EXHIBIT 10.31
REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of April 24, 1998
by and among Frontier Airlines, Inc., a Colorado corporation (the "Company"),
and each Holder (as hereinafter defined) executing a signature page hereto.
This Agreement is made pursuant to a certain Stock Purchase Agreement dated
as of the date hereof by and among the Company and the purchasers named (the
"Purchase Agreement"). In order to induce the purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution of this Agreement is a condition to
the closing of the transactions contemplated by the Purchase Agreement.
In consideration of the foregoing, the parties hereby agree as follows:
SECTION 1. DEFINITIONS.
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As used in this Agreement, the following terms shall have the following
meanings:
"Advice" has the meaning set forth in Section 5.
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"Affiliate" means, with respect to any specified Person, any other Person
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who, directly or indirectly, controls, is controlled by, or is under common
control with such specified Person.
"Business Day" means any day other than a day on which banks are authorized
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or required to be closed in the State of New York.
"Commission" means the Securities and Exchange Commission.
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"Common Stock" means the common stock, par value $.01 per share, of the
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Company.
"Company" has the meaning set forth in the preamble and shall include the
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Company's successors by merger, acquisition, reorganization or otherwise.
"Controlling Persons" has the meaning set forth in Section 7(a).
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"Damages" has the meaning set forth in Section 5(a).
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"Demand Registration Statement" has the meaning set forth in Section 3(a).
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"Exchange Act" means the Securities Exchange Act of 1934, as amended from
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time to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
"Holder" means (i) each Person (other than the Company and its Affiliates)
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who is a signatory to this Agreement as listed on Schedule 1 hereto and (ii)
each Person (other than the Company and its Affiliates) to whom a Holder
transfers Securities if such Person acquires such Securities as Registrable
Securities.
"Holders' Counsel" means Xxxxxxx, Procter & Xxxx LLP, special counsel to
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the Holders, or any successor counsel selected by Holders of a majority in
interest of the Registrable Securities.
"Inspectors" has the meaning set forth in Section 5(m).
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"NASD" has the meaning set forth in Section 5(q).
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"Nasdaq" has the meaning set forth in Section 5(o).
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"Objection Notice" has the meaning set forth in Section 5(a).
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"Objecting Party" has the meaning set forth in Section 5(a).
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"Person" means any individual, corporation, partnership, joint venture,
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association, joint-stock company, trust, limited liability company,
unincorporated organization or government or other agency or political
subdivision thereof.
"Piggy-Back Registration" has the meaning set forth in Section 4(a).
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"Prospectus" means the prospectus included in any Registration Statement
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(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective Registration
Statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"Public Offering" means a public offering of Securities registered on Form
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S-11 or Form S-3 (or any successor or equivalent forms) under the Securities Act
for the Company's own or others' account.
"Purchase Agreement" means the Securities Purchase Agreement, dated as of
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the date hereof, between the Company and the Holders pursuant to which the
Securities are being issued as amended, modified or supplemented from hereto
time, together with any exhibits, schedules or other attachments thereto.
"Records" has the meaning set forth in Section 5(m).
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"Registrable Securities" means the Securities; provided, however, that any
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Securities shall cease to be Registrable Securities when (i) a Registration
Statement covering such Registrable Securities has been declared effective and
such Registrable Securities have been disposed of by the holder thereof pursuant
to such effective Registration Statement, (ii) such Registrable Securities are
transferred by the holder thereof to any Person other than a Holder pursuant to
Rule 144 (or any successor rule or similar provision then in effect, but not
Rule 144A) under the Securities Act, including a sale pursuant to the provisions
of Rule 144(k), or (iii) such Securities shall have ceased to be outstanding.
"Registration Expenses" has the meaning set forth in Section 6.
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"Registration Statement" means any registration statement of the Company
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that covers any of the Registrable Securities pursuant to the provisions of this
Agreement (including any Demand Registration Statement and any Shelf
Registration Statement), and all amendments and supplements to any such
registration statement, including post-effective amendments, in each case
including the Prospectus, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
"Required Filing Date" has the meaning set forth in Section 2(a).
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"Securities" means (i) all shares of Common Stock held by any Holder, (ii)
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all shares of Common Stock issued to any Holder upon exercise of any options,
warrants or other rights to subscribe for, purchase or otherwise acquire Common
Stock and (iii) all shares of Common Stock directly or indirectly issued or
issuable in respect of the securities referred to in clauses (i) and (ii) above
by way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation, or other reorganization.
"Securities Act" means the Securities Act of 1933, as amended from time to
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time, or any successor statute, and the rules and regulations of the Commission
promulgated thereunder.
"Shelf Registration Statement" has the meaning set forth in Section 2(a).
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"Suspension Notice" has the meaning set forth in Section 5.
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"Suspension Period" has the meaning set forth in Section 5.
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"Target Effective Date" means the date 120 days after the earlier of (i)
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the Required Filing Date or (ii) the date on which the Shelf Registration
Statement is actually filed with the Commission.
"Target Effective Period" means the period of time between the date on
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which a Shelf Registration Statement is actually declared effective and the
earlier of (i) the date which is four years following the date hereof, and (ii)
the date when no Holder holds any Registrable Securities.
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"Target Filing Date" has the meaning set forth in Section 3(a).
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SECTION 2. SHELF REGISTRATION.
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(a) Filing; Effectiveness. As soon as practicable but not later than
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the July 10, 1998 (the "Required Filing Date"), the Company shall prepare and
file with the Commission a "shelf" registration statement (the "Shelf
Registration Statement") on the appropriate form for an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act (or any successor
rule or similar provision then in effect) covering all of the Registrable
Securities. The Company shall use its best efforts to have the Shelf
Registration Statement declared effective on or before the Target Effective Date
and to keep such Shelf Registration Statement continuously effective for the
Target Effective Period. Any Holder of Registrable Securities shall be
permitted to withdraw all or any part of the Registrable Securities from a Shelf
Registration Statement at any time prior to the effective date of such Shelf
Registration Statement.
(b) Supplements; Amendments. The Company agrees, if necessary, to
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supplement or amend the Shelf Registration Statement, as required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the Securities Act or as
requested (which request shall result in the filing of a supplement or
amendment) by any Holder of Registrable Securities to which such Shelf
Registration Statement relates, and the Company agrees to furnish to the
Holders, Holders' Counsel and any managing underwriter copies of any such
supplement or amendment prior to its being used and/or filed with the
Commission.
