$50,000,000
8.0% Convertible Senior Subordinated Debentures due 2004
REGISTRATION RIGHTS AGREEMENT
Dated as of August 26, 1997
by and among
World Airways, Inc.
and
Xxxxxx Xxxx LLC
and
Xxxxxx, Read & Co. Inc.
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
made and entered into as of August 26, 1997 by and among World
Airways, Inc. a Delaware corporation (the "Company"), Xxxxxx Xxxx
LLC, and Xxxxxx, Read & Co. Inc. as initial purchasers (the
"Initial Purchasers").
The Company proposes to issue and sell to the Initial
Purchasers (the "Initial Placement") $50,000,000 aggregate
principal amount (plus up to an additional $7,500,000 principal
amount to cover over-allotments, if any) of its 8.0% Convertible
Senior Subordinated Debentures due 2004 (the "Debentures"),
pursuant to the terms of a Purchase Agreement, dated as of
August 21, 1997 (the "Purchase Agreement"). As an inducement to
the Initial Purchasers to enter into the Purchase Agreement, and
in satisfaction of a condition to the Initial Purchasers'
obligations thereunder, the Company agrees with the Initial
Purchasers, (i) for the benefit of the Initial Purchasers and
(ii) for the benefit of the holders from time to time of the
Transfer Restricted Securities (as defined) whose names appear in
the register maintained by the Company's registrar in accordance
with the provisions of the Indenture (as defined in Section 1
hereof) (including the Initial Purchasers) (each of the foregoing
a "Holder," and collectively the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in the
Purchase Agreement. As used in this Agreement, the following
capitalized terms shall have the following meanings:
"Affiliate" of any specified person means any other person
which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such specified person. For
purposes of this definition, control of a person means the power,
direct or indirect, to direct or cause the direction of the
management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions in the State of New York
are not required to be open.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the voting common stock, $0.001 par
value per share, of the Company.
"Damages Payment Date" means with respect to the Debentures
or the underlying Common Stock, as applicable, each regular
interest payment date provided for in the Indenture.
"Debentures" means the 8.0% Convertible Senior Subordinated
Debentures due 2004 of the Company.
"Effectiveness Target Date" has the meaning set forth in
Section 3(a) hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations of the
Commission promulgated thereunder.
"Exchange Offer Registration Statement" has the meaning set
forth in Section 4 hereof.
"First Delivery Date" has the meaning set forth in the
Purchase Agreement.
"Holder" has the meaning set forth in the preamble hereto.
"Indenture" means the Indenture dated as of August 1, 1997,
between the Company and First Union National Bank, as trustee,
pursuant to which the Debentures are to be issued, as the same
may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"Initial Purchasers" has the meaning set forth in the
preamble hereto.
"Initial Placement" has the meaning set forth in the
preamble hereto.
"Liquidated Damages" shall have the meaning set forth in
Section 5 hereof.
"Losses" has the meaning set forth in Section 9(d) hereof.
"Majority Holders" means the Holders of a majority of the
aggregate principal amount of securities registered under a Shelf
Registration Statement (provided that Holders of Common Stock
issued upon conversion of Debentures shall be deemed to be
Holders of the aggregate principal amount of Debentures from
which such Common Stock was converted).
"New Debentures" means debt securities of the Company
identical in all material respects to the Debentures (except that
the New Debentures shall not be subject to restrictions on
transfer), to be issued pursuant to Section 4 hereof.
"Offering Memorandum" has the meaning set forth in the
Purchase Agreement.
"Person" means any individual, partnership, corporation,
limited liability company, trust or unincorporated organization,
or a government or agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Shelf
Registration Statement (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 under the Securities Act), as amended
or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of Transfer Restricted
Securities, covered by such Shelf Registration Statement, and all
amendments and supplements to the Prospectus, including post-
effective amendments, and all material incorporated by reference
into such Prospectus.
"Registration Default" has the meaning set forth in Section
5 hereto.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, and the rules and regulations of the
Commission promulgated thereunder.
"Shelf Registration Period" has the meaning set forth in
Section 3(b) hereof.
