EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT, dated as of September 29, 2003 (this
"Agreement"), is made by and among Midwest Express Holdings, Inc., a Wisconsin
corporation (the "Company"), with headquarters located at 0000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxx, XX 00000, and the investors named on the signature pages
hereto (each of whom is hereinafter referred to as an "Initial Investor" and all
of whom collectively are hereinafter referred to as the "Initial Investors").
RECITALS:
A. In connection with the Securities Purchase Agreement, dated September
29, 2003, by and among the Initial Investors and the Company (the "Purchase
Agreement"), the Company has agreed, upon the terms and subject to the
conditions of the Purchase Agreement, to sell to the Initial Investors 1,882,353
shares of the Company's common stock, par value $.01 per share (the "Common
Shares" and, together with any associated Rights (as defined in the Purchase
Agreement), the "Securities").
B. To induce the Initial Investors to execute and deliver the Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended (the "Securities Act"), and applicable
state securities laws with respect to the Securities.
AGREEMENT:
In consideration of the premises and the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and each of the Initial Investors hereby
agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms have the following meanings:
1.1. "Agreement" has the meaning set forth in the introduction to this
Agreement.
1.2. "Automatic Grace Period" has the meaning set forth in Section 3.6(b).
1.3. "Business Day" means any day other than a Saturday, Sunday or other
day on which the SEC is authorized or required by law to remain closed.
1.4. "Claims" has the meaning set forth in Section 6.1.
1.5. "Closing Date" has the meaning set forth in the Purchase Agreement.
1.6. "Common Shares" has the meaning set forth in Recital A.
1.7. "Company" has the meaning set forth in the introduction to this
Agreement.
1.8. "Company Indemnified Person" has the meaning set forth in Section 6.2.
1.9. "Company Representative" has the meaning set forth in Section 3.9.
1.10. "Continuing Late Effective Payment" has the meaning set forth in
Section 2.4(a).
1.11. "Event" has the meaning set forth in Section 3.6(a).
1.12. "Excess Suspension Payment" has the meaning set forth in Section
2.4(b).
1.13. "Exchange Act" has the meaning set forth in Section 1.21.
1.14. "Force Majeure" has the meaning set forth in Section 2.5.
1.15. "Fund" has the meaning set forth in Section 11.14.
1.16. "Grace Period" means an Automatic Grace Period or an Optional Grace
Period.
1.17. "Indemnified Person" has the meaning set forth in Section 6.3.
1.18. "Initial Investor" or "Initial Investors" have the respective
meanings set forth in the introduction to this Agreement.
1.19. "Inspectors" has the meaning set forth in Section 3.8.
1.20. "Inspector Representative" has the meaning set forth in Section
3.8(b).
1.21. "Investors" means the Initial Investors and any of their permitted
transferees or assignees under Article IX who receive or acquire Registrable
Securities and agree to become bound by the provisions of this Agreement in
accordance with Article IX, but only for so long as such person holds
Registrable Securities, except as otherwise provided in Article VI; provided
that no such person is registered as a broker or dealer under Section 15(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or is a
member of the National Association of Securities Dealers, Inc.
1.22. "Investor Delay" has the meaning set forth in Section 2.4(b).
1.23. "Investor Indemnified Person" has the meaning set forth in Section
6.1.
1.24. "Investor Representative" has the meaning set forth in Section
3.6(a).
1.25. "Investors' Legal Counsel" has the meaning set forth in Section 2.6.
1.26. "NYSE" means the New York Stock Exchange.
1.27. "Optional Grace Period" has the meaning set forth in Section 3.6(c).
1.28. "Plan of Distribution" has the meaning set forth in Section 2.1.
1.29. "Purchase Agreement" has the meaning set forth in Recital A.
1.30. "Records" has the meaning set forth in Section 3.8.
1.31. The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing the Registration Statement in
compliance with the Securities Act and, in particular, pursuant to Rule 415
under the Securities Act and the declaration or ordering of effectiveness of
such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
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1.32. "Registrable Securities" means the Common Shares sold pursuant to the
Purchase Agreement, any shares of capital stock issued or issuable from time to
time (with any adjustments) in exchange for or otherwise with respect to the
Common Shares and any associated Rights (as defined in the Purchase Agreement),
except that any such securities will cease to be Registrable Securities at such
time as they have been sold under the Registration Statement or pursuant to Rule
144 under the Securities Act or otherwise or at such time as they are eligible
to be sold pursuant to Rule 144(k).
1.33. "Registration Period" has the meaning set forth in Section 3.1.
1.34. "Registration Statement" means the Registration Statement(s) of the
Company filed with the SEC under the Securities Act pursuant to Section 2.1,
including all amendments (pre-effective or post-effective) and supplements
thereto and all documents incorporated by reference therein.
1.35. "Required Effective Date" has the meaning set forth in Section 2.2.
1.36. "Required Filing Date" has the meaning set forth in Section 2.1.
1.37. "Rights" has the meaning set forth in Recital A.
1.38. "Rule 415" means Rule 415 under the Securities Act, or any successor
rule providing for offering securities on a continuous basis, and applicable
rules and regulations thereunder.
1.39. "Rule 144" means Rule 144 under the Securities Act, or any successor
rule, and any applicable rules and regulations thereunder.
1.40. "Securities" has the meaning set forth in Recital A.
1.41. "Securities Act" has the meaning set forth in Recital B.
1.42. "SEC" has the meaning set forth in Section 1.31.
1.43. "Violations" has the meaning set forth in Section 6.1.
ARTICLE II
REGISTRATION
2.1. Mandatory Registration. The Company will use its reasonable best
efforts to prepare and file the Registration Statement with the SEC within five
(5) Business Days after the Closing Date (the "Required Filing Date"), on Form
S-3, if available, registering all of the Registrable Securities for resale in
accordance with the "Plan of Distribution" attached hereto as Exhibit A. This
Registration Statement shall register only the Registrable Securities. If Form
S-3 is not available at that time, then the Company will use its reasonable best
efforts to file the Registration Statement by the Required Filing Date on such
form as is then available to effect a registration of the Registrable
Securities.
2.2. Effectiveness of the Registration Statement. The Company will use its
reasonable best efforts to cause the Registration Statement contemplated by the
previous Section to be declared effective by the SEC within sixty (60) calendar
days after the Closing Date and in any event no later than ninety (90) calendar
days after the Closing Date (the "Required Effective Date"). The Company's
reasonable best efforts will include, but are not to be limited to, promptly
responding to all comments received from the staff of the SEC.