(c) Liquidated Damages. If the Shelf Registration Statement is not
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filed on or before the Required Filing Date, the Company shall pay liquidated
damages to each Holder in an amount equal to $10.00 per 1,000 shares of the
Registrable Securities per week beginning on the Required Filing Date. If the
Shelf Registration Statement is filed, but has not become effective on or before
the Target Effective Date, the Company shall pay liquidated damages to each
Holder in an amount equal to $10.00 per 1,000 shares of the Registrable
Securities per week beginning on the Target Effective Date. The weekly
liquidated damages payable by the Company to the Holders as a result of a late
filing or a late declaration of effectiveness shall increase by an amount equal
to $1.00 per 1,000 shares of the Registrable Securities two weeks after the
Required Filing Date or the Target Effective Date, as the case may be, and shall
thereafter increase by an amount equal to $1.00 per 1,000 shares of the
Registrable Securities at the end of each subsequent two week period for so long
as the Shelf Registration Statement is not filed or is not declared effective.
If a stop order is imposed or if for any other reason the effectiveness of the
Shelf Registration Statement is suspended during the Target Effective Period,
then the Company shall pay liquidated damages to each Holder of the Registrable
Securities in an amount equal to $10.00 per 1,000 shares of Registrable
Securities per week beginning on the date of such stop order or other suspension
of effectiveness. The weekly liquidated damages payable by the Company to the
Holders as a result of the imposition of a stop order or such other suspension
of the effectiveness of the Shelf Registration Statement during the Target
Effective Period shall increase by an amount
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equal to $1.00 per 1,000 shares of the Registrable Securities two weeks after
the stop order was imposed or the effectiveness of the Shelf Registration
Statement was otherwise suspended and shall thereafter increase by an amount
equal to $1.00 per 1,000 shares of the Registrable Securities at the end of each
subsequent two week period for so long as such stop order remains in effect or
the effectiveness of the Shelf Registration Statement continues to be suspended.
For purposes of the two preceding sentences, the Holders will not be entitled to
receive liquidated damages under this Agreement during a Suspension Period (as
hereinafter defined) except to the extent permitted by Section 5 of this
Agreement. The Registrable Securities with respect to which liquidated damages
shall accrue and be payable in accordance with this Section 2(c) shall be those
Registrable Securities held by the Holders which are included or proposed to be
included in the Shelf Registration Statement.
The liquidated damages payable by the Company to the Holders pursuant to
this Section 2(c) shall be deemed to commence accruing on the day on which the
event triggering such liquidated damages occurs. Such liquidated damages shall
cease to accrue (i) with respect to the liquidated damages payable as a result
of the Company's failure to file the Shelf Registration Statement on or prior to
the Required Filing Date, on the day after the Shelf Registration Statement is
filed, (ii) with respect to the liquidated damages payable as a result of the
Company's failure to have the Shelf Registration Statement declared effective
on or prior to the Target Effective Date, on the day after the Shelf
Registration Statement is declared effective, or (iii) with respect to the
liquidated damages payable as a result of the imposition of a stop order or the
suspension for any other reason of the effectiveness of the Shelf Registration
Statement, on the day after the stop order is withdrawn or the effectiveness of
the Shelf Registration Statement is otherwise reinstated.
Notwithstanding the foregoing, if the sole reason why (i) the Company has
not filed the Shelf Registration Statement on or before the Required Filing Date
and/or (ii) the Shelf Registration Statement has not become effective on or
before the Target Effective Date, is because the Holders did not provide the
Company with information which is required to be disclosed in the Shelf
Registration Statement and which the Company requested the Holders to so provide
in writing at least 15 days prior to the Required Filing Date and/or the Target
Effective Date, as the case may be, the Company's obligation to pay liquidated
damages with respect to such late filing or such late declaration of
effectiveness will not begin to accrue until five days after the Holders have
provided such information to the Company.
The Company shall pay the liquidated damages due with respect to any
Registrable Securities at the end of each week during which such liquidated
damages accrue and, to the extent such liquidated damages are not paid when due,
shall thereafter accrue dividends at a rate equal to the U.S. prime rate plus 5%
per annum. Liquidated damages shall be paid to the Holders of Registrable
Securities entitled to receive such liquidated damages by wire transfer in
immediately available funds to the accounts designated by such Holders.
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The parties hereto agree that the liquidated damages provided for in this
Section 2 constitute a reasonable estimate as of the date hereof of the damages
that will be suffered by Holders of Registrable Securities by reason of the
failure of the Shelf Registration Statement to be filed, to be declared
effective and/or to remain effective, as the case may be, in accordance with
this Agreement. However, the right of the Holders to be paid the liquidated
damages provided for in this Section 2(c) is not intended to be and shall not be
construed or deemed to be an exclusive remedy, it being understood that the
Holders shall have the full right to pursue all available remedies at law or in
equity for any breach by the Company of any of its obligations under this
Agreement.
(d) Effective Registration. A registration under this Section 2 will
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not be deemed to have been effected unless the Shelf Registration Statement with
respect thereto has been declared effective by the Commission and the Company
has complied in all material respects with its obligations under this Agreement
with respect thereto; provided, however, that if, after the Shelf Registration
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Statement has been declared effective, the offering of Registrable Securities
pursuant to such Shelf Registration Statement is interfered with by any stop
order, injunction or other order or requirement of the Commission or any other
governmental agency or court, such Shelf Registration Statement will be deemed
not to have become effective during the period of such interference (and
liquidated damages shall accrue and be payable under Section 2(c)) until the
offering of Registrable Securities pursuant to such Shelf Registration Statement
may legally resume. If a registration requested pursuant to this Section 2 is
deemed not to have been effected, then the Company shall continue to be
obligated to effect a registration pursuant to this Section 2.
(e) Selection of Underwriter. If the Holders of a majority of the
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Registrable Securities so elect, the offering of Registrable Securities pursuant
to a Shelf Registration Statement shall be in the form of an underwritten
offering. If they so elect, the Holders participating in such Shelf
Registration Statement shall select one or more nationally recognized firms of
investment bankers to act as the book-running managing underwriter or
underwriters in connection with such offering and shall select any additional
investment bankers and managers to be used in connection with the offering;
provided, however, that such selection shall be subject to the consent of the
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Company, which consent shall not be unreasonably withheld.
