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EXHIBIT 10.2
SHAREHOLDERS AGREEMENT
dated as of
October 26, 1999
among
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ TESTAMENTARY TRUST
NEMOURS FOUNDATION
AND
FLORIDA EAST COAST INDUSTRIES INC.
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TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS
SECTION 1.01. Definitions...................................................2
ARTICLE 2 RESTRICTIONS ON TRANSFER AND PURCHASE
SECTION 2.01. General.......................................................4
SECTION 2.02. Restrictions on Transfers.....................................4
SECTION 2.03. Indemnification by Shareholders...............................5
SECTION 2.04. Restrictions on Purchase......................................5
ARTICLE 3 REGISTRATION RIGHTS
SECTION 3.01. Demand Registration...........................................6
SECTION 3.02. Piggyback Registration........................................8
SECTION 3.03. Holdback Agreements...........................................9
SECTION 3.04. Registration Procedures.......................................9
SECTION 3.05. Indemnification by the Company...............................13
SECTION 3.06. Indemnification by Participating Shareholder.................14
SECTION 3.07. Conduct of Indemnification Proceedings.......................15
SECTION 3.08. Contribution.................................................16
SECTION 3.09. Participation in Public Offering.............................17
SECTION 3.10. No Transfer of Registration Rights...........................17
ARTICLE 4 MISCELLANEOUS
SECTION 4.01. Approval of Rights Plan......................................18
SECTION 4.02. Entire Agreement.............................................18
SECTION 4.03. Binding Effect; Benefit......................................18
SECTION 4.04. Assignability................................................18
SECTION 4.05. Amendment; Waiver; Effectiveness.............................18
SECTION 4.06. Notices......................................................19
SECTION 4.07. Headings.....................................................20
SECTION 4.08. Counterparts.................................................20
SECTION 4.09. Applicable Law...............................................20
SECTION 4.10. Specific Enforcement.........................................20
SECTION 4.11. Severability.................................................21
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SHAREHOLDERS AGREEMENT
AGREEMENT dated as of October 26, 1999 by and among Florida East Coast
Industries, Inc. a Florida Corporation (the "COMPANY"), the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Testamentary Trust (the "TRUST") and The Nemours Foundation, a Florida
corporation (the "Foundation").
W I T N E S S E T H :
WHEREAS, the Company and The St. ▇▇▇ Company, a Florida corporation
("ST. ▇▇▇"), have entered into a Distribution and Recapitalization Agreement
dated as of the date hereof (the "DISTRIBUTION AGREEMENT"; capitalized terms
contained herein and not otherwise defined herein shall have the meanings
ascribed to them in the Distribution Agreement);
WHEREAS, subject to the terms of the Distribution Agreement, the
Company and St. ▇▇▇ will effect the Recapitalization pursuant to which, inter
alia, (i) each outstanding share of the Common Stock, no par value, of the
Company ("OLD COMMON Stock"),other than shares of Common Stock of the Company
beneficially owned by St. ▇▇▇, will be re-designated as Class A Common Stock
(the "CLASS A STOCK") and (ii) each outstanding share of Old Common Stock
beneficially owned by St. ▇▇▇ will be exchanged for one share of a new series of
Class B Common Stock, no par value, of the Company (the "CLASS B STOCK" and
together with the Class A Common Stock, "COMMON STOCK");
WHEREAS, subject to the terms of the Distribution Agreement, St. ▇▇▇
will effect the Distribution pursuant to which St. ▇▇▇ will distribute to its
stockholders on the Distribution Date all of the shares of Class B Stock
received in connection with the Recapitalization;
WHEREAS, the Trust is the holder of 49,643,292 shares of Common Stock
of St. ▇▇▇ and will therefore receive shares of Class B Common Stock in the
Distribution;
WHEREAS, the Foundation is the holder of 2,232,408 shares of Common
Stock of St. ▇▇▇ and will therefore receive shares of Class B Common Stock in
the Distribution;
WHEREAS, the Foundation is the holder of 1,800,896 shares of Old Common
Stock which will be re-designated into 1,800,896 shares of Class A Common Stock
upon consummation of the Recapitalization;
WHEREAS, the parties hereto desire to enter into this Agreement in
order to preserve the tax-free nature of the Distribution and to govern certain
of their rights, duties and obligations after consummation of the Distribution.
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NOW, THEREFORE, the parties hereto agree as follows,
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. The following terms, as used herein, have the
following meanings:
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person, provided that no securityholder of the Company shall be deemed an
Affiliate of any other securityholder solely by reason of any investment in the
Company and no individual trustee of the Trust or individual director of the
Foundation, acting in his or her individual or separate corporate capacity and
not in concert with any other trustee of the Trust, director of the Foundation
or shareholder of the Company, shall be deemed an Affiliate of the Trust or an
Affiliate of the Foundation solely by virtue of his or her position as a trustee
or director of such entity. For the purpose of this definition, the term
"CONTROL" (including with correlative meanings, the terms "CONTROLLING",
"CONTROLLED BY" and "UNDER COMMON CONTROL with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise.
