REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of December 21, 1998, among
United Rentals, Inc., a Delaware corporation (the "Company"), ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and the other undersigned parties hereto (the "Holders").
1. Introduction. The Company is a party to the Stock Purchase
Agreement (the "Stock Purchase Agreement"), dated December 21, 1998, with
the Holders, pursuant to which the Company has agreed, among other things,
to issue 300,000 shares of its Series A Perpetual Convertible Preferred
Stock, par value $.01 per share (the "Preferred Stock"), to the Holders.
Pursuant to the terms of the Certificate of Designation with respect to the
Preferred Stock (the "Certificate of Designation"), the Preferred Stock is
convertible into shares of the Company's common stock, par value $.01 per
share (the "Common Stock"). This Agreement shall become effective upon the
issuance of the Preferred Stock to the Holders pursuant to the Stock
Purchase Agreement. Certain capitalized terms used in this Agreement are
defined in section 3 hereof; references to sections shall be to sections of
this Agreement.
2. Registration under Securities Act, etc.
2.1 Registration on Request.
(a) Request. At any time or from time to time after the
90th day following the issuance of the Preferred Stock pursuant to the
Stock Purchase Agreement, upon the written request of one or more
Initiating Holders, requesting that the Company effect the registration
under the Securities Act of all or part of such Initiating Holders'
Registrable Securities and specifying the intended method of disposition
thereof, the Company will promptly give written notice of such requested
registration to all registered holders of Registrable Securities, and
thereupon the Company will, subject to the terms of this Agreement, use its
best efforts to effect the registration under the Securities Act of:
(i) the Registrable Securities which the Company has
been so requested to register by such Initiating Holders for
disposition in accordance with the intended method of disposition
stated in such request;
(ii) all other Registrable Securities the holders of
which shall have made a written request to the Company for
registration thereof within 15 days after the giving of such written
notice by the Company (which request shall specify the intended method
of disposition of such Registrable Securities); and
(iii) all shares of Common Stock which the Company
or other holders of the Company's Common Stock having registration
rights may elect to register in connection with the offering of
Registrable Securities pursuant to this section 2.1,
all to the extent requisite to permit the disposition (in accordance with
the intended methods thereof as aforesaid) of the Registrable Securities
and the additional shares of Common Stock, if any so to be registered;
provided, that the Company shall not be required to effect any registration
pursuant to this section 2.1 (x) on more than three separate occasions and
(y) unless the Holders have requested to sell at least 2 million shares of
Registrable Securities or shares of Registrable Securities to be sold have
a fair market value (based upon the closing price of such Registrable
Securities quoted on the securities exchange or over-the-counter quotation
system on which such Registrable Securities are listed or quoted, as the
case may be, on the trading day immediately preceding any request pursuant
to this section 2.1) of at least $50 million; provided, however, the
Company shall be required, if so requested, to effect one additional
registration pursuant to this Section 2.1 subsequent to the third
anniversary of the issuance of the Preferred Stock to the Holders by the
Company which request may be made by Apollo or its Affiliates, whether or
not an Initiating Holder, and will not be subject to the volume or fair
market value limitations set forth in clause (y) above.
(b) Registration Statement Form. Registrations under this
section 2.1 shall be on such appropriate registration form of the
Commission as shall permit the disposition of such Registrable Securities
in accordance with the intended method or methods of disposition specified
in their request for such registration and as shall be permitted under the
Securities Act; provided, that such form shall not indicate that the
securities to be registered thereunder are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act.
(c) Expenses. The Company will pay all Registration
Expenses in connection with any registration requested pursuant to this
section 2.1 by any Initiating Holders. All other expenses (including
underwriting discounts and commissions and transfer taxes, if any) in
connection with each other registration requested under this section 2.1
shall be allocated pro rata among all Persons on whose behalf securities of
the Company are included in such registration, on the basis of the
respective amounts of the securities then being registered on their behalf.
(d) Effective Registration Statement. A registration
requested pursuant to this section 2.1 shall not be deemed to have been
effected (i) unless a registration statement with respect thereto has
become effective, 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 of the Initiating
Holders (other than a refusal to proceed based upon the written advice of
counsel relating to a matter with respect to the Company) shall be deemed
to have been effected by the Company at the request of such Initiating
Holders unless the Initiating Holders shall have elected to pay all
Registration Expenses in connection with such registration, (ii) if, after
it has become effective, such registration becomes subject to any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason, other than by reason of some
act or omission by such Initiating Holders with respect thereto, (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 by reason of some act or omission by such
Initiating Holders or (iv) if the sale of the securities is not consummated
due to the lack of agreement between the Initiating Holders and the
underwriters with respect to the underwriting discount on the securities to
be sold.
(e) Selection of Underwriters. If a requested registration
pursuant to this section 2.1 involves an underwritten offering, the
managing or lead underwriter shall be selected by the Company and shall be
reasonably acceptable to the holders of at least a majority (by number of
shares) of the Registrable Securities as to which registration has been
requested, which shall not unreasonably withhold its acceptance of any such
underwriters, and any co-managing and co-lead underwriters shall be
selected by the Company.
(f) Priority in Requested Registrations. If a requested
registration pursuant to this section 2.1 involves an underwritten
offering, and the managing underwriter shall advise the Company in writing
(with a copy to each holder of Registrable Securities requesting
registration) that, in its opinion, the number of securities requested to
be included in such registration (including Common Stock of the Company or
other Persons which are not Registrable Securities) exceeds the number
which can be sold in such offering within a price range acceptable to the
holders of a majority of the Registrable Securities requested to be
included in such registration, the Company will include in such
registration, to the extent of the number which the Company is so advised
can be sold in such offering, (i) first, Registrable Securities requested
to be included in such registration by the holder or holders of Registrable
Securities, pro rata among such holders requesting such registration on the
basis of the number of such securities requested to be included by such
holders, (ii) second, Common Stock the Company proposes to sell and (iii)
third, Common Stock of the Company held by other Persons having
registration rights proposed to be included in such registration by the
holders thereof. Notwithstanding the foregoing, (A) in connection with the
first requested registration pursuant to this section 2.1 in any twelve
month period, the Company shall in all events be entitled to register and
sell up to 25% of the total number of shares of Common Stock to be
registered and (B) in connection with any subsequent requested registration
pursuant to this section 2.1 in such twelve month period, the Company shall
in all events be entitled to register and sell up to 50% of the total
number of shares of Common Stock to be registered; provided, that if the
Company registers and sells in excess of 33.3% of the total number of
shares of Common Stock to be registered, the request for registration
pursuant to this section 2.1 shall not be deemed to have been effected.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If the
Company at any time after the 90th day following the issuance of the
Preferred Stock pursuant to the Stock Purchase Agreement proposes to
register any of its securities under the Securities Act (other than by a
registration on Form S-4 or any successor form, Form S-8, or any successor
form thereto, relating to a stock option plan, stock purchase plan,
managing directors' plan, savings or similar plan and other than pursuant
to section 2.1), whether or not for sale for its own account, it will each
such time give prompt written notice to all holders of Registrable
Securities of its intention to do so and of such holders' rights under this
section 2.2. Upon the written request of any such holder made within 10
Business Days after the receipt of any such notice (which request shall
specify the number of Registrable Securities intended to be disposed of by
such holder and the intended method of disposition thereof), the Company
will, subject to the terms of this Agreement, use its best efforts to
effect the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by the
holders thereof, to the extent requisite to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the
Registrable Securities so to be registered, by inclusion of such
Registrable Securities in the registration statement which covers the
securities which the Company proposes to register, provided that if, at any
time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for
any reason either not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and, thereupon, (i)
in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses
in connection therewith), without prejudice, however, to the rights of any
holder or holders of Registrable Securities entitled to do so to request
that such registration be effected as a registration under section 2.1, and
(ii) in the case of a determination to delay registering, shall be
permitted to delay registering any Registrable Securities, for the same
period as the delay in registering such other securities. No registration
effected under this section 2.2 shall relieve the Company of its obligation
to effect any registration upon request under section 2.1, nor shall any
such registration hereunder be deemed to have been effected pursuant to
section 2.1. The Company will pay all Registration Expenses in connection
with each registration of Registrable Securities requested pursuant to this
section 2.2.