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2.3. Ineligibility for Form S-3. The Company does not currently meet the
requirements for the use of Form S-3 for registration of the resale by the
Investors of the Registrable Securities. The Company represents, warrants and
covenants that it has filed and will use its reasonable best efforts to file all
reports required to be filed by the Company with the SEC in a timely manner so
as to obtain, as soon as practicable, and then maintain eligibility for the use
of Form S-3. In the event that Form S-3 is not available for the registration of
the resale of Registrable Securities hereunder, the Company shall (i) register
the resale of the Registrable Securities on Form S-1 or on another appropriate
form reasonably acceptable to the holders of at least two-thirds of the
Registrable Securities and (ii) undertake to convert such Registration Statement
on Form S-1 (or such other appropriate form) to the Registration Statement on
Form S-3 as soon as the Company is eligible to register the resale of the
Registrable Securities on Form S-3.
2.4. Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement.
(a) If the Registration Statement has not been declared effective by
the Required Effective Date, then the Company will make one or more
payments to each Investor under this subsection (a) (each, a "Continuing
Late Effective Payment"). The Continuing Late Effective Payment for each
Investor for each calendar month after the Required Effective Date that the
Registration Statement has not been declared effective will be an amount
equal to 1.00% of the purchase price paid for the Common Shares purchased
by such Investor that are held by such Investor on the respective last
calendar day of the period to which the Continuing Late Effective Payment
in question relates. The Continuing Late Effective Payment will be prorated
on a daily basis for periods less than a calendar month. Subject to
subsection (c), the Company will make the Continuing Late Effective Payment
to each Investor by check (or by wire transfer if the payment exceeds
$10,000 in amount and the Company has wire transfer instructions from the
Investor) within ten (10) Business Days following the end of each calendar
month as to which payment hereunder is due.
(b) Except in connection with any conversion of the Registration
Statement from Form S-1 (or another form) to Form S-3 pursuant to Section
2.3 and except in connection with any delays that are attributable to
changes to the Plan of Distribution pursuant to Section 3.12 and any delays
that are attributable to amendments to the Registration Statement to
include an Investor's Registrable Securities pursuant to Section 4.1 (each,
an "Investor Delay"), if at any time during the Registration Period, on any
day after such Registration Statement has been declared effective by the
SEC, sales of all the Registrable Securities required to be included in
such Registration Statement cannot be made for a period of more than thirty
(30) Business Days in the aggregate during any 12-month period (other than
during a Grace Period or any Investor Delay) pursuant to such Registration
Statement (including, without limitation, because of a failure to keep such
Registration Statement effective, to disclose such information as is
necessary for sales to be made pursuant to such Registration Statement or
to register sufficient Common Shares), then the Company will make a payment
to each Investor (each, an "Excess Suspension Payment"). The Excess
Suspension Payment for each Investor for each thirty (30) Business Day
period during which sales cannot be made in excess of such thirty (30)
Business Day period will be an amount equal to 1.00% of the purchase price
paid for the Common Shares purchased by such Investor that are held by such
Investor on the respective last Business Day of the thirty (30) Business
Day period in question. The Excess Suspension Payment will be prorated on a
daily basis for periods less than thirty (30) Business Days. Subject to
subsection (c), the Company will make the Excess Suspension Payment to each
Investor by check (or by wire transfer if the payment exceeds $10,000 in
amount and the Company has wire transfer instructions from the
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Investor) within ten (10) Business Days following the end of each thirty
(30) Business Day period as to which payment hereunder is due.
(c) Upon the reasonable request of the Company in writing, an Investor
shall promptly deliver to the Company in writing information regarding the
Investor's Common Shares (together with reasonable supporting
documentation) to enable the Company to calculate the amount of any payment
due under this Section 2.4. Until the Investor has responded to such a
reasonable request, the Company may withhold any payment due under this
Section 2.4 until the fourth Business Day after the Investor delivers such
information.
(d) The Investors may make a claim for additional damages as a remedy
for the Company's failure to comply with the timelines relating to the
Registration Statement set forth in this Agreement, but acknowledgement of
such right in this Agreement shall not constitute an admission by the
Company that any such damages exist or may exist. Notwithstanding the
foregoing, if the Company has used its reasonable best efforts to avoid
circumstances as a result of which the Registration Statement has not been
declared effective by the Required Effective Date or sales cannot be made
under the Registration Statement during the Registration Period (other than
during a Grace Period or any Investor Delay), then the damages described
above shall be the Investors' sole and exclusive remedy for damages arising
out of such circumstances. Nothing contained in the preceding sentence
shall be read to limit the ability of the Investors to seek specific
performance of this Agreement.
2.5. Force Majeure. The Company shall not be deemed in breach of its
commitments under Article II and no payments by the Company as set forth in
Article II shall be required to the extent that the Company is unable to fulfill
its obligations hereunder in a timely fashion because the SEC and/or the NYSE
are closed or operating on a limited basis as a result of the occurrence of a
Force Majeure. As used herein, "Force Majeure" means (i) war or armed
hostilities or other national or international calamity, or one or more acts of
terrorism, or (ii) a natural disaster or storm.
2.6. Investors' Legal Counsel. Subject to Article V, the Company will
permit a single firm of legal counsel, designated in writing by the Investors
holding a majority in interest of Registrable Securities (such firm of legal
counsel, or any properly designated successor, "Investors' Legal Counsel"), to
review and oversee any registration pursuant to this Article II, which shall
initially be Xxxxxxx & Xxxxx LLP. The Company and Investors' Legal Counsel shall
reasonably cooperate with each other in performing the Company's obligations
under this Agreement.
ARTICLE III
ADDITIONAL OBLIGATIONS OF THE COMPANY
At such time as the Company is obligated to file the Registration Statement
with the SEC pursuant to Section 2.1, the Company will use its best efforts to
effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof and, pursuant thereto, the Company shall
have the following obligations:
3.1. Acceleration of Effectiveness. The Company shall submit to the SEC,
within three (3) Business Days after the Company learns that no review of the
Registration Statement will be made by the staff of the SEC or that the staff
has no further comments on the Registration Statement, as the case may be, a
request for acceleration of effectiveness of such Registration Statement to a
time and date not later than 48 hours after the submission of such request.
Notwithstanding anything else in this Agreement to the contrary, the Company
shall notify each representative of an Investor named on such Investor's
signature page, if any, of the effectiveness of the Registration Statement on
the same day that the SEC notifies the Company that it has declared the
Registration Statement effective (the Company will
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send such notice as soon as reasonably possible on the day that the Registration
Statement is declared effective, and in any event no later than 5:00 p.m.,
Central Time, on such day). The Company shall keep the Registration Statement
effective pursuant to Rule 415 at all times until the earlier of (i) the date as
of which the Investors may sell all of the Registrable Securities covered by
such Registration Statement without restriction pursuant to Rule 144(k) (or
successor thereto) promulgated under the Securities Act or (ii) the date on
which the Investors shall have sold all the Registrable Securities covered by
such Registration Statement (the "Registration Period"). The Company shall
ensure that the Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein (in the case of
prospectuses, in the light of the circumstances in which they were made) not
misleading.