"Shelf Registration Statement" means a "shelf" registration
statement of the Company pursuant to the provisions of Section 3
hereof which covers the Transfer Restricted Securities, on an
appropriate form subject to Rule 415 under the Securities Act, or
any similar rule that may be adopted by the Commission,
amendments and supplements to such registration statement,
including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Supplement Delay Period" means any period commencing on the
date of receipt by a Holder of Transfer Restricted Securities of
any notice from the Company of the existence of any fact or event
of the kind described in Section 6(c)(2) hereof and ending on the
date of receipt by such Holder of an amended or supplemented
Shelf Registration Statement or Prospectus, as contemplated by
Section 6(i) hereof, or the receipt by such Holder of written
notice from the Company (the "Advice") that the use of the
Prospectus may be resumed, and receipt of copies of any
additional or supplemental filings that are incorporated by
reference in the Prospectus.
"Transfer Restricted Securities" means each Debenture and
the Common Stock issuable upon conversion thereof until the
earlier of (i) the date on which such Debenture or the Common
Stock issuable upon conversion thereof has been effectively
registered under the Securities Act and disposed of pursuant to
an effective registration statement or exchanged for a New
Debenture pursuant to Section 4 hereof, (ii) the date on which
such Debenture or the Common Stock issuable upon conversion
thereof is distributed to the public pursuant to Rule 144 under
the Securities Act (or any similar provision then in effect) or
is saleable pursuant to Rule 144(k) under the Securities Act and
all legends thereon relating to transfer restrictions have been
removed, or (iii) the date on which such Debenture or the Common
Stock issuable upon conversion thereof ceases to be outstanding.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trustee" means the trustee with respect to the Debentures
under the Indenture.
2. Securities Subject to This Agreement. The securities
entitled to the benefits of this Agreement are the Transfer
Restricted Securities.
3. Shelf Registration.
(a) The Company shall, within 90 days after the First
Delivery Date, file with the Commission and thereafter shall use
its best efforts to cause to be declared effective under the
Securities Act by the 150th day after the First Delivery Date
(the "Effectiveness Target Date"), a Shelf Registration Statement
relating to the offer and sale of the Transfer Restricted
Securities by the Holders from time to time in accordance with
the methods of distribution elected by such Holders and set forth
in such Shelf Registration Statement.
(b) The Company shall use its best efforts to keep the
Shelf Registration Statement continuously effective in order to
permit the Prospectus forming a part thereof to be usable by
Holders for a period of two years from the First Delivery Date or
such shorter period that will terminate when (i) all the Transfer
Restricted Securities covered by the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement, (ii)
such Transfer Restricted Securities are distributed to the public
pursuant to Rule 144 under the Securities Act (or any similar
provision then in effect) or are saleable pursuant to Rule 144(k)
under the Securities Act, or (iii) the date on which there ceases
to be outstanding any Transfer Restricted Securities (in any such
case, such period being called the "Shelf Registration Period").
The Company shall be deemed not to have used its best efforts to
keep the Shelf Registration Statement effective during the
requisite period if it voluntarily takes any action that would
result in Holders of Transfer Restricted Securities covered
thereby not being able to offer and sell such securities during
that period, unless (i) such action is required by applicable
law, (ii) such action is taken by the Company in good faith and
for valid business reasons (not including avoidance of the
Company's obligations hereunder), including the acquisition or
divestiture of assets, so long as the Company promptly thereafter
complies with the requirements of Section 6(i) hereof, if
applicable or (iii) such action is taken because of any fact or
circumstance giving rise to a Supplement Delay Period.
(c) The Company shall prepare and file with the Commission
such amendments, including post-effective amendments, to the
Shelf Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable
time period; cause the related Prospectus to be supplemented by
any required Prospectus supplement and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in
force) under the Securities Act; and comply with the provisions
of the Securities Act and the Exchange Act with respect to the
disposition of all securities covered by such Shelf Registration
Statement during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth
in such Shelf Registration Statement as so amended or in such
Prospectus as so supplemented.
4. Registered Exchange Offer. If the Company determines
that it is permissible to do so, in lieu of filing the Shelf
Registration Statement or maintaining the effectiveness of the
Shelf Registration Statement as contemplated herein, the Company,
in its discretion, may file with the Commission a registration
statement on Form S-4 or other applicable form with respect to
the New Debentures (the "Exchange Offer Registration Statement")
and upon the Exchange Offer Registration Statement becoming
effective, offer the holders of Debentures the opportunity to
exchange their Debentures for an equal principal amount of New
Debentures. Upon the effectiveness of an Exchange Offer
Registration Statement, the holders of Debentures constituting
Transfer Restricted Securities shall not be entitled to include
any such Debentures in a Shelf Registration Statement hereunder;
provided, however, the effectiveness of an Exchange Offer
Registration Statement shall not affect the Company's obligations
hereunder with respect to any Holder's Common Stock constituting
Transfer Restricted Securities. Notwithstanding the foregoing, in
no event shall the Company have any obligation to file a
registration statement with respect to, or to register any
Debentures pursuant to an Exchange Offer Registration Statement.
