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Exhibit 10.11
CLASS B REGISTRATION RIGHTS AGREEMENT, dated as of May 20, 1998 (the
"Agreement"), among The J. H. Heafner Company, Inc., a North Carolina
corporation (the "Company"), and the former stockholders (the "ITCO
Stockholders") of ITCO Logistics Corporation, a Delaware corporation
("ITCO")
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INTRODUCTION
Pursuant to an Agreement and Plan of Merger, dated as of March 10,
1998 (the "Merger Agreement"), among Heafner, ITCO Merger Corporation, a
Delaware corporation ("Acquisition"), ITCO and each of the ITCO Stockholders,
the parties have agreed to merge Acquisition with and into ITCO (the "ITCO
Merger"). In connection with the ITCO Merger, the ITCO Stockholders are
receiving, among other things, newly issued shares of Class B Common Stock, $.01
par value, of the Company (the "Class B Stock") in exchange for their shares of
ITCO common stock.
As a condition to the consummation of the transactions contemplated
in the Merger Agreement, the parties have agreed to enter into this Agreement.
The Company and each of the ITCO Stockholders are also parties to a
Class B Stockholder Agreement, dated as of the date hereof (the "Class B
Stockholder Agreement"), with respect to the Class B Stock.
The parties agree as follows:
ARTICLE I
REGISTRATION RIGHTS
SECTION 1.1. Requested Registration.
(a) Exercise of Rights. At any time, or from time to time following
an Initial Public Offering, one or more holders (the "Initiating Holders") of
33% or more of the shares of Class B Stock issued to the ITCO Stockholders in
connection with the ITCO Merger may, upon written request, require the Company
to effect the registration under the Securities Act of any Registrable
Securities held by such Initiating Holders. The Company promptly will give
written notice of such requested registration to all other holders of
Registrable Securities who may join in such registration, and thereupon the
Company will use its reasonable best efforts to effect, at the earliest possible
date, the registration under the Securities Act, including by means of an
"evergreen" shelf registration on Form S-3 (or any successor form) pursuant to
Rule 415 under the Securities Act if so requested in such request (but only if
the Company is then eligible to use such a shelf registration and if Form S-3
(or such successor form) is then available to the Company), of
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(i) the Registrable Securities that the Company has been so
requested to register by such Initiating Holders, and
(ii) all other Registrable Securities that the Company has
been requested to register by the holders thereof (such holders together
with the Initiating Holders hereinafter are referred to as the "Selling
Holders") by written request given to the Company within 20 days after the
giving of such written notice by the Company, all to the extent requisite
to permit the disposition of the Registrable Securities so to be
registered.
(b) Registration of Other Securities. Whenever the Company shall
effect a registration pursuant to this Section 1.1, no securities (other than
(i) Registrable Securities, (ii) securities to be offered and sold by the
Company for its own account or (iii) securities to be included in such
registration pursuant to Section 2.2 of the Registration Rights Agreement dated
May 7, 1997 (the "1818 Registration Rights Agreement") between the Company and
The 1818 Mezzanine Fund, L.P.) shall be included among the securities covered by
such registration unless the Selling Holders of not less than 51% of all
Registrable Securities to be covered by such registration shall have consented
in writing to the inclusion of such other securities.
(c) Registration Statement Form. Registrations under this Section
1.1 shall be on such appropriate registration form of the Commission as shall be
reasonably selected by the Company.
(d) Effective Registration Statement. A registration requested
pursuant to this Section 1.1 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has become effective and
remained effective in compliance with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
registration statement until the earlier of (x) such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement and (y) 180 days after the effective date of such
registration statement, except with respect to any registration statement filed
pursuant to Rule 415 under the Securities Act, in which case the Company shall
use its best efforts to keep such registration statement effective until such
time as all of the Registrable Securities cease to be Registrable Securities,
(ii) if after it has become effective, such registration 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 the
Selling Holders and has not thereafter become effective, or (iii) if the
conditions to closing specified in the underwriting agreement, if any, entered
into in connection with such registration are not satisfied or waived, other
than by reason of a failure on the part of the Selling Holders.
