from the
Initiating Holders; provided, however, that the Company shall
not exercise such right more than once in any twelve (12)
month period.
The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 2(a)(ii) below, include other
securities of the Company which are held by Persons who, by virtue of agreements
with the Company, are entitled to include their securities in any such
registration ("Other Stockholders"). In the event any Holder requests a
registration pursuant to this Section 2(a) in connection with a distribution of
Registrable Securities to its stockholders, partners, members or holders of
other beneficial or equity interests, the registration shall provide for the
resale by such Persons, if requested by such Holder.
The registration rights set forth in this Section 2 may be assigned, in
whole or in part, by an Initial Holder or any of its Affiliates to any
transferee of Registrable Securities (who shall agree to be bound by all
obligations of this Agreement), but may not be assigned, without the written
consent of the Company in its sole discretion, by any person who is not an
Initial Holder or any Affiliate of an Initial Holder, provided, however, it
being understood that, by executing this Agreement, Modal shall be deemed to be
an Initial Holder without any further action on the part of Modal or the
Company, and that upon Modal's purchase of the Common Stock held by the
Foundation as contemplated by the Foundation Stock Purchase Agreement, all
rights and obligations of the Foundation under this Agreement shall be assigned
to and assumed by Modal, without any further action on the part of the
Foundation, Modal, the Company or any other Initial Holder or Holder, and the
Foundation shall have no further rights or obligations hereunder.
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(ii) Underwriting. If the Initiating Holders intend to distribute
the Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
Section 2(a).
If Other Stockholders request such inclusion, the Holders shall offer to
include the securities of such Other Stockholders in the underwriting and may
condition such offer on their acceptance of the further applicable provisions of
this Section 2. The Holders whose shares are to be included in such registration
and the Company shall (together with all Other Stockholders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for such underwriting by the Initiating
Holders and reasonably acceptable to the Company. Notwithstanding any other
provision of this Section 2(a), if the representative advises the Holders in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the securities of the Company held by Other Stockholders shall
be excluded from such registration to the extent so required by such limitation.
If, after the exclusion of such shares, further reductions are still required,
the number of shares included in the registration by each Holder shall be
reduced on a pro rata basis (based on the number of shares held by such Holder),
by such minimum number of shares as is necessary to comply with such request. No
Registrable Securities or any other securities excluded from the underwriting by
reason of the underwriter's marketing limitation shall be included in such
registration. If any Other Stockholder who has requested inclusion in such
registration as provided above disapproves of the terms of the underwriting,
such Person may elect to withdraw therefrom by written notice to the Company,
the underwriter and the Initiating Holders. The securities so withdrawn shall
also be withdrawn from registration. If the underwriter has not limited the
number of Registrable Securities or other securities to be underwritten, the
Company and officers and directors of the Company may include its or their
securities for its or their own account in such registration if the
representative so agrees and if the number of Registrable Securities and other
securities which would otherwise have been included in such registration and
underwriting will not thereby be limited. If the Company includes shares to be
sold by it in any Registration Statement requested pursuant to this Section
2(a), such Registration Statement shall be deemed to have been a registration
under Section 2(b), unless the Holders of Registrable Securities are able to
include in such Registration Statement all of the Registrable Securities
initially requested for inclusion in such Registration Statement.
(b) Company Registration.
(i) If the Company shall determine to register any of its equity
securities either for its own account or for the account of Other
Stockholders, other than a registration relating solely to employee
benefit plans, or a registration relating solely to a Commission Rule 145
transaction, or a registration on any registration form (including Form
S-4) which does not permit secondary sales, the Company will:
(1) promptly give to each of the Holders a written notice
thereof (which shall include a list of the jurisdictions in which
the Company intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and
(2) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the
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Registrable Securities specified in a written request or requests,
made by the Holders within fifteen (15) days after receipt of the
written notice from the Company described in clause (i) above,
except as set forth in Section 2(b)(ii) below. Such written request
may specify all or a part of the Holders' Registrable Securities. In
the event any Holder requests inclusion in a registration pursuant
to this Section 2(b) in connection with a distribution of
Registrable Securities to its stockholders, partners, members or
holders of other beneficial or equity interests the registration
shall provide for the resale by such Persons, if requested by such
Holder.