SECTION 3. DEMAND REGISTRATION.
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(a) Request for Registration. At any time following the Required
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Filing Date when a Shelf Registration Statement is not effective pursuant to
Section 2 hereof, the Holders of Registrable Securities constituting at least
majority of all Registrable Securities at the time may request, in writing (a
"Demand Request"), that the Company prepare and file with the Commission a
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"shelf" registration statement (the "Demand Registration Statement") on the
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appropriate form for an offering to be made on a continuous basis pursuant to
Rule 415 under the Securities Act (or any successor rule or similar provision
then in effect); provided, however, that the Company shall not be required to
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file such Demand Registration Statement unless, in the reasonable opinion of
legal counsel to the Holders so requesting, such registration is required in
order for such Holders
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to transfer their Registrable Securities and deliver unlegended certificates to
the purchaser(s) thereof; provided, further, that, subject to Section 5(e), the
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Company shall not be required to effect more than two Demand Registration
Statements. Each Demand Request so made by a Holder shall specify the number of
Registrable Securities proposed to be sold. Subject to Section 3(g), the Company
shall file the Demand Registration Statement within 30 days after receiving a
Demand Request (the "Target Filing Date") and shall use best efforts to cause
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the same to be declared effective by the Commission as promptly as practicable
after such filing and to keep such Demand Registration Statement continuously
effective for a period beginning on the date such Demand Registration Statement
is declared effective and ending on the earlier of (i) the date which is
[twelve] months following such date, or (ii) the date on which all Registrable
Securities covered by such Demand Registration Statement have been disposed of
pursuant thereto.
(b) Supplements; Amendments. The Company agrees, if necessary, to
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supplement or amend the Demand Registration Statement, as required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Demand Registration Statement or by the Securities Act or as
requested (which request shall result in the filing of a supplement or
amendment) by any Holder of Registrable Securities to which such Demand
Registration Statement relates, and the Company agrees to furnish to the
Holders, Holders' Counsel and any managing underwriter copies of any such
supplement or amendment prior to its being used and/or filed with the
Commission.
(c) Rights of Nonrequesting Holders. Upon receipt of any Demand
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Request, the Company shall promptly (but in any event within 10 days following
the receipt thereof) give written notice of such proposed Demand Registration
Statement to all other Holders of Registrable Securities. Each of such Holders
shall have the right, exercisable by written notice to the Company within 15
days of their receipt of the Company's notice, to elect to include in such
Demand Registration Statement such portion of each such Holder's Registrable
Securities as each such Holder may request. All Holders requesting to have
their Registrable Securities included in a Demand Registration Statement in
accordance with the preceding sentence (including the Holder or Holders giving
the Demand Request) shall be deemed "Requesting Holders" for purposes of this
Section 3.
(d) Priority with Respect to Demand Registration Statement. No
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Securities to be sold for the account of any Person (including the Company)
other than a Requesting Holder shall be included in a Demand Registration
Statement unless the managing underwriter or underwriters, if any, shall advise
the Company or the Requesting Holders in writing that the inclusion of such
Securities will not materially and adversely affect the price at which the
Securities included in such Demand Registration Statement may be sold or the
success of the offering (a "Material Adverse Effect"). Furthermore, in the
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event the managing underwriter or underwriters, if any, shall advise the Company
or the Requesting Holders that even after exclusion of all Securities of other
Persons pursuant to the immediately preceding sentence, the amount of
Registrable Securities proposed to be included in such Demand Registration
Statement by Requesting Holders is sufficiently large to cause a Material
Adverse Effect, the number of
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Registrable Securities of the Requesting Holders to be included in such Demand
Registration Statement shall equal the number of shares which the Company is so
advised can be sold in such offering without a Material Adverse Effect and the
number of shares to be excluded from such Demand Registration Statement such
shares shall be allocated first to any Requesting Holders who requested
inclusion of their Registrable Securities pursuant to Section 3(c) hereof and
then, if an additional reduction is required, to all other requesting Holders,
in each case pro rata among such Requesting Holders on the basis of the number
of shares of Registrable Securities requested to be included in such
registration by each such Requesting Holder.
(e) Effective Registration. A registration statement will not be
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deemed to have been effected as a Demand Registration Statement unless such
Demand Registration Statement has been declared effective by the Commission and
the Company has complied in all material respects with its obligations under
this Agreement with respect thereto; provided, however, that if, after a Demand
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Registration Statement has been declared effective, the offering of Registrable
Securities pursuant to such Demand Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the Commission or
any other governmental agency or court, such Demand Registration Statement will
be deemed not to have become effective during the period of such interference
until the offering of Registrable Securities pursuant to such Demand
Registration Statement may legally resume. If a Demand Registration Statement
is deemed not to have been effected, then the Company shall continue to be
obligated to effect such Demand Registration Statement pursuant to this Section
3.
(f) Selection of Underwriter. If the Holders of a majority of the
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Registrable Securities requested to be included in such Demand Registration
Statement so elect, the offering of Registrable Securities pursuant to such
Demand Registration Statement shall be in the form of an underwritten offering.
If they so elect, the Holders of a majority of the Registrable Securities
requested to be included in such Demand Registration Statement shall select one
or more nationally recognized firms of investment bankers to act as the book-
running managing underwriter or underwriters in connection with such offering
and shall select any additional investment bankers and managers to be used in
connection with the offering; provided, however, that such selection shall be
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subject to the consent of the Company, which consent shall not be unreasonably
withheld.
