REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT, dated as of June 18, 2002 (this
"Agreement"), is made by and among Midwest Express Holdings, Inc., a Wisconsin
corporation (the "Company"), with headquarters located at 0000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxx, XX 00000, and the investors named on the signature pages
hereto (each of whom is hereinafter referred to as an "Initial Investor" and all
of whom collectively are hereinafter referred to as the "Initial Investors").
RECITALS:
A. In connection with the Securities Purchase Agreement, dated June 18,
2002, by and among the Initial Investors and the Company (the "Purchase
Agreement"), the Company has agreed, upon the terms and subject to the
conditions of the Purchase Agreement, to sell to the Initial Investors 1,675,000
shares of the Company's common stock, par value $.01 per share (the "Common
Shares" and, together with any associated Rights (as defined in the Purchase
Agreement), the "Securities").
B. To induce the Initial Investors to execute and deliver the Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended (the "Securities Act"), and applicable
state securities laws with respect to the Securities.
AGREEMENT:
In consideration of the premises and the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Initial Investors hereby
agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used and not otherwise defined herein have the
respective meanings given them in the Purchase Agreement. In addition, as used
in this Agreement, the following terms have the following meanings:
1.1. "Investors" means the Initial Investors and any of their permitted
transferees or assignees who receive or acquire Registrable Securities (as
herein defined) and agree to become bound by the provisions of this Agreement in
accordance with Article IX hereof; provided that no such person is registered as
a broker or dealer under Section 15(a) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or a member of the National Association of
Securities Dealers, Inc.
1.2. The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Registration Statements in compliance with the Securities Act and, in
particular, pursuant to Rule 415 under the Securities Act and the declaration or
ordering of effectiveness of such Registration Statement by the United States
Securities and Exchange Commission (the "SEC").
1.3. "Registrable Securities" means the Common Shares sold pursuant to
the Purchase Agreement, any shares of capital stock issued or issuable from time
to time (with any adjustments) in exchange for or otherwise with respect to the
Common Shares and any Rights associated with the Common Shares; provided that
Common Shares will cease to be Registrable Securities at such
time as they have been sold under a Registration Statement or pursuant to Rule
144 under the Securities Act or otherwise or at such time as they are eligible
to be sold pursuant to Rule 144(k).
1.4. "Registration Period" means the period between the date of this
Agreement and the earliest of (i) the second anniversary of the date of this
Agreement, provided that for each day that sales cannot be made by operation of
Section 3.5 this two-year period shall be extended one additional day and that
if the Registration Statement is not effective by the 60th calendar day after
the Closing Date of the purchase of the Common Shares under the Purchase
Agreement, then this period shall be extended one additional day for each day
that passes after such 60th day until the day the Registration Statement is
effective, (ii) the date on which all of the Registrable Securities have been
sold by the Investors under a Registration Statement or pursuant to Rule 144 or
(iii) the date on which all the Registrable Securities may be immediately sold
by the Investors without registration and without restriction as to the number
of Registrable Securities to be sold, pursuant to Rule 144 or otherwise.
1.5. "Registration Statement" means a Registration Statement of the
Company filed with the SEC under the Securities Act.
1.6. "Rule 415" means Rule 415 under the Securities Act, or any successor
rule providing for offering securities on a continuous basis, and applicable
rules and regulations thereunder.
ARTICLE II
REGISTRATION
2.1. Mandatory Registration. The Company will use its reasonable best
efforts to prepare and file with the SEC within five business days after the
Closing Date of the purchase of the Common Shares under the Purchase Agreement a
Registration Statement on Form S-3 registering all of the Registrable Securities
for resale in accordance with the intended methods of resale or distribution
described by the Investors in accordance with Section 4.1. This Registration
Statement shall register only the Registrable Securities. If Form S-3 is not
available at that time, then the Company will use its reasonable best efforts to
file within such five-business day period a Registration Statement on such form
as is then available to effect a registration of the Registrable Securities.
2.2. Effectiveness of the Registration Statement. The Company will use
its reasonable best efforts to cause the Registration Statement contemplated by
the previous Section to be declared effective by the SEC as soon as practicable
after filing, and in any event no later than the 60th calendar day after the
Closing Date (the "Required Effective Date"). However, so long as the Company
filed the Registration Statement within 10 business days after the Closing Date,
if the Registration Statement receives any SEC review, then the Required
Effective Date will be the 120th calendar day after the Closing Date. The
Company's reasonable best efforts will include, but are not to be limited to,
promptly responding to all comments received from the staff of the SEC. If the
Company receives notification from the SEC that the Registration Statement will
receive no action or review from the SEC, then the Company will request that the
Registration Statement become effective within five business days after such SEC
notification.
