FORM OF] AMERICAN RAILCARS INDUSTRIES, INC. REGISTRATION RIGHTS AGREEMENT
Exhibit 4.2
[FORM OF]
AMERICAN RAILCARS INDUSTRIES, INC.
REGISTRATION RIGHTS AGREEMENT, dated as of , 2005, among the parties listed on
Schedule I hereto (the “Holders”) and American Railcars Industries, Inc., a Delaware corporation
(the “Company”).
R E C I T A L S
WHEREAS, the Company has filed a registration statement on Form S-1 (file number 333-128177,
as it may be amended from time to time, the “Initial Registration Statement”) with the Commission
(as defined below) to effect a proposed public offering of the Company’s common stock;
WHEREAS, in order to enable the Company to proceed with the public offering, the Holders have
been required to consent to certain actions and to make certain other accommodations;
WHEREAS, as an inducement to the Holders to permit the public offering, the Company has agreed
to grant the Holders certain registration rights;
WHEREAS, the Company and the Holders desire to define the registration rights of the Holders
on the terms and subject to the conditions herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable
consideration, the parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following terms have the respective meaning set forth below:
Affiliate: shall have the meaning set forth in Rule 144 promulgated under the
Securities Act (as currently in effect);
Commission: shall mean the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act;
Common Stock: shall mean the common stock of the Company, par value $0.01 per share;
Effective Date: shall mean the date of the first closing for the offering contemplated
by the Initial Registration Statement;
Exchange Act: shall mean the Securities Exchange Act of 1934, as amended and the rules
and regulations promulgated thereunder;
Foundation: shall mean the Foundation for a Greater Opportunity;
Holder: shall mean any holder of Registrable Securities;
Initial Holder: shall mean any of the persons initially listed on Schedule 1 to this
Agreement;
Initial Registration Statement: shall have the meaning set forth in the recitals;
Initial Underwriting Agreement: shall mean the underwriting agreement entered into by
the Company for the sale of shares pursuant to the offering contemplated by the Initial
Registration Statement;
Initiating Holder: shall mean any Holder or Holders who in the aggregate are Holders
of more than 50% of the then outstanding Registrable Securities;
Person: shall mean an individual, partnership, limited liability company, joint-stock
company, corporation, trust or unincorporated organization, and a government or agency or political
subdivision thereof;
Register, Registered and Registration: shall mean to a registration
effected by preparing and filing a registration statement in compliance with the Securities Act
(and any post-effective amendments filed or required to be filed) and the declaration or ordering
of effectiveness of such registration statement;
Registrable Securities: shall mean the Common Stock (together with any securities
issued or issuable in respect thereof by way of a dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other reorganization or
otherwise) owned by the Holders on the Effective Date, including without limitation the Common
Stock to be purchased by one or more of the Holders from the Foundation; provided,
however, that any shares of Common Stock (or securities which would otherwise be
Registrable Securities), that are transferred in a transaction pursuant to which the registration
rights set forth herein are not assigned or permitted to be assigned as set forth in Section 2(a)
below, shall cease to be Registrable Securities.
Registration Expenses: shall mean all expenses incurred by the Company in compliance
with Section 2(a), (b) and (c) hereof, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel for the Company, reasonable fees and
expenses of one counsel for all the Holders, blue sky fees and expenses and the expense of any
special audits incident to or required by any such registration (but excluding the compensation of
regular employees of the Company, which shall be paid in any event by the Company); provided,
however, that Registration Expenses shall exclude Selling Expenses;
Security, Securities: shall have the meaning set forth in Section 2(1) of the
Securities Act;
Securities Act: shall mean the Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder; and
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Selling Expenses: shall mean all underwriting discounts and selling commissions
applicable to the sale of Registrable Securities and all fees and disbursements of counsel for each
of the Holders other than the fees and expenses of one counsel for all the Holders referenced in
the definition of Registration Expenses above.
SECTION 2. REGISTRATION RIGHTS
(a) Requested Registration.