(ii) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written
notice given pursuant to Section 2(b)(i)(1). In such event, the right of
each of the Holders to registration pursuant to this Section 2(b) shall be
conditioned upon such Holders' participation in such underwriting and the
inclusion of such Holders' Registrable Securities in the underwriting to
the extent provided herein. The Holders whose shares are to be included in
such registration shall (together with the Company and the Other
Stockholders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for
underwriting by the Company. Notwithstanding any other provision of this
Section 2(b), if the representative determines that marketing factors
require a limitation on the number of shares to be underwritten, and the
representative may (subject to the allocation priority set forth below)
limit the number of Registrable Securities to be included in the
registration and underwriting to not less than twenty five percent (25%)
of the shares included therein (based on the number of shares). The
Company shall so advise all holders of securities requesting registration,
and the number of shares of securities that are entitled to be included in
the registration and underwriting shall be allocated in the following
manner: The securities of the Company held by officers, directors and
Other Stockholders of the Company (other than Registrable Securities and
other than securities held by holders who by contractual right demanded
such registration ("Demanding Holders")) shall be excluded from such
registration and underwriting to the extent required by such limitation,
and, if a limitation on the number of shares is still required, the number
of shares that may be included in the registration and underwriting by
each of the Holders and Demanding Holders shall be reduced, on a pro rata
basis (based on the number of shares held by such Holder), by such minimum
number of shares as is necessary to comply with such limitation. If any of
the Holders or any officer, director or Other Stockholder disapproves of
the terms of any such underwriting, he may elect to withdraw therefrom by
written notice to the Company and the underwriter. Any Registrable
Securities or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
(c) Form S-3. The Company shall use its best efforts to qualify for
registration on Form S-3 for secondary sales. After the Company has qualified
for the use of Form S-3, the Initiating Holders shall have the right to request
three (3) registrations on Form S-3 (such requests shall be in writing and shall
state the number of shares of Registrable Securities to be disposed of and the
intended method of disposition of shares by such holders), provided that the
Company shall not be obligated to effect, or take any action to effect, any such
registration pursuant to this Section 2(c):
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(i) Unless the Holder or Holders requesting registration propose to
dispose of shares of Registrable Securities having an aggregate price to the
public (before deduction of Selling Expenses) of more than $5,000,000;
(ii) Within ninety (90) days of the effective date of the most
recent registration pursuant to this Section 2(c) in which securities held by
the requesting Holder could have been included for sale or distribution;
(iii)In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance, unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act or applicable rules or regulations thereunder;
(iv) During the period starting with the date forty-five (45) days
prior to the Company's good faith estimate of the date of filing of, and ending
on the date ninety (90) days immediately following the effective date of, any
registration statement pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction, a registration on any
registration form (including Form S-4) which does not permit secondary sales or
with respect to an employee benefit plan), provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective; provided, however, that the Company may only
delay an offering pursuant to this Section 2(c)(iv) for a period of not more
than sixty (60) days, if a filing of any other registration statement is not
made within that period and the Company may only exercise this right once in any
twelve (12) month period; or
(v) If the Company shall furnish to the Holders a certificate signed
by an officer of the Company stating that in the good faith judgment of the
Board of Directors it would be significantly detrimental to the Company or its
stockholders for a registration statement to be filed in the near future, in
which case the Company's obligation to use its best efforts to comply with this
Section 2(c) shall be deferred for a period not to exceed sixty (60) days from
the date of receipt of written request from the Holders; provided, however, that
the Company shall not exercise such right more than once in any twelve (12)
month period.
The Company shall give written notice to all Holders of the receipt of a
request for registration pursuant to this Section 2(c) and shall provide a
reasonable opportunity for other Holders to participate in the registration,
provided that if the registration is for an underwritten offering, the terms of
Section 2(a)(ii) shall apply to all participants in such offering. Subject to
the foregoing, the Company will use its best efforts to effect promptly the
registration of all shares of Registrable Securities on Form S-3 to the extent
requested by the Holder or Holders thereof for purposes of disposition. In the
event any Holder requests a registration pursuant to this Section 2(c) in
connection with a distribution of Registrable Securities to its stockholders,
partners, members or holders of other beneficial or equity interests, the
registration shall provide for the resale by such Persons, if requested by such
Holder.