(e) Selection of Underwriters. The underwriter or underwriters of
each underwritten offering of the Registrable Securities so to be registered
shall be selected by the Company and shall be reasonably acceptable to the
Selling Holders of more than 50% of each class of Registrable Securities to be
included in such registration.
(f) Priority in Requested Registration. If the managing underwriter
of any underwritten offering shall advise the Company in writing (and the
Company shall so advise each
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Selling Holder of Registrable Securities requesting registration of such advice)
that, in its opinion, the number of securities requested to be included in such
registration exceeds the number that can be sold in such offering within a price
range acceptable to the Selling Holders of 66 2/3% of the Registrable Securities
requested to be included in such registration, the Company, except as provided
in the following sentence, will include in such registration, to the extent of
the number and type that the Company is so advised can be sold in such offering,
prior to the inclusion of any securities which are not Registrable Securities
the number of Registrable Securities requested to be included in such
registration, pro rata among the Selling Holders requesting such registration on
the basis of the estimated gross proceeds from the sale thereof. If the total
number of Registrable Securities requested to be included in such registration
cannot be included as provided in the preceding sentence, holders of Registrable
Securities requesting registration thereof pursuant to Section 1.1, representing
not less than 33 1/3% of the Registrable Securities with respect to which
registration has been requested and constituting not less than 66 2/3% of the
Initiating Holders, shall have the right to withdraw the request for
registration by giving written notice to the Company within 15 days after
receipt of such notice by the Company and, in the event of such withdrawal, such
request shall not be counted for purposes of the requests for registration to
which holders of Registrable Securities are entitled pursuant to Section 1.1
hereof.
(g) Limitations on Registration on Request. Notwithstanding anything
in this Section 1.1 to the contrary, in no event will the Company be required to
(i) effect, in the aggregate, more than two registrations pursuant to this
Section 1.1 or (ii) effect more than one registration pursuant to this Section
1.1 within the twelve-month period occurring immediately subsequent to the
effectiveness (within the meaning of Section 1.1(d)) of a registration statement
filed pursuant to this Section 1.1.
(h) Listing. The Company shall list the Registrable Securities
subject to Section 1.1(a) on the National Market System of the Nasdaq Stock
Market or another of the national securities exchanges or automated quotation
systems.
(i) Expenses. The Company will pay all Registration Expenses (except
for any underwriting commissions or discounts) in connection with any
registration requested pursuant to this Section 1.1.
SECTION 1.2. Incidental Registration.
(a) Right to Include Registrable Securities. If the Company at any
time, other than in connection with an Initial Public Offering, proposes to
register any shares of Common Stock or any securities convertible into Common
Stock under the Securities Act by registration on any form other than Forms S-4
or S-8, whether or not for sale for its own account, it will each such time give
prompt written notice to all registered holders of Registrable Securities of its
intention to do so and of such holders' rights under this Section 1.2. Upon the
written request of any such holder (a "Requesting Holder") made as promptly as
practicable and in any event within 20 days after the receipt of any such notice
given by the Company, the Company will use its reasonable best efforts to effect
the registration under the Securities Act of all Registrable Securities that the
Company has been so requested to register by the Requesting Holders thereof;
provided, however, that prior to the effective date of the registration
statement filed in connection with such
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registration, immediately upon notification to the Company from the managing
underwriter of the price at which such securities are to be sold, if such price
is below the price that any Requesting Holder shall have indicated to be
acceptable to such Requesting Holder, the Company shall so advise such
Requesting Holder of such price, and such Requesting Holder shall then have the
right to withdraw its request to have its Registrable Securities included in
such registration statement; provided further, that if, at any time after giving
written notice of its intention to register any securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, in its sole discretion,
give written notice of such determination to each Requesting Holder of
Registrable Securities and (i) in the case of a determination not to register,
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from any obligation of the Company to
pay the Registration Expenses in connection therewith), without prejudice,
however, to the rights of any holder or holders of Registrable Securities
entitled to do so to cause such registration to be effected as a registration
under Section 1.1, and (ii) in the case of a determination to delay registering,
shall be permitted to delay registering any Registrable Securities, for the same
period as the delay in registering such other securities; provided further, that
the rights of the Requesting Holders under this Section 1.2 are subject to
Section 2.1(b) of the 1818 Registration Rights Agreement. No registration
effected under this Section 1.2 shall relieve the Company of its obligation to
effect any registration upon request under Section 1.1.