3.2. Compliance with Securities Act. The Company will comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Registration Statement until such time as
all of such Registrable Securities shall have been disposed of in accordance
with the intended methods of disposition by the seller or sellers thereof as set
forth in such Registration Statement or such securities shall cease to be
Registrable Securities.
3.3. Pre-filing Review of Registration Statement. The Company shall (a)
permit Investors' Legal Counsel to review and comment upon (i) the Registration
Statement by delivering a draft thereof at least five (5) Business Days prior to
its filing with the SEC and (ii) all amendments and supplements to all
Registration Statements (except for Annual Reports on Form 10-K, Quarterly
Reports on Form l0-Q and Current Reports on Form 8-K and any similar or
successor reports) by delivering drafts thereof within a reasonable number of
days prior to their filing with the SEC, and (b) not file the Registration
Statement or amendment or supplement thereto in a form to which Investors' Legal
Counsel reasonably objects. Except as may be required under Section 3.1, the
Company shall not submit a request for acceleration of the effectiveness of the
Registration Statement or any amendment or supplement thereto without the prior
approval of Investors' Legal Counsel, which consent shall not be unreasonably
withheld. The Company shall furnish to Investors' Legal Counsel, without charge,
(x) copies of any correspondence from the SEC or the staff of the SEC to the
Company or its representatives relating to the Registration Statement, (y) as
promptly as possible after the same is prepared and filed with the SEC, one copy
of the Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference, if
requested by an Investor, and all exhibits and (z) upon the effectiveness of the
Registration Statement, one copy of the prospectus included in such Registration
Statement and all amendments and supplements thereto. The Company shall
reasonably cooperate with Investors' Legal Counsel in performing the Company's
obligations pursuant to this Article III.
3.4. Copies of Registration Statement and Prospectus. The Company shall
furnish to each Investor whose Registrable Securities are included in the
Registration Statement, without charge, (i) promptly after the same is prepared
and filed with the SEC, at least one copy of such Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, if requested by an Investor, all
exhibits and each preliminary prospectus, (ii) upon the effectiveness of the
Registration Statement, ten (10) copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Investor may reasonably request) and (iii) such other
documents, including copies of any preliminary or final prospectus, as such
Investor may reasonably request from time to time to facilitate the disposition
of the Registrable Securities owned by such Investor.
3.5. Blue Sky Laws. The Company shall use its best efforts to (i) register
and qualify, unless an exemption from registration and qualification applies,
the resale by Investors of the Registrable Securities covered by the
Registration Statement under such other securities or "blue sky" laws of all
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applicable jurisdictions in the United States, (ii) prepare and file in those
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (v) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3.5, (w) subject itself to
general taxation in any such jurisdiction (x) file a general consent to service
of process in any such jurisdiction, (y) provide any undertakings that cause
material expense or burden to the Company, or (z) make any change in its charter
or bylaws. The Company shall promptly notify Investors' Legal Counsel and each
Investor who holds Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or qualification
of any of the Registrable Securities for sale under the securities or "blue sky"
laws of any jurisdiction in the United States or its receipt of actual notice of
the initiation or threatening of any proceeding for such purpose.
3.6. Suspension of Sale and Resale Rights.
(a) During the Registration Period, the Company will notify by
facsimile Investors' Legal Counsel and each Investor who holds Registrable
Securities being sold pursuant to the Registration Statement of the
happening of any event (except as provided in Section 3.6(c)), as promptly
as practicable after becoming aware of such event, as a result of which the
prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading (each an "Event"). Such notice shall not contain any
material, nonpublic information, and in no event will the Company disclose
to any Investor any of the facts or circumstances regarding any Event. Each
Investor will hold in confidence and will not make any disclosure of any
Event and any related information disclosed by the Company unless (i) the
release of such information is ordered pursuant to a final, non-appealable
subpoena or other final, non-appealable order from a court or government
body of competent jurisdiction, (ii) the information has been made
generally available to the public other than by disclosure in violation of
this or any other agreement (to the knowledge of the relevant Investor),
(iii) the information was developed independently by an Investor without
breach of this Agreement, (iv) the information was known to the Investor
before receipt of such information from the Company or (v) the information
was disclosed to the Investor by a third party not under an obligation of
confidentiality. However, an Investor may make disclosure of an Event
and/or any related information disclosed by the Company to any attorney,
adviser or other third party retained by it that needs to know the
information, as determined in good faith by the Investor ("Investor
Representative"), if the Investor advises the Investor Representative of
the confidentiality provisions of this Section 3.6(a), but the Investor
will be liable for any act or omission of any of its Investor
Representatives relative to such information as if the act or omission was
that of the Investor. Unless legally prohibited from so doing, each
Investor will, upon learning that disclosure of such confidential
information is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and
allow the Company, at the Company's expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, such
confidential information.
(b) If the Registration Statement ceases to be effective or the
prospectus related thereto ceases to be usable at any time during the
Registration Period, including as a result of the occurrence of an Event
under Section 3.6(a), then the Company will promptly
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prepare and file with the SEC a supplement or amendment to such
Registration Statement to correct such untrue statement or omission or to
otherwise update and modify the Registration Statement and the prospectus
as required by applicable law and use its reasonable best efforts to cause
any post-effective amendment to the Registration Statement to be declared
effective by the SEC as soon as reasonably practicable following the filing
thereof. In any event, the Company shall file any such post-effective
amendment within twelve (12) Business Days and any such supplement within
four (4) Business Days, in each case after the Company becomes aware of the
related circumstances. Sales and resales of Registrable Securities shall be
suspended until the Company has filed such post-effective amendment or
supplement to the Registration Statement or prospectus that cures such
failure to be effective or useable and that is itself, in the case of a
post-effective amendment, declared effective, and the Company will promptly
notify Investors' Legal Counsel and each Investor of such suspension in
writing. As used herein, "Automatic Grace Period" shall mean any of the
following: (i) the twelve (12) Business Day period referred to above for
the filing of an amendment or the four (4) Business Day period referred to
above for the filing of a supplement; and (ii) the time from and including
the filing of any such post-effective amendment and such post-effective
amendment being declared effective, provided that in no event shall the
period under this clause (ii) exceed ten (10) Business Days if such
post-effective amendment receives no review by the SEC or twenty (20)
business days if such post-effective amendment is reviewed by the SEC. The
Company will also promptly notify Investors' Legal Counsel and each
Investor in writing (A) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when the Registration
Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Investors' Legal
Counsel and each Investor by facsimile on the same day of such
effectiveness and by overnight mail), (B) of any request by the SEC for
amendments or supplements to the Registration Statement or related
prospectus or related information, and (C) of the Company's reasonable
determination that a post-effective amendment to the Registration Statement
would be appropriate.