5. Liquidated Damages. Subject to Section 6(m), if (a)
the Company fails to file the Shelf Registration Statement
required by Section 3 of this Agreement on or before the date
specified for such filing under Section 3(a) hereof, (b) such
Shelf Registration Statement is not declared effective by the
Commission on or prior to the Effectiveness Target Date or (c)
the Shelf Registration Statement is declared effective but
thereafter ceases to be continuously effective in connection with
resales of Transfer Restricted Securities during the Shelf
Registration Period (each such event referred to in clauses (a)
through (c) above a "Registration Default"), then the Company
will pay liquidated damages (the "Liquidated Damages") to each
Holder of Transfer Restricted Securities, with respect to the
first 90-day period immediately following the occurrence of such
Registration Default in an amount equal to $0.05 per week per
$1,000 aggregate principal amount of the Transfer Restricted
Securities held by such Holder and, if applicable, $0.01 per week
per share (subject to adjustment in the event of stock splits,
stock consolidations, stock dividends, and the like) of Common
Stock constituting Transfer Restricted Securities to be
registered under the Shelf Registration Statement. The amount of
the Liquidated Damages will increase by an additional $0.05 per
week per $1,000 aggregate principal amount of the Transfer
Restricted Securities held by each Holder and $0.01 per week per
share (subject to adjustment as set forth above) of Common Stock
constituting Transfer Restricted Securities to be registered
under the Shelf Registration Statement with respect to each
subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum amount of Liquidated Damages of $0.25
per week per $1,000 aggregate principal amount of the Transfer
Restricted Securities held by each Holder and $0.05 per week per
share (subject to adjustment as set forth above) of Common Stock
constituting Transfer Restricted Securities to be registered
under the Shelf Registration Statement. In no event shall the
Company pay Liquidated Damages in excess of such maximum amount
set forth in the preceding sentence, regardless of whether one or
multiple Registration Defaults exist. A Registration Default
under clause (a) above shall be cured on the date that the Shelf
Registration Statement is filed with the Commission; a
Registration Default under clause (b) above shall be cured on the
date that the Shelf Registration Statement is declared effective
by the Commission; and a Registration Default under clause (c)
above shall be cured on the date of the Shelf Registration
Statement is declared effective. All accrued Liquidated Damages
will be paid by the Company on each Damages Payment Date in cash.
Such payment will be made to the Holder of the Global Securities
by wire transfer of immediately available funds or by federal
funds check and to Holders of Transfer Restricted Securities
represented by Certificated Securities, if any, by wire transfer
to the accounts specified by them or, if no such accounts have
been specified, by mailing checks to their registered addresses.
Following the cure of all Registration Defaults, the accrual of
Liquidated Damages will cease. For purposes of this Section,
Debentures which have been converted into shares of Common Stock
constituting Transfer Restricted Securities shall be deemed to
bear the principal amount at which such securities were
converted.
The parties hereto agree that the Liquidated Damages
provided for in this Section 5 constitute a reasonable estimate
of the damages that may be incurred by Holders of Transfer
Restricted Securities by reason of the failure of the Shelf
Registration Statement to be filed, declared effective or
maintained effective, as the case may be, in accordance with the
provisions hereof.
6. Registration Procedures. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to the Initial Purchasers and
their counsel, not less than five Business Days prior to the
filing thereof with the Commission, a copy of any Shelf
Registration Statement and each amendment thereof, and each
amendment or supplement, if any, to the Prospectus included
therein, and shall use its best efforts to reflect in each such
document, when so filed with the Commission, such comments as the
Initial Purchasers or their counsel may reasonably propose.
(b) The Company shall use its best efforts to ensure that
(i) any Shelf Registration Statement and any amendment thereto
and any Prospectus forming part thereof and any amendment or
supplement thereto complies in all material respects with the
Securities Act and the rules and regulations thereunder, (ii)
except for information provided by holders of Transfer Restricted
Securities for inclusion in any Shelf Registration Statement
pursuant to Section 6(m), as to which the Company makes no
representation, warranty, or undertaking, any Shelf Registration
Statement and any amendment or supplement thereto does not, when
it becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading and (iii) except for information provided by holders
of Transfer Restricted Securities for inclusion in any Shelf
Registration Statement pursuant to Section 6(m), as to which the
Company makes no representation, warranty, or undertaking, any
Prospectus forming part of any Shelf Registration Statement, and
any amendment or supplement to such Prospectus, does not include
an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements, in the
light of the circumstances under which they were made, not
misleading.