(b) Priority in Incidental Registrations. If the Company
at any time proposes to register any of its securities under the Securities
Act as contemplated by this section 2.2 and such securities are to be
distributed by or through one or more underwriters, the Company will, if
requested by any holder of Registrable Securities use its best efforts to
arrange for such underwriters to include all the Registrable Securities to
be offered and sold by such holder among the securities to be distributed
by such underwriters, provided that if the managing underwriter of such
underwritten offering shall inform the holders of the Registrable
Securities requesting such registration and the holders of any Common Stock
of the Company which shall have exercised, in respect of such underwritten
offering, registration rights comparable to the rights under this section
2.2, by letter of its belief that inclusion in such underwritten
distribution of all or a specified number of such Registrable Securities or
of such other securities of the Company so requested to be included would
interfere with the successful marketing of the securities so being
registered (other than such Registrable Securities and other Common Stock
of the Company so requested to be included) by the underwriters (such
writing to state the basis of such belief and the approximate number of
such Registrable Securities and shares of Common Stock so requested to be
included which may be included in such underwritten offering without such
effect), then the Company may, upon written notice to all holders of such
Registrable Securities and of such other shares of Common Stock of the
Company so requested to be included, exclude pro rata from such
underwritten offering (if and to the extent stated by such managing
underwriter to be necessary to eliminate such effect) the number of such
Registrable Securities and shares of such other Common Stock so requested
to be included the registration of which shall have been requested by each
holder of Registrable Securities and by the holders of such other Common
Stock so that the resultant aggregate number of such Registrable Securities
and of such other shares of Common Stock so requested to be included which
are included in such underwritten offering shall be equal to the
approximate number of shares stated in such managing underwriter's letter.
2.3 Registration Procedures. If and whenever the Company is
required to use its best efforts to effect the registration of any
Registrable Securities under the Securities Act as provided in sections 2.1
and 2.2, the Company shall, as expeditiously as possible:
(i) prepare and (in the case of a registration
pursuant to section 2.1, such filing to be made within 45 days after
the initial request of one or more Initiating Holders of Registrable
Securities or in any event as soon thereafter as possible) file with
the Commission the requisite registration statement to effect such
registration (including such audited financial statements as may be
required by the Securities Act or the rules and regulations
promulgated thereunder) and thereafter use its best efforts to cause
such registration statement to become and remain effective, provided
however that the Company may discontinue any registration of its
securities which are not Registrable Securities (and, under the
circumstances specified in section 2.2(a), its securities which are
Registrable Securities) at any time prior to the effective date of the
registration statement relating thereto, provided further that before
filing such registration statement or any amendments thereto, the
Company will furnish to the counsel selected by the holders of
Registrable Securities which are to be included in such registration
copies of all such documents proposed to be filed, which documents
will be subject to the review, but not the prior approval, of such
counsel;
(ii) prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep
such registration statement effective and to comply with the
provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement until the
earlier of such time as all of such securities have been disposed of
in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement or (i) in
the case of a registration pursuant to section 2.1, the expiration of
180 days after such registration statement becomes effective, or (ii)
in the case of a registration pursuant to section 2.2, the expiration
of 90 days after such registration statement becomes effective;
(iii) furnish to each seller of Registrable
Securities covered by such registration statement and each
underwriter, if any, of the securities being sold by such seller such
number of conformed copies of such registration statement and of each
such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424
under the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, as such seller and
underwriter, if any, may reasonably request;
(iv) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such other securities laws or blue sky
laws of such jurisdictions as any seller thereof and any underwriter
of the securities being sold by such seller shall reasonably request,
to keep such registrations or qualifications in effect for so long as
such registration statement remains in effect, and take any other
action which may be reasonably necessary or advisable to enable such
seller and underwriter to consummate the disposition in such
jurisdictions of the securities owned by such seller, except that the
Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subdivision (iv)
be obligated to be so qualified, to subject itself to taxation in any
such jurisdiction or to consent to general service of process in any
such jurisdiction;
(v) use its best efforts to cause all Registrable
Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as
may be necessary to enable the seller or sellers thereof to consummate
the disposition of such Registrable Securities;
(vi) furnish to each seller of Registrable Securities a
signed counterpart, addressed to such seller and the underwriters, if
any, of:
(x) an opinion of counsel for the Company, dated the
effective date of such registration statement (or, if
such registration includes an underwritten public
offering, an opinion dated the date of the closing
under the underwriting agreement), reasonably
satisfactory in form and substance to such seller, and
(y) a "comfort" letter (or, in the case of any such
Person which does not satisfy the conditions for
receipt of a "comfort" letter specified in Statement on
Auditing Standards No. 72, an "agreed upon procedures"
letter), dated the effective date of such registration
statement (and, if such registration includes an
underwritten public offering, a letter of like kind
dated the date of the closing under the underwriting
agreement), signed by the independent public
accountants who have certified the Company's financial
statements included in such registration statement,
covering substantially the same matters with respect to
such registration statement (and the prospectus
included therein) and, with respect to events
subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to the
underwriters in underwritten public offerings of
securities (with, in the case of an "agreed upon
procedures" letter, such modifications or deletions as
may be required under Statement on Auditing Standards
No. 35) and, in the case of the accountants' letter,
such other financial matters, and, in the case of the
legal opinion, such other legal matters, as such seller
(or the underwriters, if any) may reasonably request;
(vii) notify the holders of Registrable Securities
and the managing underwriter or underwriters, if any, promptly and
confirm such advice in writing promptly thereafter:
(a) when the registration statement, the
prospectus or any prospectus supplement related thereto or post-
effective amendment to the registration statement has been filed,
and, with respect to the registration statement or any post-
effective amendment thereto, when the same has become effective;
(b) of any request by the Commission for
amendments or supplements to the registration statement or the
prospectus or for additional information;
(c) of the issuance by the Commission of any stop
order suspending the effectiveness of the registration statement
or the initiation of any proceedings by any Person for that
purpose;
(d) if at any time the representations and
warranties of the Company made as contemplated by section 2.4
below cease to be true and correct;
(e) of the receipt by the Company of any
notification with respect to the suspension of the qualification
of any Registrable Securities for sale under the securities or
blue sky laws of any jurisdiction or the initiation or threat of
any proceeding for such purpose; and
(viii) notify each seller of Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act,
upon the discovery that, or upon the happening of any event as a
result of which, the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were
made, and at the request of any such seller promptly prepare and
furnish to such seller and each underwriter, if any, a reasonable
number of copies of a supplement to or an amendment of such prospectus
as may be necessary so that, as thereafter delivered to the purchasers
of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were
made;
(ix) make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of the
registration statement at the earliest possible moment;
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months, but
not more than eighteen months, beginning with the first full calendar
month after the effective date of such registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder, and will furnish to each
such seller at least five business days prior to the filing thereof a
