EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of this 3rd day of December, 1996 by and among BANK OF AMERICA NT & SA,
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a national banking association (the "Bank"), and BANK OF AMERICA NW, NATIONAL
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ASSOCIATION, a national banking association ("BANW" and, collectively with the
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Bank, the "Holders") and XX XXXXXXXX SERVICES, INC., a Delaware corporation
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("BAMSI").
RECITALS
A. The Holders. The Bank and BANW are each an existing national banking
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association duly organized and in good standing under the laws of the United
States with their respective principal executive offices located in San
Francisco, California and Seattle, Washington.
B. BAMSI. BAMSI is an existing corporation, formed under the laws of the
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State of Delaware, with its principal executive offices located in San
Francisco, California. All of the outstanding Common Stock of BAMSI is
currently owned by the Bank and BANW.
C. Corporate Approvals. Each of the parties to this Agreement has
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obtained all necessary corporate approvals for the execution and delivery of
this Agreement.
D. Arm's Length Relationship. The parties to this Agreement intend to
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conduct their relationships hereunder on an arm's length basis.
E. BAC/BAMSI Transactions; The Offering. The Bank and BANW, each a
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subsidiary of BankAmerica Corporation ("BAC"), currently own 100% of the
outstanding common stock of BAMSI. The Bank and BANW have entered into certain
agreements with BAMSI (1) transferring the Bank's United States domestic
merchant processing business and the BANW merchant processing business to BAMSI
effective as of December 3, 1996 and (2) covering the contemplated transfer of
the Philippine and Thailand merchant processing businesses of the Bank to BAMSI
upon the receipt of certain governmental approvals (collectively, the "Asset
Transfers"). BAMSI is contemplating the issuance of shares of BAMSI's Class A
common stock, $.01 par value per share (the "Class A Common Stock"), in an
initial public offering pursuant to a Registration Statement on Form S-1
(Registration No. 333-13985) (the "Offering") and following the Offering, the
Bank and BANW will each be the beneficial and record owner of 25,670,000 shares
and 4,530,000 shares, respectively, of BAMSI's Class B common stock, $.01 par
value per share (the "Class B Common Stock"), convertible into 25,670,000 shares
and 4,530,000 shares, respectively, of the Class A Common Stock.
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F. Registration Rights. In consideration of the Asset Transfers and in
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conjunction with the Offering, the Holders and BAMSI desire to enter into this
Agreement to provide the Holders with certain registration rights as provided
herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and for other good and valuable consideration had and
received, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. As used herein, the following terms shall have the
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following respective meanings:
"Affiliate" shall mean any Person that directly or indirectly
controls, is controlled by, or is under common control with such Person. A
Person shall be deemed to control another Person if such Person owns 50% or
more of any equity interest in the "controlled" Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership
of stock or partnership interests, by contract, agreement or understanding
(whether oral or written), or otherwise.
"Class A Common Stock" shall have the meaning set forth in Recital E
of this Agreement.
"Class B Common Stock" shall have the meaning set forth in Recital E
of this Agreement.
"Designated Transferee" shall have the meaning set forth in Section
10 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Holders" shall mean the Bank and BANW, any Affiliate of the Bank or
BANW (other than BAMSI) and any Designated Transferees who are holders of
record of any Registrable Shares, and any combination of one or more such
Holders.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Other Holders" shall mean Persons who are holders of record of equity
securities of BAMSI who subsequent to the date hereof acquire more than 5%
of the outstanding shares of Class A Common Stock pursuant to a transaction
with BAMSI and to whom BAMSI grants registration rights pursuant to a
written agreement in connection with such transaction.
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"Person" shall mean any individual, corporation, association,
partnership, group (as defined in Section 13(d)(3) of the Exchange Act),
limited liability company, joint venture, business trust or unincorporated
organization, or a government or any agency or political subdivision
thereof.
"Registrable Shares" shall mean (i) the 30,200,000 shares of Class A
Common Stock which would result upon the conversion of the 30,200,000
shares of Class B Common Stock owned by the Holders on the date of this
Agreement, and (ii) any shares of Class A Common Stock acquired by a Holder
directly or upon exercise of conversion of any equity securities of BAMSI
issued or distributed after the date of this Agreement to a Holder in
respect of Registrable Shares by way of any stock dividend, stock split or
other distribution or any recapitalization or reclassification. As to any
particular Registrable Share, such Registrable Share shall cease to be a
Registrable Share when (w) it shall have been sold, transferred or
otherwise disposed of or exchanged pursuant to a registration statement
under the Securities Act; (x) it shall have been distributed to the public
pursuant to Rule 144 (or any successor provision) under the Securities Act;
(y) it shall have been sold or transferred to a Person other than a
Designated Transferee in a private transaction effected other than pursuant
to a registration statement; or (z) it shall have been sold, transferred or
otherwise disposed of in violation of this Agreement.