(c) (1) The Company shall advise the Initial Purchasers,
and, if requested by the Initial Purchasers, confirm such advice
in writing, when a Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto
has become effective.
(2) The Company shall advise the Initial Purchasers
and their counsel and, if requested by the Initial Purchasers,
confirm such advice in writing:
(i) of any request by the Commission for
amendments or supplements to the Shelf Registration
Statement or the Prospectus included therein;
(ii) of the initiation by the Commission of
proceedings relating to a stop order suspending the
effectiveness of the Shelf Registration Statement;
(iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Shelf
Registration Statement;
(iv) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the securities included in the Shelf
Registration Statement for sale in any jurisdiction or
the initiation or threatening of any proceeding for
such purpose; and
(v) of the existence of any fact and the
happening of any event (including, without limitation,
pending negotiations relating to, or the consummation
of, a transaction or the occurrence of any event which
would require additional disclosure of material non-
public information by the Company in the Shelf
Registration Statement as to which the Company has a
bona fide business purpose for preserving confidential
or which renders the Company unable to comply with
Commission requirements) that, in the opinion of the
Company, makes untrue any statement of a material fact
made in its Shelf Registration Statement, the
Prospectus or any amendment or supplement thereto or
any document incorporated by reference therein or
requires the making of any changes in the Shelf
Registration Statement or the Prospectus so that, as of
such date, the statements therein are not misleading
and do not omit to state a material fact required to be
stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not
misleading.
Such Advice may be accompanied by an instruction to suspend the
use of the Prospectus until the requisite changes have been made.
(d) The Company shall use its best efforts to obtain the
withdrawal of any order suspending the effectiveness of the Shelf
Registration Statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of the Transfer
Restricted Securities for sale in any jurisdiction, at the
earliest possible time.
(e) The Company shall furnish to each selling Holder named
in the Shelf Registration Statement, without charge, at least one
conformed copy of such Shelf Registration Statement and any post-
effective amendment thereto, including financial statements and
all exhibits and schedules (including those incorporated by
reference).
(f) The Company shall, during the Shelf Registration
Period, deliver to each Holder of Transfer Restricted Securities
named in the Shelf Registration Statement, without charge, as
many copies of the Prospectus (including each preliminary
Prospectus) included in such Shelf Registration Statement and any
amendment or supplement thereto as such Holder may reasonably
request; and, subject to any notice by the Company in accordance
with Section 7(b), the Company consents to the use of the
Prospectus or any amendment or supplement thereto by each of the
selling Holders for the purposes of offering and resale of the
Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto.
(g) Prior to the offering of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, the Company shall
use its best efforts to: (i) register or qualify or cooperate
with the Initial Purchasers acting on behalf of the Holders, and
their counsel, in connection with the registration or
qualification (or exemption from such registration or
qualification) of such Transfer Restricted Securities for offer
and sale under the securities or blue sky laws of such
jurisdictions of the United States as any such Holders reasonably
request in writing; (ii) keep each such registration or
qualification (or exemption therefrom) effective during the
period the Shelf Registration Statement is required to be kept
effective; and (iii) do any and all other acts or things
necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by
the Shelf Registration Statement; provided, however, that the
Company will not be required to qualify generally to do business
in any jurisdiction where it is not then so qualified or to take
any action which would subject it to general service of process
or to taxation in any such jurisdiction where it is not then so
subject.
(h) The Company shall cooperate with the Holders of
Transfer Restricted Securities to facilitate the timely
preparation and delivery of certificates representing Transfer
Restricted Securities to be sold pursuant to the Shelf
Registration Statement free of any restrictive legends and in
such denominations and registered in such names as such Holders
may request in writing at least two Business Days prior to sales
of securities pursuant to such Shelf Registration Statement.
(i) Upon the occurrence of any event contemplated by
paragraph (c)(2)(v) hereof, the Company shall promptly prepare a
post-effective amendment to the Shelf Registration Statement or
an amendment or supplement to the related Prospectus or any
document incorporated therein by reference or file any other
required document so that as thereafter delivered to purchasers
of the Transfer Restricted Securities covered thereby, the
Prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(j) Not later than the effective date of any such Shelf
Registration Statement hereunder, the Company shall cause to be
provided CUSIP numbers for the Transfer Restricted Securities
registered under such Shelf Registration Statement, and provide
the Trustee with printed certificates for such Transfer
Restricted Securities where necessary, in a form eligible for
deposit with The Depository Trust Company.