2.3. Payments by the Company. If (i) at any time after effectiveness of
the Registration Statement, sales thereunder during the Registration Period
cannot be made for any reason, other than by reason of the operation of Section
3.5, for a period of more than 10 consecutive business days, or 30 business days
in the aggregate, during any 12-month period, (ii) at any time after
effectiveness of the Registration Statement, sales thereunder during the
Registration Period cannot be made by reason of the operation of Section 3.5 for
a period of time that exceeds the limitations set forth in Section 3.5(b) or
(iii) at any time after the Registrable Securities are listed in accordance with
Section 3.8, the Common Shares are not listed or included for quotation on the
New York Stock Exchange (the "NYSE") for more
2
than an aggregate of 10 business days in any 12-month period, then the Company
will thereafter make a payment to each Investor as set forth below. The amount
of the payment made to each Investor will be equal to 1% of the purchase price
paid for the Common Shares purchased by the Investor and not previously sold by
the Investor for each 30 business days that sales cannot be made under the
effective Registration Statement or the Common Shares are not listed or included
for quotation on the NYSE (but any day on which both conditions exist shall
count as a single day and no day taken into account for purposes of determining
whether any payment is due under Section 2.4 or the amount of such payment shall
be taken into account for purposes of determining whether any payment is due
under this Section 2.3 or the amount of such payment). The number of shares not
previously sold as specified in the previous sentence shall be determined as of
the end of the respective 30-business day period. These payments will be
prorated on a daily basis during the 30-business day period and will be paid to
each Investor by check within five business days following the end of each month
as to which payment is due hereunder, assuming that the respective Investor
delivered to the Company at least two business days prior thereto information
with respect to the number of Common Shares not previously sold by such Investor
(together with reasonable supporting documentation). The Investors may make a
claim for additional damages as a remedy for the Company's failure to comply
with the timelines set forth in this Section, but acknowledgement of such right
in this Agreement shall not constitute an admission by the Company that any such
damages exist or may exist. Notwithstanding the foregoing, if the Company has
used its reasonable best efforts to avoid circumstances as a result of which
sales cannot be made under the Registration Statement during the Registration
Period or the Common Shares are not listed or included for quotation on the
NYSE, then the damages described above shall be the Investors' sole and
exclusive remedy for damages arising out of such circumstances. Nothing
contained in the preceding sentence shall be read to limit the ability of the
Investors to seek specific performance of this Agreement.
2.4. Effect of Late Registration. If the Registration Statement has not
been declared effective by the Required Effective Date, then the Company will
make a payment to each Investor for such delay (each a "Late Registration
Payment"). Each Late Registration Payment will be equal to 1% of the purchase
price paid for the Common Shares purchased by such Investor and not previously
sold by such Investor for each 30 business days after the Required Effective
Date (but no day taken into account for purposes of determining whether any
payment is due under Section 2.3 or the amount of such payment shall be taken
into account for purposes of determining whether any payment is due under this
Section 2.4 or the amount of such payment). The Late Registration Payments will
be prorated on a daily basis during the 30-business day period and will be paid
to the Initial Investors by check within five business days following the end of
each month as to which payment is due hereunder, assuming that the respective
Investor delivered to the Company at least two business days prior thereto
information with respect to the number of Common Shares not previously sold by
such Investor (together with reasonable supporting documentation). The Investors
may make a claim for additional damages as a remedy for the Company's failure to
comply with the timelines set forth in this Section, but acknowledgement of such
right in this Agreement shall not constitute an admission by the Company that
any such damages exist or may exist. Notwithstanding the foregoing, if the
Company has used its reasonable best efforts to avoid circumstances as a result
of which the Registration Statement has not been declared effective by the
Required Effective Date, then the damages described above shall be the
Investors' sole and exclusive remedy for damages arising out of such
circumstances. Nothing contained in the preceding sentence shall be read to
limit the ability of the Investors to seek specific performance of this
Agreement.
2.5. Piggyback Registrations.
(a) At any time prior to the expiration of the Registration
Period, if a Registration Statement under Section 2.1 is not effective
with respect to all of the Registrable Securities that the Company is
obligated to register on the Registration Statement and the Company
decides to register any of its Common Shares for its own account or for
the account of others, then the Company will promptly give the Investors
written notice thereof and will use its
3
best efforts to include in such registration all or any part of the
Registrable Securities requested by such Investors to be included
therein. This requirement does not apply to Company registrations on Form
S-4 or S-8 or their equivalents (relating to equity securities to be
issued in connection with an acquisition of any entity or business or
equity securities issuable in connection with stock option or other
employee benefit or director plans) or to Registration Statements that
would otherwise not permit the registration of resales of previously
issued securities. Each Investor must give its request for registration
under this paragraph to the Company in writing within 15 calendar days
after receipt from the Company of notice of such pending registration. If
the registration for which the Company gives notice is a public offering
involving an underwriting, then the Company will so advise the Investors
as part of the above-described written notice. In that event, if the
managing underwriter(s) of the public offering impose a limitation on the
number of Common Shares that may be included in the Registration
Statement because, in such underwriter(s)' judgment, such limitation
would be necessary to effect an orderly public distribution, then the
Company shall include in such registration (i) first, the Registrable
Securities requested by any of the Investors to be included in such
offering, pro rata among the holders of such Registrable Securities on
the basis of the number of shares requested to be included by each such
holder, (ii) second, the securities desired to be sold pursuant to such
Registration Statement by the shareholder or shareholders that are
requiring the Company pursuant to a contractual registration right to
file such Registration Statement, if any, and (iii) third, the securities
the Company proposes to sell.
