STOCKHOLDERS AGREEMENT
dated as of June 20, 1996
between
MK RAIL CORPORATION
and
MORRISON KNUDSEN CORPORATION
STOCKHOLDERS AGREEMENT
Stockholders Agreement (this "Agreement") dated as of June 20, 1996
between MK Rail Corporation, a Delaware corporation (the "Company"), and
Morrison Knudsen Corporation, an Ohio corporation ("MKO").
RECITALS
WHEREAS, in connection with the reorganization of Morrison Knudsen
Corporation, a Delaware corporation ("MK"), certain creditors of MK and MKO will
acquire restricted shares of Common Stock held by MKO, and the Company has
agreed to provide certain rights to such future holders to cause the shares so
acquired to be registered pursuant to the Securities Act; and
WHEREAS, the Company, at the request of MK and MKO, has, by execution
of a Second Amendment to Rights Agreement (the "Rights Plan Amendments") of even
date herewith, made certain amendments to the Rights Agreement between MK Rail
and Chemical Mellon Shareholder Services, L.L.C. dated as of January 19, 1996,
as amended (the "Rights Plan"), in order to facilitate the obtaining by MK and
MKO of the acceptances required to confirm a plan of reorganization that MK
contemplates filing with the Bankruptcy Court pursuant to which, among other
things, the restricted shares of Common Stock are to be transferred to creditors
of MK; and
WHEREAS, the parties hereto desire to set forth the rights of such
future holders and the Company's obligations to cause the registration of the
Registrable Securities pursuant to the Securities Act; and
WHEREAS, the Company, MKO and such future holders have agreed upon
certain matters relating to the governance of the Company and to the Rights Plan
Amendment.
NOW, THEREFORE, in consideration of good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Definitions and Usage. As used in this Agreement:
1.1. Definitions.
Affiliate. "Affiliate" means Affiliate as defined in Rule 12b-2
promulgated by the Commission under the Exchange Act.
Agent. "Agent" means the principal placement agent on an agented
placement of Registrable Securities.
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Bankruptcy Court. "Bankruptcy Court" shall mean the United States
Bankruptcy Court for the District of Delaware, in which court the Plan has
been filed.
Certificate Amendment. "Certificate Amendment" shall have the meaning
set forth in Section 9.5.
Commission. "Commission" shall mean the United States Securities and
Exchange Commission.
Common Stock. "Common Stock" shall mean (i) the common stock, par
value $.01 per share, of the Company, and (ii) shares of capital stock of
the Company issued by the Company in respect of or in exchange for shares
of such common stock in connection with any stock dividend or distribution,
stock split-up, recapitalization, recombination or exchange by the Company
generally of shares of such common stock.
Continuously Effective. "Continuously Effective," with respect to a
specified registration statement, shall mean that it shall not cease to be
effective and available for Transfers of Registrable Securities thereunder
for longer than either (i) any ten consecutive business days, or (ii) an
aggregate of fifteen business days during the period specified in the
relevant provision of this Agreement.
Demand Registration Request. "Demand Registration Request" shall have
the meaning set forth in Section 2.1(i).
Demand Registration Statement. "Demand Registration Statement" shall
have the meaning set forth in Section 2.1(i).
Demanding Holders. "Demanding Holders" shall have the meaning set
forth in Section 2.1(i).
Distribution Date. "Distribution Date" shall mean the date MK Rail
Common Stock owned by MKO on the date hereof has been distributed to
creditors of MKO in any case under Title 11 of the United States Bankruptcy
Code or through a foreclosure against MKO. Election Request. "Election
Request" shall have the meaning set forth in Section 9.6.
Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
Holder. "Holders" shall mean MKO and the Transferees of the Common
Stock held by MKO or their Transferees in accordance with Section 8.
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Majority Selling Holders. "Majority Selling Holders" means those
Selling Holders whose Registrable Securities included in a registration
represent a majority of the Registrable Securities of all Selling Holders
included therein.
Market Value. "Market Value" of Registrable Securities as of a given
date shall mean the average closing price for such securities over the ten
(10) business days immediately preceding said date as quoted on the NASDAQ
National Market System or such other securities exchange on which said
securities are listed.
Note Cancellation Agreement. "Note Cancellation Agreement" shall refer
to the Note Cancellation and Restructuring Agreement of even date herewith
by and among the Company, MKO and MK.
Outside Director. "Outside Director" shall mean a director of the
Company who (i) is not and has not been employed by MK, MKC or the Company
or their respective subsidiaries in an executive capacity within the five
years immediately prior to the annual meeting at which the nominees of the
board of directors will be voted upon; (ii) is not (and is not affiliated
with a company or a firm that is) a significant advisor or consultant to
the Company or its subsidiaries; (iii) is not affiliated with a significant
customer or supplier of the Company or its subsidiaries; (iv) does not have
significant personal services contract(s) with the Company or its
subsidiaries; (v) is not affiliated with a tax-exempt entity that receives
significant contributions from the Company or its subsidiaries; and (vi) is
not a spouse, parent, sibling or child or any person described by (i)
through (v) of this definition.
Person. "Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or other agency or
political subdivision thereof.
Piggyback Registration Statement. "Piggyback Registration Statement"
shall have the meaning set forth in Section 3.
Plan. "Plan" shall mean the plan of reorganization with respect to MK,
which plan of reorganization shall contain substantially the terms set
forth in Exhibit C to the Note Cancellation Agreement and which plan of
reorganization shall not contain any terms or provisions that are
inconsistent with the Note Cancellation Agreement, this Agreement or the
terms set forth in such Exhibit C.
Register, Registered and Registration. "Register", "registered", and
"registration" shall refer to a registration effected by preparing and
filing a registration statement or similar document in compliance with the
Securities Act, and the declaration or ordering by the Commission of
effectiveness of such registration statement or document.
Registrable Securities. "Registrable Securities" shall mean, subject
to Section 8: (i) the Shares owned by the Holders on any date of
determination, (ii) any shares of Common
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Stock or other securities issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange by the
Company generally for, or in replacement by the Company generally of, such
Shares; and (iii) any securities issued in exchange for Shares in any
merger or reorganization of the Company; provided, however, that
Registrable Securities shall not include any securities which have
theretofore been registered and sold to the public in a bona fide public
offering pursuant to the Securities Act or which have been sold to the
public pursuant to Rule 144 or any similar rule promulgated by the
Commission pursuant to the Securities Act.