copy of any amendment or supplement to such registration statement or
prospectus and shall not file any thereof to which any such seller
shall have reasonably objected on the grounds that such amendment or
supplement does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations
thereunder;
(xi) subject to the provisions of section 2.5, make
available for inspection by a representative or representatives of the
holders of Registrable Securities to be included in such registration
statement, any underwriter participating in any disposition pursuant
to the registration statement and any attorney or accountant retained
by such selling holders or underwriter (each, an "Inspector"), all
financial and other records, pertinent corporate documents and
properties of the Company (the "Records"), and cause the Company's
officers, directors and employees to supply all information reasonably
requested by any such Inspector in connection with such registration
in order to permit a reasonable investigation within the meaning of
Section 11 of the Securities Act;
(xii) provide and cause to be maintained a transfer
agent and registrar for all Registrable Securities covered by such
registration statement from and after a date not later than the
effective date of such registration statement;
(xiii) enter into such agreements and take such
other actions as sellers of such Registrable Securities holding 51% of
the shares so to be sold or any underwriter shall reasonably request
in order to expedite or facilitate the disposition of such Registrable
Securities, including, without limitation, causing members of senior
management of the Company to participate in customary "road-show"
activities;
(xiv) use its best efforts to list all Registrable
Securities covered by such registration statement on any securities
exchange on which any of the securities of the same class as the
Registrable Securities are then listed; and
(xv) use its best efforts to provide a CUSIP number for
the Registrable Securities, not later than the effective date of the
registration statement.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish the Company such
information regarding such seller and the distribution of such securities
as the Company may from time to time reasonably request in writing.
The Company will not file any registration statement or amendment
thereto or any prospectus or any supplement thereto (including such
documents incorporated by reference and proposed to be filed after the
initial filing of the registration statement) to which the holders of at
least a majority of the Registrable Securities covered by such registration
statement or the underwriter or underwriters, if any, shall reasonably
object, provided that the Company may file such document in a form required
by law or upon the advice of its counsel.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of
the occurrence of any event of the kind described in subdivision (viii) of
this section 2.3, such holder will forthwith discontinue such holder's
disposition of Registrable Securities pursuant to the registration
statement relating to such Registrable Securities until such holder's
receipt of the copies of the supplemented or amended prospectus
contemplated by subdivision (viii) of this section 2.3 and, if so directed
by the Company, will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such holder's possession
of the prospectus relating to such Registrable Securities current at the
time of receipt of such notice. In the event the Company shall give any
such notice, the period mentioned in paragraph (ii) of this section 2.3
shall be extended by the length of the period from and including the date
when each seller of any Registrable Securities covered by such registration
statement shall have received such notice to the date on which each such
seller has received the copies of the supplemented or amended prospectus
contemplated by paragraph (viii) of this section 2.3.
If any such registration statement refers to any holder of Registrable
Securities by name or otherwise as the holder of any securities of the
Company, then such holder shall have the right to require (i) the insertion
therein of language, in form and substance satisfactory to such holder, to
the effect that the holding by such holder of such securities is not to be
construed as a recommendation by such holder of the investment quality of
the Company's securities covered thereby and that such holding does not
imply that such holder will assist in meeting any future financial
requirements of the Company, or (ii) in the event that such reference to
such holder by name or otherwise is not required by the Securities Act or
any similar federal statute then in force and a written opinion from
counsel to the holder to such effect is delivered to the Company, the
deletion of the reference to such holder.
2.4 Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by the
underwriters for any underwritten offering by holders of Registrable
Securities pursuant to a registration requested under section 2.1, the
Company will enter into an underwriting agreement with such underwriters
for such offering, such agreement to be satisfactory in substance and form
to the Company, each such holder and the underwriters, and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of this type, including, without
limitation, indemnities at least as broad as those provided in section 2.6.
The holders of the Registrable Securities will cooperate with the Company
in the negotiation of the underwriting agreement and will give
consideration to the reasonable suggestions of the Company regarding the
form thereof, provided that nothing herein contained shall diminish the
foregoing obligations of the Company. The holders of Registrable
Securities to be distributed by such underwriters shall be parties to such
underwriting agreement and may, at their option, require that any or all of
the representations and warranties by, and the other agreements on the part
of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of such holders of Registrable Securities and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to
the obligations of such holders of Registrable Securities. Any such holder
of Registrable Securities shall not be required to make any representations
or warranties to or agreements with the Company or the underwriters other
than representations and warranties or agreements regarding such holder,
such holder's Registrable Securities and such holder's intended method of
distribution and any other representation required by law.
(b) Incidental Underwritten Offerings. The holders of
Registrable Securities to be distributed by such underwriters shall be
parties to the underwriting agreement between the Company and such
underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of,
the Company to and for the benefit of such underwriters shall also be made
to and for the benefit of such holders of Registrable Securities and that
any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to
the obligations of such holders of Registrable Securities. Any such holder
of Registrable Securities shall not be required to make any representations
or warranties to or agreements with the Company or the underwriters other
than representations, warranties or agreements regarding such holder, such
holder's Registrable Securities and such holder's intended method of
distribution and any other representation required by law.
(c) Holdback Agreements.
(i) So long as a holder of Registrable Securities and
its Affiliates own Common Stock and/or Preferred Stock convertible
into Common Stock exceeding 5% of the Common Stock of the Company
outstanding (including Common Stock issuable upon conversion of the
Preferred Stock) or such holder has designated a member of the board
of directors of the Company pursuant to paragraph 6(ii) of the
Certificate of Designation which director continues to serve on such
board, such holder of Registrable Securities agrees, by acquisition of
such Registrable Securities, (x) if so required by the managing
underwriter, not to sell, make any short sale of, loan, grant any
option for the purchase of, effect any public sale or distribution of
or otherwise dispose of any Common Stock or Registrable Securities not
to be sold in an underwritten offering pursuant to section 2.1 or 2.2,
during the 30 days prior to the anticipated consummation of such
underwritten offering and 90 days after the applicable underwritten
registration pursuant to section 2.1 or 2.2 has become effective,
except as part of such underwritten registration and (y) in connection
with any acquisition by or merger with the Company which is accounted
for under generally accepted accounting principles as a pooling of
interest, upon the request of the Company, not to sell, make any short
sale of, loan, grant any option for the purchase of, effect any public
sale or distribution of or otherwise dispose of any Common Stock or
Registrable Securities, for the period commencing 30 days before the
effective date of such acquisition or merger until the publication of
the Company's financial results covering a period of at least 30 days
following such acquisition or merger which is sufficient in accordance
with Accounting Series Release No. 135, or such shorter period if
consistent with the requirements for pooling of interests accounting
treatment. Notwithstanding clause (x) of the foregoing sentence and
subject to clause (y), during any period described above, each holder
of Registrable Securities subject to the foregoing sentence shall be
entitled to sell securities in a private sale so long as the purchaser
of such securities agrees to be bound by the restrictions set forth
above to the same extent as the seller for the remainder of the
applicable period.