(b) Priority in Incidental Registrations. If the managing
underwriter of any underwritten offering shall inform the Company in writing of
its opinion that the number or type of Registrable Securities requested pursuant
to Section 1.2(a) to be included in such registration would materially adversely
effect such offering, and the Company has so advised the Requesting Holders in
writing, then the Company will include in such registration, to the extent of
the number and type that the Company is so advised can be sold in (or during the
time of) such offering, first, all securities proposed by the Company to be sold
for its own account, second, if such offering has been requested by a Person
pursuant to any registration rights agreement between the Company and such
Person and by the terms of such registration rights agreement the securities
subject to such registration rights agreement must be included in such
registration prior to those held by the Requesting Holders, the securities
requested to be included in such offering by such Person, third, if a Person has
requested that the Company include securities of such Person in such offering
and by the terms of any registration rights agreement in effect as of the date
hereof between the Company and such Person the securities subject to such
registration rights agreement must be included in such offering prior to those
held by the Requesting Holders, the securities requested to be included in such
offering by such Person, fourth, Registrable Securities requested to be included
in such registration pursuant to this Agreement and fifth, all other securities
proposed to be registered.
(c) Expenses. The Company will pay all Registration Expenses (except
for any underwriting commissions or discounts) in connection with any
registration effected pursuant to this Section 1.2.
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SECTION 1.3. Registration Procedures. If and whenever the Company is
required to effect the registration of any Registrable Securities under the
Securities Act as provided in Sections 1.1 and 1.2, the Company will, as
expeditiously as possible:
(i) prepare and (within 90 days after the end of the period
within which requests for registration may be given to the Company or in
any event as soon thereafter as practicable) file with the Commission the
requisite registration statement to effect such registration and
thereafter use its reasonable best efforts to cause such registration
statement to become effective; provided, however, that the Company may
discontinue any registration of its securities that are not Registrable
Securities (and, under the circumstances specified in Section 1.2(a), its
securities that are Registrable Securities) at any time prior to the
effective date of the registration statement relating thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered
by such registration statement until the earlier of (a) such time as all
of such Registrable Securities have been disposed of in accordance with
the intended methods of disposition by the seller or sellers thereof set
forth in such registration statement and (b) 180 days after the effective
date of such registration statement, except with respect to any
registration statement filed pursuant to Rule 415 under the Securities Act
if the Company is eligible to file a registration statement on Form S-3,
in which case the Company shall use its reasonable best efforts to keep
the registration statement effective and updated, from the date such
registration statement is declared effective until such time as all of the
Registrable Securities cease to be Registrable Securities;
(iii) furnish to each seller of Registrable Securities covered
by such registration statement, such number of conformed copies of such
registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, and such other documents, as
such seller may reasonably request;
(iv) use its reasonable best efforts (x) to register or
qualify all Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of
such States of the United States of America where an exemption is not
available and as the sellers of Registrable Securities covered by such
registration statement shall reasonably request, (y) to keep such
registration or qualification in effect for so long as such registration
statement remains in effect and (z) to take any other action that may be
reasonably necessary or advisable to enable such sellers to consummate the
disposition in such jurisdictions of the securities to be sold by such
sellers, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in
any jurisdiction wherein it would not but for the requirements of this
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subdivision (iv) be obligated to be so qualified or to consent to general
service of process in any such jurisdiction;
(v) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the Company
and counsel to the seller or sellers of Registrable Securities to enable
the seller or sellers thereof to consummate the disposition of such
Registrable Securities;
(vi) in the case of an underwritten or "best efforts"
offering, furnish, if reasonably available, at the effective date of such
registration statement to each seller of Registrable Securities, and each
such seller's underwriters, if any, a signed counterpart of (x) an opinion
of counsel for the Company, dated the effective date of such registration
statement and, if applicable, the date of the closing under the
underwriting agreement, and (y) a "comfort" letter signed by the
independent public accountants who have certified the Company's financial
statements included or incorporated by reference in such registration
statement, covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the
case of the accountants' comfort letter, with respect to events subsequent
to the date of such financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' comfort letters delivered