"Registration Expenses" shall have the meaning set forth in Section
7(a) hereof.
"SEC" shall mean the Securities and Exchange Commission or any
successor agency thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended.
2. Incidental Registrations
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(a) Right to Include Registrable Shares. Each time BAMSI shall determine
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to file a registration statement under the Securities Act in connection with a
proposed offer and sale for cash of any equity securities (other than an
offering of debt securities which are convertible into equity securities or an
offering of equity securities in an amount not in excess of 5% of the number of
shares of Class A Common Stock outstanding at such time) either by it or by any
holders of its outstanding equity securities, BAMSI will give prompt written
notice of its determination to each Holder and of such Holder's rights under
this Section 2, at least 30 days prior to the anticipated filing date of such
registration statement. Upon the written request of each Holder made within 21
days after the receipt of any such notice from BAMSI, (which request shall
specify the Registrable Shares intended to be disposed of by such Holder), BAMSI
will use its best efforts to effect the registration under the Securities Act of
all Registrable Shares which BAMSI has been so requested to register by the
Holders thereof, to the extent required to permit the disposition of the
Registrable
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Shares so to be registered; provided, however, that (i) if, at any time after
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giving written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
registration, BAMSI shall determine for any reason not to proceed with the
proposed registration of the securities to be sold by it, BAMSI may, at its
election, give written notice of such determination to each Holder of
Registrable Shares and thereupon shall be relieved of its obligation to register
any Registrable Shares in connection with such registration (but not from its
obligation to pay the Registration Expenses in connection therewith), and (ii)
if such registration involves an underwritten offering, all Holders of
Registrable Shares requesting to be included in BAMSI's registration must sell
their Registrable Shares to the underwriters on the same terms and conditions as
apply to BAMSI, with such differences, including any with respect to
indemnification and liability insurance, as may be customary or appropriate in
combined primary and secondary offerings. If a registration requested pursuant
to this Section 2 involves an underwritten public offering, any Holder of
Registrable Shares requesting to be included in such registration may elect, in
writing prior to the effective date of the registration statement filed in
connection with such registration, not to register such securities in connection
with such registration. No registration effected under this Section 2 shall
relieve BAMSI of its obligations to effect registrations upon request under
Section 4 hereof.
(b) Priority in Incidental Registration. If a registration pursuant to
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this Section 2 involves an underwritten offering and the managing
underwriter(s) in good faith advise(s) BAMSI in writing that, in its opinion,
the number of securities which BAMSI, the Holders and any other Persons intend
to include in such registration exceeds the largest number of securities which
can be sold in such offering without having an adverse effect on such offering
(including the price at which such securities can be sold), then BAMSI will
include in such registration (i) first, if the registration pursuant to this
Section 2 was initiated by Other Holders exercising demand registration rights,
100% of the securities such Other Holders propose to sell (except to the extent
the terms of such Other Holders' registration rights provide otherwise); (ii)
second, 100% of the securities BAMSI proposes to sell for its own account; (iii)
third, to the extent that the number of securities which such Other Holders
exercising demand registration rights and BAMSI propose to sell is less than the
number of securities which BAMSI has been advised can be sold in such offering
without having the adverse effect referred to above, such number of Registrable
Shares which the Holders have requested to be included in such registration
pursuant to Section 2(a) hereof and which, in the opinion of such managing
underwriter(s), can be sold without having the adverse effect referred to above;
and (iv) fourth, to the extent that the number of securities which are to be
included in such registration pursuant to clauses (i), (ii) and (iii) is, in the
aggregate, less than the number of securities which BAMSI has been advised can
be sold in such offering without having the adverse effect referred to above,
such number of other securities requested to be included in the offering for the
account of any Other Holders which, in the opinion of such managing
underwriter(s), can be sold without having the adverse effect referred to above.
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3. Holdback Agreements.
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(a) If any registration of Registrable Shares shall be in connection with
an underwritten public offering, the Holders shall not effect any public sale or
distribution (except in connection with such public offering), of any equity
securities of BAMSI, or of any security convertible into or exchangeable or
exercisable for any equity security of BAMSI (in each case, other than as part
of such underwritten public offering), during the 90-day period (or such lesser
period as the managing underwriter(s) beginning on the effective date of such
registration, if, and to the extent, the managing underwriter(s) of any such
offering determine(s) such action is necessary or desirable to effect such
offering; provided, however, that each Holder has received the written notice
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required by Section 2(a) hereof; provided, however, that each Holder shall not
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be obligated to comply with such restrictions arising as a result of an
underwritten public offering subject to Section 2 hereof more than once in any
12-month period.