(d) Expenses of Registration. Subject to Section 2(e), all Registration
Expenses incurred in connection with any registration, qualification or
compliance pursuant to this Section
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2 shall be borne by the Company, and all Selling Expenses shall be borne by the
Holders of the securities so registered pro rata on the basis of the number of
their shares so registered
(e) Withdrawal of Registration Statement. At any time before the
registration statement requested under Section 2(a) or Section 2(c) covering
Registrable Shares becomes effective, the Holders of a majority of such shares
may request the Company to withdraw or not to file the registration statement.
In that event, unless such request of withdrawal was caused by, or made in
response to, (i) a material adverse effect or a similar event related to the
business, properties, condition, or operations of the Company not known (without
imputing the knowledge of any other Person to such holders) by the holders
initiating such request at the time their request was made, or other material
facts not known to such Holders at the time their request was made, or (ii) a
material adverse change in the financial markets, the Holders shall be deemed to
have used one of their registration rights under Section 2(a) or Section 2(c),
as applicable; provided, however, that such withdrawn registration shall not
count as requested registration pursuant to Section 2(a) or Section 2(c) above
if the Company shall have been reimbursed (pro rata by the Holders holding a
majority of the Registrable Shares requested to be registered or in such other
proportion as the requesting Holders may agree) for all out-of-pocket expenses
incurred by the Company in connection with such withdrawn registration.
(f) Registration Procedures. In the case of each registration effected by
the Company pursuant to this Section 2, the Company will keep the Holders, as
applicable, advised in writing as to the initiation of each registration and as
to the completion thereof. At its expense, the Company will:
(i) keep such registration effective for a period of one hundred
twenty (120) days or until the Holders (or in the case of a distribution
to the stockholders, partners, members or holders of other beneficial or
equity interests of such Holder, such Persons, as applicable, have
completed the distribution described in the registration statement
relating thereto, whichever first occurs; provided, however, that (A) such
120-day period shall be extended for a period of time equal to the period
during which the Holders (or stockholders, partners, members or holders of
other beneficial or equity interests of a Holder) as applicable, refrain
from selling any securities included in such registration in accordance
with provisions in Section 2(j) hereof; and (B) in the case of any
registration of Registrable Securities on Form S-3 which are intended to
be offered on a continuous or delayed basis, such 120-day period shall be
extended until all such Registrable Securities are sold, provided that
Rule 415, or any successor rule under the Securities Act, permits an
offering on a continuous or delayed basis, and provided further that
applicable rules under the Securities Act governing the obligation to file
a post-effective amendment permit, in lieu of filing a post-effective
amendment which (y) includes any prospectus required by Section 10(a) of
the Securities Act or (z) reflects facts or events representing a material
or fundamental change in the information set forth in the registration
statement, the incorporation by reference of information required to be
included in (y) and (z) above to be contained in periodic reports filed
pursuant to Section 12 or 15(d) of the Exchange Act in the registration
statement;
(ii) furnish such number of prospectuses and other documents
incident thereto as each of the Holders, as applicable, from time to time
may reasonably request;
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(iii) notify each Holder of Registrable Securities covered by such
registration at any time when a prospectus relating thereto is required to
be delivered under the Securities Act of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing; and
(iv) if such securities are being sold through underwriters,
furnish, on the date that such Registrable Securities are delivered to the
underwriters for sale, (1) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an
underwritten public offering and reasonably satisfactory to a majority in
interest of the Holders participating in such registration, addressed to
the underwriters, if any, and to the Holders participating in such
registration and (2) a letter, dated as of such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to
underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Holders participating in
such registration, addressed to the underwriters, if any, and if permitted
by applicable accounting standards, to the Holders participating in such
registration.
(v) Otherwise use its diligent best efforts to comply with all
applicable rules and regulations of the SEC, and make available to the
Holders, as soon as reasonably practicable, an earnings statement covering
the period of at least twelve (12) months, but not more than eighteen (18)
months, beginning with the first month after the effective date of the
Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
(g) Indemnification.