(g) Deferral of Filing. The Company may defer the filing (but not the
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preparation) of a Demand Registration Statement required by Section 3(a) until a
date not later than 30 days after the Target Filing Date (or, if longer, 30 days
after the effective date of the registration statement contemplated by clause
(ii) below) if (i) at the time the Company receives the Demand Request, the
Company or any of its Subsidiaries is engaged in confidential negotiations or
other confidential business activities, disclosure of which would be required in
such Demand Registration Statement (but would not be required if such Demand
Registration Statement were not filed), and the Board of Directors of the
Company determines in good faith that such disclosure would be materially
detrimental to the Company and its stockholders or would have a material adverse
effect on any such confidential negotiations or other confidential business
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activities, or (ii) prior to receiving the Demand Request, the Board of
Directors had determined to effect a registered underwritten public offering of
the Company's equity securities for the Company's account and the Company had
taken substantial steps (including, but not limited to, selecting a managing
underwriter for such offering) and is proceeding with reasonable diligence to
effect such offering. A deferral of the filing of a Demand Registration
Statement pursuant to this Section 3(g) shall be lifted, and the requested
Demand Registration Statement shall be filed forthwith, if, in the case of a
deferral pursuant to clause (i) of the preceding sentence, the negotiations or
other activities are disclosed or terminated, or, in the case of a deferral
pursuant to clause (ii) of the preceding sentence, the proposed registration for
the Company's account is abandoned. In order to defer the filing of a Demand
Registration Statement pursuant to this Section 3(g), the Company shall promptly
(but in any event within 10 days), upon determining to seek such deferral,
deliver to each Holder a certificate signed by an executive officer of the
Company stating that the Company is deferring such filing pursuant to this
Section 3(g) and an approximation of the anticipated delay. The Company may
defer the filing of a particular Demand Registration Statement pursuant to this
Section 3(g) only once.
SECTION 4. PIGGY-BACK REGISTRATION.
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(a) Request for Registration. Each time the Company proposes to file
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a registration statement under the Securities Act with respect to an offering by
the Company for its own account or for the account of any of its securityholders
of any class of equity security (other than (i) a registration statement on Form
S-4 or S-8 (or any substitute form that is adopted by the Commission), (ii) a
registration statement filed in connection with an exchange offer or the
offering of securities solely to the Company's existing securityholders, or
(iii) a demand or requested registration statement filed pursuant to the terms
of any other registration rights granted by the Company pursuant to an agreement
to which the Company is a party prior to the date hereof, which agreement,
pursuant to the terms thereof, prohibits or otherwise restricts the inclusion in
such demand or requested registration statement the securities of any other
securityholder of the Company other than the party making such demand or
request), then the Company shall give written notice of such proposed filing to
each Holder of Registrable Securities as soon as practicable (but in no event
less than 30 days before the anticipated filing date), and such notice shall
offer such Holder the opportunity to register such number of shares of
Registrable Securities as each such Holder may request (which request must be
made in writing and shall specify the Registrable Securities intended to be
disposed of by such Holder and the intended method of distribution thereof) (a
"Piggy-Back Registration"). The Company shall permit, or, if the offering
relating to a Piggy-Back Registration is an underwritten offering, shall use its
best efforts to cause the managing underwriter or underwriters of such proposed
underwritten offering to permit, the Registrable Securities requested to be
included in such Piggy-Back Registration to be included on the same terms and
conditions as any similar securities of the Company or any other securityholder
included therein and shall permit, or use its best efforts to cause such
managing underwriter or underwriters to permit, the sale or other disposition of
such Registrable Securities in accordance with such Holder's intended method of
distribution thereof. Any Holder shall have the right to withdraw its request
for inclusion of its Registrable
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Securities in any registration statement pursuant to this Section 4 by giving
written notice to the Company of such withdrawal. The Company may withdraw a
Piggy-Back Registration at any time prior to the time it becomes effective,
provided that the Company shall give immediate notice of such withdrawal to the
Holders who requested Registrable Securities to be included in such Piggy-Back
Registration and shall reimburse such Holders for all reasonable out-of-pocket
expenses (including counsel fees and expenses) incurred prior to such
withdrawal.
(b) Reduction of Offering. In connection with an underwritten offering
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where Holders have requested a Piggy-Back Registration pursuant to Section 3(a),
the Company shall use its best efforts to cause all Registrable Securities
requested to be included in such Piggy-Back Registration to be included as
provided in Section 4(a). If the managing underwriter or underwriters of any
such Piggy-Back Registration which is an underwritten offering have informed, in
writing, the Holders requesting inclusion of Registrable Securities in such
offering that it is their opinion that the total number of shares which the
Company, Holders of Registrable Securities and any other Persons participating
in such registration intend to include in such offering is such as to materially
and adversely affect the success of such offering, then the number of shares to
be offered for the account of all Persons (other than the Company) participating
in such Piggy-Back Registration shall be reduced or limited (to zero if
necessary) pro rata in proportion to the respective number of shares requested
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to be included in such offering by such Persons to the extent necessary to
reduce the total number of shares requested to be included in such offering to
the number of shares, if any, recommended by such managing underwriter or
underwriters.
Although the specific shares of Common Stock disposed of pursuant to a
Piggy-Back Registration will cease to be Registrable Securities, the mere
registration of Registrable Securities under this Section 4 shall not relieve
the Company of its obligation to effect or maintain a Shelf Registration
Statement pursuant to Section 2 or a Demand Registration Statement pursuant to
Section 3. No failure by the Holders to elect a Piggy-Back Registration under
this Section 4 or to complete the sale of Registrable Securities pursuant to the
registration statement effected in connection therewith, and no withdrawal of
Registrable Securities from a Piggy-Back Registration, shall relieve the Company
of any other obligation under this Agreement, including without limitation, the
Company's obligations under Sections 6 and 7.
SECTION 5. REGISTRATION PROCEDURES.
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In connection with the obligations of the Company to effect or cause the
registration of any Registrable Securities pursuant to the terms and conditions
of this Agreement, the Company shall use its best efforts to effect the
registration and sale of such Registrable Securities in accordance with the
intended method of distribution thereof as quickly as practicable, and in
connection therewith:
(a) The Company shall prepare and file with the Commission a
Registration Statement on the appropriate form under the Securities Act,
which Registration Statement
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shall comply as to form in all material respects with the requirements of
the applicable form and include all financial statements required by the
Commission to be filed therewith, and use its best efforts to cause such
Registration Statement to become effective and remain effective in
accordance with the provisions of this Agreement; provided, however, that,
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at least ten Business Days prior to filing a Registration Statement or
Prospectus or any amendments or supplements thereto, including documents
incorporated by reference after the initial filing of the Registration
Statement, the Company shall furnish to the Holders of the Registrable
Securities covered by such Registration Statement, Holders' Counsel and the
underwriters, if any, draft copies of all such documents proposed to be
filed, which documents will be subject to the review of Holders' Counsel
and the underwriters, if any, and the Company will not, unless required by
law or this Agreement, file any Registration Statement or amendment thereto
or any Prospectus or any supplement thereto to which Holders holding a
majority in interest of the Registrable Securities covered by such
Registration Statement or the underwriters with respect to such Securities,
if any, shall object; provided, however, that any such objection to the
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filing of any Registration Statement or amendment thereto or any Prospectus
or supplement thereto shall be made by written notice (the "Objection
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Notice") delivered to the Company no later than ten Business Days after the
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party or parties asserting such objection (the "Objecting Party") receives
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draft copies of the documents that the Company proposes to file. The
Objection Notice shall set forth the objections and the specific areas in
the draft documents where such objections arise. The Company shall have
five Business Days after receipt of the Objection Notice to correct such
deficiencies to the satisfaction of the Objecting Party, and will notify
each Holder of any stop order issued or threatened by the Commission in
connection therewith and shall use its best efforts to prevent the entry of
such stop order or, if entered, to have such stop order withdrawn at the
earliest possible moment.