(ii) The Company agrees if so required by the managing
underwriter (x) not to sell, make any short sale of, loan, grant any
option for the purchase of, effect any public sale or distribution of
or otherwise dispose of its equity securities or securities
convertible into or exchangeable or exercisable for any of such
securities during the 30 days prior to and the 90 days after any
underwritten registration pursuant to section 2.1 has become
effective, except as part of such underwritten registration and except
in connection with (A) a merger or acquisition by the Company in which
securities of the Company are issued directly to shareholders of the
target entity or sellers of assets in exchange for shares of such
target entity or such assets or (B) a stock option plan, stock
purchase plan, managing directors' plan, savings or similar plan, or
an acquisition of a business, merger or exchange of stock for stock,
provided that no such agreement pursuant to this clause (x) shall
prevent the Company from fulfilling its obligations pursuant to
section 2.1 or 2.2, subject to the provisions of section 2.7 and (y)
to use its reasonable best efforts to cause each director and
executive officer of the Company and any holder (other than the
Holders) of its equity securities or any securities convertible into
or exchangeable or exercisable for any of such equity securities, in
each case purchased from the Company at any time after the date of
this Agreement (other than in a public offering and other than
securities issued to employees who are not directors or executive
officers of the Company pursuant to an employee benefit plan or
similar arrangement) to agree not to sell, make any short sale of,
loan, grant any option for the purchase of, effect any public sale or
distribution of or otherwise dispose of such securities during such
period, it being understood that no action is required by the Company
pursuant to this clause (y) until the managing underwriter requests.
(d) Participation in Underwritten Offerings. No Person
(other than the Company, which will be subject to and governed by the other
terms and provisions of this Agreement) may participate in any underwritten
offering hereunder unless such Person (i) agrees to sell such Person's
securities on the basis provided in any underwriting arrangements approved,
subject to the terms and conditions hereof, by the holders of a majority of
Registrable Securities to be included in such underwritten offering and
(ii) completes and executes all questionnaires, indemnities, underwriting
agreements and other documents (other than powers of attorney) required
under the terms of such underwriting arrangements. Notwithstanding the
foregoing, no underwriting agreement (or other agreement in connection with
such offering) shall require any holder of Registrable Securities to make
any representations or warranties to or agreements with the Company or the
underwriters other than representations and warranties or agreements
regarding such holder, such holder's Registrable Securities and such
holder's intended method of distribution and any other representation
required by law.
2.5 Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, the Company will give the
holders of Registrable Securities registered under such registration
statement, their underwriters, if any, and their respective counsel 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 access to its books and records (collectively, the
"Records") and such opportunities to discuss the business of the Company
with its officers and the independent public accountants who have certified
its financial statements as shall be necessary, in the opinion of such
holders' and such underwriters' respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act; provided, that
Records which the Company determines, in good faith, to be confidential and
which it notifies such holder, underwriter, counsel or accountant are
confidential shall not be disclosed by such Person (other than to any
holder of Registrable Securities) unless (a) such Records have become
generally available to the public or (b) the disclosure of such Records may
be may be necessary or, in the case of clause (z) below, appropriate (x) in
compliance with any law, rule, regulation or order applicable to any such
holder, underwriter, counsel or accountant, (y) in response to any subpoena
or other legal process or (z) in connection with any litigation to which
such holder, underwriter, counsel or accountant is a party, and such Person
shall sign an agreement to such effect that shall be customary in form and
reasonably acceptable to the Company.
2.6 Indemnification.
(a) Indemnification by the Company. In the event of any
registration of any securities of the Company under the Securities Act
pursuant to this Agreement, the Company will, and hereby does agree to,
indemnify and hold harmless in the case of any registration statement filed
pursuant to section 2.1 or 2.2, the holder of any Registrable Securities
covered by such registration statement, its directors and officers, each
Person, if any, who controls such holder within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which such holder or any such director or officer or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration
statement under which such securities were registered under the Securities
Act, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the case of any
preliminary prospectus, final prospectus or summary prospectus, in light of
the circumstances under which they were made, not misleading, and the
Company will reimburse such holder and each such director, officer, and
controlling person for any legal or any other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
liability, action or proceeding, provided that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such holder specifically for
use therein. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such holder or any
such director, officer, underwriter or controlling person and shall survive
the transfer of such securities by such holder.
(b) Indemnification by the Sellers. As a condition to
including any Registrable Securities in any registration statement filed
pursuant to section 2.3, the Company shall have received from each seller
of Registrable Securities a written undertaking satisfactory to it from the
prospective seller of such Registrable Securities, to indemnify and hold
harmless (in the same manner and to the same extent as set forth in
subdivision (a) of this section 2.6) the Company, each director of the
Company, each officer of the Company and each other person, if any, who
controls the Company within the meaning of the Securities Act, with respect
to any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such seller
specifically stating that it is for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Any such indemnity shall remain in
full force and effect, regardless of any investigation made by or on behalf
of the Company or any such director, officer or controlling person and
shall survive the transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this section
2.6, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party, give written notice to the latter of
the commencement of such action, provided that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subdivisions of
this section 2.6, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified
and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly
notified, to the extent that the indemnifying party may wish, with counsel
reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof. No
indemnifying party shall, without the consent of the indemnified party,
consent to entry of any judgment or enter into any settlement of any such
action which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation. No indemnified party
shall consent to entry of any judgment or enter into any settlement of any
such action the defense of which has been assumed by an indemnifying party
without the consent of such indemnifying party.
(d) Other Indemnification. Indemnification similar to that
specified in the preceding subdivisions of this section 2.6 (with
appropriate modifications) shall be given by the Company and each seller of
Registrable Securities with respect to any required registration or other
qualification of securities under any Federal or state law or regulation of
any governmental authority, other than the Securities Act.
(e) Contribution. If the indemnification provided for in
the preceding subdivisions of this section 2.6 is unavailable to an
indemnified party in respect of any expense, loss, claim, damage or
liability referred to therein, then each 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 expense, loss, claim,
damage or liability (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the holder or
other Person, as the case may be, on the other from the distribution of the
Registrable Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of
the holder or other Person, as the case may be, on the other in connection
with the statements or omissions which resulted in such expense, loss,
damage or liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the holder or other Person, as the case may be, on the other in
connection with the distribution of the Registrable Securities shall be
deemed to be in the same proportion as the total net proceeds received by
the Company from the initial sale of the Registrable Securities by the
Company to the purchasers pursuant to the Stock Purchase Agreement bear to
the gain, if any, realized by the selling holder or the underwriting
discounts and commissions received by the underwriter, as the case may be.