"BENEFICIALLY OWN" shall have the meaning set forth in Rule 13d-3 of
the Exchange Act.
"BOARD" means the board of directors of the Company.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized by law to close.
"COMPANY SECURITIES" means any securities issued by the Company
including, but not limited to, the Common Stock.
"EQUITY SECURITIES" means Common Stock, securities convertible into or
exchangeable for Common Stock and options, warrants or other rights to acquire
Common Stock.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FINANCIAL EXPERT" means a nationally recognized investment banking
firm that specializes in providing valuation and valuation related services
selected by the Company.
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"ORIGINAL SHARES" means (i) shares of Class A Common Stock currently
owned by either of the Shareholders as of the date hereof, (ii) those shares of
Class B Common Stock received by the Shareholders in connection with the
Distribution and (iii) any other securities issuable with respect to such shares
of Class A Common Stock or Class B Common Stock by way of stock dividend or
stock split or in connection with a merger, recapitalization, consolidation,
combination of shares or other form of reorganization.
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"PREFERRED STOCK" means any shares of preferred stock of the Company
issued after the date hereof.
"PUBLIC OFFERING" means any primary or secondary public offering of
equity securities of the Company pursuant to an effective registration statement
under the Securities Act other than pursuant to a registration statement filed
in connection with a transaction of the type described in Rule 145 of the
Securities Act or for the purpose of issuing securities pursuant to an employee
benefit plan.
"REGISTRATION EXPENSES" means (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the securities registered), (iii) printing expenses, (iv)
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), (v) reasonable fees and disbursements of counsel for the Company and
customary fees and expenses for independent certified public accountants
retained by the Company (including expenses relating to any comfort letters or
costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letters requested pursuant to Section 3.04(i)
hereof), (vi) the reasonable fees and expenses of any special experts retained
by the Company in connection with such registration, (vii) fees and expenses in
connection with any review of underwriting arrangements by the National
Association of Shares Dealers, Inc. (the "NASD") including fees and expenses of
any "qualified independent underwriter", and (viii) any other fees and expenses
customarily paid by issuers in connection with public offerings provided,
however, that the term "Registration Expenses" shall not include any
underwriting fees, discounts or commissions attributable to the sale of Original
Shares, or any out-of-pocket expenses of the Shareholders or any fees and
expenses of underwriter's counsel.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
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"SHAREHOLDER" means each of the Trust and the Foundation, so long as
such Person shall beneficially own any Common Stock.
"SHARES" means shares of Class B Stock held by the Shareholders.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"UNDERWRITTEN PUBLIC OFFERING" means a firmly underwritten Public
Offering of securities of the Company pursuant to an effective registration
statement under the Securities Act.
ARTICLE 2
RESTRICTIONS ON TRANSFER AND PURCHASE
SECTION 2.1. General. (a) Each Shareholder agrees that it will not,
directly or indirectly, sell, assign, transfer, grant a participation in, pledge
or otherwise dispose of ("TRANSFER") any Common Stock (or solicit any offers to
buy or otherwise acquire, or take a pledge of any Common Stock) except in
compliance with the Securities Act and the terms and conditions of this
Agreement.
(b) Any attempt to transfer any Common Stock not in compliance with
this Agreement shall be null and void and the Company shall not, and shall cause
any transfer agent not to, give any effect in the Company's stock records to
such attempted transfer.
SECTION 2.2. Restrictions on Transfers.
(a) Neither Shareholder may transfer, agree to transfer or negotiate
regarding a transfer or agreement to transfer any shares of Common Stock during
the time period beginning on the date of this Agreement and ending six months
after the Distribution Date (the "SIX-MONTH ANNIVERSARY").
(b) Any time after the Six-month Anniversary until the date which is
two years after the Distribution Date (the "TWO-YEAR ANNIVERSARY"), the
Shareholders may transfer, in one transaction or in a series of transactions, up
to an aggregate for all such transfers of the number of shares of Common Stock
equal to 10% of the total number of shares of Common Stock as are outstanding
immediately upon consummation of the Distribution. At any time after the
Two-year Anniversary, each Shareholder may transfer, agree to transfer or
negotiate regarding a transfer or agreement to transfer any of its shares of
Common Stock.