to the underwriters in underwritten public offerings of securities and, in
the case of the accountants' comfort letter, such other financial matters,
and, in the case of the legal opinion, such other legal matters, as the
underwriters may reasonably request;
(vii) cause representatives of the Company to participate in
any "road show" or "road shows" reasonably requested by any underwriter of
an underwritten or "best efforts" offering of any Registrable Securities;
(viii) notify each seller of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, upon discovery that,
or upon the happening of any event as a result of which, the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, in the light of the circumstances under which they were
made, and at the request of any such seller promptly prepare and furnish
to it a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to
the purchasers of such securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were
made;
(ix) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and, if required,
make available to its security holders, as soon as reasonably practicable,
an earnings statement covering the period of at least twelve months, but
not more than eighteen months, beginning with the first full calendar
month after the effective date of such registration statement, which
earnings statement shall
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satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
promulgated thereunder, and promptly furnish to each such seller of
Registrable Securities a copy of any amendment or supplement to such
registration statement or prospectus;
(x) provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date
not later than the effective date of such registration; and
(xi) use its reasonable best efforts to list all Registrable
Securities covered by such registration statement on the National Market
System of the Nasdaq Stock Market or any national securities exchange on
which Registrable Securities of the same class covered by such
registration statement are then listed and, if no such Registrable
Securities are so listed, on the National Market System of the Nasdaq
Stock Market or any national securities exchange on which the Common Stock
is then listed.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company in a reasonably prompt
manner such information regarding such seller and the distribution of such
securities as the Company may from time to time reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in subdivision (viii) of this
Section 1.3, such holder will forthwith discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (viii) of this
Section 1.3 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such holder's possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice.
SECTION 1.4. Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by the
underwriters for any underwritten offering by holders of Registrable Securities
pursuant to a registration requested under Section 1.1, the Company will use its
reasonable best efforts to enter into an underwriting agreement with such
underwriters for such offering, such agreement to be reasonably satisfactory in
substance and form to the Company, each such holder and the underwriters and to
contain such representations and warranties by the Company and such other terms
as are generally prevailing in agreements of that type, including, without
limitation, indemnities to the effect and to the extent provided in Section 1.7.
The holders of the Registrable Securities proposed to be sold by such
underwriters will reasonably cooperate with the Company in the negotiation of
the underwriting agreement. Such holders of Registrable Securities to be sold by
such underwriters shall be parties to such underwriting agreement and may, at
their option, require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such
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underwriters under such underwriting agreement be conditions precedent to the
obligations of such holders of Registrable Securities. No holder of Registrable
Securities shall be required to make any representations or warranties to, or
agreements with, the Company other than representations, warranties or
agreements regarding such holder, such holder's Registrable Securities and such
holder's intended method of distribution or any other representations required
by applicable law.
(b) Incidental Underwritten Offerings. If the Company proposes to
register any of its securities under the Securities Act as contemplated by
Section 1.2 and such securities are to be distributed by or through one or more
underwriters, the Company will, if requested by any Requesting Holder of
Registrable Securities, use its reasonable best efforts to arrange for such
underwriters to include all the Registrable Securities to be offered and sold by
such Requesting Holder among the securities of the Company to be distributed by
such underwriters, subject to the provisions of Section 1.2(b). The holders of
Registrable Securities to be distributed by such underwriters shall be parties
to the underwriting agreement between the Company and such underwriters and may,
at their option, require that any or all of the representations and warranties
by, and the other agreements on the part of, the Company to and for the benefit
of such underwriters shall also be made to and for the benefit of such holders
of Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such holders of Registrable Securities. Any such
Requesting Holder of Registrable Securities shall not be required to make any
representations or warranties to or agreements with the Company other than
representations, warranties or agreements regarding such Requesting Holder, such
Requesting Holder's Registrable Securities and such Requesting Holder's intended
method of distribution or any other representations required by applicable law.
