Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into
as of the 31st day of March, 1999, between ALLIS-CHALMERS CORPORATION, a
Delaware corporation (the "Company"), and the PENSION BENEFIT GUARANTY
CORPORATION (the "PBGC").
WHEREAS, pursuant to the Agreement, dated as of March 31, 1999 (the
"Master Agreement"), by and between the Company and the PBGC, the Company has
agreed to issue to the PBGC 585,100 shares of the Company's common stock, $0.15
par value ("Common Stock"); in consideration of the settlement of certain
obligations owed by the Company to the PBGC;
WHEREAS, to induce the PBGC to enter into the Master Agreement, the
Company has agreed to provide the registration rights set forth in this
Agreement; and
WHEREAS, the execution and delivery of this Agreement is a condition to
the obligation of the PBGC as set forth in Section 5.1 of the Master Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. Definitions. As used herein, the following terms shall have the
following respective meanings:
"Designated Transferee" shall mean any Person that purchases
Registrable Shares from the PBGC subject to the provisions of the
Master Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Holders" shall mean the PBGC, affiliates of PBGC and any
Designated Transferees who are holders of record of shares of
Registrable Shares, and any combination of them, and the term "Holder"
shall mean any such person.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Person" shall mean any individual, corporation, association,
partnership, group (as defined in Section 13(d)(3) of the Exchange
Act), joint venture, business trust or unincorporated organization, or
a government or any agency or political subdivision thereof.
"Registrable Shares" shall mean any Common Stock (i) issued
pursuant to the Master Agreement, or (ii) issued or distributed in
respect of the Common Stock referred to in clause (i) above by way of
stock dividend or stock split or other distribution, recapitalization
or reclassification. As to any particular Registrable Share, such
Registrable Share shall cease to be a Registrable Share when (x) it
shall have been
sold, transferred or otherwise disposed of or exchanged pursuant to a
registration statement under the Securities Act or (y) it shall have
been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act.
"Registration Expenses" shall have the meaning set forth in
Section 8(b) hereof.
"Section 4(a) Notice" shall have the meaning set forth in
Section 6 hereof.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
2. Incidental Registrations.
(a) Right to Include Registrable Shares. Each time the Company
shall determine to file a registration statement under the Securities Act in
connection with the proposed offer and sale for cash of any Common Stock either
by it or by any holders of its outstanding Common Stock, the Company will give
prompt written notice of its determination to each Holder and of such Holder's
rights under this Section 2, at least 10 days prior to the anticipated filing
date of such registration statement; provided, however, that the Company is not
required to provide any such notice in connection with a registration statement
covering a Company stock option, incentive compensation, profit-sharing or
comparable employee benefit or compensation plan. Upon the written request of
each Holder made within 10 days after the receipt of any such notice from the
Company, (which request shall specify the Registrable Shares intended to be
disposed of by such Holder), the Company will use its commercially reasonable
efforts to effect the registration under the Securities Act of all Registrable
Shares which the Company has been so requested to register by the Holders
thereof, to the extent required to permit the disposition of the Registrable
Shares so to be registered; provided, that (i) 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 not to proceed with the
proposed registration of the securities to be sold by it, the Company may, at
its election, give written notice of such determination to each Holder of
Registrable Shares and thereupon shall be relieved of its obligation to register
any Registrable Shares in connection with such registration (but not from its
obligation to pay the Registration Expenses in connection therewith), and (ii)
if such registration involves an underwritten offering, all Holders of
Registrable Shares requesting to be included in the Company's registration must
sell their Registrable Shares to the underwriters on the same terms and
conditions as apply to the Company, with such differences, including any with
respect to indemnification, as may be customary or appropriate in combined
primary and secondary offerings. If a registration requested pursuant to this
Section 2(a) involves an underwritten public offering, any Holder of Registrable
Shares requesting to be included in such registration may elect, in writing
prior to the effective date of the registration statement filed in connection
with such registration, not to register such Common Stock in connection with
such registration. No registration effected under this Section 2 shall relieve
the Company of its obligations to effect registrations upon request under
Section 4 hereof.