The relative fault of the Company on the one hand and of the holder or
other Person, as the case may be, on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission to state a material fact relates
to information supplied by the Company, by the holder or by the other
Person and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission, provided
that the foregoing contribution agreement shall not inure to the benefit of
any indemnified party if indemnification would be unavailable to such
indemnified party by reason of the provisions contained in the first
sentence of subdivision (a) of this section 2.6, and in no event shall the
obligation of any indemnifying party to contribute under this subdivision
(e) exceed the amount that such indemnifying party would have been
obligated to pay by way of indemnification if the indemnification provided
for under subdivisions (a) or (b) of this section 2.6 had been available
under the circumstances.
The Company and the holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this
subdivision (e) were determined by pro rata allocation (even if the holders
and any underwriters were treated as one entity for such purpose) or by any
other method of allocation that 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 and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
in the preceding sentence and subdivision (c) of this section 2.6, 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 subdivision (e), no holder of
Registrable Securities or underwriter shall be required to contribute any
amount in excess of the amount by which (i) in the case of any such holder,
the net proceeds received by such holder from the sale of Registrable
Securities or (ii) in the case of an underwriter, the total price at which
the Registrable Securities purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount of any
damages that such holder or underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or 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.
2.7 Suspension of Registration. Notwithstanding anything to the
contrary contained herein, the Company will not be required to file any
registration statement pursuant to section 2.1(a) or furnish any supplement
to a prospectus pursuant to section 2.3(viii) during any of the following
periods: (i) 30 days prior to the anticipated consummation of a public
offering by the Company of its securities and 90 days subsequent to the
consummation of such public offering where, in the good faith judgment of
the managing underwriter or underwriters thereof, such filing or furnishing
of such supplement would have an adverse effect on such offering, (ii) if
such filing or furnishing of such supplement is prohibited by applicable
law, (iii) if the filing of such registration statement or furnishing of
such supplement would require the Company to disclose a material financing,
acquisition or other corporate development, and the proper officers of the
Company shall have determined in good faith that such disclosure is not in
the best interest of the Company or (iv) during the period described in
section 2.4(c)(ii), provided that the Company may not delay the filing of
any registration statement or furnishing of such supplement pursuant to
this section 2.7 for more than an aggregate of 135 days in any twelve-month
period; and provided, further, that any such delay pursuant to this section
2.7 shall not in the aggregate exceed 135 days in any twelve-month period.
Notwithstanding the foregoing, in the case of a public offering by any
holder of the Company's capital stock (the "Selling Holder") pursuant to
rights granted by the Company to such holder similar to section 2.1, no
delay in the filing of a registration statement or the furnishing of a
supplement pursuant to clause (i) of the immediately preceding sentence
shall be for a time period longer than any similar time period for delay
imposed on such Selling Holder pursuant to the agreement with the Company
granting such Selling Holder registration rights. Upon the expiration of
the period described in clause (iii) of the first sentence of this section
2.7, the Company shall give prompt notice to all holders of Registrable
Securities and shall promptly file any registration statement requested to
be filed pursuant to 2.1(a) and furnish any prospectus supplement required
to be furnished pursuant to section 2.3(viii).
2.8 Other Agreements. The Company shall not enter into any
agreement or instrument which would conflict with or result in a breach or
violation of any of the terms or provisions of this Agreement. In
addition, the Company shall not enter into any agreement or instrument with
any Person (other than Apollo or its Affiliates) which grant such Person
rights similar to those in section 2.1 unless such agreement permits the
holders of Registrable Securities to exercise their rights pursuant to
section 2.2 hereof in connection with any registration statement filed
pursuant to which such Person will sell securities of the Company.
3. Tag-Along Rights.
3.1 Transfer of Common Stock. (a) Underwritten Offerings. In
connection with any proposed underwritten sale which is to be registered
with the Commission under the Securities Act (an "Underwritten Sale") of
Common Stock, or rights, options, warrants or other securities convertible
into or exchangeable into Common Stock, Beneficially Owned by ▇▇▇▇▇▇ prior
to the fifth anniversary of the date of the issuance of the Preferred
Stock, no later than ten (10) Business Days prior to the filing of the
registration statement relating to such sale, ▇▇▇▇▇▇ shall provide written
notice of such proposed sale to Apollo and any Affiliate of Apollo that
then Beneficially Owns any shares of Preferred Stock or Common Stock of the
Company. During such five-year period, ▇▇▇▇▇▇ shall afford Apollo and any
such Affiliate of Apollo, the opportunity to participate proportionately in
such Underwritten Sale (based upon, with respect to Apollo and its
Affiliates, the Beneficial Ownership of Registrable Securities as of the
date of issuance of the Preferred Stock (including any shares of Common
Stock issuable upon conversion of the Preferred Stock) and, with respect to
▇▇▇▇▇▇, 16.7 million shares (subject to customary anti-dilution adjustments
including, but not limited to, stock dividends, stock subdivisions, stock
combinations, reorganizations, recapitalizations and reclassifications
("Anti-Dilution Adjustments")) of Common Stock Beneficially Owned on the
date hereof or currently or hereafter issuable upon exercise of options or
warrants held on the date hereof, in each case less any of such shares of
Common Stock or Preferred Stock sold subsequent to the date hereof) by
selling Registrable Securities for the same consideration and otherwise on
the same terms as the sale by ▇▇▇▇▇▇.
(b) Other Offerings:
(i) Certain Definitions.
(1) The term "▇▇▇▇▇▇ Options" means rights,
options or warrants or other securities which are Beneficially
Owned on the date hereof by ▇▇▇▇▇▇ and which are exercisable for,
convertible into or exchangeable for shares of Common Stock.
(2) The term "Excess Option Shares" means at any
time the amount by which (x) the number (subject to Anti-Dilution
Adjustments) of shares of Common Stock issuable or issued on
exercise, conversion or exchange of ▇▇▇▇▇▇ Options, which ▇▇▇▇▇▇
shall then propose to sell or shall have sold since the date
hereof in private sales, public sales or otherwise, exceeds (y)
2,500,000 (subject to Anti-Dilution Adjustments).
(3) The term "Excess Common Shares" means at any
time the amount by which (x) the number (subject to Anti-Dilution
Adjustments) of shares of Common Stock which ▇▇▇▇▇▇ shall then
propose to sell or shall have sold since the date hereof in
private sales, public sales or otherwise, but excluding any
shares acquired upon exercise of ▇▇▇▇▇▇ Options, exceeds (y)
5,000,000 (subject to Anti-Dilution Adjustments).
(4) The term "144 Exempt Shares" means as of any
date, that number of shares of Common Stock which ▇▇▇▇▇▇ could
then sell under the volume limitations of Rule 144, without
taking into account in calculating such volume limitation any
sales by ▇▇▇▇▇▇ within the preceding 90 days only if Apollo shall
theretofore have had the right to participate in such sale under
section 3.1(a) or 3.1(b) and without regard as to whether or not
any proposed sale by ▇▇▇▇▇▇ is in fact being made under Rule 144.