(b) The Company shall promptly prepare and file with the Commission
such amendments and post-effective amendments to the Registration Statement
as may be necessary to keep such Registration Statement effective for as
long as the Company is required to keep such Registration Statement
effective pursuant to the terms hereof; shall cause the Prospectus to be
supplemented by any required Prospectus supplement, and, as so
supplemented, to be filed pursuant to Rule 424 under the Securities Act;
and shall comply with the provisions of the Securities Act applicable to it
with respect to the disposition of all Registrable Securities covered by
such Registration Statement during the applicable period in accordance with
the intended methods of disposition by the Holders set forth in such
Registration Statement or amendment thereto or such Prospectus or
supplement thereto;
(c) The Company shall promptly furnish to any Holder and the
underwriters, if any, without charge, such number of conformed copies of
such Registration Statement and any post-effective amendment thereto and
such number of copies of the Prospectus (including each preliminary
Prospectus) and any amendments or supplements thereto, any documents
incorporated by reference therein and such other documents as any such
Holder
11
or underwriter may request in order to facilitate the public sale or other
disposition of the Registrable Securities being sold by such Holder.
(d) The Company shall, on or prior to the date on which a Registration
Statement is declared effective, (i) use its best efforts to register or
qualify the Registrable Securities covered by such Registration Statement
under the securities or "blue sky" laws of each of the 50 states of the
United States (or such jurisdictions as any Holder, Holders' counsel or
underwriter may request) or obtain appropriate exemptions therefrom; (ii)
do any and all other acts and things which may be necessary or advisable to
enable the Holders of Registrable Securities included in such Registration
Statement to consummate the disposition of such Registrable Securities in
accordance with their intended method of distribution thereof; (iii) use
its best efforts to keep each such state securities or "blue sky"
registration or qualification (or exemption therefrom) effective during the
period in which the Company is required to keep the Registration Statement
effective; and (iv) do any and all other acts or things which may be
necessary or advisable to enable the Holders of Registrable Securities
included in such Registration Statement to complete the disposition in such
jurisdictions of such Registrable Securities in accordance with their
intended method of distribution thereof; provided, however, that the
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Company shall not be required (A) to qualify to do business in any
jurisdiction where it would not otherwise be required to so qualify but for
this Section 5(d) or (B) to file any general consent to service of process.
(e) The Company shall use its best efforts to cause the Registrable
Securities covered by a Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company to enable
the Holders to consummate the disposition of such Registrable Securities in
accordance with their intended method of distribution thereof.
(f) The Company shall promptly notify each Holder, Holders' Counsel
and any underwriter and (if requested by any such Person) confirm such
notice in writing, (i) when a Registration Statement or a Prospectus or any
post-effective amendment or any Prospectus supplement has been filed and,
with respect to a Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the Commission
or any state securities authority for amendments and supplements to a
Registration Statement and Prospectus or for additional information after
the Registration Statement has become effective, (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of a
Registration Statement or the initiation or threatening of any proceedings
for that purpose, (iv) of the issuance by any state securities commission
or other regulatory authority of any order suspending the registration or
qualification or exemption from registration or qualification of any of the
Registrable Securities under state securities or "blue sky" laws or the
initiation of any proceedings for that purpose, (v) if, between the
effective date of a Registration Statement and the closing of any sale of
Registrable Securities covered thereby, the representations and warranties
of the Company
12
contained in any underwriting agreement, securities sales agreement or
other similar agreement, if any, relating to the offering of such
Registrable Securities cease to be true and correct in all material
respects, and (vi) of the happening of any event which makes any statement
of a material fact made in a Registration Statement or related Prospectus
untrue or which requires the making of any changes in such Registration
Statement or Prospectus so that such Registration Statement or Prospectus
will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and, as promptly as practicable thereafter, prepare
and file an amendment to such Registration Statement with the Commission
and furnish to the Holders and any underwriter a supplement or amendment to
such Prospectus so that, as thereafter deliverable to the purchasers of
such Registrable Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
(g) The Company shall make generally available to the Holders an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than 30 days after the end of the 12-month period
beginning with the first day of the Company's first fiscal quarter
commencing after the effective date of a Registration Statement, which
earnings statement shall cover said 12-month period, and which requirement
will be deemed to be satisfied if the Company timely files complete and
accurate information on Forms 10-Q, 10-K and 8-K under the Exchange Act and
otherwise complies with Rule 158 under the Securities Act.
(h) The Company shall promptly use its best efforts to prevent the
issuance of any order suspending the effectiveness of a Registration
Statement, and, if any such order suspending the effectiveness of a
Registration Statement is issued, shall promptly use its best efforts to
obtain the withdrawal of such order at the earliest possible moment.
(i) The Company shall, if requested by the managing underwriter or
underwriters, if any, Holders' Counsel, or any Holder promptly incorporate
in a Prospectus supplement or post-effective amendment such information as
such managing underwriter or underwriters or Holder or Holders' Counsel
requests to be included therein, including, without limitation, with
respect to the Registrable Securities being sold by such Holder to such
underwriter or underwriters, the purchase price being paid therefor by such
underwriter or underwriters and any other terms of an underwritten offering
of the Registrable Securities to be sold in such offering, and the Company
shall promptly make all required filings of such Prospectus supplement or
post-effective amendment.
(j) The Company shall, as promptly as practicable after the filing
with the Commission of any document which is incorporated by reference into
a Registration
13
Statement (in the form in which it was incorporated), deliver a copy of
each such document to each of the Holders and to Holders' Counsel.