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(b) Priority in Incidental Registrations. If a registration
pursuant to this Section 2 involves an underwritten offering and the managing
underwriter or underwriters in good faith advises the Company in writing that,
in its opinion, the number of shares of Common Stock which the Company, the
Holders and any other Persons intend to include in such registration exceeds the
largest number of shares of Common Stock which can be sold in such offering
without having an adverse effect on such offering (including the price at which
such Common Stock can be sold), then the Company will include in such
registration (i) first, 100% of the shares of Common Stock the Company proposes
to sell for its own account; (ii) second, to the extent that the number of
shares of Common Stock which the Company proposes to sell for its own account
is, in the aggregate, less than the number of shares of Common Stock which the
Company has been advised can be sold in such offering without having the adverse
effect referred to above, such number of other shares of Common Stock requested
to be included in the offering for the account of the Holders and any other
Persons which, in the opinion of such managing underwriter or underwriters, can
be sold without having the adverse effect referred to above, such number to be
allocated pro rata among all holders of Common Stock on the basis of the
relative number of such shares of Common Stock each other person has requested
to be included in such registration.
3. Holdback Agreements. (a) If any registration of Registrable Shares
shall be in connection with an underwritten public offering, the Holders agree
not to effect any public sale or distribution (except in connection with such
public offering), of any Common Stock or of any security convertible into or
exchangeable or exercisable for any Common Stock (in each case, other than as
part of such underwritten public offering), during the 90-day period (or such
lesser period as the managing underwriter or underwriters may permit) beginning
on the effective date of such registration, if, and to the extent, the managing
underwriter or underwriters of any such offering determines such action is
necessary or desirable to effect such offering, provided that each Holder has
received the written notice required by Section 2(a) hereof; provided, further,
that each Holder shall not be obligated to comply with such restrictions more
than once in any twelve-month period.
(b) If any registration of Registrable Shares shall be in
connection with any underwritten public offering, the Company agrees not to
effect any public sale or distribution (except in connection with such public
offering) of any of its Common Stock or of any security convertible into or
exchangeable or exercisable for Common Stock (in each case other than as part of
such underwritten public offering) during the 90-day period (or such lesser
period as the managing underwriter or underwriters may permit) beginning on the
effective date of such registration, and the Company also agrees to use its best
efforts to cause any Company officer, director or any holder of five percent
(5%) or more of the Common Stock to so agree.
4. Registration on Request.
(a) Request by Holders. Upon the Company's receipt of written
request of the Holders of at least 20% of the Registrable Shares that the
Company effect the registration under the Securities Act of all or part of such
Holders' Registrable Shares, and specifying the amount and intended method of
disposition thereof, the Company will promptly
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give notice of such requested registration to all other Holders of Registrable
Shares and, as expeditiously as possible, use its best efforts to effect the
registration under the Securities Act of: (i) the Registrable Shares which the
Company has been so requested to register by Holders of at least 20% of the
Registrable Shares; and (ii) all other Registrable Shares which the Company has
been requested to register by any other Holder thereof by written request
received by the Company within 21 days after the giving of such written notice
by the Company (which request shall specify the intended method of disposition
of such Registrable Shares); provided, however, that the Company shall not be
required to effect more than one registration during any twelve-month period
pursuant to this Section 4; provided, further, that the Company shall not be
obligated to file a registration statement relating to a registration request
under this Section 4 (other than on Form S-3 or any similar short-form
registration statement) within a period of three months after the effective date
of any other registration statement of the Company other than registration
statements on Form S-3 (or any similar short-form registration statement or any
successor or similar forms); provided, further, that in no event shall the
Company be required to effect more than two registrations in the aggregate
pursuant to this Section 4. Promptly after the expiration of the 21-day period
referred to in clause (ii) above, the Company will notify all the Holders to be
included in the registration of the other Holders and the number of shares of
Registrable Shares requested to be included therein. The Holders initially
requesting a registration pursuant to this Section 4 may, at any time prior to
the effective date of the registration statement relating to such registration,
cause such registration to be withdrawn by the Company by providing a written
notice to the Company requesting such withdrawal; provided, however, that upon
any such request for withdrawal, such Holders shall have forfeited their right
to such demand hereunder, and such Holders shall be responsible for the payment,
on a pro rata basis, of all Registration Expenses incurred in connection
therewith.