(b) If any registration of Registrable Shares shall be in connection with
any underwritten public offering, BAMSI shall not effect any public sale or
distribution (except in connection with such public offering) of any of its
equity securities or of any security convertible into or exchangeable or
exercisable for any of its equity securities (in each case other than as part of
such underwritten public offering) during the 180-day period (or such lesser
period as the managing underwriter(s) may permit) beginning on the effective
date of such registration, and BAMSI shall use its best efforts to cause each
member of the management of BAMSI who holds any equity security and each other
holder of 5% or more of the outstanding shares of any equity security, or of any
security convertible into or exchangeable or exercisable for any equity
security, of BAMSI purchased from BAMSI (at any time other than in a public
offering) to so agree.
4. Registration on Request.
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(a) Request by Holders. Upon the written request of the Holders of at
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least 10% of the Registrable Shares (calculated on the based on the number in
clause (i) of its definition) that BAMSI effect the registration under the
Securities Act of all or part of such Holders' Registrable Shares, and
specifying the amount (which shall not be less than 10% of the Registrable
Shares (calculated on the based on the number in clause (i) of its definition)
in the aggregate) and the intended method of disposition thereof, BAMSI will
promptly give notice of such requested registration to all other Holders of
Registrable Shares and, as expeditiously as possible, use its best efforts to
effect the registration under the Securities Act of: (i) the Registrable Shares
which BAMSI has been so requested to register by Holders of at least 10% of the
Registrable Shares; and (ii) all other Registrable Shares which BAMSI has been
requested to register by any other Holder thereof by written request received by
BAMSI within 21 days after the giving of such written notice by BAMSI (which
request shall specify the intended method of disposition of such Registrable
Shares); provided, however, that BAMSI shall not be required to effect more than
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two registrations pursuant to this Section 4; provided, further, that BAMSI
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shall not be obligated to file a registration statement relating to a
registration request under this Section 4 (x) if the registration request is
delivered after delivery of a notice by BAMSI of an intended
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registration and prior to the effective date of the registration statement
referred to in such notice, or (y) within a period of 90 days after the
effective date of any other registration statement of BAMSI requested by a
Holder pursuant to this Section 4 or pursuant to which the Holders included
Registrable Shares. The Holders initially requesting a registration pursuant to
this Section 4 may, at any time prior to the effective date of the registration
statement relating to such registration, revoke such request by providing a
written notice to BAMSI revoking such request; provided, however, that, in the
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event the Holders shall have made a written request for a demand registration
(I) which is subsequently withdrawn by the Holders after BAMSI has filed a
registration statement with the SEC in connection therewith but prior to such
demand registration being declared effective by the SEC or (II) which is not
declared effective solely as a result of the failure of Holders to take all
actions reasonably required in order to have the registration and the related
registration statement declared effective by the SEC, then, in any such event,
such demand registration shall be counted as a demand registration for purposes
of this Section 4(a). Promptly after the expiration of the 21-day period
referred to in clause (ii) above, BAMSI will notify all the Holders to be
included in the registration of the other Holders and the number of shares of
Registrable Shares requested to be included therein.
(b) Registration Statement Form. If any registration requested pursuant to
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this Section 4 which is proposed by BAMSI to be effected by the filing of a
registration statement on Form S-3 (or any successor or similar short-form
registration statement) shall be in connection with an underwritten public
offering, and if the managing underwriter(s) shall advise BAMSI in writing that,
in its opinion, the use of another form of registration statement is of material
importance to the success of such proposed offering, then such registration
shall be effected on such other form.
(c) Effective Registration Statement. A registration requested pursuant to
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this Section 4 will not be deemed to have been effected unless it has become
effective under the Securities Act and has remained effective for 270 days or
such shorter period as all the Registrable Shares included in such registration
have actually been sold thereunder. In addition, if within 180 days after it
has become effective, the offering of Registrable Shares pursuant to such
registration is interfered with by any stop order, injunction or other order or
requirement of the SEC or other governmental agency or court, such registration
will be deemed not to have been effected for purposes of this Section 4.