Registrable Securities then outstanding. "Registrable Securities then
outstanding" shall mean, with respect to a specified determination date,
the Registrable Securities owned by all Holders on such date.
Registration Expenses. "Registration Expenses" shall have the meaning
set forth in Section 6.1.
Securities Act. "Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
Selling Holders. "Selling Holders" shall mean, with respect to a
specified registration pursuant to this Agreement, Holders whose
Registrable Securities are included in such registration.
Shares. "Shares" shall mean the shares of Common Stock acquired by
certain creditors of MK in connection with the reorganization of MK.
Shelf Registration Statement. "Shelf Registration Statement" shall
have the meaning set forth in Section 2.2.
Standstill Termination Date. "Standstill Termination Date" shall have
the meaning set forth in Section 9.2.
Stockholders Meeting. "Stockholders Meeting" shall have the meaning
set forth in Section 9.7.
Substantial Stockholder. "Substantial Stockholder" shall mean any
Person beneficially owning 5% of more of the outstanding Common Stock.
Transfer. "Transfer" shall mean and include the act of selling,
giving, transferring, creating a trust (voting or otherwise), assigning or
otherwise disposing of (other than pledging, hypothecating or otherwise
transferring as security) (and correlative words shall have correlative
meanings); provided however, that any transfer or other disposition upon
foreclosure or other exercise of remedies of a secured creditor after an
event of default under or with respect to a
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pledge, hypothecation or other transfer as security shall constitute a
"Transfer." "Transferee" shall mean any Person who acquires Common Stock
pursuant to a Transfer.
Underwriters' Representative. "Underwriters' Representative" shall
mean the managing underwriter, or, in the case of a co-managed
underwriting, the lead manager.
Violation. "Violation" shall have the meaning set forth in Section
7.1.
1.2. Usage.
(i) References to a Person are also references to its assigns and
successors in interest (by any means whatever, including merger,
consolidation or sale of all or substantially all the assets of such
Person or otherwise, as the case may be).
(ii) References to Registrable Securities "owned" by a Holder shall include
Registrable Securities beneficially owned by such Person but which are
held of record in the name of a nominee, trustee, custodian, or other
agent, but shall exclude shares of Common Stock held by a Holder
(other than the liquidating trust contemplated by the Plan) in a
fiduciary capacity for customers of such Person.
(iii)References to a document are to it as amended, waived and otherwise
modified from time to time and references to a statute or other
governmental rule are to it as amended and otherwise modified from
time to time (and references to any provision thereof shall include
references to any successor provision).
(iv) References to Sections or to Schedules or Exhibits are to sections
hereof or schedules or exhibits hereto, unless the context otherwise
requires.
(v) The definitions set forth herein are equally applicable both to the
singular and plural forms and the feminine, masculine and neuter forms
of the terms defined.
(vi) The term "including" and correlative terms shall be deemed to be
followed by "without limitation" whether or not followed by such words
or words of like import.
(vii)The term "hereof" and similar terms refer to this Agreement as a
whole.
(viii) The "date of" any notice or request given pursuant to this Agreement
shall be determined in accordance with Section 12.2.
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Section 2. Demand and Shelf Registration Statements.
2.1. (i) At any time during the period commencing on the date of the first
filing by the Company of its Annual Report on Form 10-K that follows the
effective date of the Plan and ending on the fifth anniversary thereof, one or
more Holders of Registrable Securities may at their option make a written
request (a "Demand Registration Request") to the Company (the "Demanding
Holders") requesting that the Company file with the Commission a registration
statement on an appropriate form under the Securities Act (a "Demand
Registration Statement") to register (subject to Section 2.6) all or such number
of such Demanding Holder's Registrable Securities as the Demanding Holder shall
request in writing; provided, however, that no request may be made pursuant to
this Section 2.1 if (A) within twelve months prior to the date of such request a
Demand Registration Statement pursuant to this Section 2.1 shall have been
declared effective by the Commission or (B) the Registrable Securities that the
Demanding Holders request be included in the Demand Registration Statement do
not have a Market Value as of the date the request is given to the Company of at
least $5,000,000. Notwithstanding the foregoing, in no event shall a Demand
Registration Request be effective unless and until the Registrable Securities
that the Demanding Holders request be included in the Demand Registration and
that other Holders request be included in the Demand Registration pursuant to
Section 2.1(iii) hereof have an aggregate Market Value determined as of the day
the last such request is received of at least $20,000,000. After an effective
Demand Registration Request is made, the Company shall file with the Commission
the Demand Registration Statement. Any Demand Registration Statement shall
relate to an underwritten offering (whether on a "firm," "best efforts" or "all
reasonable efforts" basis or otherwise) or an agented offering. Any Demand
Registration Request made pursuant to this Section 2.1 shall be addressed to the
attention of the Secretary of the Company and shall specify the number of
Registrable Securities to be registered, the intended methods of disposition
thereof and that the request is for a Demand Registration Statement pursuant to
this Section 2.1.
(ii) The Company shall be entitled to postpone for up to 120 days the
filing of any Demand Registration Statement otherwise required to be prepared
and filed pursuant to this Section 2.1 if (A) the Board of Directors of the
Company determines, in its good faith reasonable judgment, that such
registration and the Transfer of Registrable Securities contemplated thereby
would materially interfere with, or require the premature disclosure of, any
financing, acquisition or reorganization involving the Company or any of its
subsidiaries or would otherwise require the premature disclosure of any other
material nonpublic information as to which the Company has a bona fide business
purpose for maintaining its confidentiality and (B) the Company promptly gives
the Demanding Holders notice of such determination (which notice need not
disclose the fact, event or information); provided, however, that the Company
shall not have, within the twelve months prior to the date of the postponement,
postponed pursuant to this Section 2.1(ii) the filing of any other Demand
Registration Statement that was subsequently abandoned because the Demand
Registration Request relating thereto was withdrawn.
(iii) Whenever the Company receives a demand pursuant to Section 2.1(i) to
effect the registration of any Registrable Securities, the Company shall
promptly give written notice of
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such proposed registration to all Holders. Any such Holder may, within thirty
days after receipt of such notice, request in writing that all of such Holder's
Registrable Securities, or any portion thereof designated by such Holder, be
included in the registration.