(i) Request for Registration. If the Company shall receive from an Initiating
Holder, at any time after the Effective Date, subject to Section (2)(j), if applicable, a
written request that the Company effect any registration with respect to more than 30% of the
Registrable Securities, the Company will:
(1) promptly give written notice of the proposed registration, qualification or
compliance to all other Holders; and
(2) as soon as practicable, but in no event prior to the time permitted under the
Initial Underwriting Agreement, use its diligent best efforts to effect such registration
(including, without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the Securities Act)
as may be so requested and as would permit or facilitate the sale and distribution of all or
such portion of such Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any Holder or Holders joining in such
request as are specified in a written request received by the Company within 10 business
days after written notice from the Company is given under Section 2(a)(i)(1) above;
provided that the Company shall not be obligated to effect, or take any action to
effect, any such registration pursuant to this Section 2(a):
(A) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance, unless the Company is already
subject to service in such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations thereunder;
(B) After the Company has effected two (2) such registrations
pursuant to this Section 2(a) and such registrations have been declared or
ordered effective and the sales of such Registrable Securities shall have
closed;
(C) If the Registrable Securities requested by all Holders to be
registered pursuant to such request do not have an anticipated aggregate public
offering price (before any underwriting discounts and commissions) of not less
than $5,000,000;
(D) During the period starting with the date forty-five (45) days
prior to the Company’s good faith estimate of the date of filing of, and ending
on the date ninety (90) days (or in the case of the offering contemplated by
the
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Initial Public Offering, such period of time as provided in the Initial
Underwriting Agreement) immediately following the effective date of, any
registration statement pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction, or a registration on
any registration form (including Form S-4) which does not permit secondary
sales, with respect to an employee benefit plan or with respect to the
Company’s first registered public offering of its stock); provided
that the Company is actively employing in good faith all reasonable efforts
to cause such registration statement to become effective;
(E) If the Company shall furnish to the Initiating Holders a
certificate signed by an officer of the Company stating that in the good faith
judgment of the Board of Directors it would be significantly detrimental to the
Company or its stockholders for a registration statement to be filed or
securities to be offered, in which case the Company’s obligation to use its
best efforts to comply with this Section 2 shall be deferred for a period not
to exceed sixty (60) days from the date of receipt of written request from the
Initiating Holders; provided, however, that the Company shall
not exercise such right more than once in any twelve (12) month period.
The registration statement filed pursuant to the request of the Initiating Holders may,
subject to the provisions of Section 2(a)(ii) below, include other securities of the Company which
are held by Persons who, by virtue of agreements with the Company, are entitled to include their
securities in any such registration (“Other Stockholders”). In the event any Holder requests a
registration pursuant to this Section 2(a) in connection with a distribution of Registrable
Securities to its stockholders, partners, members or holders of other beneficial or equity
interests, the registration shall provide for the resale by such Persons, if requested by such
Holder.
The registration rights set forth in this Section 2 may be assigned, in whole or in part, by
an Initial Holder or any of its Affiliates to any transferee of Registrable Securities (who shall
agree to be bound by all obligations of this Agreement), but may not be assigned, without the
written consent of the Company in its sole discretion, by any person who is not an Initial Holder
or any Affiliate of an Initial Holder.
(ii) Underwriting. If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to Section 2(a).
If Other Stockholders request such inclusion, the Holders shall offer to include the
securities of such Other Stockholders in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Section 2. The Holders whose shares are to
be included in such registration and the Company shall (together with all Other Stockholders
proposing to distribute their securities through such underwriting) enter into an underwriting
agreement in customary form with the representative of the underwriter or underwriters selected for
such underwriting by the Initiating Holders and reasonably acceptable to the Company.