Notwithstanding the foregoing, the number of 144 Exempt Shares
shall be zero so long as Apollo and its Affiliates shall have
sold an aggregate of less than 7,000,000 shares (subject to Anti-
Dilution Adjustments) of Common Stock to Persons which at the
time of the sale are not Affiliates of Apollo in private sales,
public sales or otherwise.
(ii) Tag-Along. Prior to the fifth anniversary of the
issuance of the Preferred Stock, in connection with any proposed sale
by ▇▇▇▇▇▇ (other than an Underwritten Sale or a sale of 144 Exempt
Shares which will be free from resale restrictions under the
Securities Act subsequent to such sale) of any Excess Option Shares or
any Excess Common Shares (each such sale, a "Covered Sale"), ▇▇▇▇▇▇
shall, as soon as practicable, but in any event no later than three
(3) or earlier than fifteen (15) Business Days prior to the trade date
of such Covered Sale, provide written notice of such proposed Covered
Sale to Apollo and any Affiliate of Apollo that then Beneficially Owns
shares of Preferred Stock or Common Stock of the Company. During such
five-year period, ▇▇▇▇▇▇ shall afford Apollo and any Affiliate of
Apollo the opportunity to participate in each Covered Sale by selling
two shares of Registrable Securities for every three shares of Excess
Common Shares or Excess Option Shares to be sold in such Covered Sale
for the same consideration and otherwise on the same terms as the sale
by ▇▇▇▇▇▇; provided, however, if the number of Excess Common Shares or
Excess Option Shares exceeds by any amount (the "Over 50% Amount") 50%
of the total number of shares of Common Stock and Common Stock
issuable upon exchange of ▇▇▇▇▇▇ Options to be sold by all Persons
(including, without limitation, ▇▇▇▇▇▇ and Apollo) in such Covered
Sale, then ▇▇▇▇▇▇ shall afford Apollo and its Affiliates the
opportunity to further participate in such Covered Sale by selling one
share of Registrable Securities for every one share of Excess Common
Shares or Excess Option Shares which is included in the Over-50%
Amount. To participate in any Covered Sale, except as provided below,
Apollo or its Affiliates must provide written notice to ▇▇▇▇▇▇, by
facsimile or otherwise, no later than three (3) Business Days after
the day ▇▇▇▇▇▇ provides notice to Apollo and such Affiliate of such
Covered Sale pursuant to this paragraph.
Notwithstanding the foregoing requirement that ▇▇▇▇▇▇
provide three (3) Business Days prior notice of any Covered Sale,
▇▇▇▇▇▇ shall be required to give such notice of a Covered Sale
pursuant to an unsolicited bid which is reasonable in the
circumstances (an "Expedited Notice"), provided, that if such notice
is given less than one Business Day before the sale, then such notice
shall be given to Apollo no more than one hour after receipt of such
bid and not less than 30 minutes before the expiration of such bid.
Apollo and its Affiliates shall give notice to ▇▇▇▇▇▇ of their binding
intention to participate in such sale a reasonable time after receipt
of such Expedited Notice, provided that notice from Apollo and its
Affiliates shall be deemed to be reasonable if given to ▇▇▇▇▇▇ not
later than the later of 30 minutes after receipt of such notice or 30
minutes prior to the expiration of the bid. If, for example, ▇▇▇▇▇▇
receives an unsolicited bid at 1 p.m. which expires at 4 p.m. on the
same day, he must give notice no later than 2 p.m. in order for such
notice to be deemed reasonable. If he receives a bid at 1 p.m. which
expires at 1:30 p.m., he must give immediate notice to Apollo if he
intends to accept such bid, in order for such notice to be deemed
reasonable. A bid shall be considered solicited only if it is
responsive to an explicit request for a bid from ▇▇▇▇▇▇. A bid which
is responsive to an explicit request of ▇▇▇▇▇▇ shall nevertheless be
deemed unsolicited if ▇▇▇▇▇▇ provided Apollo notice of such request
immediately after making such request and such bid is received no
earlier than the day after such request and no later than seven days
after such request. A notice under this paragraph shall be given by
telephone or in person to the person or persons designated from time
to time by Apollo, who shall initially be ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
or ▇▇▇▇ ▇▇▇▇▇▇, or such other persons who may be designated in writing
hereafter; provided that if ▇▇▇▇▇▇ has used his best efforts to
telephone Apollos' designees at the numbers provided to him for that
purpose and has been unable to reach them, he will be deemed to have
given the required notice if he has left messages for each of such
persons and has sent a fax outlining the terms of the sale to the fax
numbers provided by Apollo for such purpose.
In addition, prior to the fifth anniversary of the issuance
of the Preferred Stock, Apollo may at any time provide to ▇▇▇▇▇▇ a
notice (a "Sale Notice") in writing as to its intention to participate
in any Covered Sale until the earlier of (i) 30 days from the date of
such notice or (ii) receipt by ▇▇▇▇▇▇ a written cancellation or
amendment of such notice, for a price equal to or greater than the
price specified in the Sale Notice and for a number of shares or a
percentage of shares equal to that set forth in such Sale Notice. In
the event of a Covered Sale entered into by ▇▇▇▇▇▇ during the period
covered by such Sale Notice in a manner consistent with the terms of
the Sale Notice, if ▇▇▇▇▇▇ is unable to give actual notice of the
Covered Sale because of his inability to speak to one of the persons
designated by Apollo, he shall include the Apollo shares in such
Covered Sale to the extent indicated in the Sale Notice.
(c) Notices. Unless otherwise specified herein, notices
given by ▇▇▇▇▇▇ pursuant to section 3.1(a) and 3.1(b) shall be given by
facsimile transmission to each of (i) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇,
(ii) ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇ and (iii) ▇▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇, or in each case such other
facsimile number or to the attention of such other Person as Apollo shall
have furnished to ▇▇▇▇▇▇.
(d) Notwithstanding any other provisions of this Agreement,
the rights of Apollo and its Affiliates under this Section 3.1 shall be
transferable or assignable only to Affiliates of Apollo.
(e) ▇▇▇▇▇▇ will not grant to any Person (other than Apollo
or any of its Affiliates) rights similar to those contained in section
3.1(b) which rights become effective before the rights granted to Apollo
and its Affiliates due to lesser thresholds than those contained in the
parenthetical of the first sentence of section 3.1(b).
(f) The rights granted Apollo and its Affiliates pursuant
to section 3.1(b) shall not apply to any sale or gift by ▇▇▇▇▇▇ to a member
of his family or to any trust whose principal beneficiaries are ▇▇▇▇▇▇ or
members of his family or to any gift to a charitable organization. The
obligations of ▇▇▇▇▇▇ under this section shall not transfer to any Person
to whom ▇▇▇▇▇▇ transfer securities other than an Affiliate of ▇▇▇▇▇▇, a
member of Jacob's family or any trust whose principal beneficiaries are
▇▇▇▇▇▇ or members of his family.