(c) Underwriting Discounts and Commission. The holders of
Registrable Securities sold in any offering pursuant to Section 1.4(a) or
Section 1.4(b) shall pay all underwriting discounts and commissions of the
underwriter or underwriters with respect to the Registrable Securities sold
thereby.
SECTION 1.5. Preparation; Reasonable Investigation. In connection
with the preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, the Company will give the holders of
Registrable Securities registered under such registration statement, their
underwriters, if any, and their respective counsel the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such reasonable access to its
books and records and such opportunities to discuss the business of the Company
with its officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of such holders' and
such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
SECTION 1.6. Limitations, Conditions and Qualifications to
Obligations under Registration Covenants. The Company shall be entitled to
postpone for a reasonable period of time (but not exceeding 90 days) the filing
of any registration statement otherwise required to be
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prepared and filed by it pursuant to Section 1.1 if the Company determines, in
its good faith judgment, that such registration and offering would interfere
with any material financing, acquisition, corporate reorganization or other
material transaction involving the Company or any of its affiliates and promptly
gives the holders of Registrable Securities requesting registration thereof
pursuant to Section 1.1 written notice of such determination, containing a
general statement of the reasons for such postponement and an approximation of
the anticipated delay. If the Company shall so postpone the filing of a
registration statement, holders of Registrable Securities requesting
registration thereof pursuant to Section 1.1, representing not less than 33 1/3%
of the Registrable Securities with respect to which registration has been
requested and constituting not less than 66 2/3% of the Initiating Holders,
shall have the right to withdraw the request for registration by giving written
notice to the Company within 30 days after receipt of the notice of postponement
and, in the event of such withdrawal, such request shall not be counted for
purposes of the requests for registration to which holders of Registrable
Securities are entitled pursuant to Section 1.1 hereof. The delay right in favor
of the Company contemplated by this Section 1.6 may be exercised no more
frequently than once during any calendar year.
SECTION 1.7. Indemnification.
(a) Indemnification by the Company. The Company will, and hereby
does, indemnify and hold harmless, in the case of any registration statement
filed pursuant to Section 1.1 or 1.2, each seller of any Registrable Securities
covered by such registration statement and each other Person who participates as
an underwriter in the offering or sale of such securities and each other Person,
if any, who controls such seller or any such underwriter within the meaning of
the Securities Act, and their respective directors, officers, partners, members,
agents and affiliates against any losses, claims, damages, expenses or
liabilities, joint or several, to which such seller or underwriter or any such
director, officer, partner, member, agent, affiliate or controlling person may
become subject under the Securities Act or otherwise, including, without
limitation, the reasonable fees and expenses of legal counsel (including those
incurred in connection with any claim for indemnity hereunder), insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, and the Company will
reimburse such seller or underwriter and each such director, officer, partner,
member, agent, affiliate and controlling Person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such seller
or underwriter, as the case may be, specifically stating that it is for use in
the preparation thereof; and provided further, that the Company shall
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not be liable to any Person who participates as an underwriter in the offering
or sale of Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, 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 such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
to the Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such seller
or any such director, officer, partner, member, agent or controlling person and
shall survive the transfer of such securities by such seller.