Notwithstanding any other provision of this Section 2(a), if the representative advises the Holders
in writing that marketing factors require a limitation on the number of shares to be
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underwritten, the securities of the Company held by Other Stockholders shall be excluded from
such registration to the extent so required by such limitation. If, after the exclusion of such
shares, further reductions are still required, the number of shares included in the registration by
each Holder shall be reduced on a pro rata basis (based on the number of shares held by such
Holder), by such minimum number of shares as is necessary to comply with such request. No
Registrable Securities or any other securities excluded from the underwriting by reason of the
underwriter’s marketing limitation shall be included in such registration. If any Other
Stockholder who has requested inclusion in such registration as provided above disapproves of the
terms of the underwriting, such Person may elect to withdraw therefrom by written notice to the
Company, the underwriter and the Initiating Holders. The securities so withdrawn shall also be
withdrawn from registration. If the underwriter has not limited the number of Registrable
Securities or other securities to be underwritten, the Company and officers and directors of the
Company may include its or their securities for its or their own account in such registration if
the representative so agrees and if the number of Registrable Securities and other securities which
would otherwise have been included in such registration and underwriting will not thereby be
limited. If the Company includes shares to be sold by it in any Registration Statement requested
pursuant to this Section 2(a), such Registration Statement shall be deemed to have been a
registration under Section 2(b), unless the Holders of Registrable Securities are able to include
in such Registration Statement all of the Registrable Securities initially requested for inclusion
in such Registration Statement.
(b) Company Registration.
(i) If the Company shall determine to register any of its equity securities either for its
own account or for the account of Other Stockholders, other than a registration relating solely
to employee benefit plans, or a registration relating solely to a Commission Rule 145
transaction, or a registration on any registration form (including Form S-4) which does not
permit secondary sales, the Company will:
(1) promptly give to each of the Holders a written notice thereof (which shall include
a list of the jurisdictions in which the Company intends to attempt to qualify such
securities under the applicable blue sky or other state securities laws); and
(2) include in such registration (and any related qualification under blue sky laws or
other compliance), and in any underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made by the Holders within fifteen (15) days
after receipt of the written notice from the Company described in clause (i) above, except
as set forth in Section 2(b)(ii) below. Such written request may specify all or a part of
the Holders’ Registrable Securities. In the event any Holder requests inclusion in a
registration pursuant to this Section 2(b) in connection with a distribution of Registrable
Securities to its stockholders, partners, members or holders of other beneficial or equity
interests the registration shall provide for the resale by such Persons, if requested by
such Holder.
(ii) Underwriting. If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so advise each of the
Holders as a part of the written notice given pursuant to Section 2(b)(i)(1). In such event,
the right of each of the Holders to registration pursuant to this Section 2(b) shall be
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conditioned upon such Holders’ participation in such underwriting and the inclusion of such
Holders’ Registrable Securities in the underwriting to the extent provided herein. The Holders
whose shares are to be included in such registration shall (together with the Company and the
Other Stockholders distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the underwriter or
underwriters selected for underwriting by the Company. Notwithstanding any other provision of
this Section 2(b), if the representative determines that marketing factors require a limitation
on the number of shares to be underwritten, and the representative may (subject to the
allocation priority set forth below) limit the number of Registrable Securities to be included
in the registration and underwriting to not less than twenty five percent (25%) of the shares
included therein (based on the number of shares). The Company shall so advise all holders of
securities requesting registration, and the number of shares of securities that are entitled to
be included in the registration and underwriting shall be allocated in the following manner: The
securities of the Company held by officers, directors and Other Stockholders of the Company
(other than Registrable Securities and other than securities held by holders who by contractual
right demanded such registration (“Demanding Holders”)) shall be excluded from such registration
and underwriting to the extent required by such limitation, and, if a limitation on the number
of shares is still required, the number of shares that may be included in the registration and
underwriting by each of the Holders and Demanding Holders shall be reduced, on a pro rata basis
(based on the number of shares held by such Holder), by such minimum number of shares as is
necessary to comply with such limitation. If any of the Holders or any officer, director or
Other Stockholder disapproves of the terms of any such underwriting, he may elect to withdraw