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(c) Other than the transfers permitted by Section 2.02(b) of this
Agreement, neither Shareholder may transfer, agree to transfer or negotiate
regarding a transfer or agreement to transfer any shares of Common Stock during
the time period beginning six months after the date of the Distribution and
ending two years after the date of the Distribution unless such Shareholder
receives a ruling from the Internal Revenue Service or an opinion of nationally
recognized tax counsel, reasonably satisfactory to the Company, to the effect
that the transfer of such Common Stock will not be treated as part of a "plan"
or "series of related transactions" involving the Distribution within the
meaning of Section 355(e) of the Internal Revenue Code of 1986, as amended (the
"CODE"), and any regulations thereunder.
SECTION 2.3. Indemnification by Shareholders. In addition to the rights
of the Company under Section 4.10 hereof, each Shareholder shall severally and
not jointly indemnify, defend and hold harmless the FEC Indemnitees from and
against any and all Liability (including (i) any liability for which the Company
may be obligated to indemnify the St. ▇▇▇ Indemnitees under the Distribution
Agreement relating to the application of Section 355 of the Code because of a
failure to comply with the restrictions or transfer in Section 2.02 hereof and
(ii) any lost financing or other corporate opportunity of the Company related to
the Company's inability to issue stock or engage in a transaction without
violating Section 355 of the Code to the extent that the Company could have
issued such stock or engaged in such transaction without so violating Section
355 had there not been a violation by the Shareholders of this Article 2) to
which the FEC Indemnitees may become subject, arising from any failure by such
Shareholder to comply with its obligations under Article 2 of this Agreement.
SECTION 2.4. Restrictions on Purchase. (a) Subject to Section 2.04(b),
until the date which is three years after the Distribution Date, neither
Shareholder nor any of their respective Affiliates (nor any Person acting on
behalf of or in concert with either Shareholder or either Shareholder's
respective Affiliates) may, directly or indirectly, (i) acquire or agree to
acquire any voting securities of the Company or (ii) form, join or in any way
participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange
Act) with respect to any voting securities of the Company.
(b) If at any time after the Distribution Date the Company issues any
shares of Class B Common Stock, Section 2.04(a)(i) shall not restrict either
Shareholder or any of their respective Affiliates to the extent (and only to the
extent) that such Person acquires shares of Class B Common Stock solely to
maintain the same percentage ownership of the then outstanding shares of Class B
Common Stock as such Person owned immediately prior to the issuance by the
Company of shares of Class B Common Stock.
(c) From the date hereof until the Distribution is consummated, neither
Shareholder nor any of their respective Affiliates (nor any person acting on
behalf of or in concert with either Shareholder or either Shareholder's
respective
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Affiliates) may, directly or indirectly, acquire or agree to acquire any shares
of capital stock of St. ▇▇▇.
ARTICLE 3
REGISTRATION RIGHTS
SECTION 3.1. Demand Registration. (a) Subject to Article 2 hereof, if
the Company receives a written request by either or both Shareholders (a
"DEMANDING SHAREHOLDER") that the Company effect a registration under the
Securities Act of all or a portion of the Shareholder's Original Shares, and
specifying the intended method of disposition thereof, the Company will use its
best efforts to effect, as expeditiously as possible, the registration (a
"DEMAND REGISTRATION") under the Securities Act of such Original Shares. It is
understood that one Demand Registration may cover Original Shares of both
Demanding Shareholders.
(b) Notwithstanding Section 3.01(a) and subject to Article 2, the
Company shall not be obligated to effect more than three Demand Registrations
and the Company shall not be obligated to effect a Demand Registration unless
the aggregate proceeds expected to be received from the sale of the Original
Shares requested to be included in such Demand Registration, in the reasonable
opinion of a Financial Expert exercised in good faith, have a fair market value
of at least $50 million (provided that in connection with a Demand Registration
pursuant to which the Demanding Shareholder intends to sell all but not less
than all of its remaining Original Shares, the expected aggregate proceeds of
such registration may be less than $50 million unless, in the opinion of the
Company, such lesser amount is not reasonable in light of the expected
Registration Expenses or does not have a reasonable likelihood of being
successfully sold). In no event will the Company be required to effect more than
one Demand Registration within any six-month period.