(c) Notwithstanding anything to the contrary herein, at any time after
the Registration Statement has been declared effective by the SEC, the
Company may delay the disclosure of material non-public information
concerning the Company the disclosure of which at the time is not, in the
good faith opinion of the Company following consultation with legal
counsel, in the best interest of the Company and otherwise required (an
"Optional Grace Period"), provided that the Company shall promptly (i)
notify the Investors in writing of the existence of material non-public
information giving rise to an Optional Grace Period (such notice shall not
contain any material, nonpublic information, and in no event will the
Company disclose to any Investor any of the related facts or circumstances)
and the date on which the Optional Grace Period will begin and (ii) notify
the Investors in writing of the date on which the Optional Grace Period
ends; and, provided further, that no Optional Grace Period shall exceed
forty-five (45) consecutive calendar days and during any three hundred
sixty-five (365) day period such Optional Grace Periods shall not exceed an
aggregate of sixty (60) calendar days and the first day of any Optional
Grace Period must be at least five (5) Business Days after the last day of
any prior Optional Grace Period. For purposes of determining the length of
an Optional Grace Period, the Optional Grace Period shall begin on and
include the date the Investors receive the notice referred to in clause (i)
and shall end on and include the later of the date the Investors receive
the notice referred to in clause (ii) and the date referred to in such
notice. Section 3.6(a) shall not be applicable during the period of any
Optional Grace Period. Upon expiration of an Optional Grace Period, the
Company shall again be bound by Section 3.6(a) with respect to any Event
giving rise to material non-public information concerning the Company
unless disclosing any such Event is no longer applicable. Notwithstanding
anything to the contrary in this Agreement, the Company shall
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cause its transfer agent to deliver unlegended Common Shares to a
transferee of an Investor in accordance with the terms of the Securities
Purchase Agreement in connection with any sale of Registrable Securities
with respect to which an Investor has entered into a contract for sale, and
delivered a copy of the prospectus included as part of the applicable
Registration Statement, prior to the Investor's receipt of the notice of an
Optional Grace Period and for which the Investor has not yet settled.
3.7. Stop Orders and Suspensions of Effectiveness. Subject to the Company's
rights under Section 3.6, the Company shall use its reasonable best efforts to
prevent the issuance of any stop order or other suspension of effectiveness of
the Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment. As soon as practicable, and in any event within
two (2) Business Days after the Company receives notice of the issuance of such
an order or suspension, the Company will notify Investors' Legal Counsel and
each Investor of the issuance of such order and the resolution thereof or its
receipt of actual notice of the initiation or threat of any proceeding for such
purpose.
3.8. Inspection of Records; Confidentiality.
(a) During the Registration Period, the Company shall make available
for inspection during normal business hours and upon two (2) Business Days
prior notice by (i) any Investor, (ii) Investors' Legal Counsel and (iii)
one (1) firm of accountants or other agents reasonably acceptable to the
Company and retained by the Investors (collectively, the "Inspectors") all
pertinent financial and other records, and pertinent corporate documents
and properties of the Company (collectively, the "Records") as shall be
reasonably deemed necessary by each Inspector to enable each Inspector to
exercise its due diligence responsibility in connection with or related to
the contemplated offering. The Company will cause the Company's officers,
directors and employees to supply all information that any Inspector may
reasonably request for purposes of performing such due diligence.
(b) Each Inspector will hold in strict confidence, use only in
connection with the contemplated offering and not make any disclosure
(except to an Investor) of any Records or other information that the
Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (i) the disclosure of
such Records is necessary to avoid or correct a misstatement or omission in
the Registration Statement or is otherwise required under the Securities
Act, (ii) the release of such Records is ordered pursuant to a final,
non-appealable subpoena or other final, non-appealable order from a court
or government body of competent jurisdiction, (iii) the information in such
Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement (to the knowledge of
the relevant Inspector), (iv) the Records or other information was
developed independently by an Inspector without breach of this Agreement,
(v) the information was known to the Inspector before receipt of such
information from the Company, or (vi) the information was disclosed to the
Inspector by a third party not under an obligation of confidentiality.
However, an Inspector may make disclosure of such Records and other
information to any attorney, adviser or other third party retained by it
that needs to know the information, as determined in good faith by the
Inspector ("Inspector Representative"), if the Inspector advises the
Inspector Representative of the confidentiality provisions of this Section
3.8(b), but the Inspector will be liable for any act or omission of any of
its Inspector Representatives relative to such information as if the act or
omission was that of the Inspector. Unless legally prohibited from so
doing, each Investor will, upon learning that disclosure of Records
containing confidential information is sought in or by a court or
governmental body of competent jurisdiction or through other means, give
prompt
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written notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, the Records deemed confidential. Nothing
herein (or in any other confidentiality agreement between the Company and
any Investor) shall be deemed to limit the Investors' ability to sell
Registrable Securities in a manner that is otherwise consistent with
applicable laws and regulations.
3.9. Disclosure of Investors' Information. The Company will hold in
confidence, and will not make any disclosure of, information concerning an
Investor provided to the Company under this Agreement unless (i) the Company
reasonably determines disclosure of such information is necessary to comply with
federal or state securities laws, or any exchange listing or similar rules and
regulations, (ii) the disclosure of such information is necessary to avoid or
correct a misstatement or omission in the Registration Statement, (iii) the
release of such information is ordered pursuant to a final, non-appealable
subpoena or other final, non-appealable order from a court or governmental body
of competent jurisdiction, (iv) such information has been made generally
available to the public other than by disclosure in violation of this Agreement
or any other agreement, (v) the information was disclosed to the Company by a
third party not under an obligation of confidentiality or (vi) such Investor
consents to the form and content of any such disclosure. However, the Company
may make disclosure of such information to any attorney, adviser or other third
party retained by it that needs to know the information, as determined in good
faith by the Company ("Company Representative"), if the Company advises the
Company Representative of the confidentiality provisions of this Section 3.9,
but the Company will be liable for any act or omission of any Company
Representatives relative to such information as if the act or omission was that
of the Company. If the Company learns that disclosure of such information
concerning an Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, the Company will (unless legally
prohibited from so doing) give prompt written notice to such Investor prior to
making such disclosure and allow such Investor, at the Investor's expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.