(b) No right to registration of Registrable Securities under this
Section 2.5 limits in any way the registration required under Section 2.1
above. The obligations of the Company under this Section 2.5 expire upon
the earlier of (i) the effectiveness of the Registration Statement filed
pursuant to Section 2.1 above with respect to the Registrable Securities
or the respective portion thereof or (ii) expiration of the Registration
Period.
2.6. Eligibility to use Form S-3. The Company represents and warrants
that it currently meets, and will use its reasonable best efforts to continue to
meet, the "registrant eligibility" requirements for a secondary offering set
forth in the general instructions to Form S-3 to enable the registration of the
Registrable Securities.
2.7. Force Majeure. The Company shall not be deemed in breach of its
commitments under Article II and no payments by the Company as set forth in
Article II shall be required to the extent that the Company is unable to fulfill
its obligations hereunder in a timely fashion because the SEC and/or the NYSE
are closed or operating on a limited basis as a result of the occurrence of a
Force Majeure. As used herein, "Force Majeure" means war or armed hostilities or
other national or international calamity, or one or more acts of terrorism.
ARTICLE III
ADDITIONAL OBLIGATIONS OF THE COMPANY
3.1. Continued Effectiveness of Registration Statement. Subject to the
limitations set forth in Section 3.5, the Company will use its best efforts to
keep the Registration Statement covering the Registrable Securities effective
under Rule 415 at all times during the Registration Period.
3.2. Accuracy of Registration Statement. Assuming the accuracy of
information furnished by or on behalf of the Investors, any Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein) filed by the Company covering Registrable Securities will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading. The Company
will promptly prepare and file with the SEC such
4
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to permit sales pursuant to the
Registration Statement at all times during the Registration Period (but subject
to Section 3.5) and, during such period, will comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities of
the Company covered by the Registration Statement until the termination of the
Registration Period.
3.3. Furnishing Documentation. The Company will furnish to each Investor
whose Registrable Securities are included in a Registration Statement, and
Investors' Counsel (as herein defined), if any, (a) promptly after each document
is filed with the SEC, one copy of any Registration Statement filed pursuant to
this Agreement and any amendments thereto, each preliminary prospectus (if any)
and final prospectus and each amendment or supplement thereto; and (b) a number
of copies of a prospectus, including a preliminary prospectus (if any), and all
amendments and supplements thereto, and such other documents as the Investor may
reasonably request to facilitate the disposition of the Registrable Securities
owned by the Investor. The Company will notify by facsimile each Investor whose
Registrable Securities are included in any Registration Statement of the filing
and the effectiveness of the Registration Statement and any post-effective
amendment on the date of filing of the Registration Statement, effectiveness of
the Registration Statement or any post-effective amendment, as applicable.
3.4. Additional Obligations. The Company will use its reasonable best
efforts to (a) register and qualify the Registrable Securities covered by a
Registration Statement under such other securities or blue sky laws of such U.S.
jurisdictions as each Investor who holds Registrable Securities being offered
reasonably requests, (b) prepare and file in those jurisdictions any amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain their effectiveness during the
Registration Period, (c) take any other actions necessary to maintain such
registrations and qualifications in effect at all times during the Registration
Period, and (d) take any other actions reasonably necessary or advisable to
qualify the Registrable Securities for sale in such jurisdictions during the
Registration Period. Notwithstanding the foregoing, the Company is not required,
in connection with such obligations, to (i) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3.4, (ii) subject itself to general taxation in any such jurisdiction,
(iii) file a general consent to service of process in any such jurisdiction,
(iv) provide any undertakings that cause material expense or burden to the
Company, or (v) make any change in its charter or bylaws, which in each case the
Company determines to be contrary to the best interests of the Company and its
shareholders.
3.5. Suspension of Resale Rights.
(a) During the Registration Period, the Company will notify by
facsimile each Investor who holds Registrable Securities being sold
pursuant to a Registration Statement of the happening of any event of
which the Company has knowledge as a result of which the prospectus
included in the Registration Statement as then in effect includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (each an "Event"). The Company will promptly make such
notification after the Company becomes aware of the event (but in no
event will the Company disclose to any Investor any of the facts or
circumstances regarding the event), will promptly (but in no event later
than 10 business days after the Company becomes aware of the event)
prepare a supplement or amendment to the Registration Statement to
correct such untrue statement or omission, and will deliver a number of
copies of such supplement or amendment to each Investor as such Investor
may reasonably request. Each Investor will hold in confidence and will
not make any disclosure of any Event and any related information
disclosed by the Company unless (i) the release of such information is
ordered pursuant to a subpoena or other order from a court or government
body of competent
5
jurisdiction, (ii) the information has been made generally available to
the public other than by disclosure in violation of this or any other
agreement (to the knowledge of the relevant Investor), (iii) the
information was developed independently by an Investor without breach of
this Agreement, (iv) the information was known to the Investor before
receipt of such information from the Company, or (v) the information was
disclosed to the Investor by a third party not under an obligation of
confidentiality. However, an Investor may make disclosure of an Event
and/or any related information disclosed by the Company to any attorney,
adviser or other third party retained by it that needs to know the
information, as determined in good faith by the Investor ("Investor
Representative"), if the Investor advises the Investor Representative of
the confidentiality provisions of this Section 3.5(a), but the Investor
will be liable for any act or omission of any of its Investor
Representatives relative to such information as if the act or omission
was that of the Investor. Unless legally prohibited from so doing, each
Investor will, upon learning that disclosure of such confidential
information is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company
and allow the Company, at the Company's expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for,
such confidential information.