(c) A registration requested pursuant to this Section 3.01 shall not be
deemed to have been effected (and therefore not requested for purposes of the
limitations in Section 3.01(b) on the number of the registrations that can be
made pursuant to Section 3.01(a)), (i) unless a registration statement with
respect thereto has become effective under the Securities Act and has remained
effective for a period of at least 180 days (or such shorter period in which all
Original Shares included in such registration statement have actually been sold
thereunder), provided that a registration which does not become effective after
the Company has filed a registration statement with respect thereto solely by
reason of the refusal to proceed by the Demanding Shareholder (other than a
refusal to proceed based upon the advice of counsel relating to a material
adverse change in, or other material development relating to, the business
properties, financial conditions or results of operations of the Company) shall
be deemed to have been effected by the Company at the request of the Demanding
Shareholder unless the
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Demanding Shareholder shall have elected to pay all Registration Expenses in
connection with such registration, (ii) if, after it has becomes effective, such
registration statement becomes subject to any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court for any
reason, or (iii) if the conditions to closing specified in the purchase
agreement or underwriting agreement entered into in connection with such
registration are not satisfied, other than solely by reason of some act or
omission by the Demanding Shareholder.
(d) The Company will pay all Registration Expenses in connection with
any Demand Registration.
(e) If a Demand Registration involves an Underwritten Public Offering
and the managing underwriter shall advise the Company and the Demanding
Shareholder that, in its view, the number of Original Shares to be included in
such registration (including Common Stock which the Company proposes to be
included exceeds the largest number of shares which can be sold without having a
materially adverse effect on such offering, including the price at which such
shares can be sold (the "MAXIMUM OFFERING SIZE"), the Company will include in
such registration, in the priority listed below, up to the Maximum Offering
Size:
(A) first, all Original Shares requested to be registered by
the Shareholders;
(B) second, any Common Stock proposed to be registered by the
Company.
(f) Upon written notice to the Requesting Shareholder, the Company may
postpone effecting a registration pursuant to this Section 3.01 on one occasion
during any period of six consecutive months for a reasonable time specified in
the notice but not exceeding 90 days (which period may not be extended or
renewed), if (1) a Financial Expert shall advise the Company and the Demanding
Shareholder in writing that effecting the registration would materially and
adversely affect an offering of securities of the Company the preparation of
which had then been commenced or (2) the Company is in possession of material
non-public information the disclosure of which during the period specified in
such notice the Company believes would not be in the best interests of the
Company.
SECTION 3.2. Piggyback Registration. (a) Subject to Article 2 hereof,
if the Company proposes to register any of its Common Stock in a Public Offering
under the Securities Act, whether or not for sale for its own account, it will
each such time, subject to the provisions of Section 3.02(b) and Section 3.02(c)
hereof, give prompt written notice at least 20 days prior to the anticipated
filing date of the registration statement relating to such registration to the
Shareholders, which notice shall set forth the Shareholders' rights under this
Section 3.02 and shall offer each Shareholder the opportunity to include in such
registration statement
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such number of Original Shares as each such Shareholder may request (a
"PIGGYBACK REGISTRATION"). Upon the written request of either Shareholder (a
"REQUESTING SHAREHOLDER") made within 10 days after the receipt of notice from
the Company (which request shall specify the number of Original Shares intended
to be disposed of by such Shareholder), the Company will use best efforts to
effect the registration under the Securities Act of all Original Shares which
the Company has been so requested to register by such Requesting Shareholder, to
the extent requisite to permit the disposition of the Original Shares so to be
registered; provided that (i) if such registration involves an Underwritten
Public Offering, the Requesting Shareholder must sell its Original Shares to the
underwriters selected as provided in Section 3.04(h) on the same terms and
conditions as apply to the Company, as applicable (taking into account any
differences with respect to Class A Stock and Class B Stock), and (ii) if, at
any time after giving written notice of its intention to register any stock
pursuant to this Section 3.02(a) and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register such stock, the Company shall
give written notice to the Requesting Shareholders and, thereupon, shall be
relieved of its obligation to register any Original Shares in connection with
such registration, provided that the Company shall reimburse each Requesting
Shareholder for its reasonable out-of-pocket expenses in connection with such
registration. No registration effected under this Section 3.02 shall relieve the
Company of its obligations to effect a Demand Registration to the extent
required by Section 3.01 hereof. The Company will pay all Registration Expenses
in connection with each registration of Original Shares requested pursuant to
this Section 3.02.
(b) If a registration pursuant to this Section 3.02 involves an
Underwritten Public Offering and the managing underwriter advises the Company in
writing that, in its view, the number of shares of Common Stock which the
Company and the Requesting Shareholders intend to include in such registration
exceeds the Maximum Offering Size, the Company will include in such
registration, in the following priority, up to the Maximum Offering Size:
(i) first, so much of the Common Stock proposed to be
registered for the account of the Company as would not cause the
offering to exceed the Maximum Offering Size; and
(ii) second, all Original Shares requested to be included in
such registration by any Requesting Shareholder pursuant to Section
3.02 (allocated, if necessary for the offering not to exceed the
Maximum Offering Size, pro rata among the Requesting Shareholders on
the basis of the relative number of Original Shares so requested to be
included in such registration).