(k) The Company shall use its best efforts to comply with
all applicable rules and regulations of the Commission and shall
make generally available to its security holders in a regular
filing on Form 10-Q or Form 10-K an earnings statement satisfying
the provisions of Rule 158 (which need not be audited) for the
twelve-month period commencing after effectiveness of the Shelf
Registration Statement.
(l) The Company shall cause the Indenture to be qualified
under the Trust Indenture Act in a timely manner not later than
the effective date of the Registration Statement.
(m) The Company may require each Holder of Transfer
Restricted Securities to be sold pursuant to the Shelf
Registration Statement to furnish to the Company within 10
Business Days after written request for such information has been
made by the Company, such customary information regarding the
Holder and the distribution of such securities as the Company may
from time to time reasonably require for inclusion in such Shelf
Registration Statement and such other information as may be
necessary or advisable in the reasonable opinion of the Company
and its counsel, in connection with such Shelf Registration
Statement. No Holder of Transfer Restricted Securities shall be
entitled to the benefit of any Liquidated Damages under Section 5
of this Agreement or be entitled to use the Prospectus unless and
until such Holder shall have furnished the information required
by this Section 6(m) and all such information required to be
disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
(n) The Company shall, if requested, promptly incorporate
in the Shelf Registration Statement or Prospectus, if necessary,
pursuant to a supplement or post-effective amendment to the Shelf
Registration Statement, such information as the Initial
Purchasers acting on behalf of the Holders reasonably request to
have included therein and shall make all required filings of such
Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be
incorporated in such Prospectus supplement or post-effective
amendment.
(o) The Company shall (i) make reasonably available at
reasonable time for inspection by the Holders of Transfer
Restricted Securities to be registered thereunder, and the
counsel or other agent retained by the Initial Purchasers on
behalf of the Holders, at the office where normally kept during
normal business hours, all financial and other records, pertinent
corporate documents and properties of the Company and its
subsidiaries, and cause the Company's office, directors and
employees to supply all relevant information reasonably requested
by the Holders, attorney, accountant or other agent in connection
with the Shelf Registration Statement as is customary for similar
due diligence examinations, provided, however, that such persons
shall first agree in writing with the Company that any
information that is reasonably and in good faith designated by
the Company in writing as confidential at the time of delivery of
such information shall be kept confidential by such persons; and
(ii) deliver such documents and certificates as may be reasonably
requested by the Initial Purchasers acting on behalf of the
Holders, including those to evidence compliance with Section
6(i). The foregoing actions set forth in clause (ii) of this
Section 6(o) shall be performed at the effectiveness of such
Shelf Registration Statement and each post-effective amendment
thereto.
(p) The Company shall list the Common Stock covered by such
Shelf Registration Statement on any securities exchange on which
the Common Stock is then listed.
7. Holders' Agreements. Each Holder of Transfer
Restricted Securities, by the acquisition of such Transfer
Restricted Securities agrees:
(a) To furnish the information required to be furnished
pursuant to Section 6(m) hereof within the time period set forth
therein. The Company may exclude from any Shelf Registration
Statement the Transfer Restricted Securities of any Holder who
does not furnish such information. Each Holder of Transfer
Restricted Securities shall promptly furnish to the Company all
such information required to be disclosed in order to make the
information previously furnished to the Company by such Holder
not materially misleading.
(b) That upon receipt of a notice of the commencement of a
Supplement Delay Period, it will keep the fact of such notice
confidential, forthwith discontinue disposition of its Transfer
Restricted Securities, as the case may be, pursuant to the Shelf
Registration Statement, and will not deliver any Prospectus
forming a part thereof until receipt of the amended or
supplemented Shelf Registration Statement or Prospectus, as
applicable, as contemplated by Section 6(i) hereof, or until
receipt of the Advice.
(c) If so directed by the Company in a notice of the
commencement of a Supplement Delay Period, each Holder of
Transfer Restricted Securities, as the case may be, will 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 the Transfer Restricted Securities, as the
case may be.
(d) Sales of such Transfer Restricted Securities pursuant
to a Shelf Registration Statement shall only be made in the
manner set forth in such currently effective Shelf Registration
Statement.
8. Registration Expenses. The Company shall bear its own
expenses incurred in connection with the performance of its
obligations under Sections 3, 5 and 6 hereof and will reimburse
the Holders for the cost of qualifying the Transfer Restricted
Securities for sale pursuant to the various state "blue sky" laws
(including reasonable attorney's fees in connection therewith).