(b) Notwithstanding the obligations under Section 3.5(a) or any
provision of this Agreement, if (i) in the good faith judgment of the
Company, following consultation with legal counsel, it would be
detrimental to the Company and its shareholders for resales of
Registrable Securities to be made pursuant to the Registration Statement
due to the existence of a material development or potential material
development involving the Company which the Company would be obligated to
disclose in the Registration Statement, which disclosure would be
premature or otherwise inadvisable at such time or would have a Material
Adverse Effect upon the Company and its shareholders, or (ii) in the good
faith judgment of the Company, it would adversely affect or require
premature disclosure of the filing of a Company-initiated registration of
any class of its equity securities, then the Company will have the right
to suspend the use of the Registration Statement for a period of not more
than 30 calendar days, provided, however, that the Company may so defer
or suspend the use of the Registration Statement no more than 60 calendar
days in a calendar year, and provided, further, that, after deferring or
suspending the use of the Registration Statement, the Company may not
again defer or suspend the use of the Registration Statement until a
period of 30 calendar days has elapsed after resumption of the use of the
Registration Statement.
(c) Subject to the Company's rights under this Section 3.5, during
the Registration Period, the Company will use its best efforts to prevent
the issuance of any stop order or other suspension of effectiveness of a
Registration Statement and, if such an order is issued, will use its best
efforts to obtain the withdrawal of such order at the earliest possible
time and the Company will promptly notify each Investor that holds
Registrable Securities being sold of the issuance of such order and the
resolution thereof.
(d) Notwithstanding anything to the contrary contained herein or
in the Purchase Agreement, if the use of the Registration Statement is
suspended by the Company, then the Company will promptly give notice of
the suspension to all Investors whose securities are covered by the
Registration Statement and will promptly notify each such Investor as
soon as possible that the use of the Registration Statement may be
resumed.
3.6. Review by the Investors. The Company will permit a single firm of
legal counsel, designated in writing by the Investors in accordance with Section
11.12 (the "Investors' Counsel"), to review the Registration Statement and all
amendments and supplements thereto (as well as all requests for acceleration or
effectiveness thereof) a reasonable period of time prior to their filing with
the SEC, and will not file any document in a form to which such counsel
reasonably objects, unless otherwise required
6
by law in the opinion of the Company's counsel; provided that the time periods
set forth in Section 2.2 shall be tolled to the extent that such legal counsel
does not deliver its final comments relating to such Registration Statement and
all amendments and supplements thereto (as well as all requests for acceleration
or effectiveness thereof) to the Company within three business days after
receipt of such Registration Statement and all amendments and supplements
thereto (as well as all requests for acceleration or effectiveness thereof). The
sections of any such Registration Statement including information with respect
to the Investors, the Investors' beneficial ownership of securities of the
Company and the Investors' intended method of disposition of Registrable
Securities must conform to the information provided to the Company by each of
the Investors, so long as they comply with all applicable laws in the Company's
reasonable opinion. The Company acknowledges and agrees that the use of
Investors' Counsel is for the purposes of the Company's convenience only and
that such Counsel shall not be deemed to be the individual counsel of each
Investor as each such Investor has been represented by separate counsel with
respect to the transactions contemplated hereby. The Company further
acknowledges and agrees that the use of Investors' Counsel pursuant hereto shall
not be deemed to create a presumption that the Investors are in any way acting
in concert with respect to the transactions contemplated by this agreement or
the Purchase Agreement.
3.7. Due Diligence; Confidentiality.
(a) During the Registration Period, the Company will make
available, upon reasonable advance notice during normal business hours,
for inspection by any Investor whose Registrable Securities are being
sold pursuant to a Registration Statement and any Investor Representative
retained by any such Investor (collectively, the "Inspectors"), all
pertinent financial and other records, pertinent corporate documents and
properties of the Company (collectively, the "Records") as reasonably
necessary to enable each Inspector to exercise its due diligence
responsibility in connection with or related to the contemplated
offering. The Company will cause its officers, directors and employees to
supply all information that any Inspector may reasonably request for
purposes of performing such due diligence.
(b) Each Inspector will hold in confidence, use only in connection
with the contemplated offering and not make any disclosure (except to an
Investor) of all Records and other information that the Company
determines in good faith to be confidential, and of which determination
the Inspectors are so notified, unless (i) the disclosure of such Records
is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court or government body of
competent jurisdiction, (iii) the information in such Records has been
made generally available to the public other than by disclosure in
violation of this or any other agreement (to the knowledge of the
relevant Inspector), (iv) the Records or other information was developed
independently by an Inspector without breach of this Agreement, (v) the
information was known to the Inspector before receipt of such information
from the Company, or (vi) the information was disclosed to the Inspector
by a third party not under an obligation of confidentiality. However, an
Inspector may make disclosure of such Records and other information to
any attorney, adviser or other third party retained by it that needs to
know the information, as determined in good faith by the Inspector
("Inspector Representative"), if the Inspector advises the Inspector
Representative of the confidentiality provisions of this Section 3.7(b),
but the Inspector will be liable for any act or omission of any of its
Inspector Representatives relative to such information as if the act or
omission was that of the Inspector. Unless legally prohibited from so
doing, each Investor will, upon learning that disclosure of Records
containing confidential information is sought in or by a court or
governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, the Records deemed
7
confidential. Nothing herein will be deemed to limit the Investor's
ability to sell Registrable Securities in a manner that is otherwise
consistent with applicable laws and regulations.