3.10. Listing of Registrable Securities. During the Registration Period,
the Company shall use its reasonable best efforts to maintain the listing of all
of the Registrable Securities on the principal securities exchange or market or
trading system, if any, on which the Common Shares are then listed or traded.
3.11. Delivery of Certificates. The Company shall cooperate with the
Investors and, to the extent applicable, facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to the Registration Statement and
enable such certificates to be in such denominations or amounts, as the case may
be, as the Investors may reasonably request and registered in such names as the
Investors may reasonably request.
3.12. Updates to Plan of Distribution. At the request of any Investor,
provided that Investors holding a majority in interest of the Registrable
Securities registered pursuant to the Registration Statement consent, the
Company will promptly prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement, and
the prospectus used in connection with the Registration Statement, as may be
necessary to change the Plan of Distribution set forth in such Registration
Statement.
3.13. Other Governmental Approvals. The Company shall use reasonable
efforts to cause the Registrable Securities covered by the Registration
Statement to be registered with or approved by such other governmental agencies
or authorities as may be necessary to consummate the disposition of such
Registrable Securities.
10
3.14. Best Efforts of Company. The Company shall use its best efforts to
comply with all applicable rules and regulations of the SEC in connection with
any registration hereunder.
3.15. Confirmation Upon Effectiveness. Within two (2) Business Days after
the Registration Statement that covers Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investors whose Registrable Securities are
included in such Registration Statement) confirmation that such Registration
Statement has been declared effective by the SEC in the form attached hereto as
Exhibit B.
ARTICLE IV
OBLIGATIONS OF THE INVESTORS
4.1. Investor Information. As a condition to the obligations of the Company
to complete any registration pursuant to this Agreement with respect to the
Registrable Securities of each Investor, such Investor will furnish to the
Company such information regarding itself, the Registrable Securities held by it
and the intended methods of disposition of the Registrable Securities held by it
as is reasonably required by the Company to effect the registration of the
Registrable Securities. At least five (5) Business Days prior to the first
anticipated filing date of the Registration Statement for any registration under
this Agreement, the Company will notify each Investor of the information the
Company requires from that Investor whether or not such Investor has elected to
have any of its Registrable Securities included in the Registration Statement.
If the Company has not received the requested information from an Investor by
the Business Day prior to the anticipated filing date, then the Company may file
the Registration Statement without including Registrable Securities of that
Investor.
4.2. Further Assurances. Each Investor will cooperate with the Company, as
reasonably requested by the Company, in connection with the preparation and
filing of the Registration Statement hereunder, unless such Investor has
notified the Company in writing of such Investor's irrevocable election to
exclude all of such Investor's Registrable Securities from such Registration
Statement.
4.3. Suspension of Sales. Upon receipt of any notice from the Company under
Section 3.6, each Investor will immediately discontinue the disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until (i) it receives copies of a supplemented or amended
prospectus contemplated by Section 3.6 or (ii) the Company advises the Investor
that a suspension of sales under Section 3.6 has terminated. If so directed by
the Company, each Investor will deliver to the Company (at the expense of the
Company) or destroy all copies in the Investor's possession (other than a
limited number of file copies) of the prospectus covering such Registrable
Securities that is current at the time of receipt of such notice.
ARTICLE V
EXPENSES OF REGISTRATION
During the Registration Period, in connection with registrations, filings
or qualifications pursuant to Article II and Article III, the Company will bear
(i) all reasonable expenses (other than underwriting discounts and commissions,
and transfer taxes, if any) incurred in connection with registrations, filings
or qualifications pursuant to Article II and Article III of this Agreement,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees; (ii) the fees and disbursements of legal
counsel for the Company; and (iii) the reasonable fees and disbursements of
Investors' Legal Counsel (not to exceed in the aggregate $10,000).
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ARTICLE VI
INDEMNIFICATION
In the event that any Registrable Securities are included in the
Registration Statement under this Agreement:
6.1. Indemnification of the Investors. To the extent permitted by law, the
Company will indemnify and hold harmless each Investor, any underwriter (as
defined in the Securities Act) for the Investors, any directors or officers of
such Investor (including for purposes of this Article VI any person who was an
Investor) and any person who controls such Investor within the meaning of the
Securities Act or the Exchange Act or acts as such Investor's investment advisor
(each, an "Investor Indemnified Person") against any losses, claims, damages,
expenses or liabilities (joint or several) (collectively, and together with
actions, proceedings or inquiries by any regulatory or self-regulatory
organization, whether commenced or threatened in respect thereof, "Claims") to
which any of them become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Claims arise out of or are based upon any of the
following statements, omissions or violations in the Registration Statement
filed pursuant to this Agreement, any post-effective amendment thereof or any
prospectus included therein: (a) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
post-effective amendment thereof or any final prospectus (as amended or
supplemented, if the Company files any amendment or supplement thereto with the
SEC) included therein or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading or (b) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or any other law related to the Registration
Statement, including without limitation any state securities law or any rule or
regulation thereunder (the matters in the foregoing clauses (a) and (b) being,
collectively, "Violations"). Subject to the restrictions set forth in Section
6.3 with respect to the number of legal counsel, the Company will reimburse the
Investors and each such underwriter or controlling person and each such other
Investor Indemnified Person, promptly as such expenses are incurred and are due
and payable, for any reasonable legal fees or other reasonable expenses incurred
by them in connection with investigating or defending any Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6.1: (i) does not apply to Claims arising out of or
based upon a Violation that occurs in reliance upon and in conformity with
written information furnished to the Company by or on behalf of an Investor or
Investor Indemnified Persons expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3.3; (ii) does not apply to a Claim arising out of or based
on any failure by an Investor or Investor Indemnified Persons to comply with
prospectus delivery requirements (or the Securities Act, the Exchange Act or any
other law or legal requirement applicable to sales under the Registration
Statement) or any covenant or agreement contained in the Purchase Agreement,
with respect to sales under the Registration Statement, or in this Agreement;
(iii) does not apply to a Claim arising from an offer or sale of Registrable
Securities occurring during a period in which sales are suspended in accordance
with Section 4.3; and (iv) does not apply to amounts paid in settlement of any
Claim if such settlement is made without the prior written consent of the
Company, which consent will not be unreasonably withheld or delayed. This
indemnity obligation will remain in full force and effect regardless of any
investigation made by or on behalf of the Investor Indemnified Persons and will
survive the transfer of the Registrable Securities by the Investors under
Article IX.