2.2. As soon as practicable after the later of (i) the entry by the
Bankruptcy Court of the order approving the assumption of this Agreement and the
transactions contemplated hereby and (ii) July 1, 1996, the Company shall file
with the Commission a registration statement on Form S-3 in accordance with the
Securities Act for an offering on a delayed or continuous basis pursuant to Rule
415 under the Securities Act (the "Shelf Registration Statement"). The Company
shall use its reasonable best efforts to have the Shelf Registration Statement
declared effective on the effective date of the Plan. Subject to compliance with
the provisions of Section 5, the Holders shall be entitled to have all or a
portion of such Holders' Registrable Securities included in the Shelf
Registration Statement.
2.3. The Company shall be obligated to effect no more than four Demand
Registration Statements pursuant to this Agreement. For purposes of the
preceding sentence, a Demand Registration Statement shall not be deemed to have
been effected (i) unless a registration statement with respect thereto has
become effective, (ii) if after such registration statement has become
effective, such registration or the related offer, sale or distribution of
Registrable Securities thereunder is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason not attributable to any of the Selling Holders
and such interference is not thereafter eliminated, or (iii) if the conditions
to closing specified in any underwriting agreement containing usual and
customary terms entered into in connection with such registration are not
satisfied or waived, other than by reason of a failure on the part of any of the
Selling Holders. The Company's obligation to effect a given Demand Registration
pursuant to Section 2.1 shall be deemed to have been satisfied upon the earlier
of (x) the date as of which all of the Registrable Securities included therein
shall have been disposed of pursuant to the Demand Registration Statement, and
(y) the date as of which such Demand Registration Statement shall have been
Continuously Effective for a period of 90 days.
2.4. Whenever the Company receives a request for a Demand Registration
Statement pursuant to Section 2.1, the Company shall have the right to register
in any such Demand Registration Statement and to include in any related offering
shares of authorized but unissued Common Stock. The Company may exercise the
foregoing option to include additional shares by written notice delivered to
each of the Selling Holders within 30 days following the Company's receipt of
the request for a Demand Registration Statement pursuant to Section 2.1(i).
2.5. In any Demand Registration Statement, the managing or lead underwriter
or underwriters (for an underwritten offering) or the lead agent (for an agented
offering) shall be a nationally recognized firm selected by the Majority Selling
Holders with the approval of the Company, which approval shall not be
unreasonably withheld.
2.6 Whenever the Company effects a Demand Registration Statement pursuant
to Section 2.1, if the Underwriters' Representative or Agent advises the Company
and each Selling
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Holder in writing that, in its opinion, the amount of securities requested to be
included in such offering (whether by the Company or the Selling Holders)
exceeds the amount which can be sold in such offering within a price range
acceptable to the Majority Selling Holders, the securities to be included in
such offering and the related registration shall be reduced in the following
order to an amount which can be sold within such price range: first, the amount
of securities, if any, that the Company has requested be included in the
offering and registration shall be reduced until no such securities are included
therein; and second, the amount of Registrable Securities that the Selling
Holders have requested be included in the offering and registration shall be
reduced on a pro rata basis among all Selling Holders based on the relative
number of securities each has requested be included in such offering.
2.7. Notwithstanding anything in this Agreement to the contrary, neither MK
nor MKO shall have the right to dispose of any Registrable Securities pursuant
to any registration statement effected pursuant to Sections 2 or 3.
Section 3. Piggyback Registration Statements.
3.1. If at any time the Company proposes to register (including for this
purpose a registration effected by the Company for stockholders of the Company
other than the Holders) equity securities or securities convertible or
exchangeable into equity securities under the Securities Act in connection with
a public offering solely for cash (other than by a registration on Form S-4 or
S-8 or any successor or similar forms or filed in connection with an exchange
offer or any offering of securities solely to the Company's existing
stockholders or otherwise pursuant to a dividend reinvestment plan or a dividend
reinvestment and stock purchase plan, and other than pursuant to Section 2), the
Company shall promptly give each Holder of Registrable Securities written notice
of such registration (a "Piggyback Registration Statement"). Upon the written
request of each Holder given within fifteen days following the date of such
notice, the Company shall cause to be included in such registration statement
and use its reasonable best efforts to be registered under the Securities Act
all the Registrable Securities that each such Holder shall have requested to be
registered; provided, however, that such right of inclusion shall not apply to
any registration statement covering an underwritten offering of convertible or
exchangeable securities or equity securities other than Common Stock if the
Underwriters' Representative or Agent shall advise the Company in writing (with
a copy to each Selling Holder) that in its opinion, the kind of Registrable
Securities requested to be included in the Piggyback Registration Statement
would adversely affect the offering of the convertible or exchangeable
securities or equity securities or the timing thereof. The Company shall have
the absolute right at any time to withdraw or cease to prepare or file any
registration statement for any offering referred to in this Section 3 without
any obligation or liability to any Holder.
3.2 If the Underwriters' Representative or Agent shall advise the Company
in writing (with a copy to each Selling Holder) that, in its opinion, the amount
of securities requested to be included in such offering (whether by the Company,
the Selling Holders or other selling stockholders) exceeds the amount which can
be sold in such offering within a price range
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acceptable to the Company, the securities to be included in such offering and
the related registration shall be reduced in the following order to an amount
which can be sold within such price range: first the amount of securities to be
included in the offering and registration by any selling stockholder other than
the Selling Holders shall be reduced until no such securities are included
therein; second, the amount of Registrable Securities that the Selling Holders
have requested be included in the offering and registration shall be reduced on
a pro rata basis among all Selling Holders based on the relative number of
securities each has requested be included in such offering; and third, the
amount of securities to be included in the offering and registration by the
Company shall be reduced.
3.3 During the term of this Agreement, each Holder shall be entitled to
have its Registrable Securities included in an unlimited number of Piggyback
Registration Statements pursuant to this Section 3.
3.4 If the Company has previously filed a registration statement with
respect to Registerable Securities pursuant to Section 2.1 or pursuant to this
Section 3, and if such previous registration statement has not been withdrawn or
abandoned, the Company will not file or cause to be effected any other
registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (except on Form S-8 or any successor form), whether on its own behalf or at
the request of any holder or holders of such securities, until a period of 180
days has elapsed from the effective date of such a previous registration
statement.
Section 4. Registration Procedures. Whenever required under Section 2 or Section
3 to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as practicable:
4.1. Prepare and file with the Commission a registration statement with
respect to such Registrable Securities, subject to Section 2.2, and use the
Company's reasonable best efforts to cause such registration statement to become
effective, in each instance giving due regard to the need to prepare current
financial statements, conduct due diligence and complete other actions that are
reasonably necessary to effect a registered public offering; provided, however,
that before filing a registration statement or prospectus or any amendments or
supplements thereto, including documents incorporated by reference after the
initial filing of the registration statement and prior to effectiveness thereof,
the Company shall use its reasonable efforts to furnish to one firm of legal
counsel for the Selling Holders (selected by the Majority Selling Holders)
copies of all such documents in the form substantially as proposed to be filed
with the Commission at least five business days prior to filing for review and
comment by such counsel.