(k) The Company shall cooperate with the Holders and the managing
underwriter or underwriters, if any, to facilitate the timely preparation
and delivery of certificates (which shall not bear any restrictive legends
unless required under applicable law) representing Registrable Securities
sold under a Registration Statement to the purchasers thereof, and enable
such Registrable Securities to be in such denominations and registered in
such names as the managing underwriter or underwriters, if any, or such
Holders may request and keep available and make available to the Company's
transfer agent prior to the effectiveness of such Registration Statement a
supply of such certificates.
(l) The Company shall enter into such customary agreements (including,
if applicable, an underwriting agreement in customary form) and take such
other actions as the Holders or the underwriters retained by the Holders
participating in an underwritten public offering, if any, may request in
order to expedite or facilitate the disposition of Registrable Securities
(the Holders may, at their option, require that any or all of the
representations, warranties and covenants of the Company to or for the
benefit of any underwriters also be made to and for the benefit of the
Holders).
(m) The Company shall promptly make available to each Holder, any
underwriter participating in any disposition of Registrable Securities
pursuant to a Registration Statement, and any attorney, accountant or other
agent or representative retained by any such Holder or underwriter
(collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company (collectively,
the "Records"), as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information requested by any such
Inspector in connection with such Registration Statement.
(n) The Company shall furnish to each Holder of Registrable Securities
included in such offering and to each underwriter, if any, a signed
counterpart, addressed to such Holder or underwriter, of (i) an opinion or
opinions of counsel to the Company, and (ii) a comfort letter or comfort
letters from the Company's independent public accountants, each in
customary form and covering matters of the type customarily covered by
opinions or comfort letters, as the case may be.
(o) The Company shall use its best efforts to cause the Registrable
Securities included in a Registration Statement (if the Company and the
Registrable Securities so qualify) (i) to be listed on each national
securities exchange, if any, on which similar securities issued by the
Company are then listed, or (ii) if similar securities of the Company are
not then listed, to be authorized for quotation or listing, as applicable,
on
14
the New York Stock Exchange or The Nasdaq Stock Market, Inc.'s ("Nasdaq")
National Market or Small-Cap Market.
(p) The Company shall provide a CUSIP number for all Registrable
Securities covered by a Registration Statement not later than the effective
date of such Registration Statement.
(q) The Company shall cooperate with each Holder and each underwriter
participating in the disposition of Registrable Securities and their
respective counsel in connection with any filings required to be made with
the National Association of Securities Dealers, Inc. ("NASD").
(r) The Company shall, during the period when the Prospectus is
required to be delivered under the Securities Act, promptly file all
documents required to be filed with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act.
(s) The Company shall appoint or maintain a transfer agent and
registrar for all Registrable Securities covered by a Registration
Statement not later than the effective date of such Registration Statement.
(t) In connection with an underwritten offering, the Company shall
participate, to the extent reasonably requested by the managing underwriter
for the offering or the Holders, in customary efforts to sell the
securities being offered, including without limitation, participating in
"road shows", provided, however, that the selling Holder or Holders shall
reimburse the Company for its reasonable out-of-pocket expenses actually
incurred at the request of such selling Holder or Holders in connection
with such selling efforts.
(u) If a Holder proposes to sell a block of Registrable Securities
with a value in excess of $20 million, the Company shall make members of
the management of the Company available for reasonable selling efforts,
including senior management attendance at "road shows", provided, however,
that the selling Holder or Holders shall reimburse the Company for its
reasonable out-of-pocket expenses actually incurred at the request of such
selling Holder or Holders in connection with such selling efforts.
(v) If the Registrable Securities are of a class of securities that is
listed on a national securities exchange, the Company shall file copies of
any Prospectus with such exchange in compliance with Rule 153 under the
Securities Act so that the Holders shall benefit from the prospectus
delivery procedures described therein.
In the case of a Shelf Registration Statement, each Holder, upon receipt of
any notice (a "Suspension Notice") from the Company of the happening of any
event of the kind described in Section 5(f)(vi), shall forthwith discontinue
disposition of the Registrable Securities pursuant to
15
the Shelf Registration Statement covering such Registrable Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(f) or until such Holder is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be resumed, and such
Holder has received copies of any additional or supplemental filings which are
incorporated by reference in the Prospectus, and, if so directed by the Company,
such Holder will, or will request the managing underwriter or underwriters, if
any, to, deliver to the Company (at the Company's expense) all copies, other
than permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice; provided, however, that the Company shall not give a Suspension Notice
-------- -------
until after the Shelf Registration Statement has been declared effective and
shall not give more than one Suspension Notice during any period of 12
consecutive months and in no event shall the period from the date on which any
Holder receives a Suspension Notice to the date on which any Holder receives
either the Advice or copies of the supplemented or amended Prospectus
contemplated by Section 5(f) (the "Suspension Period") exceed 30 days. In the
event that the Company shall give any Suspension Notice, (i) the Company shall
use its best efforts and take such actions as are reasonably necessary to render
the Advice and end the Suspension Period as promptly as practicable and (ii) the
time periods for which a Shelf Registration Statement is required to be kept
effective pursuant to Section 2 hereof shall be extended by the number of days
during the Suspension Period. If any Suspension Period exceeds 30 days or more
than one Suspension Notice is given during any period of 12 consecutive months,
the Company shall pay liquidated damages to each Holder of Registrable
Securities in an amount equal to $10.00 per 1,000 shares of the Registrable
Securities included in the Shelf Registration Statement per week beginning on
the 31st day of such Suspension Period or the date of such additional Suspension
Notice, as the case may be. The weekly liquidated damages payable by the
Company to the Holders as a result of the continuance of a Suspension Period
beyond 30 days or as a result of the giving of more than one Suspension Notice
during any 12 consecutive month period shall increase by an amount equal to
$1.00 per 1,000 shares of the Registrable Securities two weeks after the event
triggering such liquidated damages and shall thereafter increase by an amount
equal to $1.00 per 1,000 shares of the Registrable Securities at the end of each
subsequent two week period for so long as the event triggering such liquidated
damages has not been eliminated. The Company shall pay the liquidated damages
due with respect to any Registrable Securities at the end of each week during
which such damages accrue. Liquidated damages shall be paid to the Holders of
Registrable Securities entitled to receive such liquidated damages by wire
transfer in immediately available funds to the accounts designated by such
Holders.