6.2. Indemnification of the Company and Certain Shareholders. In connection
with the Registration Statement in which an Investor is participating, each such
Investor will indemnify and hold harmless, severally and not jointly, to the
same extent and in the same manner set forth in Section 6.1 above, the Company,
each of its directors, each of its officers who signs the Registration
Statement, each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange
12
Act, and any other shareholder selling securities pursuant to the Registration
Statement and any of its directors and officers and any person who controls such
shareholder within the meaning of the Securities Act or the Exchange Act (each a
"Company Indemnified Person") against any Claim to which any of them may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as such
Claim arises out of or is based upon any of the following: (a) any matter of the
type referred to in clause (a) in Section 6.1 above in each case to the extent
(and only to the extent) that such violation occurs in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Investor or its Investor Indemnified Persons expressly for use in
connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3.3; (b) any failure by such
Investor or its Investor Indemnified Persons to comply with prospectus delivery
requirements (or the Securities Act, the Exchange Act or any other law or legal
requirement applicable to sales under the Registration Statement) or any
covenant or agreement contained in the Purchase Agreement, with respect to sales
under the Registration Statement, or in this Agreement; or (c) any offer or sale
of Registrable Securities occurring during a period in which sales are suspended
in accordance with Section 4.3. Subject to the restrictions set forth in Section
6.3, such Investor will promptly reimburse any legal or other expenses, promptly
as such expenses are incurred and due and payable, reasonably incurred by them
in connection with investigating or defending any such Claim. However, the
indemnity agreement contained in this Section 6.2 does not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent will not be unreasonably
withheld, and no Investor will be liable under this Agreement (including this
Section 6.2 and Article VII) for the amount of any Claim that exceeds the net
proceeds actually received by such Investor as a result of the sale of such
Investor's Registrable Securities. This indemnity will remain in full force and
effect regardless of any investigation made by or on behalf of the Company
Indemnified Persons and will survive the transfer of the Registrable Securities
by the Investors under Article IX.
6.3. Notification and Other Indemnification Procedures. Promptly after
receipt by an Investor Indemnified Person or a Company Indemnified Person, as
the case may be (an "Indemnified Person"), under this Article VI of notice of
the commencement of any action (including any governmental action), such
Indemnified Person will, if a Claim in respect thereof is to be made against any
indemnifying party under this VI, deliver to the indemnifying party a written
notice of the commencement thereof. The indemnifying party may participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly given notice, assume control of the defense thereof
with counsel mutually and reasonably satisfactory to the indemnifying parties
and the Indemnified Person. If the indemnifying party assumes the defense by
notice given to the Indemnified Person, then the indemnifying party shall not be
responsible for any legal or other expenses subsequently incurred by the
Indemnified Person in connection with the defense thereof, except as expressly
provided herein, and the indemnifying party will diligently pursue such defense.
If, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person and the indemnifying
party would be inappropriate due to actual or potential conflicts of interest
between the Indemnified Person and any other party represented by such counsel
in such proceeding or the actual or potential defendants in, or targets of, any
such action including the Indemnified Person and such Indemnified Person
reasonably determines that there may be legal defenses available to such
Indemnified Person that are different from or in addition to those available to
the indemnifying party, then the Indemnified Person is entitled to assume such
defense and may retain its own counsel, with the reasonable fees and expenses to
be paid by the indemnifying party (subject to the restrictions on settlement
under Section 6.1 or 6.2, as applicable). However, the Company will pay for only
one separate legal counsel for the Investors collectively, and such legal
counsel will be selected in accordance with Section 2.6. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action does not relieve an indemnifying party of any
liability to an Indemnified Person under this Article VI, except to the extent
that the indemnifying party is prejudiced in its ability to defend such action.
The indemnification required by this Article VI will be made by periodic
13
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and
payable.
ARTICLE VII
CONTRIBUTION
To the extent that any indemnification provided for herein is prohibited or
limited by law, the indemnifying party will contribute the amount paid or
payable by the Indemnified Party as a result of such Claim in such proportion as
is appropriate to reflect not only the relative benefits received by the
Indemnified Party and the indemnifying party, but also the relative fault of the
Indemnified Party and the indemnifying party, as well as any other relevant
equitable considerations. However, (a) no contribution will be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Article VI, (b) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any person of
Registrable Securities who was not guilty of such fraudulent misrepresentation
and (c) no Investor will be liable under this Agreement (including this Article
VII) for the amount of any Claim that exceeds the net proceeds actually received
by such Investor as a result of the sale of such Investor's Registrable
Securities.
ARTICLE VIII
EXCHANGE ACT REPORTING
To make available to the Investors the benefits of Rule 144 or any similar
rule or regulation of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration, the Company will,
until the end of the Registration Period:
(a) Use its best efforts to file with the SEC in a timely manner, and make
and keep available, all reports and other documents required of the Company
under the Securities Act and the Exchange Act so long as the Company remains
subject to such requirements (it being understood that nothing herein limits the
Company's obligations under Section 4.3 of the Purchase Agreement) and the
filing and availability of such reports and other documents is required for the
applicable provisions of Rule 144; and
(b) Furnish to each Investor, so long as such Investor holds Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of the Securities Act and the
Exchange Act, (ii) if not available on the SEC's XXXXX system, a copy of the
most recent annual or quarterly report of the Company and such other reports and
documents filed by the Company with the SEC and (iii) such other information as
may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
ARTICLE IX
ASSIGNMENT OF REGISTRATION RIGHTS
The rights of the Investors hereunder, including the right to have the
Company register Registrable Securities pursuant to this Agreement, shall be
assignable (in whole or in part) by each Investor to any permitted transferee or
assignee of the Registrable Securities if (a) the Investor agrees in writing
with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company within a reasonable time after such
assignment, (b) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being transferred or assigned, (c) such transfer or
assignment was not made under the Registration Statement or
14
Rule 144, (d) at or before the time the Company received the written notice
contemplated by clause (b) of this sentence, the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained
herein and (e) such transfer is made in accordance with the applicable
requirements of the Purchase Agreement. Any transferee or assignee of an
Investor under Article IX shall be deemed an "Investor" for all purposes of this
Agreement and shall be entitled to all rights of, and subject to all obligations
(including indemnification obligations) of, an Investor hereunder.
ARTICLE X
AMENDMENT OF REGISTRATION RIGHTS
This Agreement may be amended and the obligations hereunder may be waived
(either generally or in a particular instance, and either retroactively or
prospectively) only with the written consent of the Company and of the Investors
who then hold at least a majority in interest of the Registrable Securities (but
not including any Investor who is not affected by such amendment or waiver). Any
amendment or waiver effected in accordance with this Article X is binding upon
each Investor and the Company. Notwithstanding the foregoing, no amendment or
waiver will retroactively affect any Investor without its consent, or will
prospectively adversely affect any Investor who no longer owns any Registrable
Securities without its consent. The Company will promptly notify any Investor
not consenting to the amendment of the substance of such amendment.