The Holders will otherwise bear their own expenses, including the
fees and disbursements of their counsel designated by the Initial
Purchasers to act as counsel for the Holders in connection
therewith.
9. Indemnification and Contribution.
(a) In connection with the Shelf Registration Statement,
the Company will indemnify and hold harmless each Holder of
Transfer Restricted Securities covered thereby, the directors,
officers, employees and agents of each such Holder and each
person who controls any such Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any and all losses, claims, liabilities,
expenses and damages, joint or several (including any and all
investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claim asserted), to which they,
or any of them, may become subject under the Securities Act, the
Exchange Act or other federal, state or foreign statutory law or
regulation, at common law or otherwise, insofar as such losses,
claims, liabilities, expenses and damages arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the Shelf Registration Statement as
originally filed or in any amendment thereof, or in any
preliminary Prospectus or Prospectus, or in any amendment thereof
or supplement thereto, or the omission or alleged omission to
state in such documents a material fact required to be stated
therein or necessary to make the statements therein not
misleading; provided, however, that the Company will not be
liable to the extent that any such loss, claim, liability expense
or damage arises out of or is based on any such untrue statement
or omission or alleged untrue statement or omission made therein
in reliance on and in conformity with information relating to any
Holder of Transfer Restricted Securities furnished in writing to
the Company by any such Holder expressly for inclusion therein.
This indemnity agreement will be in addition to any liability
which the Company might otherwise have.
(b) Each Holder of Transfer Restricted Securities covered
by the Shelf Registration Statement will severally indemnify and
hold harmless the Company, each person who controls the Company
within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, each director of the Company and
each officer of the Company to the same extent as the foregoing
indemnity from the Company to each such Holder, but only insofar
as losses, claims, liabilities, expenses or damages arise out of
or are based on any untrue statement or omission or alleged
untrue statement or omission made in reliance on and in
conformity with information relating to such Holder furnished to
the Company by or on behalf of such Holder expressly for use in
the Shelf Registration Statement as originally filed or in any
amendment thereof, or in any preliminary Prospectus or
Prospectus, or in any amendment thereof or supplement thereto.
This indemnity agreement will be in addition to any liability
that such Holder might otherwise have.
(c) Any party that proposes to assert the right to be
indemnified under this Section 9 will, promptly after receipt of
notice of commencement of any action against such party in
respect of which a claim is to be made against an indemnifying
party or parties under this Section 9, notify each indemnifying
party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying
party (i) will not relieve it from any liability that it may have
to any indemnified party under the foregoing provisions of this
Section 9 unless, and only to the extent that, it did not
otherwise learn of such action and such omission results in the
forfeiture of substantive rights or defenses by the indemnifying
party and (ii) will not, in any event relieve the indemnifying
party from any obligations to any indemnified party other than
the indemnification obligations in Sections 9(a) and 9(b) hereof.
If any such action is brought against any indemnified party and
it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the
extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume
the defense of the action, with counsel satisfactory to the
indemnified party, and after notice from the indemnifying party
to the indemnified party of its election to assume the defense,
the indemnifying party will not be liable to the indemnified
party for any legal or other expenses except as provided below
and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense.
The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel to the indemnified party
that there may be legal defense available to it or other
available indemnified parties that are different from or in
addition to those available to the indemnifying party), (3) a
conflict or potential conflict exists (based on advice of counsel
to the indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of
the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within
a reasonable time after receiving notice of the commencement of
the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense
of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable fees, disbursements and other charges
of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or
parties. Such firm shall be designated in writing by the Majority
Holders in the case of parties indemnified pursuant to Section
9(a) and by the Company, in the case of parties indemnified
pursuant to Section 9(b). All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as
they are incurred. No indemnifying party shall, without the prior
written consent of each indemnified party, settle or compromise
or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding relating to the matters
contemplated by this Section 9 (whether or not any indemnified
party is a party thereto), unless such settlement, compromise or
consent includes an unconditional release of each indemnified
party from all liability arising or that may arise out of such
claim, action or proceeding.