4.2. (i) Use the Company's reasonable best efforts to keep the relevant
registration statement Continuously Effective (x) if a Demand Registration
Statement, for up to 90 days or until such earlier date as of which all the
Registrable Securities under the Demand Registration Statement shall have been
disposed of in the manner described in the Demand Registration Statement, and
(y) if a Shelf Registration Statement, subject to the immediately following
sentence,
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for three years. As soon as reasonably practicable after the occurrence of any
fact or event that makes untrue any statement of a material fact made in the
Shelf Registration Statement or that requires the making of any additions to or
changes in the Shelf Registration Statement in order to make the statements
therein, in light of the circumstances in which they were made, not misleading,
the Company shall prepare and file a supplement or amendment to the Shelf
Registration Statement or related prospectus, or a document incorporated therein
by reference, so that such Shelf Registration Statement and related prospectus
shall not contain any such untrue statement of a material fact or any such
omission of a material fact; provided, however, that if the Board of Directors
of the Company determines, in its good faith reasonable judgment, that the
Transfer of Registrable Securities pursuant to the Shelf Registration Statement
would materially interfere with, or require the premature disclosure of, any
financing, acquisition or reorganization involving the Company or any of its
subsidiaries or otherwise would require premature disclosure of any other
material nonpublic information as to which the Company has a bona fide business
purpose for maintaining its confidentiality, then for so long as such
circumstances or such business purpose continues to exist (provided that the
number of days of any such suspension may not exceed an aggregate of 120 days in
any calendar year), the Company shall not be required to prepare or file any
such supplement, amendment or document.
(ii) Each Holder agrees by acquisition of a Registrable Security that, upon
receipt of any notice from the Company of the existence of any fact or event of
the kind described in Section 2.1(ii) or 4.2(i) (which notice need not disclose
the fact, event or information), such Holder will forthwith discontinue the
disposition of any Registrable Securities pursuant to the Shelf Registration
Statement until such Holder's receipt of the copies of a supplemented or amended
prospectus as contemplated by Section 4.2(i), or until it is advised in writing
by the Company that the use of the prospectus related to the Shelf Registration
Statement may be resumed, and, has received copies of any additional or
supplemental filings that are incorporated by reference in such prospectus. If
so directed by the Company, each Holder will deliver to the Company all copies,
other than permanent file copies then in such Holder's possession, of the
prospectus covering such Registrable Securities that was current at the time of
receipt of such notice.
(iii) Notwithstanding the foregoing, if, in the case of a Demand
Registration Statement, the filing of a registration statement is postponed as
permitted by Section 2.1(ii), or, in the case of a Shelf Registration Statement,
the preparation and filing of a supplement, amendment or incorporated document
is postponed as permitted by Section 4.2(i) or Section 4.2(ii), the five-year
period for filing a Demand Registration Statement or the three-year period of
effectiveness of the Shelf Registration Statement, as the case may be, shall be
extended by the aggregate number of days of such postponement.
4.3. Subject to Section 4.2(i), prepare and file with the Commission such
amendments, supplements or incorporated documents to such registration statement
and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement. If the
registration statement is for an underwritten offering, the Company shall amend
the registration statement or supplement the prospectus whenever required by the
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terms of the underwriting agreement entered into pursuant to Section 4.6. In the
event that any Registrable Securities included in a registration statement
subject to, or required by, this Agreement remain unsold at the end of the
period during which the Company is obligated to use its reasonable best efforts
to maintain the effectiveness of such registration statement, the Company may
file a post-effective amendment to the registration statement for the purpose of
removing such securities from registered status.
4.4. Furnish to each Selling Holder of Registrable Securities copies of the
registration statement, any pre-effective or post-effective amendment thereto,
the prospectus, including each preliminary prospectus and any amendments or
supplements thereto, in each case in conformity with the requirements of the
Securities Act.
4.5. Use the Company's reasonable best efforts (i) to register and qualify
the securities covered by such registration statement under the securities or
Blue Sky laws of such states or jurisdictions as shall be reasonably requested
by the Underwriters' Representative or Agent (as applicable, or if inapplicable,
the Majority Selling Holders), and (ii) to obtain the withdrawal of any order
suspending the effectiveness of a registration statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of the offer
and transfer of any of the Registrable Securities in any jurisdiction, at the
earliest practicable moment; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business, subject itself to taxation or to file a general consent to service of
process in any states or jurisdictions where it is not now so subject.
4.6. In the event of Demand Registration Statement, enter into and perform
the Company's obligations under an underwriting or agency agreement (including
indemnification and contribution obligations of underwriters or agents), in
usual and customary form, with the managing underwriter or underwriters of or
agents for such offering. The Company shall also cooperate with the Majority
Selling Holders and the Underwriters' Representative or Agent for such offering
in the marketing of the Registrable Securities, including making reasonably
available the Company's officers, accountants, counsel, premises, books and
records for such purpose.
4.7. Promptly notify each Selling Holder of any stop order issued or
threatened to be issued by the Commission in connection therewith (and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered).
4.8. Make generally available to the Company's security holders an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act no
later than 90 days following the end of the 12-month period beginning with the
first month of the Company's first fiscal quarter commencing after the effective
date of each registration statement filed pursuant to this Agreement.
4.9. Make reasonably available for inspection by any Selling Holder, any
underwriter participating in such offering and the representatives of such
Selling Holder and Underwriter (but not more than one firm of legal counsel to
such Selling Holders), all financial
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and other information as shall be reasonably requested by them, and provide the
Selling Holder, any underwriter participating in such offering and the
representatives of such Selling Holder and Underwriter the opportunity to
discuss the business affairs of the Company with its principal executives and
independent public accountants who have certified the audited financial
statements included in such registration statement, in each case to the extent
necessary to enable them to exercise their due diligence responsibility under
the Securities Act; provided, however, that information that the Company
determines, in good faith, to be confidential and which the Company advises such
Person in writing, is confidential shall not be disclosed unless such Person
signs a confidentiality agreement reasonably satisfactory to the Company.