ARTICLE XI
MISCELLANEOUS
11.1. Conflicting Instructions. A person or entity is deemed to be a holder
of Registrable Securities whenever such person or entity owns of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company will act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.
11.2. Notices. Except as set forth herein, any notices required or
permitted to be given under the terms of this Agreement will be given and deemed
received as set forth in the Purchase Agreement.
11.3. Waiver. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, does not operate as a waiver thereof.
11.4. Governing Law; Waiver of Jury Trial. This Agreement, including the
validity hereof and the rights and obligations of the Company and of the
Investors and all amendments and supplements hereto and all waivers and consents
hereunder, shall be construed in accordance with and governed by the internal
laws of Wisconsin without giving effect to any choice of law or conflicts of law
provision or rule that would cause the application of the internal laws of any
other jurisdiction.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY
LEGAL OR EQUITABLE ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR THE SUBJECT
MATTER OF ANY OF THE FOREGOING.
15
11.5. Severability. If any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
will be deemed modified in order to conform with such statute or rule of law.
Any provision hereof that may prove invalid or unenforceable under any law will
not affect the validity or enforceability of any other provision hereof.
11.6. Entire Agreement. This Agreement and the Purchase Agreement
(including all schedules and exhibits thereto) constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein or therein. This Agreement supersedes all
prior agreements and understandings among the parties hereto with respect to the
subject matter hereof.
11.7. Successors and Assigns. Subject to the requirements of Article IX,
this Agreement inures to the benefit of and is binding upon the successors and
assigns of each of the parties hereto. Notwithstanding anything to the contrary
herein, including, without limitation, Article IX, the rights of an Investor
hereunder are assignable to and exercisable by a bona fide pledgee of the
Registrable Securities in connection with an Investor's margin or brokerage
accounts.
11.8. Use of Pronouns. All pronouns refer to the masculine, feminine or
neuter, singular or plural, as the context may require.
11.9. Headings. The headings of this Agreement are for convenience of
reference only, are not part of this Agreement and do not affect its
interpretation.
11.10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which is deemed an original but all of which constitute
one and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission, and facsimile
signatures are binding on the parties hereto.
11.11. Further Assurances. Each party will do and perform, or cause to be
done and performed, all such further acts and things, and will execute and
deliver all other agreements, certificates, instruments and documents, as
another party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
11.12. Consents. All consents and other determinations to be made by the
Investors pursuant to this Agreement will be made by the Initial Investors or
the Investors holding a majority in interest of the Registrable Securities.
11.13. No Strict Construction. The language used in this Agreement is
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
11.14. Mutual Fund. Certain Investors are registered investment companies
entering into this Agreement solely on behalf of one or more of their mutual
fund series (each, a "Fund"). With respect to all obligations of a Fund arising
out of this Agreement, the Company will look for payment or satisfaction of any
claim solely to the assets and property of the applicable Fund.
* * * *
16
IN WITNESS WHEREOF, the undersigned Investors and the Company have caused
this Agreement to be duly executed as of the date first above written.
COMPANY:
MIDWEST EXPRESS HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title:Senior Vice President and
Chief Financial Officer
[SIGNATURES CONTINUE ON THE FOLLOWING PAGES]
[INVESTORS' SIGNATURE PAGES OMITTED]
[NAME OF INVESTOR]
Sign Name:
--------------------------------
Print Name:
--------------------------------
Title:
--------------------------------
EXHIBIT A
PLAN OF DISTRIBUTION
The selling shareholders may resell or redistribute the securities listed
elsewhere in this prospectus from time to time on any stock exchange or
automated interdealer quotation system on which the securities are listed, in
the over-the-counter market, in privately negotiated transactions, or in any
other legal manner, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to prevailing market prices or
at negotiated prices. Persons who are pledgees, donees, transferees, or other
successors in interest of any of the named selling shareholders (including but
not limited to persons who receive securities from a named selling shareholder
as a gift, partnership distribution or other non-sale-related transfer after the
date of this prospectus) may also use this prospectus and are included when we
refer to "selling shareholders" in this prospectus. Selling shareholders may
sell the securities by one or more of the following methods, without limitation:
o block trades (which may include cross trades) in which the broker or
dealer so engaged will attempt to sell the securities as agent but may
position and resell a portion of the block as principal to facilitate
the transaction;
o purchases by a broker or dealer as principal and resale by the broker
or dealer for its own account;
o an exchange distribution or secondary distribution in accordance with
the rules of any stock exchange on which the securities are listed;
o ordinary brokerage transactions and transactions in which the broker
solicits purchases;
o an offering at other than a fixed price on or through the facilities
of any stock exchange on which the securities are listed or to or
through a market maker other than on that stock exchange;
o privately negotiated transactions, directly or through agents;
o short sales;
o through the writing of options on the securities, whether or the
options are listed on an options exchange;
o through the distribution of the securities by any selling shareholder
to its partners, members or stockholders;
o one or more underwritten offerings;
o agreements between a broker or dealer and one or more of the selling
shareholders to sell a specified number of the securities at a
stipulated price per share; and
o any combination of any of these methods of sale or distribution, or
any other method permitted by applicable law.
The selling shareholders may also transfer the securities by gift. We do
not know of any current arrangements by the selling shareholders for the sale or
distribution of any of the securities.
The selling shareholders may engage brokers and dealers, and any brokers or
dealers may arrange for other brokers or dealers to participate in effecting
sales of the securities. These brokers, dealers or underwriters may act as
principals, or as an agent of a selling shareholder. Broker-dealers may agree
with a selling shareholder to sell a specified number of the securities at a
stipulated price per security. If the broker-dealer is unable to sell securities
acting as agent for a selling shareholder, it may purchase as principal any
unsold securities at the stipulated price. Broker-dealers who acquire securities
as principals may thereafter resell the securities from time to time in
transactions in any stock exchange or automated interdealer quotation system on
which the securities are then listed, at prices and on terms then prevailing at
the time of sale, at prices related to the then-current market price or in
negotiated transactions. Broker-dealers may use block transactions and sales to
and through broker-dealers, including transactions of the nature described
above. The selling shareholders may also sell the securities in accordance with
Rule 144 under the Securities Act rather than pursuant to this prospectus,
regardless of whether the securities are covered by this prospectus.
From time to time, one or more of the selling shareholders may pledge,
hypothecate or grant a security interest in some or all of the securities owned
by them. The pledgees, secured parties or persons to whom the securities have
been hypothecated will, upon foreclosure in the event of default, be deemed to
be selling shareholders. The number of a selling shareholder's securities
offered under this prospectus will decrease as and when it takes such actions.