(d) Priority in Requested Registrations. If a requested registration
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pursuant to this Section 4 involves an underwritten offering and the managing
underwriter(s) in good faith advise(s) BAMSI in writing that, in its opinion,
the number of securities requested to be included in such registration
(including securities of BAMSI which are not Registrable Shares) exceeds the
largest number of securities which can be sold in such offering without having
an adverse effect on such offering (including the price at which such securities
can be sold), then BAMSI will include in such registration (i) first, 100% of
the Registrable Shares requested to be registered pursuant to Section 4(a)
hereof (provided that if the number of Registrable Shares requested to be
registered pursuant to Section 4(a) hereof exceeds the number which BAMSI has
been advised can be sold in such offering without having the adverse effect
referred to above, the number of such Registrable Shares to be
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included in such registration by the Holders shall be allocated pro rata among
such Holders on the basis of the relative number of Registrable Shares each such
Holder has requested to be included in such registration); (ii) second, to the
extent that the number of Registrable Shares requested to be registered pursuant
to Section 4(a) hereof is less than the number of securities which BAMSI has
been advised can be sold in such offering without having the adverse effect
referred to above, such number of shares of equity securities BAMSI requests to
be included in such registration, and (iii) third, to the extent that the number
of Registrable Shares requested to be included in such registration pursuant to
Section 4(a) hereof and the securities which BAMSI proposes to sell for its own
account are, in the aggregate, less than the number of equity securities which
BAMSI has been advised can be sold in such offering without having the adverse
effect referred to above, such number of other securities proposed to be sold by
any Other Holder which, in the opinion of such managing underwriter(s), can be
sold without having the adverse effect referred to above (provided that if the
number of such securities of such Other Holder requested to be registered
exceeds the number which BAMSI has been advised can be sold in such offering
without having the adverse effect referred to above, the number of such
securities to be included in such registration pursuant to this Section 4(d)
shall be allocated pro rata among all such Other Holders on the basis of the
relative number of securities each such Other Holder has requested to be
included in such registration).
(e) Additional Rights. If BAMSI at any time grants to any other holders of
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equity securities of BAMSI any rights to request BAMSI to effect the
registration of any such shares of equity securities on terms more favorable to
such holders than the terms set forth in this Section 4 and in Section 5 hereof,
the terms of this Section 4 and of Section 5 hereof shall be deemed amended or
supplemented to the extent necessary to provide the Holders such more favorable
rights and benefits. In no event shall BAMSI grant to any person any rights to
request BAMSI to effect the registration of any shares of equity securities of
BAMSI on terms which are adverse to rights of the Holders set forth in Section 2
and this Section 4.
5. Registration Procedures.
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(a) If and whenever BAMSI is required by the provisions of Section 2 or 4
hereof to use its best efforts to effect or cause the registration of
Registrable Shares, BAMSI shall as expeditiously as possible:
(i) prepare and, in any event within 60 days after the end of the
period within which a request for registration may be given to BAMSI, file
with the SEC a registration statement with respect to such Registrable
Shares and use its best efforts to cause such registration statement to
become effective;
(ii) 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 to keep such registration statement effective for a
period not in excess of 270 days and to comply with the provisions of the
Securities
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Act, the Exchange Act, and the rules and regulations promulgated thereunder
with respect to the disposition of all the securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the Holders thereof set forth in such
registration statement; provided, however, that (A) before filing a
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registration statement (including an initial filing) or prospectus, or any
amendments or supplements thereto, BAMSI will furnish to one counsel
selected by the Holders of a majority of the Registrable Shares covered by
such registration statement copies of all documents proposed to be filed,
which documents will be subject to the review and comment of such counsel,
and (B) BAMSI will notify each Holder of Registrable Shares covered by such
registration statement of any stop order issued or threatened by the SEC,
any other order suspending the use of any preliminary prospectus or of the
suspension of the qualification of the registration statement for offering
or sale in any jurisdiction, and take all reasonable actions required to
prevent the entry of such stop order, other order or suspension or to
remove it if entered;
(iii) furnish to each Holder and each underwriter, if applicable, of
Registrable Shares covered by such registration statement such number of
copies of the registration statement and of each amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus included in such registration statement (including each
preliminary prospectus and summary prospectus), in conformity with the
requirements of the Securities Act, and such other documents as each Holder
of Registrable Shares covered by such registration statement may reasonably
request in order to facilitate the disposition of the Registrable Shares by
such Holder;
(iv) use its best efforts to register or qualify such Registrable
Shares covered by such registration statement under the state securities or
blue sky laws of such jurisdictions as each Holder of Registrable Shares
covered by such registration statement and, if applicable, each
underwriter, may reasonably request, and do any and all other acts and
things which may be reasonably necessary to consummate the disposition in
such jurisdictions of the Registrable Shares owned by such Holder, except
that BAMSI shall not for any purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction where, but for the