(c) The Company will hold in confidence, and will not make any
disclosure of, information concerning an Investor provided to the Company
under this Agreement unless (i) disclosure of such information is
necessary to comply with federal or state securities laws, or any
exchange listing or similar rules and regulations, (ii) the disclosure of
such information is necessary to avoid or correct a misstatement or
omission in any Registration Statement, (iii) the release of such
information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, (iv) such information has
been made generally available to the public other than by disclosure in
violation of this Agreement or any other agreement, (v) the information
was disclosed to the Company by a third party not under an obligation of
confidentiality or (vi) such Investor consents to the form and content of
any such disclosure. However, the Company may make disclosure of such
information to any attorney, adviser or other third party retained by it
that needs to know the information, as determined in good faith by the
Company ("Company Representative"), if the Company advises the Company
Representative of the confidentiality provisions of this Section 3.7(c),
but the Company will be liable for any act or omission of any Company
Representatives relative to such information as if the act or omission
was that of the Company. If the Company learns that disclosure of such
information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, the
Company will (unless legally prohibited from so doing) give prompt notice
to such Investor prior to making such disclosure and allow such Investor,
at its expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, such information.
3.8. Listing. During the Registration Period, the Company shall use its
reasonable best efforts to (i) cause all of the Registrable Securities covered
by each Registration Statement to be listed on each national securities exchange
on which securities of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable Securities is then permitted
under the rules of such exchange, or (ii) to the extent the securities of the
same class or series are not then listed on a national securities exchange,
secure the designation and quotation of all of the Registrable Securities
covered by each Registration Statement on the NYSE.
3.9. Share Certificates. The Company will cooperate with the Investors
who hold Registrable Securities being sold to facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legends) representing
Registrable Securities to be offered pursuant to a Registration Statement and
will enable such certificates to be in such denominations or amounts as the case
may be, and registered in such names as the Investors may reasonably request,
all in accordance with Article V of the Purchase Agreement.
3.10. Plan of Distribution. At the request of the Investors holding a
majority in interest of the Registrable Securities registered pursuant to the
Registration Statement under Section 2.1, the Company will promptly prepare and
file with the SEC such amendments (including post-effective amendments) and
supplements to the Registration Statement, and the prospectus used in connection
with the Registration Statement, as may be necessary to change the plan of
distribution set forth in such Registration Statement.
3.11. Securities Laws Compliance. During the Registration Period, the
Company will comply with all applicable laws related to any Registration
Statement relating to the sale of Registrable Securities and to offering and
sale of securities and with all applicable rules and regulations of governmental
authorities in connection therewith (including, without limitation, the
Securities Act, the Exchange Act and the rules and regulations promulgated by
the SEC).
8
3.12. Further Assurances. The Company will take all other reasonable
actions as any Investor may reasonably request to expedite and facilitate
disposition by such Investor of the Registrable Securities pursuant to the
Registration Statement.
ARTICLE IV
OBLIGATIONS OF THE INVESTORS
4.1. Investor Information. As a condition to the obligations of the
Company to complete any registration pursuant to this Agreement with respect to
the Registrable Securities of each Investor, such Investor will furnish to the
Company such information regarding itself, the Registrable Securities held by it
and the intended methods of disposition of the Registrable Securities held by it
as is reasonably required by the Company to effect the registration of the
Registrable Securities. At least five business days prior to the first
anticipated filing date of a Registration Statement for any registration under
this Agreement, the Company will notify each Investor of the information the
Company requires from that Investor whether or not such Investor has elected to
have any of its Registrable Securities included in the Registration Statement.
If the Company has not received the requested information from an Investor by
the business day prior to the anticipated filing date, then the Company may file
the Registration Statement without including Registrable Securities of that
Investor.
4.2. Further Assurances. Each Investor will cooperate with the Company,
as reasonably requested by the Company, in connection with the preparation and
filing of any Registration Statement hereunder, unless such Investor has
notified the Company in writing of such Investor's irrevocable election to
exclude all of such Investor's Registrable Securities from such Registration
Statement.
4.3. Suspension of Sales. Upon receipt of any notice from the Company
under Section 3.5, each Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until (i) it receives copies of a supplemented or amended
prospectus contemplated by Section 3.5(a) or (ii) the Company advises the
Investor that a suspension of sales under Section 3.5(b) has terminated. If so
directed by the Company, each Investor will deliver to the Company (at the
expense of the Company) or destroy all copies in the Investor's possession
(other than a limited number of file copies) of the prospectus covering such
Registrable Securities that is current at the time of receipt of such notice.