(b) Registration Statement Form. If any registration requested
pursuant to this Section 4 which is proposed by the Company to be effected by
the filing of a registration statement on Form S-3 (or any successor or similar
short-form registration statement) shall be in connection with an underwritten
public offering, and if the managing underwriter or underwriters shall advise
the Company in writing that, in its opinion, the use of another form of
registration statement is of material importance to the success of such proposed
offering, then such registration shall be effected on such other form.
(c) Effective Registration Statement. A registration requested
pursuant to this Section 4 will not be deemed to have been effected unless it
has become effective under the Securities Act and, subject to Section 4(d), such
registration has been maintained for a period of six (6) months or such earlier
period such that all the Registrable Shares included in such registration have
actually been sold thereunder. In addition, if within 180 days after it has
become effective, the offering of Registrable Shares pursuant to such
registration is materially interfered with by any stop order, injunction or
other order or requirement of the SEC or other governmental agency or court,
such registration will be deemed not to have been effected.
(d) Priority in Requested Registrations. If a requested
registration pursuant to this Section 4 involves an underwritten offering and
the managing underwriter or
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underwriters in good faith advises the Company in writing that, in its opinion,
the number of shares of Common Stock requested to be included in such
registration (including shares of Common Stock of the Company which are not
Registrable Shares) exceeds the largest number of shares of Common Stock which
can be sold in such offering without having an adverse effect on such offering
(including the price at which such shares of Common Stock can be sold), then the
Company will include in such registration (i) first, 100% of the Registrable
Shares requested to be registered pursuant to Section 4(a) hereof (provided that
if the number of Registrable Shares requested to be registered pursuant to
Section 4(a) hereof exceeds the number which the Company has been advised can be
sold in such offering without having the adverse effect referred to above, the
number of such Registrable Shares to be included in such registration by the
Holders shall be allocated pro rata among such Holders on the basis of the
relative number of Registrable Shares each such Holder has requested to be
included in such registration); (ii) second, to the extent that the number of
Registrable Shares requested to be registered pursuant to Section 4(a) hereof is
less than the number of shares of Common Stock which the Company has been
advised can be sold in such offering without having the adverse effect referred
to above, such number of shares of Common Stock the Company requests to be
included in such registration; and (iii) third, to the extent that the number of
Registrable Shares requested to be included in such registration pursuant to
Section 4(a) hereof and the shares of Common Stock which the Company proposes to
sell for its own account are, in the aggregate, less than the number of shares
of Common Stock which the Company has been advised can be sold in such offering
without having the adverse effect referred to above, such number of other shares
of Common Stock proposed to be sold by any other Person which, in the opinion of
such managing underwriter or underwriters, can be sold without having the
adverse effect referred to above (provided that if the number of such shares of
Common Stock of such other Persons requested to be registered exceeds the number
which the Company has been advised can be sold in such offering without having
the adverse effect referred to above, the number of such shares of Common Stock
to be included in such registration pursuant to this Section 4(d) shall be
allocated pro rata among all such other Persons on the basis of the relative
number of shares of Common Stock each such Person has requested to be include in
such registration).