requirements of this clause (iv), it would not be obligated to be so
qualified;
(v) use its best efforts to cause such Registrable Shares covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
Holders thereof to consummate the disposition of such Registrable Shares;
(vi) if at any time when a prospectus relating to the Registrable
Shares is required to be delivered under the Securities Act, any event
shall have occurred as the result of which any such prospectus as then in
effect
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would include an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, immediately give written notice thereof
to each Holder and the managing underwriter or underwriters, if any, of
such Registrable Shares and prepare and furnish to each such Holder a
reasonable number of copies of an amended or supplemental prospectus as may
be necessary so that, as thereafter delivered to the purchasers of such
Registrable Shares, such prospectus shall not include an untrue statement
of material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
(vii) use its best efforts to list any portion of such Registrable
Shares not already listed on any securities exchange on which similar
securities of BAMSI are then listed, and enter into customary agreements
including a listing application and indemnification agreement in customary
form, provided that the applicable listing requirements are satisfied, and
provide a transfer agent and registrar for such Registrable Shares covered
by such registration statement not later than the effective date of such
registration statement;
(viii) enter into such customary agreements (including an
underwriting agreement in customary form) and take such other actions as
each Holder of Registrable Shares being sold or the underwriter or
underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Shares, including customary
indemnification and opinions;
(ix) use its best efforts to obtain a "cold comfort" letter or
letters from BAMSI's independent public accountants in customary form and
covering matters of the type customarily covered by "cold comfort" letters
as the Holders of the Registrable Shares being sold or the underwriters
retained by such Holders shall reasonably request;
(x) make available for inspection by representatives of any Holder of
Registrable Shares covered by such registration statement, by any
underwriter participating in any disposition to be effected pursuant to
such registration statement and by any attorney, accountant or other agent
retained by such Holders or any such underwriter, all financial and other
records pertinent corporate documents and properties of BAMSI and its
subsidiaries' officers, directors and employees to supply all information
and respond to all inquiries reasonably requested by such Holders or any
such representative, underwriter, attorney, accountant or agent in
connection with such registration statement;
(xi) promptly prior to the filing of any document which is to be
incorporated by reference into the registration statement or the prospectus
(after initial filing of the registration statement), provide copies of
such document to counsel to the Holders of Registrable Shares covered by
such
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registration statement and to the managing underwriter(s), if any, make
BAMSI's representatives available for discussion of such document and make
such changes in such document prior to the filing thereof as counsel for
such Holders or underwriter(s) may reasonably request;
(xii) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable after the effective date of the
registration statement, an earning statement which shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and
regulations promulgated thereunder;
(xiii) not later than the effective date of the applicable
registration statement, use its best efforts to provide a CUSIP number for
any portion of such Registrable Shares not already included in a CUSIP
number for similar securities of BAMSI, and provide the applicable transfer
agents with printed certificates for the Registrable Shares which are in a
form eligible for deposit with the Depository Trust Company;
(xiv) notify counsel for the Holders of Registrable Shares included
in such registration statement and the managing underwriter or
underwriters, if any, immediately and confirm the notice in writing, (A)
when the registration statement, or any post-effective amendment to the
registration statement, shall have become effective, or any supplement or
amendment to the prospectus shall have been filed, (B) of the receipt of
any comments from the SEC and (C) of any request of the SEC to amend the
registration statement or amend or supplement the prospectus or for
additional information; and
(xv) cooperate with each seller of Registrable Shares and each
underwriter, if any, participating in the disposition of such Registrable
Shares and their respective counsel in connection with any filings required
to be made with the NASD.
(b) Each Holder of Registrable Shares hereby agrees that, upon receipt of
any notice from BAMSI of the happening of any event of the type described in
Section 5(a)(vi) hereof, such Holder shall forthwith discontinue disposition of
such Registrable Shares covered by such registration statement or related
prospectus until such Holder's receipt of the copies of the supplemental or
amended prospectus contemplated by Section 5(a)(vi) hereof, and, if so directed
by BAMSI, such Holder will deliver to BAMSI (at BAMSI's expense) all copies,
other than permanent file copies then in such Holder's possession, of the
prospectus covering such Registrable Shares at the time of receipt of such
notice. In the event BAMSI shall give any such notice, the period mentioned in
Section 5(a)(ii) hereof shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 5(a)(vi) hereof and including the date when such Holder shall have
received the copies of the supplemental or amended prospectus contemplated by
Section 5(a)(vi) hereof. If for any other reason the
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effectiveness of any registration statement filed pursuant to Section 4 hereof
is suspended or interrupted prior to the expiration of the time period regarding
the maintenance of the effectiveness of such Registration Statement required by
Section 5(a)(ii) hereof so that Registrable Shares may not be sold pursuant
thereto, the applicable time period shall be extended by the number of days
equal to the number of days during the period beginning with the date of such
suspension or interruption to and ending with the date when the sale of
Registrable Shares pursuant to such registration statement may be recommenced.