(c) If a Requesting Shareholder requests, pursuant to this Section
3.02, the registration of a class of Common Stock different from the class of
Common
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Stock proposed to be registered by the Company and the managing underwriter (if
any) advises the Company in writing that, in its view, the inclusion in the
offering of such class of Common Stock requested by the Requesting Shareholder
will materially adversely effect the success of the proposed offering, the
Company shall not be required to include in such offering any shares of the
differing class of Common Stock requested by such Requesting Shareholder.
SECTION 3.3. Holdback Agreements. With respect to each and every firmly
underwritten Public Offering, each Shareholder agrees not to effect any public
sale or distribution under the Securities Act, of any shares of Common Stock
(except for Shares, if any, sold in that Public Offering) during the 7 days
prior to the effective date of the applicable registration statement (except as
part of such registration) or during the period after such effective date equal
to the lesser of: (i) 90 days or (ii) any such other period as the Company, the
Demanding Shareholders (if any), the Requesting Shareholders (if any) and the
managing underwriters of an Underwritten Public Offering agree).
SECTION 3.4. Registration Procedures. Whenever a Shareholder requests
that any Original Shares be registered pursuant to Section 3.01 or 3.02 hereof,
the Company will, subject to the provisions of such Sections, use its best
efforts to effect the registration and the sale of such Original Shares in
accordance with the intended method of disposition thereof and in connection
with any such request.
(a) The Company will prepare and file with the SEC a registration
statement on any form selected by counsel for the Company and which form shall
be available for the sale of the Original Shares to be registered thereunder in
accordance with the intended method of distribution thereof, and use its best
efforts to cause such filed registration statement to become and remain
effective for a period of not less than 180 days (or such shorter period in
which all of the Original Shares included in such registration statement shall
have actually been sold thereunder).
(b) The Company will, prior to filing a registration statement or
prospectus or any amendment or supplement thereto, furnish to each Shareholder
holding Original Shares covered by such registration statement (each, a
"PARTICIPATING SHAREHOLDER") and each underwriter, if any, copies of such
registration statement as proposed to be filed, and thereafter the Company will
furnish to such Shareholder and underwriter, if any, such number of copies of
such registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein),
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such Shareholder or
underwriter may reasonably request in order to facilitate the disposition of the
Original Shares owned by such Shareholder. Each Participating Shareholder shall
have the right to request that the Company modify any information contained in
such registration statement, amendment and supplement thereto pertaining to such
Participating Shareholder and the Company shall use its best efforts to comply
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with such request, provided, however that, subject to the last sentence of this
paragraph (b), the Company shall not have any obligation to so modify any
information if so doing would cause, in the Company's sole discretion, the
prospectus to contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading. The Company will not file any registration
statement or amendment thereto or any supplement to which a Participating
Shareholder or its underwriter or underwriters, if any, shall reasonable object.
(c) If any such registration statement refers to a Participating
Shareholder by name or otherwise as the holder of any securities of the Company,
then the Participating Shareholder shall have the right to require (i) the
insertion therein of language, in form and substance satisfactory to the
Participating Shareholder, to the effect that the holding by the Participating
Shareholder of such securities does not necessarily make the Participating
Shareholder a "controlling person" of the Company with the meaning of the
Securities Act (if appropriate based on the advice of the Participating
Shareholder's counsel and concurrence therewith by counsel to the Company), such
holding is not to be construed as a recommendation by the Participating
Shareholder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that the Participating Shareholder
will assist in meeting any future financial requirements of the Company, or (ii)
in the event that such reference to the Participating Shareholder by name or
otherwise is not required by the Securities Act or rules and regulations
promulgated thereunder and concurrence with such position by counsel to the
Company, the deletion of the reference to the Participating Shareholder.
(d) In connection with the preparation and filing of each registration
statement under the Securities Act pursuant to this Agreement, the Company will
give the Participating Shareholders, their underwriter or underwriters, if any,
and their respective counsel, financial advisors and accountants, the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give each of them such
reasonable access during normal business hours to its books and records and such
opportunities to discus the business of the Company with its officers, legal
counsel and the independent public accountants necessary, in the opinion of such
Participating Shareholders' and their underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.
(e) After the filing of the registration statement, the Company will
promptly notify each Participating Shareholder holding Original Shares covered
by such registration statement of any stop order issued or threatened by the SEC
or any state securities commission under state blue sky laws and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.
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(f) The Company will use its best efforts to (i) register or qualify
the Original Shares covered by such registration statement under such other
securities or blue sky laws of such jurisdictions in the United States as the
Participating Shareholder holding such Original Shares reasonably (in light of
such Participating Shareholder's intended plan of distribution) requests and
(ii) cause such Original Shares to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Participating
Shareholder to consummate the disposition of the Original Shares owned by such
Participating Shareholder; provided that the Company will not be required to (A)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph (e), (B) subject itself
to taxation in any such jurisdiction or (C) consent to general service of
process in any such jurisdiction.