5. Registration Procedures.
(a) If and whenever the Company is required by the provisions of
Sections 2 or 4 hereof to use its best efforts to effect or cause the
registration of Registrable Shares, the Company shall as expeditiously as
possible:
(i) prepare and, in any event within 60 days after
the end of the period within which a request for registration may
be given to the Company, file with the SEC a registration
statement with respect to such Registrable Shares and use its
commercially reasonable efforts to cause such registration
statement to become effective;
(ii) prepare and file with the SEC 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 for a
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period not in excess of 180 days or such shorter period until the
shares covered thereunder are sold and to comply with the
provisions of the Securities Act, the Exchange Act and the rules
and regulations promulgated thereunder with respect to the
disposition of all the shares of Common Stock covered by such
registration statement during such period in accordance with the
intended methods of disposition by the Holders hereof set forth in
such registration statement; provided, that (A) before filing a
registration statement (including an initial filing) or
prospectus, or any amendments or supplements thereto, the Company
will furnish to the Holders of the Registrable Shares covered by
such registration statement copies of all documents proposed to be
filed, which documents will be subject to the review and comment
of such Holders, and (B) the Company will notify each Holder of
Registrable Shares covered by such registration statement of any
stop order issued or threatened by the SEC, any other order
suspending the use of any preliminary prospectus or of the
suspension of the qualification of the registration statement for
offering or sale in any jurisdiction, and take all reasonable
actions required to prevent the entry of such stop order, other
order or suspension or to remove it if entered;
(iii) furnish to each Holder and each underwriter,
if applicable, of Registrable Shares covered by such registration
statement such number of copies of the registration statement and
of each amendment and supplement thereto (in each case including
all exhibits), such number of copies of the prospectus included in
such registration statement (including each preliminary prospectus
and summary prospectus), in conformity with the requirements of
the Securities Act, and such other documents as each Holder of
Registrable Shares covered by such registration statement may
reasonably request in order to facilitate the disposition of the
Registrable Shares owned by such Holder;
(iv) use its best efforts to register or qualify
such Registrable Shares covered by such registration statement
under the state securities or blue sky laws of such jurisdictions
as each Holder of Registrable Shares covered by such registration
statement and, if applicable, each underwriter, may reasonably
request, and do any and all other acts and things which may be
reasonably necessary to consummate the disposition in such
jurisdictions of the Registrable Shares owned by such Holder,
except that the Company shall not for any purpose (A) be required
to qualify generally to do business as a foreign corporation or a
broker-dealer in any jurisdiction where, but for the requirements
of this clause (iv), it would not be obligated to be so qualified,
(B) subject itself to taxation in any such jurisdiction or (C)
consent to service of process in any such jurisdiction;
(v) use its commercially reasonable efforts to cause
such Registrable Shares 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 Holders thereof
to consummate the disposition of such Registrable Shares;
(vi) if at any time when a prospectus relating to
the Registrable Shares is required to be delivered under the
Securities Act any event shall
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have occurred as the result of which any such prospectus as then
in effect would include 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, promptly
give written notice thereof to each Holder and the managing
underwriter or underwriters, if any, of such Registrable Shares
and prepare and furnish to each such Holder a reasonable number of
copies of an amended or supplemental prospectus as may be
necessary so that, as thereafter delivered to the purchasers of
such Registrable Shares, such prospectus shall not include an
untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statement
therein not misleading;
(vii) enter into such customary agreements
(including an underwriting agreement in customary form) and take
such other actions as each Holder of Registrable Shares being sold
or the underwriter or underwriters, if any, reasonably request in
order to expedite or facilitate the disposition of such
Registrable Shares, including customary indemnification and
opinions;
(viii) use its best efforts to obtain a "comfort"
letter or letters from the Company's independent public
accountants in customary form and covering matters of the type
customarily covered by "comfort" letters as the Holders of at
least 25% of the Registrable Shares being sold or the underwriters
retained by such Holders shall reasonably request;
(ix) make available for inspection by
representatives of any Holder of Registrable Shares covered by
such registration statement, by any underwriter participating in
any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained
by such Holders or any such underwriter, all financial and other
records, pertinent corporate documents and properties of the