therefrom by written notice to the Company and the underwriter. Any Registrable Securities or
other securities excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
(c) Form S-3. The Company shall use its best efforts to qualify for registration on
Form S-3 for secondary sales. After the Company has qualified for the use of Form S-3, the
Initiating Holders shall have the right to request three (3) registrations on Form S-3 (such
requests shall be in writing and shall state the number of shares of Registrable Securities to be
disposed of and the intended method of disposition of shares by such holders), provided
that the Company shall not be obligated to effect, or take any action to effect, any such
registration pursuant to this Section 2(c):
(i) Unless the Holder or Holders requesting registration propose to dispose of shares of
Registrable Securities having an aggregate price to the public (before deduction of Selling
Expenses) of more than $5,000,000;
(ii) Within ninety (90) days of the effective date of the most recent registration pursuant
to this Section 2(c) in which securities held by the requesting Holder could have been included
for sale or distribution;
(iii) In any particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration, qualification or
compliance, unless the Company is already subject to service in such jurisdiction and except as
may be required by the Securities Act or applicable rules or regulations thereunder;
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(iv) During the period starting with the date forty-five (45) days prior to the Company’s
good faith estimate of the date of filing of, and ending on the date ninety (90) days
immediately following the effective date of, any registration statement pertaining to securities
of the Company (other than a registration of securities in a Rule 145 transaction, a
registration on any registration form (including Form S-4) which does not permit secondary sales
or with respect to an employee benefit plan), provided that the Company is actively employing in
good faith all reasonable efforts to cause such registration statement to become effective;
provided, however, that the Company may only delay an offering pursuant to this
Section 2(c)(iv) for a period of not more than sixty (60) days, if a filing of any other
registration statement is not made within that period and the Company may only exercise this
right once in any twelve (12) month period; or
(v) If the Company shall furnish to the Holders a certificate signed by an officer of the
Company stating that in the good faith judgment of the Board of Directors it would be
significantly detrimental to the Company or its stockholders for a registration statement to be
filed in the near future, in which case the Company’s obligation to use its best efforts to
comply with this Section 2(c) shall be deferred for a period not to exceed sixty (60) days from
the date of receipt of written request from the Holders; provided, however, that
the Company shall not exercise such right more than once in any twelve (12) month period.
The Company shall give written notice to all Holders of the receipt of a request for
registration pursuant to this Section 2(c) and shall provide a reasonable opportunity for other
Holders to participate in the registration, provided that if the registration is for an
underwritten offering, the terms of Section 2(a)(ii) shall apply to all participants in such
offering. Subject to the foregoing, the Company will use its best efforts to effect promptly the
registration of all shares of Registrable Securities on Form S-3 to the extent requested by the
Holder or Holders thereof for purposes of disposition. In the event any Holder requests a
registration pursuant to this Section 2(c) in connection with a distribution of Registrable
Securities to its stockholders, partners, members or holders of other beneficial or equity
interests, the registration shall provide for the resale by such Persons, if requested by such
Holder.
(d) Expenses of Registration. Subject to Section 2(e), all Registration Expenses
incurred in connection with any registration, qualification or compliance pursuant to this Section
2 shall be borne by the Company, and all Selling Expenses shall be borne by the Holders of the
securities so registered pro rata on the basis of the number of their shares so registered
(e) Withdrawal of Registration Statement. At any time before the registration
statement requested under Section 2(a) or Section 2(c) covering Registrable Shares becomes
effective, the Holders of a majority of such shares may request the Company to withdraw or not to
file the registration statement. In that event, unless such request of withdrawal was caused by,
or made in response to, (i) a material adverse effect or a similar event related to the business,
properties, condition, or operations of the Company not known (without imputing the knowledge of
any other Person to such holders) by the holders initiating such request at the time their request
was made, or other material facts not known to such Holders at the time their request was made, or
(ii) a material adverse change in the financial markets, the Holders shall be deemed to have used
one of their registration rights under Section 2(a) or Section 2(c), as applicable;
provided, however, that such withdrawn registration shall not count as requested
registration
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pursuant to Section 2(a) or Section 2(c) above if the Company shall have been reimbursed
(pro rata by the Holders holding a majority of the Registrable Shares requested to
be registered or in such other proportion as the requesting Holders may agree) for all
out-of-pocket expenses incurred by the Company in connection with such withdrawn registration.