4.10. In the event of a Demand Registration Statement, use the Company's
reasonable best efforts to obtain a "comfort letter" from its independent public
accountants and legal opinions of counsel to the Company addressed to the
Selling Holders, in customary form and covering such matters of the type
customarily covered by such letters and in a form that shall be reasonably
satisfactory to the Majority Selling Holders. The Company shall furnish to each
Selling Holder a signed counterpart of any such comfort letter or legal opinion.
Delivery of any comfort letter shall be subject to the recipient furnishing such
written representations or acknowledgments as are customarily provided by
selling stockholders who receive such comfort letters under SAS No. 72. Nothing
in the immediately preceding sentence shall be deemed to require a Selling
Holder to make representations and warranties if the Selling Holder is willing
to receive a letter in the form to be provided to selling stockholders not
making representations and warranties under SAS No. 76.
4.11. 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.
4.12. Use all reasonable efforts to cause the Registrable Securities
covered by such registration statement, if the Common Stock is then listed on a
securities exchange or included for quotation in a recognized trading market, to
continue to be so listed or included for a reasonable period of time after the
offering.
Section 5. Holders' Obligations.
5.1. It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Agreement with respect to the Registrable
Securities of any Selling Holder of Registrable Securities that such Selling
Holder shall:
(i) furnish to the Company such information regarding such Selling Holder
and its affiliates, the number of Registrable Securities owned and
proposed to be sold by it, the intended method of disposition of such
securities and any other information as shall be required to effect
the registration of such Selling Holder's Registrable Securities, and
cooperate with the Company in preparing such registration statement
and in complying with the requirements of the Securities Act;
12
(ii) agree to sell their Registrable Securities to the underwriters at the
same price and on substantially the same terms and conditions as the
Company or the other Persons on whose behalf the registration
statement was being filed have agreed to sell their securities, and
execute the underwriting agreement agreed to by the Company and the
Majority Selling Holders and customary custody arrangements, lock-up
letters, indemnities, questionnaires and other documents reasonably
required by the underwriters or agents and agreed to by the Majority
Selling Holders.
5.2. In the event that a Demand Registration Statement or a Piggyback
Registration Statement becomes effective, if and to the extent requested by the
managing underwriter or lead agent for the offering relating thereto, no Holder
shall offer, sell or agree to sell or otherwise dispose of or transfer any
Registrable Securities or securities convertible into or exchangeable or
exercisable for any Registrable Securities (other than, in the case of the
Selling Holders under the Demand Registration Statement or Piggyback
Registration Statement, pursuant to such Demand Registration Statement or
Piggyback Registration Statement, as the case may be), or exercise any right to
register any such securities, during the period commencing ten days prior to the
anticipated effective date of such registration statement and ending 120 days
from the effective date of such registration statement. In order to enforce the
foregoing agreement, the Company shall be entitled to impose stop-transfer
instructions with respect to the Registrable Securities of each Holder until the
end of such period.
Section 6. Expenses of Registration. Expenses in connection with registrations
pursuant to this Agreement shall be allocated and paid as follows:
6.1 With respect to the Shelf Registration Statement, MKO shall bear and
pay or shall reimburse the Company for, and with respect to each Demand
Registration Statement, the Company shall bear and pay, all of the expenses
incurred in connection with the registration and offering of Registrable
Securities with respect to such Shelf Registration Statement or Demand
Registration Statement, as the case may be, including, but not limited to, all
registration, filing and National Association of Securities Dealers, Inc. fees,
all fees and expenses of complying with securities or blue sky laws, all word
processing and duplicating expenses, messenger and delivery expenses, the fees
and disbursements of counsel for the Company, the fees and disbursements of the
Company's independent public accountants, including the expenses of "cold
comfort" letters required by or incident to such performance and compliance, and
all printing expenses (including the printing of certificates evidencing the
Registrable Securities and the printing of the registration statement and any
related prospectus, or any amendment or supplement thereto) (collectively, the
"Registration Expenses"); provided, however, that, the Selling Holders shall pay
(i) underwriting discounts and commissions relating to the Registrable
Securities sold by them pursuant to any such registration statement and (ii) all
fees and disbursements of counsel and any other advisors to the Selling Holders.
Notwithstanding the foregoing, in no event shall the obligations of MKO under
this Section 6.1 exceed $75,000 in the aggregate. In no event shall MKO be
responsible for the expenses of a Demand Registration Statement. To the extent
MKO is not required by this Section to pay or reimburse the Company for expenses
incurred in connection with a Shelf Registration
13
Statement, those expenses shall be borne and paid by the Company, except as
expressly otherwise provided in the first sentence of this Section.
6.2 The Company shall bear and pay all Registration Expenses incurred in
connection with any Piggyback Registration Statements pursuant to Section 3,
other than (i) underwriting discounts and commissions relating to Registrable
Securities, (ii) the portion of any filing fees allocable to the Registrable
Securities included in such registration by the Holders and (iii) the fees and
disbursements of any counsel and other advisors to the Selling Holders (each of
which expenses in clauses (i) and (ii) shall be paid on a pro rata basis by the
Selling Holders of Registrable Securities included in such Piggyback
Registration Statement and which expenses in clause (iii) shall be paid on a pro
rata basis by the Selling Holders for which the expenses are incurred).
Section 7. Indemnification; Contribution. If any Registrable Securities are
included in a registration statement under this Agreement:
7.1. To the extent permitted by applicable law, the Company shall indemnify
and hold harmless each Selling Holder, its directors, officers, shareholders,
employees, investment advisors, agents and Affiliates, either direct or indirect
(and each such Affiliate's directors, officers, shareholders, employees,
investment advisors and agents) and each other Person, if any, who controls such
Selling Holder within the meaning of the Securities Act against any and all
losses, claims, damages, liabilities and expenses, including attorneys' fees and
disbursements and expenses of investigation, incurred by such party pursuant to
any actual or threatened action, suit, proceeding or investigation, to which any
of the foregoing Persons may become subject under the Securities Act, the
Exchange Act or other federal or state laws, insofar as such losses, claims,
damages, liabilities and expenses arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein, or any amendments or supplements thereto, or the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading (collectively, a
"Violation"); provided, however, that the indemnification required by this
Section 7.1 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or expense if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld), nor
shall the Company be liable in any such case for any such loss, claim, damage,
liability or expense to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished to the Company by the indemnified party expressly for use
in connection with such registration.