Company and its subsidiaries, and cause all of the Company's and
its subsidiaries' officers, directors and employees to supply all
information and respond to all inquiries reasonably requested by
such Holders or any such representative, underwriter, attorney,
accountant or agent in connection with such registration
statement;
(x) promptly prior to the filing of any document
which is to be incorporated by reference into the registration
statement or the prospectus (after initial filing of the
registration statement), provide copies of such document to
counsel to the Holders of Registrable Shares covered by such
registration statement and to the managing underwriter or
underwriters, if any, and make the Company's representatives
available for discussion of such document;
(xi) otherwise use its commercially reasonable
efforts to comply with all applicable rules and regulations of the
SEC, and make available to its security holders, as soon as
reasonably practicable after the effective date of the
registration statement, an earnings statement which shall satisfy
the provisions of
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Section 11(a) of the Securities Act and the rules and regulations
promulgated thereunder;
(xii) use its best efforts to provide a CUSIP number
for all Registrable Shares not later than the effective date of
the applicable registration statement, and provide the applicable
transfer agents with printed certificates for the Registrable
Shares which are in a form eligible for deposit with the
Depository Trust Company;
(xiii) notify counsel for the Holders of Registrable
Shares included in such registration statement and the managing
underwriter or underwriters, if any, promptly, and confirm the
notice in writing, (A) when the registration statement, or any
post-effective amendment to the registration statement, shall have
become effective, or any supplement to the prospectus or any
amendment prospectus shall have been filed, (B) of the receipt of
any comments from the SEC and (C) of any request of the SEC to
amend the registration statement or amend or supplement the
prospectus or for additional information; and
(xiv) cooperate with each seller of Registrable
Shares and each underwriter, if any, participating in the
disposition of such Registrable Shares and their respective
counsel in connection with any filings required to be made with
the NASD.
(b) Each Holder of Registrable Shares hereby agrees that, upon
receipt of any notice from the Company of the happening of any event of the type
described in Section 5(a)(vi) hereof, such Holder shall forthwith discontinue
disposition of such Registrable Shares covered by such registration statement or
related prospectus until such Holder's receipt of the copies of the supplemental
or amended prospectus contemplated by Section 5(a)(vi) hereof, and, if so
directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies of the prospectus in its possession, covering such
Registrable Shares at the time of receipt of such notice. In the event the
Company shall give any such notice, the period mentioned in Section 5(a)(ii)
hereof shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to Section 5(a)(vi)
hereof and including the date when such Holder shall have received the copies of
the supplemental or amended prospectus contemplated by Section 5(a) (vi) hereof.
If for any other reason the effectiveness of any registration statement filed
pursuant to Section 4 hereof is suspended or interrupted prior to the expiration
of the time period regarding the maintenance of the effectiveness of such
Registration Statement required by Section 5(a)(ii) hereof so that Registrable
Shares may not be sold pursuant thereto, the applicable time period shall be
extended by the number of days equal to the number of days during the period
beginning with the date of such suspension or interruption to and ending with
the date when the sale of Registrable Shares pursuant to such registration
statement may be recommenced.
(c) Each Holder hereby agrees to provide the Company, upon receipt
of its request, with such information about such Holder to enable the Company to
comply with the requirements of the Securities Act and to execute such
certificates as the Company may
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reasonably request in connection with such information and otherwise to satisfy
any requirements of law.
6. Denial, Postponement or Suspension of Registration.
(a) If the Company receives a written request in compliance with
Section 4(a) hereof (a "Section 4(a) Notice") and is then contemplating filing
with the SEC a registration statement within 90 days of the date the Company
receives such request, which filing could otherwise trigger the application of
incidental registration rights of Holders under Section 2 hereof, then the
Company may deny the Holders the rights of registration granted pursuant to
Section 4 hereof; provided, however, that the Company shall be prohibited from
exercising its denial rights pursuant to this Section 6(a) more than one time in
any twelve-month period. The Company shall give prompt written notice (the
"Denial Notice") to the Holders of any such denial. The Company's failure to
file a registration statement with the SEC promptly (but in no event later than
90 days after the date it receives a Section 4(a) Notice) after denying a
Holder's request pursuant to Section 4(a) hereof, shall result in the loss of
the Company's denial rights with respect to any registration by the Holders
pursuant to a Section 4(a) Notice given within 180 days after receipt of the
Denial Notice.