(f) Registration Procedures. In the case of each registration effected by the Company
pursuant to this Section 2, the Company will keep the Holders, as applicable, advised in writing as
to the initiation of each registration and as to the completion thereof. At its expense, the
Company will:
(i) keep such registration effective for a period of one hundred twenty (120) days or until
the Holders (or in the case of a distribution to the stockholders, partners, members or holders
of other beneficial or equity interests of such Holder, such Persons, as applicable, have
completed the distribution described in the registration statement relating thereto, whichever
first occurs; provided, however, that (A) such 120-day period shall be extended
for a period of time equal to the period during which the Holders (or stockholders, partners,
members or holders of other beneficial or equity interests of a Holder) as applicable, refrain
from selling any securities included in such registration in accordance with provisions in
Section 2(j) hereof; and (B) in the case of any registration of Registrable Securities on Form
S-3 which are intended to be offered on a continuous or delayed basis, such 120-day period shall
be extended until all such Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Securities Act, permits an offering on a continuous or delayed basis,
and provided further that applicable rules under the Securities Act governing the obligation to
file a post-effective amendment permit, in lieu of filing a post-effective amendment which (y)
includes any prospectus required by Section 10(a) of the Securities Act or (z) reflects facts or
events representing a material or fundamental change in the information set forth in the
registration statement, the incorporation by reference of information required to be included in
(y) and (z) above to be contained in periodic reports filed pursuant to Section 12 or 15(d) of
the Exchange Act in the registration statement;
(ii) furnish such number of prospectuses and other documents incident thereto as each of
the Holders, as applicable, from time to time may reasonably request;
(iii) notify each Holder of Registrable Securities covered by such registration at any time
when a prospectus relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; and
(iv) if such securities are being sold through underwriters, furnish, on the date that such
Registrable Securities are delivered to the underwriters for sale, (1) an opinion, dated as of
such date, of the counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten public offering
and reasonably satisfactory to a majority in interest of the Holders participating in such
registration, addressed to the underwriters, if any, and to the Holders participating in such
registration and (2) a letter, dated as of such date, from the independent
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certified public accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an underwritten public offering
and reasonably satisfactory to a majority in interest of the Holders participating in such
registration, addressed to the underwriters, if any, and if permitted by applicable accounting
standards, to the Holders participating in such registration.
(v) Otherwise use its diligent best efforts to comply with all applicable rules and
regulations of the SEC, and make available to the Holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve (12) months, but not more than
eighteen (18) months, beginning with the first month after the effective date of the
Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder.
(g) Indemnification.
(i) The Company will indemnify each of the Holders, as applicable, each of its officers,
directors, members and partners, and each Person controlling each of the Holders, with respect
to each registration which has been effected pursuant to this Section 2, and each underwriter,
if any, and each person who controls any underwriter, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any prospectus, offering circular or
other document (including any related registration statement, notification or the like) incident
to any such registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by the Company of the Securities Act or
the Exchange Act or any rule or regulation thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each of the Holders, each of its officers,
directors, members and partners, and each Person controlling each of the Holders, each such
underwriter and each Person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating and defending any such claim,
loss, damage, liability or action, provided that the Company will not be liable in any such case
to the extent that any such claim, loss, damage, liability or expense arises out of or is based
on any untrue statement or omission based upon written information furnished to the Company by
the Holders or underwriter and stated to be specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities held by it are included in the
securities as to which such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors and officers and each underwriter, if any, of the
Company’s securities covered by such a registration statement, each person who controls the
Company or such underwriter, each Other Stockholder and each of their officers, directors,
members and partners, and each person controlling such Other Stockholder against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document made by such Holder,
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or any omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements by such Holder therein not misleading, and
will reimburse the Company and such Other Stockholders, directors, officers, members, partners,
persons, underwriters or control persons for any legal or any other expenses reasonably incurred
in connection with investigating or defending any such claim, loss, damage, liability or action,
in each case to the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be specifically for use
therein; provided, however, that the obligations of each of the Holders hereunder shall be
limited to an amount equal to the net proceeds to such Holder of securities sold as contemplated
herein.