(c) Each Holder hereby agrees to provide BAMSI, upon receipt of its
request, with such information about such Holder to enable BAMSI to comply with
the requirements of the Securities Act and to execute such certificates as BAMSI
may reasonably request in connection with such information and otherwise to
satisfy any requirements of law.
6. Underwritten Registrations. Subject to the provisions of Sections 2,
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3 and 4 hereof, any of the Registrable Shares covered by a registration
statement may be sold in an underwritten offering at the discretion of the
Holder thereof. In the case of an underwritten offering pursuant to Section 2
hereof, the managing underwriter(s) that will administer the offering shall be
selected by BAMSI; provided, however, that such managing underwriter(s) shall be
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reasonably satisfactory to the Holders of a majority of the Registrable Shares
to be registered. In the case of any underwritten offering pursuant to Section
4 hereof, the managing underwriter(s) that will administer the offering shall be
selected by the Holders of a majority of the Registrable Shares to be
registered; provided, however, that such underwriter(s) shall be reasonably
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satisfactory to BAMSI.
7. Expenses.
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(a) Subject to Section 7(b), BAMSI shall pay all fees, costs and expenses
of all registrations pursuant to Section 2 hereof, including all SEC and stock
exchange or NASD registration and filing fees and expenses, reasonable fees and
expenses of any "qualified independent underwriter" and its counsel as may be
required by the rules of the NASD, fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel for the underwriters, if any, in connection with blue sky qualifications
of the Registrable Shares), rating agency fees, printing expenses (including
expenses of printing certificates for Registrable Shares and prospectuses),
messenger, telephone and delivery expenses, the fees and expenses incurred in
connection with the listing of the securities to be registered on each
securities exchange or national market system on which similar securities issued
by BAMSI are then listed, fees and disbursements of counsel for BAMSI and all
independent certified public accountants (including the expenses of any annual
audit, special audit and "cold comfort" letters required by or incident to such
performance and compliance), the fees and disbursements of the underwriters
customarily paid by issuers or sellers of securities (including expenses
relating to "road shows" and other marketing activities), the reasonable fees
and expenses of special experts required to be retained by BAMSI in connection
with such registration, and the reasonable fees and expenses of other Persons
required to be retained by BAMSI (collectively, "Registration Expenses");
provided, however, that Registration Expenses shall not include (i) any
-------- -------
allocation of the overhead of BAMSI, including any allocation of the
compensation
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or benefits of employees of BAMSI that assist in a registration, or (ii) any
other expense to the extent it would have been incurred by BAMSI in the absence
of any sale of securities in connection with a registration pursuant to this
Agreement (including the cost of BAMSI's annual audit).
(b) The Holders shall pay the following: (i) all fees, costs and expenses
of all registrations effected pursuant to Section 4 hereof including all
Registration Expenses, (ii) any underwriting discounts or commissions or
transfer taxes, if any, attributable to the sale of Registrable Shares by the
Holders pursuant to this Agreement and (iii) all fees, costs and expenses of
counsel to the Holders pursuant to this Agreement in connection with any
registration pursuant to this Agreement.
8. Indemnification.
---------------
(a) Indemnification by BAMSI. In the event of any registration of any
------------------------
securities of BAMSI under the Securities Act pursuant to Section 2 or 4 hereof,
BAMSI will, and it hereby does, indemnify and hold harmless, to the extent
permitted by law, each of the Holders of any Registrable Shares covered by such
registration statement, each Affiliate of such Holder (other than BAMSI) and
their respective directors and officers, each other Person who participates as
an underwriter in the offering or sale of such securities and each other Person,
if any, who controls such Holder or any such underwriter within the meaning of
the Securities Act (collectively, the "Indemnified Parties"), against any and
all losses, claims, damages or liabilities, joint or several, and expenses
(including any amounts paid in any settlement effected with BAMSI's consent,
which consent shall not be unreasonably withheld) to which any Indemnified Party
may become subject under the Securities Act, state securities or blue sky laws,
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof, whether or not such Indemnified
Party is a party thereto) or expenses arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such securities were registered under the
Securities Act, any preliminary, final or summary prospectus contained therein,
or any amendment or supplement thereof, (ii) 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 (iii) any violation by BAMSI of any
federal, state or common law rule or regulation applicable to BAMSI and relating
to action required of or inaction by BAMSI in connection with any such
registration, and BAMSI will reimburse such Indemnified Party for any legal or
any other expenses reasonably incurred by it in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided,
--------
however, that BAMSI shall not be liable to any Indemnified Party in any such
-------
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement or amendment or supplement thereof or in any
such preliminary, final or summary prospectus in reliance upon and in conformity
with written information with respect to such Holder furnished to BAMSI by such
Holder specifically for use in the preparation thereof. Such indemnity shall
remain in full force and
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effect regardless of any investigation made by or on behalf of such Holder or
any Indemnified Party and shall survive the transfer of such securities by such
Holder.