(g) The Company will immediately notify each Participating Shareholder
holding such Original Shares covered by such registration statement, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Original Shares, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
and promptly prepare and make available to each such Participating Shareholder
and file with the SEC any such supplement or amendment.
(h) In connection with any Demand Registration, the Company shall
appoint the managing underwriter, if any, chosen by the Demanding Shareholder,
provided that such managing underwriter shall be reasonably satisfactory to the
Company. In connection with any other registration statement contemplated by
this Article 3, the Company shall be free to choose the managing underwriter, if
any, in its sole discretion. The Company will enter into customary agreements
(including an underwriting agreement in customary form) and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of such Original Shares, including the engagement of a "qualified
independent underwriter" in connection with the qualification of the
underwriting arrangements with the NASD.
(i) Upon execution of confidentiality agreements in form and substance
reasonably satisfactory to the Company, the Company will make available for
inspection by any Participating Shareholder and any underwriter participating in
any disposition pursuant to a registration statement being filed by the Company
pursuant to this Article 3 and any attorney, accountant or other professional
retained by any such Participating Shareholder or underwriter (collectively, the
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"INSPECTORS"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "RECORDS") as shall be
reasonably requested by any such Person, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
Inspectors in connection with such registration statement.
(j) The Company will furnish to each such Participating Shareholder and
to each underwriter, if any, a signed counterpart, addressed to such underwriter
and the Participating Shareholders, of (i) an opinion or opinions of counsel to
the Company and (ii) a comfort letter or comfort letters from the Company's
independent public accountants, each in customary form and covering such matters
of the type customarily covered by opinions or comfort letters, as the case may
be, as a majority of such Participating Shareholders or the managing underwriter
therefor reasonably requests.
(k) The Company will otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
securityholders, as soon as reasonably practicable, an earnings statement
covering a period of 12 months, beginning within three months after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act.
(l) The Company may require each such Shareholder to promptly furnish
in writing to the Company information regarding the distribution of the Original
Shares as the Company may from time to time reasonably request and such other
information as may be legally required in connection with such registration.
(m) Each such Shareholder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
3.04(g) hereof, such Shareholder will forthwith discontinue disposition of
Original Shares pursuant to the registration statement covering such Original
Shares until such Shareholder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3.04(g) hereof, and, if so directed
by the Company, such Shareholder will deliver to the Company all copies, other
than any permanent file copies then in such Shareholder's possession, of the
most recent prospectus covering such Original Shares at the time of receipt of
such notice. In the event that the Company shall give such notice, the Company
shall extend the period during which such registration statement shall be
maintained effective (including the period referred to in Section 3.04(a)
hereof) by the number of days during the period from and including the date of
the giving of notice pursuant to Section 3.04(g) hereof to the date when the
Company shall make available to such Shareholder a prospectus supplemented or
amended to conform with the requirements of Section 3.04(g) hereof.
SECTION 3.5. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Shareholder holding Original Shares covered
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by a registration statement, its officers, trustees, directors, employees,
partners and agents, and each Person, if any, who controls such Shareholder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Original Shares (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission so made in strict conformity with information furnished in writing to
the Company by such Shareholder or on such Shareholder's behalf expressly for
use therein; provided that with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus, or in
any prospectus, as the case may be, the indemnity agreement contained in this
paragraph shall not apply to the extent that any such loss, claim, damage,
liability or expense results from the fact that a current copy of the prospectus
(as amended or supplemented) was not sent or given to the Person asserting any
such loss, claim, damage, liability or expense at or prior to the written
confirmation of the sale of the Original Shares concerned to such Person if it
is determined that the Company has provided such prospectus to such Shareholder
in a timely manner prior to such sale and it was the responsibility of such
Shareholder under the Securities Act to provide such Person with a current copy
of the prospectus (or such amended or supplemented prospectus, as the case may
be) and such current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) would have cured the defect giving rise to such
loss, claim, damage, liability or expense, it being understood that the
limitation contained in this provision shall not apply in the case of an
Underwritten Public Offering or a Public Offering otherwise effected through a
securities agent, broker or dealer where it was the contractual or other legal
responsibility of such agent, broker or dealer to deliver to such Person a
current copy of the prospectus. The Company also agrees to indemnify any
underwriters of the Original Shares, their officers and directors and each
person who controls such underwriters on substantially the same basis as that of
the indemnification of the Shareholders provided in this Section 3.05.