If any Registration Statement refers to any Holder by name or otherwise as
the holder of any securities of the Company, then such Holder shall have the
right to require (i) the insertion therein of language, in form and substance
reasonably satisfactory to such Holder, to the effect that the holding by such
Holder of such securities is not to be construed as a recommendation by such
Holder of the investment quality of the Company's securities covered thereby and
that such holding does not imply that such Holder will assist in meeting any
future financial requirements of the Company, or (ii) in the event that such
reference to such Holder by name or otherwise is
16
not required by the Securities Act or any similar Federal or state securities or
"blue sky" statute and the rules and regulations thereunder then in force, the
deletion of the reference to such Holder.
SECTION 6. REGISTRATION EXPENSES. Any and all expenses incident to the
---------------------
Company's performance of or compliance with this Agreement, including without
limitation, all Commission and securities exchange, Nasdaq or NASD registration,
listing and filing fees, all fees and expenses incurred in connection with
compliance with state securities or "blue sky" laws (including reasonable fees
and disbursements of counsel for any underwriters or Holder in connection with
the state securities or "blue sky" qualifications of the Registrable
Securities), printing expenses, messenger and delivery expenses, internal
expenses (including, without limitation, all salaries and expenses of the
Company's officers and employees performing legal or accounting duties), all
expenses for word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, the fees and
expenses incurred in connection with the listing of the Registrable Securities,
the fees and disbursements of counsel for the Company and of the independent
certified public accountants of the Company (including the expenses of any
comfort letters or costs associated with the delivery by independent certified
public accountants of a comfort letter or comfort letter requested pursuant to
Section 5(n), Securities Act liability insurance (if the Company elects to
obtain such insurance), the reasonable fees and expenses of any special experts
or other Persons retained by the Company in connection with any registration,
the reasonable fees and disbursements of Holders' Counsel and any reasonable
out-of-pocket expenses of the Holders and their agents, including any reasonable
travel costs (but excluding underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of Registrable Securities and
fees and disbursements of underwriters if any such sale or disposition is
effected pursuant to an underwritten offering initiated by the Holders) (all
such expenses being herein called "Registration Expenses"), will be borne by the
Company whether or not the Shelf Registration Statement or Piggy-Back
Registration to which such expenses relate becomes effective.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
(a) Indemnification by the Company. The Company agrees to indemnify
------------------------------
and hold harmless, to the full extent permitted by law, each Holder, its
partners, officers, directors, trustees, stockholders, employees, agents and
investment advisers, and each Person who controls such Holder within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act, or
is under common control with, or is controlled by, such Holder, together with
the partners, officers, directors, trustees, stockholders, employees, agents and
investment advisors of such controlling Person (collectively, the "Controlling
-----------
Persons"), from and against all losses, claims, damages, liabilities and
-------
expenses (including, without limitation, any legal or other fees and expenses
incurred by any Holder or any such Controlling Person in connection with
defending or investigating any action or claim in respect thereof)
(collectively, the "Damages") to which such Holder, its partners, officers,
-------
directors, trustees, stockholders, employees, agents and
17
investment advisers, and any such Controlling Person, may become subject under
the Securities Act or otherwise, insofar as such Damages (or proceedings in
respect thereof) arise out of or are based upon any untrue or alleged untrue
statement of material fact contained in any Registration Statement (or any
amendment thereto) pursuant to which Registrable Securities were registered
under the Securities Act, including all documents incorporated therein by
reference, or are caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or are caused by any
omission or alleged omission to state therein a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the Company shall not be liable
-------- -------
for Damages to any Holder under this Section 6(a) to the extent that any such
Damages (i) arise out of or are based upon any such untrue statement or omission
which is based upon information relating to such Holder furnished in writing to
the Company by such Holder expressly for use in any such Registration Statement
(or any amendment thereto) or Prospectus (or amendment or supplement thereto);
or (ii) were caused by the fact that such Holder sold Securities to a Person as
to whom it shall be established that there was not sent or given, or deemed sent
or given pursuant to Rule 153 under the Securities Act, at the time of or prior
to the written confirmation of such sale, a copy of the Prospectus as then
amended or supplemented if, and only if, (a) the Company has previously
furnished copies of such amended or supplemented Prospectus to such Holder and
(b) such Damages were caused by any untrue statement or omission or alleged
untrue statement or omission contained in the Prospectus so delivered which was
corrected in such amended or supplemented Prospectus. In connection with an
underwritten offering, the Company will indemnify the underwriters thereof,
their officers and directors and each Person who controls such underwriters
(within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities except with respect to
information provided by the underwriter specifically for inclusion therein.
(b) Indemnification by the Holders. Each Holder agrees, severally and
------------------------------
not jointly, to indemnify and hold harmless the Company, its directors and
officers and each Person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against all Damages to the same extent as the foregoing indemnity from the
Company to such Holder, but only to the extent such Damages arise out of or are
based upon any untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) or Prospectus (or any amendment or
supplement thereto) or are caused by any omission to state therein a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, which untrue statement or omission
is based upon information relating to such Holder furnished in writing to the
Company by such Holder expressly for use in any such Registration Statement (or
any amendment thereto) or any such Prospectus (or any amendment or supplement
thereto); provided, however, that such Holder shall not be obligated to provide
-------- -------
such indemnity to the extent that such
18
Damages result from the failure of the Company to promptly amend or take action
to correct or supplement any such Registration Statement or Prospectus on the
basis of corrected or supplemental information furnished in writing to the
Company by such Holder expressly for such purpose. In no event shall the
liability of any Holder of Registrable Securities hereunder be greater in amount
than the amount of the proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
(c) Indemnification Procedures. In case any proceeding (including any
--------------------------
governmental investigation) shall be instituted involving any Person in respect
of which indemnity may be sought pursuant to either paragraph (a) or (b) above,
such Person (the "indemnified party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceedings
and shall pay the fees and disbursements of such counsel relating to such
proceeding. The failure of an indemnified party to notify the indemnifying
party with respect to a particular proceeding shall not relieve the indemnifying
party from any obligation or liability (i) which it may have pursuant to this
Agreement if the indemnifying party is not materially prejudiced by such failure
to so notify it or (ii) which it may otherwise have pursuant to this Agreement.