(i) The Company will indemnify each of the Holders, as applicable,
each of its officers, directors, members and partners, and each Person
controlling each of the Holders, with respect to each registration which
has been effected pursuant to this Section 2, and each underwriter, if
any, and each person who controls any underwriter, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other
document (including any related registration statement, notification or
the like) incident to any such registration, qualification or compliance,
or based on any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the Securities
Act or the Exchange Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and
will reimburse each of the Holders, each of its officers, directors,
members and partners, and each Person controlling each of the Holders,
each such underwriter and each Person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection
with investigating and defending any such claim, loss, damage, liability
or action, provided
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that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission based upon written information
furnished to the Company by the Holders or underwriter and stated to be
specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities held by it
are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each
of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration statement, each person
who controls the Company or such underwriter, each Other Stockholder and
each of their officers, directors, members and partners, and each person
controlling such Other Stockholder against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering
circular or other document made by such Holder, or any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements by such Holder therein not
misleading, and will reimburse the Company and such Other Stockholders,
directors, officers, members, partners, persons, underwriters or control
persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in conformity
with written information furnished to the Company by such Holder and
stated to be specifically for use therein; provided, however, that the
obligations of each of the Holders hereunder shall be limited to an amount
equal to the net proceeds to such Holder of securities sold as
contemplated herein.
(iii) Each party entitled to indemnification under this Section 2(g)
(the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom; provided
that counsel for the Indemnifying Party, who shall conduct the defense of
such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld) and
the Indemnified Party may participate in such defense at such party's
expense (unless the Indemnified Party shall have reasonably concluded that
there may be a conflict of interest between the Indemnifying Party and the
Indemnified Party in such action, in which case the fees and expenses of
counsel shall be at the expense of the Indemnifying Party), and provided
further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 2 unless the Indemnifying Party is
materially prejudiced thereby. No Indemnifying Party shall be liable for
any settlement of any action or proceeding effected without its written
consent. No Indemnifying Party, in the defense of any such claim or
litigation shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in
respect to such claim or litigation. Each Indemnified Party
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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.
(iv) If the indemnification provided for in this Section 2(g) is held by a court
of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable
by such Indemnified Party as a result of such loss, liability, claim,
damage or expense in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or
omissions which resulted in such loss, liability, claim, damage or expense,
as well as any other relevant equitable considerations. The relative fault
of the Indemnifying Party and of the Indemnified Party 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 by the Indemnified Party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission.
(v) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement
entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall be
controlling.
(h) Information by the Holders.
(i) Each of the Holders holding securities included in any
registration shall furnish to the Company such information regarding such
Holder and the distribution proposed by such Holder 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 Section 2.
(ii) In the event that, either immediately prior to or subsequent to
the effectiveness of any registration statement, any Holder shall
distribute Registrable Securities to its stockholders, partners, members
or holders of other beneficial or equity interests, such Holder shall so
advise the Company and provide such information as shall be necessary to
permit an amendment to such registration statement to provide information
with respect to such Persons, as selling securityholders. Promptly
following receipt of such information, the Company shall file an
appropriate amendment to such registration statement reflecting the
information so provided.
(i) Rule 144 Reporting.
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
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(i) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act ("Rule 144"),
at all times from and after ninety (90) days following the effective date
of the first registration under the Securities Act filed by the Company
for an offering of its securities to the general public;
(ii) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act at any time after it has become
subject to such reporting requirements; and
(iii) so long as the Holder owns any Registrable Securities, furnish
to the Holder upon request, a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed as the Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing the Holder to sell any such
securities without registration.
(j) "Market Stand-off" Agreement. Each of the Holders agrees, if requested
by the Company or an underwriter of equity securities of the Company, not to
sell or otherwise transfer or dispose of any Registrable Securities held by such
Holder during the ninety (90) day period following the effective date of a
registration statement of the Company filed under the Securities Act, provided
that all officers and directors of the Company enter into similar agreements.