3.2 Priority in Registrations. In the event that, in connection
with an underwritten offering in which ▇▇▇▇▇▇ is to sell securities of the
Company, the managing underwriter shall advise ▇▇▇▇▇▇ and Apollo in writing
that, in its opinion, the number of securities requested to be included in
such offering exceeds the number which can be sold in such offering without
interfering with the successful marketing of the securities so being
registered, the number of shares to be sold may be reduced to such number
stated in the letter of the managing underwriter which can be sold without
interfering with the successful marketing of such securities. In such
circumstances, notwithstanding section 2.2(b) or the terms of the
Registration Rights Agreement, dated as of September 29, 1998 between the
Company, ▇▇▇▇▇▇ and the other parties signatory thereto, the number of
shares Beneficially Owned by each of Apollo, its Affiliates and ▇▇▇▇▇▇ to
be sold shall be reduced by the same percentage.
4. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
Affiliate: With respect to any entity, any other entity directly
or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified entity. For
purposes of this definition, the term "control" means (I) the
power to direct the management and policies of an entity,
directly or through one or more intermediaries, whether through
the ownership of voting securities, by contract or otherwise or
(ii) without limiting the foregoing, the beneficial ownership of
50% or more of the voting power of the voting common equity of
such entity (on a fully diluted basis).
Apollo: Apollo Investment Fund IV, L.P., Apollo Overseas
Partners IV, L.P. and their Affiliates, collectively.
Beneficial Ownership or Beneficially Owned: With respect to any
person, any securities with respect to which such person is
deemed to have "beneficial ownership" as defined in rule 13d-3
under the Securities Exchange Act of 1934, as amended. For
purposes of this Agreement only, any holder of Preferred Stock
shall be deemed to be the beneficial owner of any shares of
Common Stock of the Company issuable upon conversion of such
Preferred Stock.
Business Day: Any day except a Saturday, Sunday or nationally
recognized holiday in the State of New York, United States of
America.
Commission: The Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
Common Stock: As defined in section 1.
Company: As defined in the introductory paragraph of this
Agreement.
Exchange Act: The Securities Exchange Act of 1934, or any
similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the
time. Reference to a particular section of the Securities
Exchange Act of 1934 shall include a reference to the comparable
section, if any, of any such similar Federal statute.
Holder: As defined in the introductory paragraph of this
Agreement.
Holder's Counsel: A single counsel (if any) designated by the
holders of not less than 25% of the aggregate principal amount of
the Registrable Securities to be sold pursuant to section 2.1 or
2.2; provided, however, that if more than one counsel is so
designated, the Holder's Counsel shall be the designee of the
holders that are holding the greater percentage of the
Registrable Securities.
Initiating Holders: Any holder or holders of Registrable
Securities holding at least 35% of the Registrable Securities (in
each case by number of shares at the time issued and
outstanding), and initiating a request pursuant to section 2.1
for the registration of all or part of such holder's or holders'
Registrable Securities.
▇▇▇▇▇▇: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
Person: A corporation, an association, a partnership, an
organization, business, an individual, a governmental or
political subdivision thereof or a governmental agency.
Preferred Stock: As defined in section 1.
Registrable Securities: The Common Stock or any other securities
issuable upon conversion of the Preferred Stock issued pursuant
to the Stock Purchase Agreement and any securities issued or
issuable with respect to any such Common Stock by way of stock
dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other
reorganization or otherwise which the holders thereof are
entitled to receive. As to any particular Registrable
Securities, once issued such securities shall cease to be
Registrable Securities when (a) a registration statement with
respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have
been disposed of in accordance with such registration statement,
(b) they shall have been distributed to the public pursuant to
Rule 144 (or any successor provision) under the Securities Act,
(c) they shall have been otherwise transferred, new certificates
for them not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent disposition of
them shall not require registration or qualification of them
under the Securities Act or any similar state law then in force,
or (d) they shall have ceased to be outstanding.
Registration Expenses: All expenses incident to the Company's
performance of or compliance with section 2, including, without
limitation, (a) all Commission and any NASD registration and
filing fees and expenses, (b) all fees and expenses in connection
with the registration or qualification of the Registrable
Securities for offering and sale under the State securities and
blue sky laws and, in the case of an underwritten offering,
determination of their eligibility for investment under the laws
of such jurisdictions as the managing underwriter or underwriters
may designate, including reasonable fees and disbursements, if
any, of counsel for the underwriters in connection with such
registrations or qualifications and determination, (c) all
expenses relating to the preparation, printing, distribution and
reproduction of the registration statement required to be filed
hereunder, each prospectus included therein or prepared for
distribution pursuant hereto, each amendment or supplement to the
foregoing, the expenses of preparing the Registrable Securities
for delivery and the expenses of printing or producing any
underwriting agreement(s) among underwriters and "Blue Sky" or
legal investment memoranda, any selling agreements and all other
documents in connection with the offering, sale or delivery of
Registrable Securities to be disposed of, (d) messenger,
telephone and delivery expenses of the Company, (e) fees and
expenses of any transfer agent and registrar with respect to the
Registrable Securities and any escrow agent or custodian, (f)
internal expenses of the Company (including, without limitation,
all salaries and expenses of the Company's officers and employees
performing legal or accounting duties), (g) fees, disbursements
and expenses of counsel and independent certified public
accountants of the Company (including the expenses of any
opinions or "cold comfort" letters required by or incident to
such performance and compliance), (h) fees, disbursements and
expenses of any "qualified independent underwriter" engaged for
acting in such capacity, (i) fees, expenses and disbursements of
any other persons retained by the Company, including special
experts retained by the Company in connection with such
registration, (k) all fees and expenses incurred in connection
with the qualification of the shares of Common Stock constituting
Registrable Securities for quotation on the Nasdaq National
Market, any over-the-counter market, or the listing of such
shares on any securities exchange and (l) in the case of an
underwritten offering, the reasonable fees, disbursements and
expenses of a single counsel retained by the Holders to represent
them in connection with such offering (the selection of such
counsel by such Holders to be made in the same manner as is
provided in the definition of the terms "Holders' Counsel").
Securities Act: The Securities Act of 1933, or any similar
Federal statute, and the rules and regulations of the Commission
thereunder, all as of the same shall be in effect at the time.
References to a particular section of the Securities Act of 1933
shall include a reference to the comparable section, if any, of
any such similar Federal statute.
Stock Purchase Agreement: As defined in section 1.
5. Rules 144 and 144A. The Company shall timely file the reports
required to be filed by it under the Securities Act and the Exchange Act
(including but not limited to the reports under sections 13 and 15(d) of
the Exchange Act referred to in subparagraph (c) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted
by the Commission thereunder (or, if the Company is not required to file
such reports, will, upon the request of any holder of Registrable
Securities, make publicly available other information) and will take such
further action as any holder of Registrable Securities or any broker
facilitating such sale may reasonably request, all to the extent (i)
required from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, or (b) any similar rule
or regulation hereafter adopted by the Commission. The Company shall also
provide such information and otherwise use all reasonable commercial
efforts to cooperate with any holder of Registrable Securities in
connection with any other sale by such holder pursuant to another exemption
under the Securities Act, in each case to the extent such information or
other action by the Company may be necessary to effect such sale pursuant
to the applicable exemption. Upon the request of any holder of Registrable
Securities, the Company will deliver to such holder any information to be
delivered or filed in connection with the requirements of this Section 5.