(d) In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 9 is applicable in
accordance with its terms but for any reason is held to be
unavailable from the Company or the Holders of Transfer
Restricted Securities, or insufficient, the Company and such
Holders will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and
other expenses reasonably incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or
any claim asserted, but after deducting any contribution received
by the Company from persons other than such Holders and any
contribution received by any of the Holders from persons other
than the Company, such as persons who control the Company or a
Holder within the meaning of the Securities Act or the Exchange
Act and officers and directors of the Company, who also may be
liable for contribution) (collectively, "Losses") to which the
Company and any one or more of such Holders of Transfer
Restricted Securities may be subject in such proportion as shall
be appropriate to reflect the relative benefits received by the
Company on the one hand and such Holders on the other. The
relative benefits received by the Company shall be deemed to be
equal to the total net proceeds from the Initial Placement
(before deducting expenses) as set forth on the cover page of the
Offering Memorandum. Benefits received by the Initial Purchasers
shall be deemed to be equal to the total purchase discounts and
commissions as set forth on the cover page of the Offering
Memorandum, and benefits received by any other Holders shall be
deemed to be equal to the value of receiving Debentures or Common
Stock issuable upon conversion thereof, as applicable, registered
under the Securities Act. If, but only if, the allocation
provided by this Section is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to
in this Section but also the relative fault of the Company, on
the one hand, and the Holders, on the other, with respect to the
statements or omissions which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as
well as any other relevant equitable considerations with respect
to such offering. Such relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a fact
relates to information supplied by the Company or the Holders,
the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement
or omission. The Company and the Holders agree that it would not
be just and equitable if contributions pursuant to this Section
9(d) were to be determined by pro rata allocation (even if the
Holders were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or
payable by any party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to
above in this Section 9(d) shall be deemed to include, for
purpose of this Section 9(d), any legal or other expenses
reasonably incurred by such party in connection with
investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9(d), in no case
shall any Initial Purchaser be responsible, in the aggregate, for
any amount in excess of the purchase discount or commission
applicable to such Debentures, as set forth on the cover page of
the Offering Memorandum. No person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
Holders' obligations to contribute as provided in this Section
9(d) are several and not joint. For purposes of this Section
9(d), any person who controls the Company or a Holder within the
meaning of the Securities Act will have the same rights to
contribution as that party, and each officer or director of the
Company or such Holder will have the same rights to contribution,
as the Company or such Holder, as applicable, subject in each
case to the provisions hereof. Any party entitled to contribution
promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution
may be made under this Section 9(d), will notify any such party
or parties from whom contribution may be sought, but the omission
so to notify will not relieve the party or parties from whom
contribution may be sought from any other obligation it or they
may have under this Section 9(d). No party will be liable for
contribution with respect to any action or claim settled without
its written consent (which consent will not be unreasonably
withheld or delayed).
(e) The indemnity and contribution agreements contained in
this Section 9 will remain in full force and effect, regardless
of any investigation made by or on behalf of any Holder or the
Company or any of the officers, directors or controlling persons
referred to in this Section 9, and will survive the sale by a
Holder of securities covered by the Shelf Registration Statement.
10. Rules 144 and 144A. The Company shall use its best
efforts to file the reports required to be filed by it under the
Securities Act and the Exchange Act in a timely manner and, if at
any time it is not required to file such reports but in the past
had been required to or did file such reports, it will, upon the
request of any holder of Transfer Restricted Securities, make
available other information as reasonably required by, and so
long as reasonably necessary to permit, sales of its Transfer
Restricted Securities pursuant to Rule 144 and Rule 144A. The
Company covenants that, for so long as a sale of Transfer
Restricted Securities is not permitted pursuant to a Shelf
Registration Statement, it will take such further action as any
Holder of Transfer Restricted Securities may reasonably request,
all to the extent required from time to time, to enable such
Holder to sell securities without registration under the
Securities Act within the limitation of the exemptions provided
by Rule 144 and 144A (including the requirements of Rule
144A(d)(4)). Notwithstanding the foregoing, nothing in this
Section 10 shall be deemed to require the Company to register any
of its securities pursuant to the Exchange Act.
11. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of
its obligations under this Agreement, each Holder, in addition to
being entitled to execute all rights granted by law, including
recovery of damages, will be entitled to specific performance of
its rights under this Agreement. The Company agrees that monetary
damages (including the Liquidated Damages contemplated hereby)
would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and
hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate. The remedies
provided herein are cumulative and not exclusive of any remedies
provided by law.
(b) No Inconsistent Agreements. The Company has not, as of
the date hereof, entered into, nor shall it, on or after the date
hereof, enter into, any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders
herein or conflicts with the provisions hereof.