SECTION 3.6. Indemnification by Participating Shareholder. Each
Shareholder holding Original Shares included in any registration statement
agrees, severally but not jointly, to indemnify and hold harmless the Company,
its officers, directors and agents and each Person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act to the same extent as the foregoing indemnity from the
Company to such Shareholder, but only (i) with respect to information furnished
in writing by such Shareholder or on such Shareholder's behalf expressly for use
in any registration statement or prospectus relating to the Original Shares, or
any
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amendment or supplement thereto, or any preliminary prospectus or (ii) to the
extent that any loss, claim, damage, liability or expense described in Sections
3.05 results from the fact that a current copy of the prospectus (as amended or
supplemented) was not sent or given to the Person asserting any such loss,
claim, damage, liability or expense at or prior to the written confirmation of
the sale of the Original Shares concerned to such Person if it is determined
that it was the responsibility of such Shareholder to provide such Person with a
current copy of the prospectus (or such amended or supplemented prospectus, as
the case may be) and such current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) would have cured the defect giving
rise to such loss, claim, damage, liability or expense, it being understood that
the indemnification contained in this clause (ii) shall not apply in the case of
an Underwritten Public Offering or a Public Offering otherwise effected through
a securities agent, broker or dealer where it was the contractual or other legal
responsibility of such agent, broker or dealer to deliver to such Person a
current copy of the prospectus. Each such Shareholder shall be prepared, if
required by the underwriting agreement, to indemnify and hold harmless
underwriters of the Original Shares, their officers and directors and each
person who controls such underwriters on substantially the same basis as that of
the indemnification of the Company provided in this Section 3.06. As a condition
to including Original Shares in any registration statement filed in accordance
with Article 3 hereof, the Company may require that it shall have received an
undertaking reasonably satisfactory to it from any underwriter to indemnify and
hold it harmless to the extent customarily provided by underwriters with respect
to similar securities.
SECTION 3.7. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
this Article 3, such Person (an "INDEMNIFIED PARTY") shall promptly notify the
Person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all fees and expenses as incurred, including
reasonable costs of investigation; provided that the failure of any Indemnified
Party so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder except to the extent that the Indemnifying
Party is materially prejudiced by such failure to notify. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of such Indemnified Party representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in
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addition to any local counsel) at any time for all such Indemnified Parties, and
that all such fees and expenses shall be reimbursed as they are incurred. In the
case of any such separate firm for the Indemnified Parties, such firm shall be
designated in writing by the Indemnified Parties. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent, or if there be a final judgment for
the plaintiff, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any and all losses, claims, damages,
liabilities and expenses or liability (to the extent stated above) by reason of
such settlement or judgment. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability arising out of such proceeding.
SECTION 3.8. Contribution. If the indemnification provided for in this
Article 3 is held by a court of competent jurisdiction to be unavailable to the
Indemnified Parties in respect of any losses, claims, damages or liabilities
referred to herein, then each such Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (i)
as between the Company and the Participating Shareholders and their related
Indemnified Parties on the one hand and the underwriters and their related
Indemnified Parties on the other, in such proportion as is appropriate to
reflect the relative benefits received by the Company and such Participating
Shareholders on the one hand and the underwriters on the other, from the
offering of the Participating Shareholders' Original Shares, or if such
allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits but also the relative
fault of the Company and such Participating Shareholders on the one hand and of
such underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations and (ii) as between the Company and
their related Indemnified Parties on the one hand and each Participating
Shareholder and their related Indemnified Parties on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
each such Participating Shareholder in connection with such statements or
omissions, as well as any other relevant equitable considerations. Any
contribution by a Participating Shareholder shall be several in the proportion
that the number of Original Shares of such Participating Shareholder sold
pursuant to the registration statement giving rise to the contribution
obligation bears to the total number of shares sold by all Participating
Shareholders pursuant to such registration statement. The relative benefits
received by the Company and such Participating Shareholders on the one hand and
such underwriters on the other shall be deemed to be in the same proportion as
the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting
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expenses) received by the Company and such Participating Shareholders bear to
the total underwriting discounts and commissions received by such underwriters,
in each case as set forth in the table on the cover page of the prospectus. The
relative fault of the Company and such Participating Shareholder on the one hand
and of such underwriters on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company and such Participating Shareholders or by
such underwriters. The relative fault of the Company on the one hand and of each
such Shareholder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Shareholders agree that it would not be just and
equitable if contribution pursuant to this Section 3.08 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 3.08, no underwriter shall be
required to contribute any amount in excess of the underwriting discount
applicable to Common Stock purchased by such underwriter in such offering, less
the aggregate amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no Participating Shareholder shall be required to
contribute any amount in excess of the amount by which the total proceeds
received in respect of the Original Shares of such Participating Shareholder
(without deduction for any underwriting discount) exceeds the amount of any
damages which such Participating Shareholder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. Each
Participating Shareholder's obligation to contribute pursuant to this Section
3.08 is several in the proportion that the proceeds of the offering received by
such Participating Shareholder bears to the total proceeds of the offering
received by all such Shareholders and not joint.