7.2. To the extent permitted by applicable law, each Selling Holder shall
indemnify and hold harmless the Company, its directors, officers, shareholders,
employees, investment advisors, agents and Affiliates, either direct or indirect
(and each such Affiliate's directors, officers, shareholders, employees,
investment advisors and agents) and each other Person, if any, who controls the
Company within the meaning of the Securities Act, any other Selling Holder and
any controlling Person of any such other Selling Holder against any and all
losses, claims,
14
damages, liabilities and expenses, including attorneys' fees and disbursements
and expenses of investigation, incurred by such party pursuant to any actual or
threatened action, suit, proceeding or investigation, to which any of the
foregoing Persons may otherwise become subject under the Securities Act, the
Exchange Act or other federal or state laws, insofar as such losses, claims,
damages, liabilities and expenses arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation occurs
in reliance upon and in conformity with written information furnished by such
Selling Holder expressly for use in connection with such registration statement;
provided, however, that (x) the indemnification required by this Section 7.2
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if settlement is effected without the consent of the
relevant Selling Holder of Registrable Securities, which consent shall not be
unreasonably withheld, (y) in no event shall the amount of any indemnity under
this Section 7.2 and of the contribution obligation of a Selling Holder under
Section 7.4 exceed the net proceeds from the applicable offering received by
such Selling Holder, and (z) the obligation to provide indemnification hereunder
shall be several, and not joint and several, among the indemnifying parties.
7.3. Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, suit, proceeding, investigation or
threat thereof made in writing for which such indemnified party may make a claim
under this Section 7, such indemnified party shall deliver to the indemnifying
party a written notice of the commencement thereof. The failure to deliver
written notice to the indemnifying party within a reasonable time following the
commencement of any such action, if and to the extent materially prejudicial to
its ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 7 but shall not relieve
the indemnifying party of any liability that it may have to any indemnified
party otherwise than pursuant to this Section 7. Any fees and expenses incurred
by the indemnified party (including any fees and expenses incurred in connection
with investigating or preparing to defend such action or proceeding) shall be
paid to the indemnified party, as incurred, within thirty days of written notice
thereof to the indemnifying party (regardless of whether it is ultimately
determined that an indemnified party is not entitled to indemnification
hereunder). Any such indemnified party shall have the right to employ separate
counsel in any such action, claim or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be the expenses
of such indemnified party unless (i) the indemnifying party shall have failed to
promptly assume the defense of such action, claim or proceeding or (ii) the
named parties to any such action, claim or proceeding (including any impleaded
parties) include both such indemnified party and the indemnifying party, and
such indemnified party shall have been advised by its counsel that there may be
one or more legal defenses available to it which are different from or in
addition to those available to the indemnifying party and that the assertion of
such defenses would create a conflict of interest such that counsel employed by
the indemnifying party could not represent the indemnified party (in which case,
if such indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such
action, claim or proceeding on behalf of such indemnified party; it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or
15
related actions, claims or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties, unless
the indemnified party shall have been advised by its counsel that a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such action, claim or proceeding such that
the counsel could not represent the indemnified party and any other of such
indemnified parties, in which event the indemnifying party shall be obligated to
pay the fees and expenses of such additional counsel or counsels). No
indemnifying party shall be liable to an indemnified party for any settlement of
any action, proceeding or claim without the written consent of the indemnifying
party, which consent shall not be unreasonably withheld.
7.4. If the indemnification required by this Section 7 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to in this
Section 7:
(i) The indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which resulted
in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any
Violation has been committed by, or relates to information
supplied by, such indemnifying party or indemnified parties, and
the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such Violation. The amount
paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in
Section 7.1 and Section 7.2, any legal or other fees or expenses
reasonably incurred by such party in connection with any
investigation or proceeding.
(ii) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 7.4 were determined by
pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred
to in Section 7.4(i). 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.
7.5. The obligations of the Company and the Selling Holders of Registrable
Securities under this Section 7 shall survive the completion of any offering of
Registrable Securities pursuant to a registration statement under this
Agreement.
Section 8. Transfer of Common Stock. Notwithstanding anything in this Agreement
to the contrary, no Holder may Transfer any shares of Common Stock to any
Person, except as set forth in the last paragraph of this Section 8, unless
prior to any such Transfer such
16
Person has executed an agreement (in the form of Exhibit A hereto) to be bound
by the provisions of this Agreement. The Company shall place the following
legend on any certificate representing
shares of Common Stock held by a Holder:
"This security is subject to certain restrictions on transfer
contained in a Stockholders Agreement dated as of June 20,
1996 between MK Rail Corporation and Morrison Knudsen
Corporation to which the holder of this certificate is bound,
a copy of which agreement is on file with the Secretary of MK
Rail Corporation."
In order to enforce the foregoing transfer restriction, without limiting
any other rights or remedies available to the Company, the Company shall be
entitled to impose stop-transfer instructions with respect to the Registrable
Securities of each Holder. The foregoing transfer restrictions and legend shall
be removed in connection with any sale of Common Stock to the public pursuant to
an effective registration statement or pursuant to Rule 144 or any similar rule
promulgated by the Commission under the Securities Act, in each case so long as
the specific identities of the Transferees are not known to the Holders selling
such shares prior to such sale.
Section 9. Corporate Governance Agreement.
9.1. Until either the second anniversary of the Distribution Date (or, if
an effective Election Request, as defined in Section 9.6 hereof, is made and the
Stockholders Meeting, as defined in Section 9.7 hereof, is held prior thereto,
the date of the Stockholders Meeting), each Holder (i) shall vote all of its
shares of Registrable Securities and any other voting securities of the Company
over which such Holder exercises voting power (or execute written consents in
lieu of meetings) in favor of the election of the Company's nominees for
director and against the removal of any of the Company's directors (other than a
removal for cause) at any meeting of stockholders or in any action by written
consent and (ii) shall take all other necessary or desirable actions within such
Holder's control (including, but not limited to, attendance at annual or special
stockholder meetings of the Company in person or by proxy for purposes of
obtaining a quorum) to elect such nominees and to vote against such removal of
any of the Company's directors; provided, however, that the total number of
directors on the Company's Board of Directors shall not be fewer than seven and
a majority of such directors shall at all times consist of Outside Directors.