(c) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, qualified, 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 the
Holders of at least a majority of the then outstanding aggregate
principal amount of Transfer Restricted Securities; provided,
however, that, with respect to any matter that directly or
indirectly affects the rights of any Initial Purchaser hereunder,
the Company shall obtain the written consent of each such Initial
Purchaser against which such amendment, qualification,
supplement, waiver or consent is to be effective. Notwithstanding
the foregoing (except the foregoing proviso), a waiver or consent
to departure from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders whose
securities are being sold pursuant to a Shelf Registration
Statement as that does not directly or indirectly affect the
rights of other Holders may be given by the Majority Holders,
determined on the basis of Debentures being sold rather than
registered under such Shelf Registration Statement.
(d) Notices. All statements, requests, notices and
agreements hereunder shall be in writing or by telegram if
promptly confirmed in writing, and shall be sufficient in all
respects if delivered or sent by reliable courier, first-class
mail, telex, or facsimile transmission:
(1) if to a Holder, at the most current address given
by such Holder to the Company in accordance with the
provisions of this Section 11(d), which address initially
is, with respect to each Holder, the address of such Holder
maintained by the registrar under the Indenture, with a copy
in like manner to Xxxxxx Xxxx LLC;
(2) if to the Initial Purchasers, initially at the
address set forth in the Purchase Agreement; and
(3) if to the Company, initially at its address set
forth in the Purchase Agreement.
Any such statements, requests, notices or agreements shall
take effect upon receipt.
The Initial Purchasers or the Company by notice to the other
may designate additional or different addresses for subsequent
notices or communications.
(e) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of
each of the parties hereto, including, without the need for an
express assignment or any consent by the Company thereto,
subsequent Holders of Debentures. The Company hereby agrees to
extend the benefits of this Agreement to any Holder of Debentures
and any such Holder may specifically enforce the provisions of
this Agreement as if an original party hereto. The Company may
not assign its rights or obligations hereunder without the prior
written consent of the Majority Holders of Transfer Restricted
Securities.
(f) 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.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof. All references made in this Agreement
to "Section" and "paragraph" refer to such Section or paragraph
of this Agreement, unless expressly stated otherwise.
(h) Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York without regard
to the conflict of law provisions thereof.
(i) Submission to Jurisdiction. The Company hereby
irrevocably submits to the non-exclusive jurisdiction of any New
York state court sitting in the Borough of Manhattan in the City
of New York or any federal court sitting in the Borough of
Manhattan in the City of New York in respect of any suit, action
or proceeding arising out of or relating to this Agreement, and
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, jurisdiction of the aforesaid
courts. The Company irrevocably waives, to the fullest extent it
may effectively do so under applicable law any objection that it
may now or hereafter have to the laying of the venue of any such
suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum.
(j) Severability. In the event that any one of 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 hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges
of the parties shall be enforceable to the fullest extent
permitted by law.
(k) 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 prevailing
party, as determined by the court, shall be entitled to recover
its reasonable attorneys' fees in addition to any other available
remedy.
(l) Approval of Holders. Whenever the consent or approval
of holders of a specified percentage of Transfer Restricted
Securities is required hereunder, Transfer Restricted Securities
held by the Company or its affiliates (as such term is defined in
Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the
holders of such required percentage. For purposes of calculating
the consent or approval of holders of a majority of the then
outstanding aggregate principal amount of Transfer Restricted
Securities, Transfer Restricted Securities which have been
converted into shares of Common Stock shall be deemed to bear the
principal amount at which such securities were converted.
(m) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement relating to the
registration under the Securities Act of the Transfer Restricted
Securities and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein and the
registration rights granted by the Company with respect to the
Debentures sold pursuant to the Purchase Agreement and the Common
Stock issuable upon conversion of the Debentures. There are no
restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein, with respect to the
registration rights granted by the Company with respect to the
Debentures or the Common Stock issuable upon conversion of the
Debentures. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such
registration rights.
(n) Further Assurances. Each of the parties hereto shall
use all reasonable efforts to take, or cause to be taken, all
appropriate action, do or cause to be done all things reasonably
necessary, proper or advisable under applicable law, and execute
and deliver such documents and other papers, as may be required
to carry out the provisions of this Agreement and the other
documents contemplated hereby and consummate and make effective
the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
WORLD AIRWAYS, INC.
By:
-------------------------
Name: Xxxx Xxxxx
Title: Chief Financial
Officer
XXXXXX XXXX LLC
XXXXXX, READ & CO. INC.
The Initial Purchasers
By: XXXXXX XXXX LLC
By:
---------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