SECTION 3.9. Participation in Public Offering. No Person may
participate in any Underwritten Public Offering hereunder unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such
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arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and the provisions of
this Agreement in respect of registration rights.
SECTION 3.10. No Transfer of Registration Rights. None of the rights of
Shareholders under this Article 3 shall be assignable by any Shareholder other
than to a Person acquiring at least four million shares of Class B Stock,
provided that such assignment is in form and substance reasonably acceptable to
the Company and that under no circumstances shall the Company be required under
this Agreement to effect more than three Demand Registrations in the aggregate.
ARTICLE 4
MISCELLANEOUS
SECTION 4.1. Approval of Rights Plan. The Shareholders each acknowledge
that, as soon as practicable after the date hereof, the Company will present to
the Board for its approval the adoption of a "Rights Plan" (the "RIGHTS PLAN")
substantially in accordance with the terms attached hereto as Exhibit A. Each of
the Shareholders agrees to support, and to use its best efforts to cause each of
its respective representatives on the Board, subject to the fiduciary duties of
such representatives, to support and vote in favor of, the adoption of the
Rights Plan.
SECTION 4.2. Entire Agreement. This Agreement and the transactions
contemplated hereby constitute the entire agreement among the parties with
respect to the subject matter hereof and thereof and supersede all prior and
contemporaneous agreements and understandings, both oral and written, between
the parties with respect to the subject matter hereof and thereof.
SECTION 4.3. Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
successors, legal representatives and permitted assigns. Nothing in this
Agreement, expressed or implied, is intended to confer on any Person other than
the parties hereto, and their respective heirs, successors, legal
representatives and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
SECTION 4.4. Assignability. Other than as permitted by Section 3.10
hereof, neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by any Shareholder.
SECTION 4.5. Amendment; Waiver; Effectiveness. (a) No provision of this
Agreement may be waived except by an instrument in writing executed by the party
against whom the waiver is to be effective. No provision of this Agreement may
be amended or otherwise modified except by an instrument in writing
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executed by the Company with approval of the Board (including at least a
majority of the directors who are not Affiliates or designees of either
Shareholder) and each of the Shareholders.
(b) This Agreement (other than Section 2.04(c) and Section 4.01) shall
become effective immediately upon the consummation of the Distribution. Section
2.04(c) and Section 4.01 hereof shall become effective immediately upon
execution of this Agreement.
SECTION 4.6. Notices. All notices and other communications given or
made pursuant hereto or pursuant to any other agreement among the parties,
unless otherwise specified, shall be in writing and shall be deemed to have been
duly given and received when sent by fax (with confirmation in writing via first
class U.S. mail) or delivered personally or on the third Business Day after
being sent by registered or certified U.S. mail (postage prepaid, return receipt
requested) to the parties at the fax number or address set forth below or at
such other addresses as shall be furnished by the parties by like notice:
if to the Company to:
Florida East Coast Industries, Inc
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trust to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Testamentary Trust
Suite 400 du Pont Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chairman
Fax: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy to:
McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP
One ▇▇▇▇▇ Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
if to the Foundation to:
The Nemours Foundation
Suite 400
duPont Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to
McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP
One ▇▇▇▇▇ Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
SECTION 4.7. Headings. The headings contained in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
SECTION 4.8. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument.
SECTION 4.9. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Florida, without regard
to the conflicts of laws rules of such state.
SECTION 4.10. Specific Enforcement. Each party hereto acknowledges that
the remedies at law of the other parties for a breach or threatened breach of
this Agreement would be inadequate and, in recognition of this fact, any party
to this Agreement, without posting any bond, and in addition to all other
remedies which may be available, shall be entitled to obtain equitable relief in
the form of
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specific performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available.
SECTION 4.11. Severability. If one or more provisions of this Agreement
are held to be unenforceable to any extent under applicable law, such provision
or provisions shall be interpreted as if it or they were written so as to be
enforceable to the maximum possible extent so as to effectuate the parties'
intent to the maximum possible extent, and the balance of the Agreement shall be
interpreted as if such provision or provisions were so excluded and shall be
enforceable in accordance with its terms to the maximum extent permitted by law.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
FLORIDA EAST COAST INDUSTRIES, INC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TESTAMENTARY TRUST
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇▇
Title: Chairman
THE NEMOURS FOUNDATION
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇
Title: Vice Chairman
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