ARTICLE V
EXPENSES OF REGISTRATION
During the Registration Period, in connection with registrations, filings
or qualifications pursuant to Articles II and III, the Company will bear (i) all
reasonable expenses (other than underwriting discounts and commissions, and
transfer taxes, if any) incurred in connection with registrations, filings or
qualifications pursuant to Articles II and III of this Agreement, including,
without limitation, all registration, listing and qualifications fees, printers
and accounting fees; (ii) the fees and disbursements of legal counsel for the
Company; and (iii) the reasonable fees and disbursements of Investors' Counsel
(not to exceed $10,000).
ARTICLE VI
INDEMNIFICATION
In the event that any Registrable Securities are included in a
Registration Statement under this Agreement:
9
6.1. Indemnification of the Investors. To the extent permitted by law,
the Company will indemnify and hold harmless each Investor, any underwriter (as
defined in the Securities Act) for the Investors, any directors or officers of
such Investor and any person who controls such Investor within the meaning of
the Securities Act or the Exchange Act or acts as such Investor's investment
advisor (each, an "Indemnified Person") against any losses, claims, damages,
expenses or liabilities (joint or several) (collectively, and together with
actions, proceedings or inquiries by any regulatory or self-regulatory
organization, whether commenced or threatened in respect thereof, "Claims") to
which any of them become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Claims arise out of or are based upon any of the
following statements, omissions or violations in a Registration Statement filed
pursuant to this Agreement, any post-effective amendment thereof or any
prospectus included therein: (a) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
post-effective amendment thereof or any final prospectus (as amended or
supplemented, if the Company files any amendment or supplement thereto with the
SEC) included therein or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading or (b) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or any other law related to the Registration
Statement, including without limitation any state securities law or any rule or
regulation thereunder (the matters in the foregoing clauses (a) and (b) being,
collectively, "Violations"). Subject to the restrictions set forth in Section
6.3 with respect to the number of legal counsel, the Company will reimburse the
Investors and each such underwriter or controlling person and each such other
Indemnified Person, promptly as such expenses are incurred and are due and
payable, for any reasonable legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6.1: (i) does not apply to Claims arising out of or
based upon a Violation that occurs in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of an
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto, if
such prospectus was timely made available by the Company pursuant to Section 3.3
hereof; (ii) does not apply to a Claim arising out of or based on any failure by
any Indemnified Person to comply with prospectus delivery requirements (or the
Securities Act, the Exchange Act or any other law or legal requirement
applicable to them) or any covenant or agreement contained in the Purchase
Agreement or this Agreement; and (iii) does not apply to amounts paid in
settlement of any Claim if such settlement is made without the prior written
consent of the Company, which consent will not be unreasonably withheld or
delayed. This indemnity obligation will remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Persons
and will survive the transfer of the Registrable Securities by the Investors
under Article IX of this Agreement.
6.2. Indemnification of the Company and Certain Shareholders. In
connection with any Registration Statement in which an Investor is
participating, each such Investor will indemnify and hold harmless, severally
and not jointly, to the same extent and in the same manner set forth in Section
6.1 above, the Company, each of its directors, each of its officers who signs
the Registration Statement, each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, and any other shareholder
selling securities pursuant to the Registration Statement and any of its
directors and officers and any person who controls such shareholder within the
meaning of the Securities Act or the Exchange Act (each an "Indemnified Person")
against any Claim to which any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such Claim arises out of or is
based upon any of the following: (a) any matter of the type referred to clause
(a) in Section 6.1 above in each case to the extent (and only to the extent)
that such violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Investor expressly for use in
connection with such Registration Statement or (b) any failure by such Investor
to comply with prospectus delivery requirements (or the Securities Act, the
Exchange Act or any other law or legal requirement applicable to sales under the
Registration Statement) or any covenant or agreement contained
10
in the Purchase Agreement or this Agreement with respect to sales under the
Registration Statement. Subject to the restrictions set forth in Section 6.3,
such Investor will promptly reimburse any legal or other expenses, promptly as
such expenses are incurred and due and payable, reasonably incurred by them in
connection with investigating or defending any such Claim. However, the
indemnity agreement contained in this Section 6.2 does not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent will not be unreasonably
withheld, and no Investor will be liable under this Agreement (including this
Section 6.2 and Article VII) for the amount of any Claim that exceeds the net
proceeds actually received by such Investor as a result of the sale of such
Investor's Registrable Securities. This indemnity will remain in full force and
effect regardless of any investigation made by or on behalf of an Indemnified
Party and will survive the transfer of the Registrable Securities by the
Investors under Article IX of this Agreement.
6.3. Notification and Other Indemnification Procedures. Promptly after
receipt by an Indemnified Person under this Article VI of notice of the
commencement of any action (including any governmental action), such Indemnified
Person will, if a Claim in respect thereof is to be made against any
indemnifying party under this Article VI, deliver to the indemnifying party a
written notice of the commencement thereof. The indemnifying party may
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly given notice, assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying parties
and the Indemnified Person. In that case, the indemnifying party will diligently
pursue such defense. If, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the Indemnified Person
and the indemnifying party would be inappropriate due to actual or potential
conflicts of interest between the Indemnified Person and any other party
represented by such counsel in such proceeding or the actual or potential
defendants in, or targets of, any such action including the Indemnified Person
and such Indemnified Person reasonably determines that there may be legal
defenses available to such Indemnified Person that are different from or in
addition to those available to the indemnifying party, then the Indemnified
Person is entitled to assume such defense and may retain its own counsel, with
the reasonable fees and expenses to be paid by the indemnifying party (subject
to the restrictions on settlement under Section 6.1 or 6.2, as applicable).