The plan of distribution for that selling shareholder's securities will
otherwise remain unchanged. In addition, a selling shareholder may, from time to
time, sell the securities short, and in those instances, this prospectus may be
delivered in connection with the short sales and the securities offered under
this prospectus may be used to cover short sales.
The selling shareholders and any underwriters, brokers, dealers or agents
that participate in the distribution of the securities may be deemed to be
"underwriters" within the meaning of the Securities Act, and any discounts,
concessions, commissions or fees received by them and any profit on the resale
of the securities sold by them may be deemed to be underwriting discounts and
commissions.
A selling shareholder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of the
securities in the course of hedging the positions they assume with that selling
shareholder, including, without limitation, in connection with distributions of
the securities by those broker-dealers. A selling shareholder may enter into
option or other transactions with broker-dealers that involve the delivery of
the securities offered under this prospectus to the broker-dealers, who may then
resell or otherwise transfer those securities. A selling shareholder may also
loan or pledge the securities offered under this prospectus to a broker-dealer
and the broker-dealer may sell the securities offered under this prospectus so
loaned or upon a default may sell or otherwise transfer the pledged securities
offered under this prospectus.
The selling shareholders and other persons participating in the sale or
distribution of the securities will be subject to applicable provisions of the
Securities Exchange Act of 1934, as amended, and the related rules and
regulations adopted by the SEC, including Regulation M. This regulation may
limit the timing of purchases and sales of any of the securities by the selling
shareholders and any other person. The anti-manipulation rules under the
Exchange Act may apply to sales of securities in the market and to the
activities of the selling shareholders and their affiliates. Furthermore,
Regulation M may restrict the ability of any person engaged in the distribution
of the securities to engage in market-making activities with respect to the
particular securities being distributed for a period of up to five business days
before the distribution. These restrictions may affect the marketability of the
securities and the ability of any person or entity to engage in market-making
activities with respect to the securities.
We have agreed to indemnify the selling shareholders, any underwriter for
the selling shareholders, any directors or officers of the selling shareholders
and any person who controls (within the meaning of the federal securities laws )
the selling shareholders or acts as an investment advisor to the selling
shareholders against specified liabilities, including liabilities under the
federal securities laws. The selling shareholders have each agreed, severally
and not jointly, to indemnify us, each of our directors, each of our officers
who sign the registration statement, each person who controls (within the
meaning of the federal securities laws) us and the other selling shareholders,
including any director, officer or person who controls (within the meaning of
the federal securities laws) the other selling shareholders, against specified
liabilities arising from information provided by the selling shareholder for use
in this prospectus, including liabilities under the federal securities laws. The
selling shareholders may agree to indemnify any brokers, dealers or agents who
participate in transactions involving sales of the securities against specified
liabilities arising under the federal securities laws in connection with the
offering and sale of the securities.
The securities offered under this prospectus were originally issued to the
selling shareholders pursuant to an exemption from the registration requirements
of the Securities Act. We agreed to register the securities under the Securities
Act and to keep the registration statement of which this prospectus is a part
effective until the earlier of (a) the date as of which the selling shareholders
may sell all of the shares of common stock subject to this registration
statement without restriction pursuant to Rule 144(k) (or successor thereto)
promulgated under the Securities Act or (b) the date on which the selling
shareholders shall have sold all shares of common stock subject to this
registration statement. We have agreed to pay all expenses in connection with
this offering, including fees and expenses of a single counsel for the selling
shareholders, but not including underwriting discounts, concessions, commissions
or fees of the selling shareholders.
We will not receive any proceeds from sales of any securities by the
selling shareholders.
We cannot assure you that the selling shareholders will sell all or any
portion of the securities offered under this prospectus.
We will supply the selling shareholders and the any stock exchange upon
which the securities are listed with reasonable quantities of copies of this
prospectus. To the extent required by Rule 424 under the Securities Act in
connection with any resale or redistribution by a selling shareholder, we will
file a prospectus supplement setting forth
o the aggregate number of shares to be sold;
o the purchase price;
o the public offering price;
o if applicable, the names of any underwriter, agent or broker-dealer;
and
o any applicable commissions, discounts, concessions, fees or other
items constituting compensation to underwriters, agents or
broker-dealers with respect to the particular transaction (which may
exceed customary commissions or compensation).
If a selling shareholder notifies us that a material arrangement has been
entered into with a broker-dealer for the sale of shares through a block trade,
special offering, exchange, distribution or secondary distribution or a purchase
by a broker or dealer, then we will file a prospectus supplement that
includes any other facts that are material to the transaction. If applicable,
this may include a statement to the effect that the participating broker-dealers
did not conduct any investigation to verify the information set out or
incorporated by reference in this prospectus. We will also file a supplement to
this prospectus upon our being notified by a selling shareholder that a donee,
pledgee, transferee or other successor-in-interest intends to sell more than 500
shares or as otherwise required by law.
EXHIBIT B
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: _____________________
Re: Midwest Express Holdings, Inc.
Ladies and Gentlemen:
We are counsel to Midwest Express Holdings, Inc., a Wisconsin corporation
(the "Company"), and have represented the Company in connection with the Company
negotiating and executing that certain Securities Purchase Agreement, dated as
of September 29, 2003, by and among the investors named on the signature pages
thereto (the "Investors") and the Company (the "Purchase Agreement"). Upon the
terms and subject to the conditions of the Purchase Agreement, the Company has
agreed to sell to the Investors 1,882,353 shares of the Company's common stock,
par value $.01 per share (and, together with any associated Rights (as defined
in the Purchase Agreement), the "Securities"). Pursuant to the Purchase
Agreement, the Company entered into a Registration Rights Agreement with the
Investors, dated as of September 29, 2003 (the "Registration Rights Agreement"),
pursuant to which the Company agreed, among other things, to register the
Securities under the Securities Act of 1933, as amended (the "Securities Act").
In connection with the Company's obligations under the Registration Rights
Agreement, on _______ ___, 2003, the Company filed the Registration Statement on
Form S-1 (File No. 333-_________) (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC"). The Registration Statement
registers the Securities for resale under the Securities Act and names each of
the Investors as a selling shareholder thereunder.
In connection with the Registration Statement, we advise you that a member
of the SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the Securities Act at
[ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS], and we have no
knowledge, after telephonic inquiry of a member of the SEC's staff, that any
stop order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or threatened by, the SEC and the
Securities are available for resale under the Securities Act pursuant to the
Registration Statement.
Very truly yours,
[COMPANY'S COUNSEL]
By:_____________________
CC: [LIST NAMES OF INVESTORS]