(b) The Company, at its option, may postpone for up to 180 days
the filing of any registration statement authorized hereunder, and to suspend
sales under any registration statement authorized hereunder for up to 180 days;
provided, however, that in computing the 180-day period for which the Company is
required to maintain the effectiveness of any registration statement authorized
in accordance with Section 5 hereof, the period of any such suspension shall not
be included; provided, further, that the Company shall be prohibited from
exercising its suspension rights pursuant to this Section 6(b) more than one
time in any twelve-month period. The Company shall give prompt written notice to
the Holders of any such postponement or suspension, and shall likewise give
prompt written notice to the Holders of the termination of such postponement or
suspension. Each Holder hereby agrees to postpone the sale of any Registrable
Shares registered pursuant to any registration statement authorized under this
Agreement during any postponement or suspension.
7. Underwritten Registrations. Subject to the provisions of Sections 2,
3 and 4 hereof, any of the Registrable Shares covered by a registration
statement may be sold in an underwritten offering at the discretion of the
Holder thereof. In the case of an underwritten offering pursuant hereto, the
managing underwriter or underwriters shall be selected by the Company.
8. Expenses.
(a) The fees, costs and expenses of all registrations in
accordance with Section 2 and Section 4 hereof shall be borne by the Company,
subject to the provisions of Section 8(b) hereof.
(b) The fees, costs and expenses of registration to be borne as
provided in Section 8(a) hereof shall include, without limitation, all expenses
incident to the Company's performance of or compliance with this Agreement,
including without limitation
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all SEC or NASD registration and filing fees and expenses, reasonable fees and
expenses of any "qualified independent underwriter" and its counsel as may be
required by the rules of the NASD, fees and expenses of compliance with
securities or blue sky laws (including without limitation reasonable fees and
disbursements of counsel for the underwriters, if any, or for the selling
Holders, in connection with blue sky qualifications of the Registrable Shares),
rating agency fees, printing expenses (including expenses of printing
certificates for Registrable Shares and prospectuses), messenger, telephone and
delivery expenses, the fees and expenses incurred in connection with the listing
of the shares of Common Stock to be registered on each securities exchange or
national market system on which similar shares of Common Stock issued by the
Company are then listed, fees and disbursements of counsel for the Company and
all independent certified public accountants (including the expenses of any
annual audit, special audit and "cold comfort" letters required by or incident
to such performance and compliance), securities laws liability insurance (if the
Company, in its sole and absolute discretion, decides to obtain such insurance),
the fees and disbursements of underwriters customarily paid by issuers or
sellers of securities (including, without limitation, expenses relating to "road
shows" and other marketing activities), the reasonable fees of one counsel
retained in connection with each such registration by the Holders of a majority
of the Registrable Shares being registered, the reasonable fees and expenses of
any special experts retained by the Company in connection with such
registration, and fees and expenses of other persons retained by the Company
(but not including any underwriting discounts or commissions or transfer taxes,
if any, attributable to the sale of Registrable Shares by such Holders)
(collectively, "Registration Expenses").
9. Indemnification.
(a) Indemnification by the Company. In the event of any
registration of any shares of Common Stock of the Company under the Securities
Act pursuant to Section 2 or 4 hereof, the Company will, and it hereby does,
indemnify and hold harmless, to the extent permitted by law, each of the Holders
of any Registrable Shares covered by such registration statement, each affiliate
of such Holder and their respective directors and officers or general and
limited partners (and the directors, officers, general and limited partners,
affiliates and controlling Persons thereof), each other Person who participates
as an underwriter in the offering or sale of such shares of Common Stock and
each other Person, if any, who controls such Holder or any such underwriter
within the meaning of the Securities Act (collectively, the "Indemnified
Parties"), against any and all losses, claims, damages or liabilities, joint or
several, and expenses (including any amounts paid in any settlement effected
with the Company's consent) to which any Indemnified Party may become subject
under the Securities Act, state securities or blue sky laws, common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof, whether or not such Indemnified Party is a party
thereto) or expenses arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such shares of Common Stock were registered under the
Securities Act, any preliminary, final or summary prospectus contained therein,
or any amendment or supplement thereto, (ii) 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 or (iii) any violation by the Company of
any federal, state or common law rule or
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regulation applicable to the Company and relating to action required of or
inaction by the Company in connection with any such registration, and the
Company will reimburse such Indemnified Party for any out-of-pocket legal or any
other expenses reasonably incurred by it in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided, that
the Company shall not be liable to any Indemnified Party 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 any untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement or amendment or supplement thereto or in any such
preliminary, final or summary prospectus in reliance upon and in conformity with
written information with respect to such Holder furnished to the Company by such
Holder specifically for use in the preparation thereof. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Holder or any Indemnified Party and shall survive the transfer of
such Common Stock by such Holder.