(b) Indemnification by the Holders and the Underwriters. BAMSI may
---------------------------------------------------
require, as a condition to including any Registrable Shares in any registration
statement filed in accordance with Section 2 or 4 hereof, that BAMSI shall have
received an undertaking reasonably satisfactory to it from the Holders of such
Registrable Shares or any underwriter to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 8(a) hereof) BAMSI
with respect to 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, if such statement
or alleged statement or omission or alleged omission was made in reliance upon
and in conformity with written information with respect to the Holders of the
Registrable Shares being registered or such underwriter furnished to BAMSI by
such Holders or such underwriter specifically for use in the preparation of such
registration statement, preliminary, final or summary prospectus or amendment or
supplement, or a document incorporated by reference into any of the foregoing;
provided, however, that no such Holder shall be liable for any indemnity claims
-------- -------
in excess of the amount of the net proceeds received by such Holder from the
sale of Registrable Shares. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of BAMSI or any of
the Holders, or any of their respective Affiliates (other than BAMSI),
directors, officers or controlling Persons, and shall survive the transfer of
such securities by such Holder.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified party
----------------------
hereunder of written notice of the commencement of any action or proceeding with
respect to which a claim for indemnification may be made pursuant to this
Section 8, 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, however, that the failure of the
-------- -------
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Section 8, except to the extent
that the indemnifying party is actually materially 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, with counsel 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 other than reasonable costs of
investigation; provided, however, that the indemnified party shall have the
-------- -------
right, at the sole cost and expense of the indemnifying party, to employ counsel
to represent the indemnified party and its respective controlling persons,
directors, officers, employees or agents who may be subject to liability arising
out of any claim in respect of which indemnity may be sought by the indemnified
party against such indemnifying party under this Section 8 if (i) the employment
of such counsel shall have been authorized in writing by such indemnifying party
in connection with the defense of such action, (ii) the indemnifying party shall
not have promptly employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action or counsel, or (iii) any indemnified
party shall have reasonably
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concluded that there may be defenses available to such indemnified party or its
respective controlling persons, directors, officers, employees or agents which
are in conflict with or in addition to those available to an indemnifying party;
provided, further, that the indemnifying party shall not be obligated to pay for
-------- -------
more than the expenses of one firm of separate counsel for the indemnified party
(in addition to the reasonable fees and expenses of one firm serving as local
counsel). No indemnifying party will consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to any indemnified party under Section 8(a) or 8(b) hereof
or is insufficient to hold it harmless in respect of any loss, claim, damage or
liability, or any action in respect of any loss, claim, damage or liability, or
any action in respect thereof referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by the indemnified party and indemnifying party or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the indemnified party
and indemnifying party with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. Notwithstanding any
other provision of this Section 8(d), no Holder of Registrable Shares shall be
required to contribute an amount greater than the dollar amount of the proceeds
received by such Holder with respect to the sale of any such Registrable Shares.
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.
(e) Other Indemnification. Indemnification similar to that specified in
---------------------
the preceding subdivisions of this Section 8 (with appropriate modifications)
shall be given by BAMSI and each Holder of Registrable Shares with respect of
any required registration or other qualification of securities under any federal
or state law or regulation other than the Securities Act.
(f) Non-Exclusivity. The obligations of the parties under this Section 8
---------------
shall be in addition to any liability which any party may otherwise have to any
other party.
9. Rule 144. BAMSI covenants that it will file in a timely manner the
--------
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations promulgated thereunder (or, if BAMSI is not
required to file such reports, it will, upon the request of any Holder of
Registrable Shares, make publicly available such information), and it will take
such further action as any Holder of Registrable Shares may reasonably request,
all to the extent required from time to time to enable such Holder to sell
Registrable Shares without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule may be
-14-
amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the SEC. Upon the request of any Holder of Registrable Shares, BAMSI
will deliver to such Holder a written statement as to whether it has complied
with such requirements.