Notwithstanding the foregoing, a Holder shall not be required to vote any voting
securities of the Company over which such Holder exercises voting power that are
not Registrable Securities (or execute written consents in lieu of meetings with
respect to such voting securities) as otherwise required by this Section to the
extent the voting securities are held or controlled by the Holder as an agent,
custodian, trustee or executor, in all cases for or on behalf of parties that
are not Holders of Registrable Securities or their Affiliates or associates (as
defined in the rules promulgated under the Exchange Act), or are controlled by
the Holder as an investment advisor for an investment company registered under
the Investment Company Act of 1940, as amended, or as an investment advisor for
any other person or group; provided, that in all cases, the arrangement whereby
the Holder owns or controls the voting securities has not been entered into for
the purpose of circumventing this Section; and further provided, in the case of
17
securities controlled by the Holder as an investment advisor for a person or
group that is not an investment company registered under the Investment Company
Act, that no Holder or Holders has a direct economic beneficial interest in the
person or group for which the Holder so acts as an investment advisor.
9.2. Without the prior written consent of the Company, until either (i)
ninety (90) days prior to the scheduled date of the Stockholders Meeting (if an
effective Election Request is made pursuant to Section 9.6 hereof) or (ii) the
second anniversary of the Distribution Date (if no effective Election Request is
made) (in either case, the "Standstill Termination Date"), no Holder may (i)
solicit proxies (as such terms are defined in Rule 14a-1 under the Exchange
Act), whether or not such solicitation is exempt under 14a-2 under the Exchange
Act, with respect to any matter from holders of any shares of common or
preferred stock of the Company, or any securities convertible into or
exchangeable for or exercisable (whether currently or upon the occurrence of any
contingency) for the purchase of any such capital stock, or make any
communication exempted from the definition of solicitation by Rule
14a-1(l)(2)(iv) under the Exchange Act, or (ii) initiate, or induce or attempt
to induce any other Person or group (as defined in Section 13(d)(3) of the
Exchange Act) to initiate, any stockholder proposal or tender offer for
securities of the Company or any subsidiary thereof, any change of control of
the Company or any subsidiary thereof or the convening of a stockholders'
meeting of the Company or any subsidiary thereof; or (iii) otherwise seek or
propose (or request permission to propose) to influence or control the
management or policies of the Company or any subsidiary thereof. Nothing herein
shall be deemed to apply to a Holder to the extent the Holder is acting solely
in its capacity as an agent, custodian, trustee or executor holding securities
that are not Registrable Securities for persons that are not Holders or
Affiliates of Holders, provided that the Holder's actions are (a) at the
direction of a person or persons that are not Holders that are the beneficial
owners of the securities so held by the Holder or (b) arise from the fiduciary
duties of the Holder acting in such capacity ascertained in good faith after
consulting with and based on advice of counsel as described in reasonable detail
in a written notice given the Company at least thirty (30) days prior to taking
such action; and further provided that in all cases the arrangement whereby the
Holder holds the securities has not been entered into, and the action by the
Holder has not been taken, for the purpose of circumventing this Section.
9.3 Notwithstanding anything herein to the contrary, the provisions of
Sections 9.1 and 9.2 hereof shall terminate at such time prior to the second
anniversary of the Distribution Date, if ever, that all of the Registrable
Securities held by all Holders constitutes less than 15% of the outstanding
Common Stock.
9.4 For so long as the provisions of Section 9.1 hereof are in force and
effect, the Company shall not amend the Rights Plan (i) to change the percentage
used in the definition of "Acquiring Person" therein so that it is less than
fifteen percent (15%) or (ii) in any other manner that would deprive the Holders
of the Registrable Securities of the intended benefits of the Rights Plan
Amendment.
9.5 At the first annual meeting of the stockholders of the Company
scheduled to occur at least seventy-five (75) days after the effective date of
this Agreement, the
18
Board of Directors of the Company shall propose to the stockholders of the
Company, shall recommend approval of, and shall solicit proxies voting to
approve an amendment (the "Certificate Amendment") to the Amended and Restated
Certificate of Incorporation of the Company, as amended, that, if adopted and
approved by the requisite vote of the stockholders of the Company, would amend
the first sentence of Section 3 of the Seventh Article thereof in its entirety
so it states as follows:
Subject to the rights, if any, of the holders of any series of
Preferred Stock to elect additional directors under circumstances
specified in a Preferred Stock Designation, newly created directorships
resulting from any increase in the number of Directors and any
vacancies on the Board resulting from death, resignation,
disqualification, removal or other cause, will be filled solely by the
affirmative vote of the majority of the remaining Directors then in
office, even though less than a quorum of the Board, or by a sole
remaining Director; provided, however, that at the sole option of the
Board, effected by resolution of the Board of Directors, one or more
such vacancies or newly created directorships may be filled by the
stockholders at a meeting of the stockholders called by the Board of
Directors.
If the Certificate Amendment is effectively adopted and approved by the
stockholders of the Company, the Board of Directors shall make a conforming
amendment to the first sentence of By- Law 11 of the By-Laws of the Company.
9.6 The Holders shall have the right at their option to request that the
Company hold a meeting of the stockholders as provided herein by delivery of a
written request (the "Election Request") to the Secretary of the Company at its
principal executive offices not more than one hundred twenty (120) nor less than
ninety (90) days prior to the second anniversary of the Distribution Date, which
Election Request shall identify each of the Holders making the Election Request
and shall include the information they would be required to give under By-Law 13
of the By-Laws of the Company as in effect on the date hereof as if they were
making nominations for positions as directors at an annual meeting of the
stockholders of the Company. An Election Request shall be ineffective if it has
not been executed by Holders owning Registrable Securities constituting at least
fifteen percent (15%) of the outstanding Common Stock of the Company as of the
ninetieth (90th) day prior to the second anniversary of the Distribution Date
and shall cease to be effective if prior to the second anniversary of the
Distribution Date the Holders executing the Election Request cease to own
Registrable Securities constituting at least fifteen percent (15%) of the
outstanding Common Stock of the Company. If no effective Election Request is
delivered to the Secretary of the Company at the Company's principal executive
offices not more than one hundred twenty (120) nor less than ninety (90) days
prior to said second anniversary of the Distribution Date or if, prior to the
second anniversary of the Distribution Date, the Election Request ceases to be
effective, the Holders shall have no further rights under this Section.
9.7 Provided the Certificate Amendment has been adopted and approved, upon
receipt of an effective Election Request, unless and until it becomes
ineffective, the Board
19
of Directors of the Company shall call a meeting of the stockholders of the
Company to be held as closely as practicable to the second anniversary of the
Distribution Date (which meeting may be the annual meeting of stockholders) (the
"Stockholders Meeting"), at which meeting the stockholders of the Company shall
be entitled to vote to fill vacancies and/or newly-created positions on the
Board of Directors of the Company, which vacancies and/or newly-created
positions, when filled, will constitute a majority of the Company's Board of
Directors.