However, the Company will pay for only one separate legal counsel for the
Investors collectively, and such legal counsel will be selected in accordance
with Section 11.12. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action does not
relieve an indemnifying party of any liability to an Indemnified Person under
this Article VI, except to the extent that the indemnifying party is prejudiced
in its ability to defend such action. The indemnification required by this
Article VI will be made by periodic payments of the amount thereof during the
course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
ARTICLE VII
CONTRIBUTION
To the extent that any indemnification provided for herein is prohibited
or limited by law, the indemnifying party will contribute the amount paid or
payable by the Indemnified Party as a result of such Claim in such proportion as
is appropriate to reflect not only the relative benefits received by the
Indemnified Party and the indemnifying party, but also the relative fault of the
Indemnified Party and the indemnifying party, as well as any other relevant
equitable considerations. However, (a) no contribution will be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Article VI, (b) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any person of
Registrable Securities who was not guilty of such fraudulent misrepresentation
and (c) no Investor will be liable under this Agreement (including this Article
VII) for
11
the amount of any Claim that exceeds the net proceeds actually received by such
Investor as a result of the sale of such Investor's Registrable Securities.
ARTICLE VIII
EXCHANGE ACT REPORTING
To make available to the Investors the benefits of Rule 144 or any
similar rule or regulation of the SEC that may at any time permit the Investors
to sell securities of the Company to the public without registration, the
Company will, until the end of the Registration Period:
(a) File with the SEC in a timely manner, and make and keep available,
all reports and other documents required of the Company under the Securities Act
and the Exchange Act so long as the Company remains subject to such requirements
(it being understood that nothing herein limits the Company's obligations under
Section 4.3 of the Purchase Agreement) and the filing and availability of such
reports and other documents is required for the applicable provisions of Rule
144; and
(b) Furnish to each Investor, so long as such Investor holds Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of the Securities Act and the
Exchange Act, (ii) if not available on the SEC's XXXXX system, a copy of the
most recent annual or quarterly report of the Company and such other reports and
documents filed by the Company with the SEC and (iii) such other information as
may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
ARTCILE IX
ASSIGNMENT OF REGISTRATION RIGHTS
The rights of the Investors hereunder, including the right to have the
Company register Registrable Securities pursuant to this Agreement, shall be
assignable by each Investor to any transferee or assignee of the Registrable
Securities (i) in the case of either an assignment of Registrable Securities to
an affiliate of such Investor or an assignment of all Registrable Securities
held by such Investor without the consent of the Company and (ii) in the case of
an assignment of less than all of the Registrable Securities held by such
Investor with the consent of the Company (which consent shall not be
unreasonably withheld or delayed), if (a) the Investor agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment, (b)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being transferred or assigned, (c) such transfer or assignment was not made
under the Registration Statement or Rule 144, (d) at or before the time the
Company received the written notice contemplated by clause (b) of this sentence,
the transferee or assignee agrees in writing with the Company to be bound by all
of the provisions contained herein, (e) such transfer is made in accordance with
the applicable requirements of the Purchase Agreement and (f) the transferee has
provided to the Company an investor questionnaire (or equivalent document)
evidencing that the transferee is a "qualified institutional buyer" or an
"accredited investor" as defined in Rule 501(a)(1),(2),(3) or (7) of Regulation
D. Any transferee or assignee of an Investor under Article IX shall be deemed an
"Investor" for all purposes of this Agreement, and shall be entitled to all
rights of, and subject to all obligations (including indemnification
obligations) of, an Investor hereunder.
12
ARTICLE X
AMENDMENT OF REGISTRATION RIGHTS
This Agreement may be amended and the obligations hereunder may be waived
(either generally or in a particular instance, and either retroactively or
prospectively) only with the written consent of the Company and of the Investors
who then hold a majority in interest of the Registrable Securities (but not
including any Investor who is not affected by such amendment or waiver). Any
amendment or waiver effected in accordance with this Article X is binding upon
each Investor and the Company. Notwithstanding the foregoing, no amendment or
waiver will retroactively affect any Investor without its consent, or will
prospectively adversely affect any Investor who no longer owns any Registrable
Securities without its consent.
ARTICLE XI
MISCELLANEOUS
11.1. Conflicting Instructions. A person or entity is deemed to be a
holder of Registrable Securities whenever such person or entity owns of record
such Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company will act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.
11.2. Notices. Except as set forth in Sections 3.3 and 3.5, any notices
required or permitted to be given under the terms of this Agreement will be
given and deemed received as set forth in the Purchase Agreement.
11.3. Waiver. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, does not operate as a waiver thereof.
11.4. Governing Law. This Agreement will be governed by and interpreted
in accordance with the laws of the State of New York without regard to the
principles of conflict of laws.