6. Amendments and Waivers. This Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall have
obtained the written consent to such amendment, action or omission to act,
of the holder or holders of 50% or more of the shares of Registrable
Securities and, in the case of any such amendment, action or omission to
act in respect of the first sentence of Section 5, the written consent of
each holder affected thereby. Each holder of any Registrable Securities at
the time or thereafter outstanding shall be bound by any consent authorized
by this section 6, whether or not such Registrable Securities shall have
been marked to indicate such consent.
7. Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner
thereof, the beneficial owner thereof may, at its election, be treated as
the holder of such Registrable Securities for purposes of any request or
other action by any holder or holders of Registrable Securities pursuant to
this Agreement or any determination of any number or percentage of shares
of Registrable Securities held by any holder or holders of Registrable
Securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances
reasonably satisfactory to it of such owner's beneficial ownership of such
Registrable Securities.
8. Notices. Except as otherwise provided in this Agreement, all
notices, requests and other communications to any Person provided for
hereunder shall be in writing and shall be given to such Person (a) in the
case of a party hereto other than the Company, addressed to such party in
the manner set forth in the applicable Stock Purchase Agreement or at such
other address as such party shall have furnished to the Company in writing,
or (b) in the case of any other holder of Registrable Securities, at the
address that such holder shall have furnished to the Company in writing,
or, until any such other holder so furnishes to the Company an address,
then to and at the address of the last holder of such Registrable
Securities who has furnished an address to the Company, or (c) in the case
of the Company or ▇▇▇▇▇▇, at Four ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ to the attention of its Chief Executive Officer, with a
copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, or at such other address, or to the attention of such other officer,
as the Company shall have furnished to each holder of Registrable
Securities at the time outstanding. Each such notice, request or other
communication shall be effective (i) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (ii) if given by any other means (including,
without limitation, by air courier), when delivered at the address
specified above, provided that any such notice, request or communication to
any holder of Registrable Securities shall not be effective until received.
9. Assignment. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. In addition, the provisions of this
Agreement which are for the benefit of the parties hereto other than the
Company shall also be for the benefit of and enforceable by any subsequent
holder of any Registrable Securities that acknowledges such assignment in
writing and agrees to the terms hereof.
10. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only
and shall not limit or otherwise affect the meaning hereof.
11. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE
LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE PRINCIPLES OF
CONFLICTS OF LAWS.
12. Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but
all such counterparts shall together constitute one and the same
instrument.
13. Entire Agreement. This Agreement embodies the entire agreement
and understanding between the Company and each other party hereto relating
to the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter.
14. SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS AND APPELLATE
COURTS FROM ANY THEREOF. THE COMPANY HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF TO THE COMPANY BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE COMPANY
AT ITS ADDRESS SPECIFIED IN SECTION 7. THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVE TRIAL BY JURY, AND THE COMPANY HEREBY IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS.
15. Severability. If any provision of this Agreement, or the
application of such provisions to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such
provision to Persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
UNITED RENTALS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
APOLLO INVESTMENT FUND IV, L.P.
By: Apollo Advisors, IV, L.P.,
its general partner
By: Apollo Capital Management IV,
Inc., its general partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
APOLLO OVERSEAS PARTNERS IV, L.P.
By: Apollo Advisors, IV, L.P.,
its general partner
By: Apollo Capital Management IV,
Inc., its general partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
UNITED RENTALS, INC.
REGISTRATION RIGHTS AGREEMENT
Dated December 21, 1998
TABLE OF CONTENTS
Section Page
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . 1
2. Registration under Securities Act, etc. . . . . . . . . . 1
2.1 Registration on Request . . . . . . . . . . . . . . . 1
(a) Request . . . . . . . . . . . . . . . . . . . 1
(b) Registration Statement Form . . . . . . . . . 2
(c) Expenses . . . . . . . . . . . . . . . . . . . 3
(d) Effective Registration Statement . . . . . . . 3
(e) Selection of Underwriters . . . . . . . . . . 3
(f) Priority in Requested Registrations . . . . . 4
2.2 Incidental Registration . . . . . . . . . . . . . . . 4
(a) Right to Include Registrable
Securities . . . . . . . . . . . . . . . . . 4
(b) Priority in Incidental Registrations . . . . . . 5
2.3 Registration Procedures . . . . . . . . . . . . . . . 6
2.4 Underwritten Offerings . . . . . . . . . . . . . . 12
(a) Requested Underwritten Offerings . . . . . . . . 12
(b) Incidental Underwritten Offerings . . . . . . . 13
(c) Holdback Agreements . . . . . . . . . . . . . . 13
(d) Participation in Underwritten
Offerings . . . . . . . . . . . . . . . . . . . 15
2.5 Preparation; Reasonable Investigation . . . . . . . . 15
2.6 Indemnification . . . . . . . . . . . . . . . . . . . 16
(a) Indemnification by the Company . . . . . . . . . 16
(b) Indemnification by the Sellers . . . . . . . . . 17
(c) Notices of Claims, etc . . . . . . . . . . . . . 17
(d) Other Indemnification . . . . . . . . . . . . . 18
(e) Contribution . . . . . . . . . . . . . . . . . . 18
2.7 Suspension of Registration . . . . . . . . . . . . . 20
2.8 Other Agreements . . . . . . . . . . . . . . . . . . 21
3. Tag-Along Rights . . . . . . . . . . . . . . . . . . . . . 21
3.1 Transfer of Common Stock . . . . . . . . . . . . . . 21
(a) Underwritten Offerings . . . . . . . . . . . . . 21
(b) Other Offerings . . . . . . . . . . . . . . . . 22
(c) Notices . . . . . . . . . . . . . . . . . . . . 25
(d) . . . . . . . . . . . . . . . . . . . . . . . . 25
(e) . . . . . . . . . . . . . . . . . . . . . . . . 25
(f) . . . . . . . . . . . . . . . . . . . . . . . . 25
3.2 Priority in Registrations . . . . . . . . . . . . . 25
4. Definitions . . . . . . . . . . . . . . . . . . . . . . . 26
5. Rules 144 and 144A . . . . . . . . . . . . . . . . . . . . 29
6. Amendments and Waivers . . . . . . . . . . . . . . . . . . 30
7. Nominees for Beneficial Owners . . . . . . . . . . . . . . 30
8. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 30
9. Assignment . . . . . . . . . . . . . . . . . . . . . . . . 31
10. Descriptive Headings . . . . . . . . . . . . . . . . . . . 31
11. Governing Law . . . . . . . . . . . . . . . . . . . . . . 31
12. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 31
13. Entire Agreement . . . . . . . . . . . . . . . . . . . . . 31
14. Submission to Jurisdiction . . . . . . . . . . . . . . . . 32
15. Severability . . . . . . . . . . . . . . . . . . . . . . . 32