The failure of an indemnified party to notify the indemnifying party with
respect to a particular proceeding shall not relieve the indemnifying party from
any obligation or liability (i) which it may have pursuant to this Agreement if
the indemnifying party is not substantially prejudiced by such failure to so
notify it or (ii) which it may have otherwise than pursuant to this Agreement.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, or (ii) the
indemnifying party fails promptly to assume the defense of such proceeding or
fails to employ counsel reasonably satisfactory to such indemnified party, or
(iii) (A) the named parties to any such proceeding (including any impleaded
parties) include both such indemnified party or an Affiliate of such indemnified
party and any indemnifying party or an Affiliate of such indemnifying party, (B)
there may be one or more defenses available to such indemnified party or any
Affiliate of such indemnified party that are different from or additional to
those available to any indemnifying party or any Affiliate of any indemnifying
party and (C) such indemnified party shall have been advised by such counsel
that there may exist a conflict of interest between or among such indemnified
party or any Affiliate of such indemnified party and such indemnifying party or
any Affiliate of such indemnifying party, in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ
separate counsel of its choice at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the indemnifying party, it being
understood, however, that unless there exists a conflict among indemnified
parties, the indemnifying parties shall not, in connection with any one such
proceeding or separate but substantially similar or related proceedings in the
same jurisdiction, arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm
19
of attorneys (together with appropriate local counsel) at any time for such
indemnified parties. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but, if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify each indemnified party from and against
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of each indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which such
indemnified party is a party, and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on all claims that are the subject
matter of such proceeding with no payment by such indemnified party of
consideration in connection with such settlement.
(d) Contribution. If the indemnification from the indemnifying
------------
party provided for in this Section 7 is found, pursuant to a final judicial
determination not subject to appeal, to be unavailable to an indemnified party
hereunder or insufficient in respect of any Damages incurred by such indemnified
party, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the Damages paid or payable by such indemnified party
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified parties in connection with the actions or
omissions that resulted in such Damages, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether any
action or omission in question, including any untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact,
has been made by, or relates to information supplied by, such indemnifying party
or indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the Damages referred to above shall be
deemed to include, subject to the limitations set forth in Section 7(c), any
legal or other expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 7(d), no underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public (less any underwriting discounts or
commissions) exceeds the amount of any damages which such underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no selling Holder shall be
required to contribute any amount in excess of the amount by which the total net
proceeds received by such selling Holder with respect to Registrable Securities
sold by such selling Holder exceeds the amount of any damages which such selling
Holder has otherwise been required to pay by reason of such untrue statement or
alleged untrue statement or omission or alleged omission. Each Holder's
obligation to contribute pursuant to this Section 7(d) is several and not joint
and shall be
20
determined by reference to the proportion that the proceeds of the offering
received by such Holder bears to the total proceeds of the offering received by
all the Holders. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies that may otherwise be available to
any indemnified party at law or in equity.
Notwithstanding the foregoing, if indemnification is available under
paragraph (a) or (b) of this Section 7, the indemnifying parties shall indemnify
each indemnified party to the full extent provided in such paragraphs without
regard to the relative fault of said indemnifying party or indemnified party or
any other equitable consideration provided for in this Section 7(d).
SECTION 8. RULE 144. The Company covenants that it will file any
---------
reports required to be filed by it under the Securities Act and the Exchange
Act, and the rules and regulations adopted by the Commission thereunder (or, if
the Company is not required to file such reports, it will, upon the request of
any Holder, make publicly available other information so long as necessary to
permit sales of the Registrable Securities under Rule 144 under the Securities
Act), and it will take such further action as any Holder may request, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (b) any successor rule or similar
provision or regulation hereafter adopted by the Commission. Upon the request
of any Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
SECTION 9. MISCELLANEOUS.
-------------
(a) No Inconsistent Agreements. The Company has not entered into nor
--------------------------
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
other issued and outstanding securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in interest of the outstanding Registrable Securities
affected by such amendment, modification, supplement, waiver or consent;
provided, however, that, no amendment, modification, supplement, waiver or
-------- -------
consent to any departure from the provisions of Section 5 hereof (other than any
immaterial amendment,
21
modification, supplement, waiver or consent) shall be effective as against any
Holder of Registrable Securities unless consented to in writing by such Holder.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by telecopier, registered or certified
mail (return receipt requested), postage prepaid or courier to the parties at
their respective addresses set forth on the signature pages hereof (or at such
other address for any party as shall be specified by like notice, provided that
notices of a change of address shall be effective only upon receipt thereof).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; by confirmed
receipt of transmission, if telecopied; and on the next Business Day if timely
delivered to a courier guaranteeing overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders. If any transferee of any Holder shall acquire
Registrable Securities in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such person shall be entitled to
receive the benefits hereof.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Colorado without regard to
principles or rules of conflicts of law.
(h) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.
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(i) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and is intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(j) Attorneys' Fees. In any action or proceeding brought to enforce
---------------
any provision of this Agreement or where any provision hereof is validly
asserted as a defense, the successful party shall, to the extent permitted by
applicable law, be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.
(k) Further Assurances. Each party shall cooperate and take such
------------------
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
(l) Remedies. In the event of a breach or a threatened breach by any
--------
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement and granted by law.
The parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that remedies at law for violations
hereof, including monetary damages, are inadequate and that the right to object
in any action for specific performance or injunctive relief hereunder on the
basis that a remedy at law would be adequate is waived.
[Remainder of page left intentionally blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
FRONTIER AIRLINES, INC., a Colorado
corporation
By:______________________________________________
Name: Xxxxxx X. Xxxxxx
Title: President
Notice Information:
Frontier Airlines, Inc.
00000 Xxxx 00xx Xxx.
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx, Esq.
General Counsel
Tel. No: (000) 000-0000
Fax No: (000) 000-0000
B III CAPITAL PARTNERS, L.P.
By: DDJ Capital III, LLC
Its: General Partner
By: DDJ Capital Management, LLC
Its: Manager
By:___________________________________
Its:
Notice Information
B III Capital Partners, L.P.
000 Xxxxxx Xxxxxx, Xxxxx 0
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx Xxxxxxx
Tel. No: (000) 000-0000
Fax No: (000) 000-0000
24