11.5. Severability. If any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
will be deemed modified in order to conform with such statute or rule of law.
Any provision hereof that may prove invalid or unenforceable under any law will
not affect the validity or enforceability of any other provision hereof.
11.6. Entire Agreement. This Agreement and the Purchase Agreement
(including all schedules and exhibits thereto) constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein or therein. This Agreement supersedes all
prior agreements and understandings among the parties hereto with respect to the
subject matter hereof.
11.7. Successors and Assigns. Subject to the requirements of Article IX
hereof, this Agreement inures to the benefit of and is binding upon the
successors and assigns of each of the parties hereto. Notwithstanding anything
to the contrary herein, including, without limitation, Article IX, the rights of
an Investor hereunder are assignable to and exercisable by a bona fide pledgee
of the Registrable Securities in connection with an Investor's margin or
brokerage accounts.
11.8. Use of Pronouns. All pronouns refer to the masculine, feminine or
neuter, singular or plural, as the context may require.
13
11.9. Headings. The headings of this Agreement are for convenience of
reference only, are not part of this Agreement and do not affect its
interpretation.
11.10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which is deemed an original but all of which constitute
one and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission, and facsimile
signatures are binding on the parties hereto.
11.11. Further Assurances. Each party will do and perform, or cause to be
done and performed, all such further acts and things, and will execute and
deliver all other agreements, certificates, instruments and documents, as
another party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
11.12. Consents. All consents and other determinations to be made by the
Investors pursuant to this Agreement will be made by the Initial Investors or
the Investors holding a majority in interest of the Registrable Securities.
11.13. No Strict Construction. The language used in this Agreement is
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
11.14. Waive Jury Trial. The Company and the Investors hereby waive trial
by jury in any action, proceeding or counterclaim brought by any of the parties
hereto against the another party in respect of any matter arising out of or in
connection with this Agreement.
11.15. Massachusetts Business Trusts. A copy of the Agreement and
Declaration of Trust of each Investor that is a fund or series investment
company (each, a "Fund") organized as a Massachusetts business trust (each, a
"Trust") is on file with the Secretary of the Commonwealth of Massachusetts. The
Company and the other Investors acknowledge and agree that this Agreement is not
executed on behalf of or binding upon any of the trustees, officers, directors
or shareholders of a Trust individually, but is binding upon the applicable Fund
and its assets and property. The Company agrees that no trustee, officer,
director or shareholder of a Trust or the applicable Fund may be held personally
liable or responsible for any obligations of a Fund arising out of this
Agreement. With respect to all obligations of the Fund arising out of this
Agreement, the Company shall look for payment or satisfaction of any claim
solely to the assets and property of the Fund. The Company is expressly put on
notice that the rights and obligations of each series of shares of a Trust under
its Agreement and Declaration of Trust are separate and distinct from those of
any and all other series.
* * * *
14
IN WITNESS WHEREOF, the undersigned Investors and the Company have caused
this Agreement to be duly executed as of the date first above written.
COMPANY:
MIDWEST EXPRESS HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board,
President and Chief
Executive Officer
[SIGNATURES CONTINUE ON THE FOLLOWING PAGES]
15
INVESTORS:
FIDELITY PURITAN TRUST:
FIDELITY LOW-PRICED STOCK FUND
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Assistant Treasurer
[OR]
--------------------------------------
By: __________________________________
Name: ________________________________
Title: _______________________________
16
INVESTORS:
SF CAPITAL PARTNERS LTD.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Authorized Signatory
[OR]
--------------------------------------
By: __________________________________
Name: ________________________________
Title: _______________________________
17
INVESTORS:
Advantus Series Fund, Inc. Small
Company Value Portfolio
By: State Street Research & Management
Company
Its: Adviser
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director and Chief
Investment Officer - Equity
[OR]
--------------------------------------
By: __________________________________
Name: ________________________________
Title: _______________________________
18
INVESTORS:
Advantus Venture Fund, Inc.
By: State Street Research & Management
Company
Its: Adviser
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director and Chief
Investment Officer - Equity
[OR]
--------------------------------------
By: __________________________________
Name: ________________________________
Title: _______________________________
19
INVESTORS:
General American Capital Company
Small-Cap Equity Fund
By: State Street Research & Management
Company
Its: Adviser
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director and Chief
Investment Officer - Equity
[OR]
--------------------------------------
By: __________________________________
Name: ________________________________
Title: _______________________________
20
INVESTORS:
Minnesota Life Insurance Company
By: State Street Research & Management
Company
Its: Adviser
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director and Chief
Investment Officer - Equity
[OR]
--------------------------------------
By: __________________________________
Name: ________________________________
Title: _______________________________
21
INVESTORS:
Metropolitan Series Fund, Inc.
State Street Research Aurora Portfolio
By: State Street Research & Management
Company
Its: Adviser
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director and Chief
Investment Officer - Equity
[OR]
--------------------------------------
By: __________________________________
Name: ________________________________
Title: _______________________________
22
INVESTORS:
State Street Research Aurora Fund
By: State Street Research & Management
Company
Its: Adviser
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director and Chief
Investment Officer - Equity
[OR]
--------------------------------------
By: __________________________________
Name: ________________________________
Title: _______________________________
23