(iii) Each party entitled to indemnification under this Section 2(g) (the “Indemnified
Party”) shall give notice to the party required to provide indemnification (the “Indemnifying
Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall
be approved by the Indemnified Party (whose approval shall not unreasonably be withheld) and the
Indemnified Party may participate in such defense at such party’s expense (unless the
Indemnified Party shall have reasonably concluded that there may be a conflict of interest
between the Indemnifying Party and the Indemnified Party in such action, in which case the fees
and expenses of counsel shall be at the expense of the Indemnifying Party), and provided further
that the failure of any Indemnified Party to give notice as provided herein shall not relieve
the Indemnifying Party of its obligations under this Section 2 unless the Indemnifying Party is
materially prejudiced thereby. No Indemnifying Party shall be liable for any settlement of any
action or proceeding effected without its written consent. No Indemnifying Party, in the
defense of any such claim or litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation. Each Indemnified Party
shall furnish such information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required in connection with
the defense of such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(g) is held by a court of
competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss,
liability, claim, damage or expense referred to herein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and of the Indemnified Party on the other in connection with the statements or omissions
which resulted in such loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified
Party shall be determined by reference to, among other things,
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whether the untrue (or alleged untrue) statement of a material fact or the omission (or
alleged omission) to state a material fact relates to information supplied by the Indemnifying
Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection with any
underwritten public offering contemplated by this Agreement are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall be controlling.
(h) Information by the Holders.
(i) Each of the Holders holding securities included in any registration shall furnish to
the Company such information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in this Section 2.
(ii) In the event that, either immediately prior to or subsequent to the effectiveness of
any registration statement, any Holder shall distribute Registrable Securities to its
stockholders, partners, members or holders of other beneficial or equity interests, such Holder
shall so advise the Company and provide such information as shall be necessary to permit an
amendment to such registration statement to provide information with respect to such Persons, as
selling securityholders. Promptly following receipt of such information, the Company shall file
an appropriate amendment to such registration statement reflecting the information so provided.
(i) Rule 144 Reporting.
With a view to making available the benefits of certain rules and regulations of the
Commission which may permit the sale of restricted securities to the public without registration,
the Company agrees to:
(i) make and keep public information available as those terms are understood and defined in
Rule 144 under the Securities Act (“Rule 144”), at all times from and after ninety (90) days
following the effective date of the first registration under the Securities Act filed by the
Company for an offering of its securities to the general public;
(ii) use its best efforts to file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the Exchange Act at any
time after it has become subject to such reporting requirements; and
(iii) so long as the Holder owns any Registrable Securities, furnish to the Holder upon
request, a written statement by the Company as to its compliance with the reporting requirements
of Rule 144, and of the Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed as the Holder may
reasonably request in availing itself of any rule or
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regulation of the Commission allowing the Holder to sell any such securities without
registration.
(j) “Market Stand-off” Agreement. Each of the Holders agrees, if requested by the
Company or an underwriter of equity securities of the Company, not to sell or otherwise transfer or
dispose of any Registrable Securities held by such Holder during the ninety (90) day period
following the effective date of a registration statement of the Company filed under the Securities
Act, provided that all officers and directors of the Company enter into similar agreements.
If requested by the underwriters, the Holders shall execute a separate agreement to the
foregoing effect. The Company may impose stop-transfer instructions with respect to the shares (or
securities) subject to the foregoing restriction until the end of said ninety (90) day period. The
provisions of this Section 2(j) shall be binding upon any transferee who acquires Registrable
Securities. The parties understand and agree that the Holders have entered into separate
agreements with the Initial Underwriters in respect of the offering contemplated by the Initial
Registration Statement, which agreements, in respect of such offering, shall be deemed to have
satisfied and be in lieu of the agreements set forth in or contemplated by this Section 2(j).