9.8 Nothing in Sections 9.6 or 9.7 hereof shall be deemed to amend, modify
or waive any provisions of the By-Laws of the Company, including, without
limitation, those regarding the manner in which stockholders of the Company may
make proposals or nominations at meetings of such stockholders, all of which
shall continue to be in full force and effect with respect to the Stockholders
Meeting, if it is held. The provisions of By-Law 13 of the Company's By-Laws
shall be in full force and effect with respect to all nominations to fill
vacancies at the Stockholders Meeting, if it is held.
Section 10. Amendment, Modification and Waivers; Further Assurances.
10.1. This Agreement may be amended with the consent of the Company, 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 of Holders owning Registrable Securities possessing a
majority in number of the Registrable Securities then outstanding to such
amendment, action or omission to act.
10.2. No waiver of any terms or conditions of this Agreement shall operate
as a waiver of any other breach of such terms and conditions or any other term
or condition, nor shall any failure to enforce any provision hereof operate as a
waiver of such provision or of any other provision hereof. No written waiver
hereunder, unless it by its own terms explicitly provides to the contrary, shall
be construed to effect a continuing waiver of the provisions being waived and no
such waiver in any instance shall constitute a waiver in any other instance or
for any other purpose or impair the right of the party against whom such waiver
is claimed in all other instances or for all other purposes to require full
compliance with such provision.
10.3. Each of the parties hereto shall execute all such further instruments
and documents and take all such further action as any other party hereto may
reasonably require in order to effectuate the terms and purposes of this
Agreement.
Section 11. Assignment; Benefit. This Agreement and all of the provisions hereof
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, permitted assigns, executors, administrators or
successors; provided, however, that except as specifically provided herein with
respect to certain matters, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned or delegated by the Company
without the prior written consent of Holders owning Registrable Securities
possessing a majority in number of the Registrable Securities then outstanding
on the date as of which such delegation or
20
assignment is to become effective. A Holder may Transfer its rights hereunder to
a successor in interest to the Registrable Securities owned by such assignor
only as permitted by Section 8.
Section 12. Miscellaneous.
12.1. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING REGARD TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
12.2. Notices. All notices and requests given pursuant to this Agreement
shall be in writing and shall be made by hand-delivery, first-class mail
(registered or certified, return receipt requested), confirmed facsimile or
overnight air courier guaranteeing next business day:
(a) If to MK Rail, to:
MK Rail Corporation
1200 Reedsdale Street
Pittsburgh, PA 15233
Attention: Chairman
With a copy to:
Michael A. Weiss, Esquire
Doepken Keevican & Weiss
37th Floor, USX Tower
600 Grant Street
Pittsburgh, PA 15219
(b) If to MKO or MKC, to:
Morrison Knudsen Corporation
720 Park Boulevard
Boise, Idaho
Attention: President
With a copy to:
Robert Dean Avery, Esq.
Jones, Day, Reavis & Pogue
Suite 4600
555 West Fifth Street
Los Angeles, CA 90013-1025
21
(c) and if to any other Holder, to:
the address set forth in the relevant
agreement in the form of Exhibit A whereby
such party became bound by the provisions of
this Agreement.
Except as otherwise provided in this Agreement, the date of each such notice and
request shall be deemed to be, and the date on which each such notice and
request shall be deemed given shall be: at the time delivered, if personally
delivered or mailed; when receipt is acknowledged, if sent by facsimile; and the
next business day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next business day delivery.
12.3. Entire Agreement; Integration. This Agreement supersedes all prior
agreements between or among any of the parties hereto with respect to the
subject matter contained herein, and this agreement embodies the entire
understanding among the parties relating to such subject matter.
12.4. Injunctive Relief. Each of the parties hereto acknowledges that in
the event of a breach by any of them of any material provision of this
Agreement, the aggrieved party may be without an adequate remedy at law. Each of
the parties therefore agrees that in the event of such a breach hereof the
aggrieved party may elect to institute and prosecute proceedings in any court of
competent jurisdiction to enforce specific performance or to enjoin the
continuing breach hereof. By seeking or obtaining any such relief, the aggrieved
party shall not be precluded from seeking or obtaining any other relief to which
it may be entitled.
12.5. Section Headings. Section headings are for convenience of reference
only and shall not affect the meaning of any provision of this Agreement.
12.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which shall
together constitute one and the same instrument. All signatures need not be on
the same counterpart.
12.7. Filing. A copy of this Agreement and of all amendments thereto shall
be filed at the principal executive office of the Company with the Secretary of
the Company.
12.8 Termination. This Agreement may be terminated at any time by a written
instrument signed by the parties hereto. Unless sooner terminated in accordance
with the immediately preceding sentence, the parties' obligations under this
Agreement (other than Section 7 hereof) shall terminate in their entirety on the
fifth anniversary of the Distribution Date.
12.9 Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, the successful party shall be entitled to recover
reasonable attorneys'
22
fees (including any fees incurred in any appeal) in addition to its costs and
expenses and any other available remedy.
12.10 No Third Party Beneficiaries. Nothing herein expressed or implied is
intended to confer upon any person, other than the parties hereto or their
respective permitted assigns, successors, heirs and legal representatives and
other than parties entitled to indemnification uinder Section 7 hereof, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
23
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first written above.
MK RAIL CORPORATION
By:_____________________
John C. Pope, Chairman
MORRISON KNUDSEN CORPORATION
By:______________________
Name:
Title:
EXHIBIT A
AGREEMENT TO BE BOUND
BY THE STOCKHOLDERS AGREEMENT
The undersigned, being the proposed transferee of ______
shares of the common stock, $.01 par value per share (the "Common Stock"), of MK
Rail Corporation, a Delaware corporation (the "Company"), as a condition to the
receipt of such Common Stock, acknowledges that matters pertaining to the
registration, voting and transfer of such Common Stock is governed by the
Stockholders Agreement dated as of __________, 1996 (the "Agreement") initially
among the Company and Morrison Knudsen Corporation, an Ohio corporation, and the
undersigned hereby (1) acknowledges receipt of a copy of the Agreement, and (2)
agrees to be bound as a Holder by the terms of the Agreement, as the same has
been or may be amended from time to time.
Agreed to this __ day of ______________, ____________.
- ---------------------------------
_________________________________*
_________________________________*
*Include address for notices.