10. Assignability. This Agreement shall be binding upon and shall inure
-------------
to the benefit of the parties hereto and their respective successors and
permitted assigns. Except as provided herein, no party may assign any of its
rights or delegate any of its duties under this Agreement without the express
consent of the other parties hereto. In addition, and whether or not any
express assignment shall have been made, the provisions of this Agreement which
are for the benefit of the parties hereto other than BAMSI shall also be for the
benefit of and enforceable by any subsequent Holder of any Registrable Shares,
subject to the provisions contained herein. Any Holder may assign any of its
rights or delegate any of its duties under this Agreement, in whole or in part,
without any prior consent of BAMSI only to a Person (a "Designated Transferee")
(a) who is an Affiliate of the Bank or BANW or (b) who is a transferee of
Registrable Shares (whether through purchase, share exchange, bequest or
otherwise) and who agrees to be bound by the terms of this Agreement. Any
purported assignment in violation of this Section 10 shall be void.
11. Notices. Any and all notices, designations, consents, offers,
-------
acceptances or any other communications shall be given in writing by either (a)
personal delivery to and receipted for by the addressee or by (b) telecopy or
registered or certified mail which shall be addressed, in the case of BAMSI, to:
XX Xxxxxxxx Services, Inc., Xxx Xxxxx Xxx Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, attention: General Counsel #3710; in the case of Holders, to
the address or addresses thereof appearing on the books of BAMSI or of the
transfer agent and registrar for its Class A Common Stock. All such notices and
communications shall be deemed to have been duly given and effective: when
delivered by hand, if personally delivered; two business days after being
deposited in the mail, postage prepaid, if mailed; and when receipt is
acknowledged, if telecopied.
12. No Inconsistent Agreements. BAMSI will not hereafter enter into any
--------------------------
agreement with respect to its securities which is inconsistent with the rights
granted to the Holders in this Agreement.
13. Specific Performance. BAMSI acknowledges that the rights granted to
--------------------
the Holders in this Agreement are of a special, unique and extraordinary
character, and that any breach of this Agreement by BAMSI could not be
compensated for by damages. Accordingly, if BAMSI breaches its obligations
under this Agreement, the Holders shall be entitled, in addition to any other
remedies that they may have, to enforcement of this Agreement by a decree of
specific performance requiring BAMSI to fulfill its obligations under this
Agreement. BAMSI consents to personal jurisdiction in any such action brought
in the United States District Court for the Northern District of California or
any such other court and to service of process upon it in the manner set forth
in Section 11 hereof.
14. Severability. If any provision of this Agreement or any portion
------------
thereof is finally determined by a court of competent jurisdiction to be
unlawful or unenforceable, such provision or portion thereof shall in no way
affect any other provision of this
-15-
Agreement, the application of any such provision and any other circumstances,
and any portion of such invalidated provision that is not invalidated by such a
determination shall remain in full force and effect.
15. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which,
together, shall constitute one and the same instrument.
16. Defaults. A default by any party to this Agreement in such party's
--------
compliance with any of the conditions or covenants hereof or performance of any
of the obligations of such party hereunder shall not constitute a default by any
other party.
17. Amendments, Waivers. This Agreement may not be amended, modified or
-------------------
supplemented and no waivers of or consents to or departures from the provisions
hereof may be given unless consented to in writing by BAMSI and the holders of a
majority of the Registrable Shares; provided, however, that no such amendment,
-------- -------
supplement, modification or waiver shall deprive any Holder of any rights under
Section 2 or 4 hereof without the consent of such Holder.
18. Construction. The captions contained in this Agreement are for
------------
reference purposes only and shall not constitute a part of this Agreement.
Unless the context requires otherwise, the use of the masculine shall include
the feminine, and the use of the singular shall include the plural. The word
"including" shall mean "including, without limitation."
19. Attorneys' Fees. In any action or proceeding brought to enforce any
---------------
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the successful party shall be entitled to recover reasonable
attorneys' fees in addition to any other available remedy.
20. Third Party Beneficiaries. Except as expressly provided in this
-------------------------
Agreement, the parties hereto intend that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any person other than the
parties hereto.
21. Entire Agreement. This Agreement contains the entire agreement among
----------------
the parties hereto with respect to the transactions contemplated herein and
understandings among the parties relating to the subject matter hereof. Any and
all previous agreements and understandings between or among the parties hereto
regarding the subject matter hereof are, whether written or oral, superseded by
this Agreement.
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22. Governing Law. This Agreement is made pursuant to and shall be
-------------
construed in accordance with the laws of the State of California without regard
to that state's conflicts of laws principles.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date first written
above.
BANK OF AMERICA NT & SA
By /s/ Xxxxx X. Xxxx
-------------------------------------------
Name: Xxxxx X. Xxxx
------------------------------------
Title: Senior Vice President
------------------------------------
BANK OF AMERICA NW, NATIONAL ASSOCIATION
By /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
-------------------------------------
Title: Senior Vice President and Secretary
-------------------------------------
XX XXXXXXXX SERVICES, INC.
By /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
-------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
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