(b) Indemnification by the Holders and Underwriters. The Company
may require, as a condition to including any Registrable Shares in any
registration statement filed in accordance with Sections 2 or 4 hereof, that the
Company shall have received an undertaking reasonably satisfactory to it from
the Holders of such Registrable Shares or any underwriter to indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section 9(a)
hereof) the Company with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary,
final or summary prospectus contained therein, or any amendment or supplement,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information with respect to the
Holders of the Registrable Shares being registered or such underwriter furnished
to the Company by such Holders or such underwriter specifically for use in the
preparation of such registration statement, preliminary, final or summary
prospectus or amendment or supplement, or a document incorporated by reference
into any of the foregoing; provided, that no such Holder shall be liable for any
indemnity claims in excess of the amount of proceeds received by such Holder
from the sale of Registrable Shares. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the Company
or any of the Holders, or any of their respective affiliates, directors,
officers or controlling Persons, and shall survive the transfer of such Common
Stock by such Holders.
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 8, 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 the
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Section 9, except to the extent
that the indemnifying party is actually materially prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
the indemnifying party will be entitled to participate in and to assume the
defense thereof, with counsel satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election to
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assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation; provided that the indemnified party shall have the right to
employ counsel to represent the indemnified party and its respective controlling
persons, directors, officers, general or limited partners, employees or agents
who may be subject to liability arising out of any claim in respect of which
indemnification may be sought by the indemnified party against such indemnifying
party under this Section 9 if (i) the employment of such counsel shall have been
authorized in writing by such indemnifying party in connection with the defense
of such action, (ii) the indemnifying party shall not have promptly employed
counsel reasonably satisfactory to the indemnified party to assume the defense
of such action or counsel, or (iii) any indemnified party shall have reasonably
concluded that there may be defenses available to such indemnified party or its
respective controlling persons, directors, officers, employees or agents which
are in conflict with or in addition to those available to the indemnifying
party, and in that event the reasonable fees and expenses of one firm of
separate counsel for the indemnified party shall be paid by the indemnifying
party. No indemnifying party will consent to entry of any judgment or enter into
any settlement 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 of such claim or litigation.
(d) If the indemnification provided for in this Section 9 shall
for any reason be unavailable to any indemnified party under Section 9(a) or
9(b) hereof or is insufficient to hold it harmless in respect of any loss,
claim, damage or liability, or any action in respect thereof referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the indemnified party
and indemnifying party 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) but also the relative
fault of the indemnified party and indemnifying party with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. Notwithstanding any other provision of this Section 9(d), no
Holder of Registrable Shares shall be required to contribute an amount greater
than the dollar amount of the proceeds received by such Holder with respect to
the sale of any such Registrable Shares. 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.
10. Rule 144. The Company covenants that it will file in a timely
manner the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations promulgated thereunder (or, if the
Company is not required to file such reports, it will, upon the request of any
Holder of Registrable Shares, make publicly available such information), and it
will take such further action as any Holder of Registrable Shares may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Shares without registration under the Securities Act within the
limitations of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended
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from time to time, or (b) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of any Holder of Registrable Shares, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements.