SECTION 3. MISCELLANEOUS
(a) Directly or Indirectly. Where any provision in this Agreement refers to action to
be taken by any Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
(b) Governing Law; Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made and to be performed
entirely within such State. The parties further agree that any action or proceeding to enforce any
right arising out of this Agreement shall be commenced in any New York State court or United Sates
District Court sitting in New York, and the parties hereto consent to such jurisdiction, agree that
venue will be proper in such courts and in any such matter, agree that the State of New York is the
most convenient forum for litigation in any suit, action or legal proceeding in any such court
shall be properly served an shall confer personal jurisdiction if served by registered or certified
mail, or as otherwise provided by the laws of the State of New York or the United States.
(c) Section Headings. The headings of the sections and subsections of this Agreement
are inserted for convenience only and shall not be deemed to constitute a part thereof.
(d) Notices.
(i) All communications under this Agreement shall be in writing and shall be delivered by
hand or facsimile or mailed by overnight courier or by registered or certified mail, postage
prepaid:
(1) if to the Company, to American Railcars Industries, Inc., 000 Xxxxx Xxxxxx, Xx.
Xxxxxxx, XX 00000, Attention: Chief Financial Officer (facsimile: (000) 000-0000, or at such
other address as it may have furnished in writing to the Holders.
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(2) if to the Holders, at the address or facsimile number listed on Schedule I hereto,
or at such other address or facsimile number as may have been furnished the Company in
writing.
(ii) Any notice so addressed shall be deemed to be given: if delivered by hand or
facsimile, on the date of such delivery; if mailed by overnight courier, on the first business
day following the date of such mailing; and if mailed by registered or certified mail, on the
third business day after the date of such mailing.
(e) Reproduction of Documents. This Agreement and all documents relating thereto,
including, without limitation, any consents, waivers and modifications which may hereafter be
executed may be reproduced by the Holders by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and the Holders may destroy any original document
so reproduced. The parties hereto agree and stipulate that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative proceeding (whether
or not the original is in existence and whether or not such reproduction was made by the Holders in
the regular course of business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
(f) Successors and Assigns. Subject to the restrictions set forth herein, this
Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of
the parties.
(g) Entire Agreement; Amendment and Waiver. This Agreement constitutes the entire
understanding of the parties hereto and supersedes all prior understanding among such parties.
This Agreement may be amended, and the observance of any term of this Agreement may be waived, with
(and only with) the written consent of the Company and the Holders holding a majority of the then
outstanding Registrable Securities.
(h) Severability. In the event that any part or parts of this Agreement shall be held
illegal or unenforceable by any court or administrative body of competent jurisdiction, such
determination shall not affect the remaining provisions of this Agreement which shall remain in
full force and effect.
(i) No Third Party Beneficiaries. The parties hereto acknowledge and agree that there
are no intended third party beneficiaries to this Agreement and no third parties have any rights
under or relating to this Agreement
(j) Lock-Up Restrictions. Notwithstanding anything in this Agreement to the
contrary, the Company shall not file any registration statement for any Registrable Securities prior to the expiration of
the Lock-Up Period (as defined in the Initial Underwriting Agreement) or as otherwise permitted under the Initial Underwriting
Agreement.
(k) Counterparts. This Agreement may be executed in two or more counterparts
(including by facsimile), each of which shall be deemed an original and all of which together shall
be considered one and the same agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set
forth above.
| AMERICAN RAILCAR INDUSTRIES, INC. | ||||
| By: | ||||
| Name: Xxxxx X. Xxxxx | ||||
| Title: President | ||||
[Insert Holders]
By: |
||||
| Title: | ||||
| [Insert Holders] | ||||
By: |
||||
| Title: | ||||