If requested by the underwriters, the Holders shall execute a separate
agreement to the foregoing effect. The Company may impose stop-transfer
instructions with respect to the shares (or securities) subject to the foregoing
restriction until the end of said ninety (90) day period. The provisions of this
Section 2(j) shall be binding upon any transferee who acquires Registrable
Securities. The parties understand and agree that the Holders have entered into
separate agreements with the Initial Underwriters in respect of the offering
contemplated by the Initial Registration Statement, which agreements, in respect
of such offering, shall be deemed to have satisfied and be in lieu of the
agreements set forth in or contemplated by this Section 2(j).
SECTION 3. MISCELLANEOUS
(a) Directly or Indirectly. Where any provision in this Agreement refers
to action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person.
(b) Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State. The parties
further agree that any action or proceeding to enforce any right arising out of
this Agreement shall be commenced in any New York State court or United Sates
District Court sitting in New York, and the parties hereto consent to such
jurisdiction, agree that venue will be proper in such courts and in any such
matter, agree that the State of New York is the most convenient forum for
litigation in any suit, action or legal proceeding in any such court shall be
properly served an shall confer personal jurisdiction if
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served by registered or certified mail, or as otherwise provided by the laws of
the State of New York or the United States.
(c) Section Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
(d) Notices.
(i) All communications under this Agreement shall be in writing and
shall be delivered by hand or facsimile or mailed by overnight courier or
by registered or certified mail, postage prepaid:
(1) if to the Company, to American Railcar Industries, Inc.,
000 Xxxxx Xxxxxx, Xx. Xxxxxxx, XX 00000, Attention: Chief Financial
Officer (facsimile: (000) 000-0000, or at such other address as it
may have furnished in writing to the Holders.
(2) if to the Holders, at the address or facsimile number
listed on Schedule I hereto, or at such other address or facsimile
number as may have been furnished the Company in writing.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand or facsimile, on the date of such delivery; if mailed by
overnight courier, on the first business day following the date of such
mailing; and if mailed by registered or certified mail, on the third
business day after the date of such mailing.
(e) Reproduction of Documents. This Agreement and all documents relating
thereto, including, without limitation, any consents, waivers and modifications
which may hereafter be executed may be reproduced by the Holders by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and the Holders may destroy any original document so reproduced.
The parties hereto agree and stipulate that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made by the Holders in the regular course of business) and that
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
(f) Successors and Assigns. Subject to the restrictions set forth herein,
this Agreement shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties.
(g) Entire Agreement; Amendment and Waiver. This Agreement constitutes the
entire understanding of the parties hereto and supersedes all prior
understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and the Holders holding a majority of the then
outstanding Registrable Securities.
(h) Severability. In the event that any part or parts of this Agreement
shall be held illegal or unenforceable by any court or administrative body of
competent jurisdiction, such
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determination shall not affect the remaining provisions of this Agreement which
shall remain in full force and effect.
(i) No Third Party Beneficiaries. The parties hereto acknowledge and agree
that there are no intended third party beneficiaries to this Agreement and no
third parties have any rights under or relating to this Agreement.
(j) Lock-Up Restrictions. Notwithstanding anything in this Agreement to
the contrary, the Company shall not file any registration statement for any
Registrable Securities prior to the expiration of the Lock-Up Period (as defined
in the Initial Underwriting Agreement) or as otherwise permitted under the
Initial Underwriting Agreement.
(k) Counterparts. This Agreement may be executed in two or more
counterparts (including by facsimile), each of which shall be deemed an original
and all of which together shall be considered one and the same agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
AMERICAN RAILCAR INDUSTRIES, INC.
By:
----------------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief
Executive Officer
-----------------------------
Xxxx X. Icahn
FOUNDATION FOR A GREATER OPPORTUNITY
By:
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
XXXXXX INVESTMENTS LLC
By: Barberry Corp.
By:
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
MODAL LLC
By:
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Schedule I
Initial Holders
INVESTOR NAME AND ADDRESS
Xxxx X. Icahn
c/o Icahn Associates Corp.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Foundation for a Greater Opportunity
Attn: Xxxxxx X. Xxxxxxxx and Xxxxx Xxxxx Goodyear
c/o Icahn Associates Corp. and Affiliated Company
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxx Investments LLC
c/o Icahn Associates Corp. and Affiliated Companies
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
MODAL LLC
c/o Icahn Associates Corp. and Affiliated Companies
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