11. Assignability. The rights granted to the PBGC in this Agreement
shall not be assigned or transferred, and any attempted assignment or transfer
shall be null and void and without legal effect; provided, however, that the
PBGC or any Designated Transferee shall be entitled to assign and transfer any
or all of its rights hereunder to one or more Designated Transferees as long as
(i) the obligations of the Company hereunder are not increased or enlarged, (ii)
each Designated Transferee executes and delivers an agreement, in form and
substance reasonably satisfactory to the Company, acknowledging such Designated
Transferee's obligations under this Agreement, and (iii) each Designated
Transferee acquires not less than 117,020 shares of Common Stock, subject to
equitable adjustment after the date hereof in the event of a stock split,
reverse stock split, recapitalization, reorganization or comparable change in
the Company's capital structure (other than an issuance of Common Stock for fair
value).
12. Notices. Any and all notices, designations, consents, offers,
acceptances or any other communications shall be given in writing by either (a)
personal delivery to and receipted for by the addressee or by (b) telecopy or
registered or certified mail which shall be addressed, in the case of the
Company, to: Allis-Chalmers Corporation, 1626 South 70th Street, Milwaukee,
Wisconsin 53214, Attention: William Vaitl, with a copy to Luke E. Sims, Foley &
Lardner, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, in the case of
Holders, the address or addresses thereof appearing on the books of the Company
or of the transfer agent and registrar for its Common Stock.
All such notices and communications shall be deemed to have been duly
given and effective: when delivered by hand, if personally delivered; two
business days after being deposited in the mail, postage prepaid, if mailed; and
when receipt acknowledged, if telecopied.
13. No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its Common Stock which is inconsistent with
the rights granted to the Holders in this Agreement.
14. Specific Performance. The Company acknowledges that the rights
granted to the Holders in this Agreement are of a special, unique and
extraordinary character, and that any breach of this Agreement by the Company
could not be compensated for by damages. Accordingly, if the Company breaches
its obligations under this Agreement, the Holders shall be entitled, in addition
to any other remedies that they may have, to enforcement of this Agreement by a
decree of specific performance requiring the Company to fulfill its obligations
under this Agreement. The Company consents to personal jurisdiction in any such
action brought in the United States District Court for the Southern District of
New York or any such other court and to service of process upon it in the manner
set forth in Section 11 hereof.
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15. Severability. If any provision of this Agreement or any portion
thereof is finally determined to be unlawful or unenforceable, such provision or
portion thereof shall be deemed to be severed from this Agreement. Every other
provision, and any portion of such an invalidated provision that is not
invalidated by such a determination, shall remain in full force and effect.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which,
together, shall constitute one and the same instrument.
17. Defaults. A default by any party to this Agreement in such party's
compliance with any of the conditions or covenants hereof or performance of any
of the obligations of such party hereunder shall not constitute a default by any
other party.
18. Amendments, Waivers. This Agreement may not be amended, modified or
supplemented and no waivers of or consents to departures from the provisions
hereof may be given unless consented to in writing by the Company and the
Holders of a majority of the Registrable Shares; provided, however, that no such
amendment, supplement, modification or waiver shall deprive any Holder of any
rights under Sections 2 or 4 hereof without the consent of such Holder.
19. Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
20. Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the successful party shall be entitled to recover reasonably
attorneys' fees in addition to any other available remedy.
21. Entire Agreement. This Agreement, together with the Master
Agreement and the other agreements referenced therein, contains the entire
agreement among the parties hereto with respect to the transactions contemplated
herein and understandings among the parties relating to the subject matter
hereof.
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22. Governing Law. This Agreement is make pursuant to and shall be
construed in accordance with the internal laws of the State of Delaware. The
parties hereto submit to the non-exclusive jurisdiction of the courts of the
State of New York in New York County and the United States District Court for
the Southern District of New York in any action or proceeding arising out of or
relating to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date aforesaid.
ALLIS-CHALMERS CORPORATION
By: /s/John T. Grigsby, Jr.
Name: John T. Grigsby, Jr.
Title: Executive V.P. and CFO
PENSION BENEFIT GUARANTY CORPORATION
By: /s/Robert M. Klein
Name: Robert M. Klein
Title: Acting Chief Negotiator
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