(b) Indemnification by the Sellers. As a condition to including any
Registrable Securities in any registration statement, the Company shall have
received an undertaking satisfactory to it from the prospective seller of such
Registrable Securities, to indemnify and hold harmless (in the same manner and
to the same extent as set forth in Section 1.7(a)) the Company, and each
director of the Company, each officer of the Company and each other Person, if
any, who participates as an underwriter in the offering or sale of such
securities and each other Person who controls the Company or any such
underwriter within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by such seller specifically stating that it is for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement; provided, however, that
the liability of such indemnifying party under this Section 1.7(b) shall be
limited to the amount of the net proceeds received by such indemnifying party in
the offering giving rise to such liability. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in Section 1.7(a) or (b), 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,
however, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 1.7, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it may
wish, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party; provided, however, that any indemnified party may, at
its own expense, retain separate counsel to participate in such defense.
Notwithstanding the foregoing, in any action or proceeding in which both the
Company and an indemnified party is, or is reasonably likely to become, a party,
such indemnified party shall have
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the right to employ separate counsel at the Company's expense and to control its
own defense of such action or proceeding if, in the reasonable opinion of
counsel to such indemnified party, (a) there are or may be legal defenses
available to such indemnified party or to other indemnified parties that are
different from or additional to those available to the Company or (b) any
conflict or potential conflict exists between the Company and such indemnified
party that would make such separate representation advisable; provided, however,
that in no event shall the Company be required to pay fees and expenses under
this Section 1.7 for more than one firm of attorneys in any jurisdiction in any
one legal action or group of related legal actions. No indemnifying party shall
be liable for any settlement of any action or proceeding effected without its
written consent, which consent shall not be unreasonably withheld. No
indemnifying party shall, without the consent of the indemnified party, consent
to entry of any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation or which requires action other than the payment of money by the
indemnifying party.
(d) Contribution. If the indemnification provided for in this
Section 1.7 shall for any reason be held by a court to be unavailable to an
indemnified party under Section 1.7(a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, then, in lieu of
the amount paid or payable under Section 1.7(a) or (b), the indemnified party
and the indemnifying party under Section 1.7(a) or (b) shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating the same,
including those incurred in connection with any claim for indemnity hereunder),
(i) in such proportion as is appropriate to reflect the relative fault of the
Company and the prospective sellers of Registrable Securities covered by the
registration statement which resulted in such loss, claim, damage or liability,
or action or proceeding in respect thereof, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action or
proceeding in respect thereof, as well as any other relevant equitable
considerations or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and such prospective
sellers from the offering of the securities covered by such registration
statement; provided, however, that for purposes of this clause (ii), the
relative benefits received by the prospective sellers shall be deemed not to
exceed the amount of proceeds received by such prospective sellers. 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. Such prospective sellers'
obligations to contribute as provided in this Section 1.7(d) are several in
proportion to the relative value of their respective Registrable Securities
covered by such registration statement and not joint. In addition, no Person
shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim effected without such Person's consent, which
consent shall not be unreasonably withheld.
(e) Other Indemnification. Indemnification and contribution similar
to that specified in the preceding subdivisions of this Section 1.7 (with
appropriate modifications) shall be given by the Company and each seller of
Registrable Securities with respect to any required registration or other
qualification of securities under any federal or state law or regulation of any
governmental authority other than the Securities Act.
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(f) Indemnification Payments. The indemnification and contribution
required by this Section 1.7 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.
SECTION 1.8. Transfer of Registration Rights. The rights of the ITCO
Stockholders set forth in this Agreement may be assigned only in connection with
a transfer or assignment of Registrable Securities by a holder thereof; provided
that such transfer of Registrable Securities (i) may otherwise be effected in
accordance with applicable securities laws and (ii) is effected in compliance
with the restrictions on transfer applicable to such Registrable Securities, if
any, contained in the Company's certificate of incorporation or bylaws or any
agreement between the Company and any of its stockholders; provided, further,
that any such assignment is subject to the provisions herein respecting the
minimum numbers or percentages of shares of Registrable Securities required in
order to be entitled to certain rights, or take certain actions, contained
herein. No transfer or assignment will divest a holder of Registrable Securities
or any subsequent owner of such rights and powers unless all Registrable
Securities are transferred or assigned. This Section 1.8 is not intended to
modify or waive any restrictions on transfer of the Registrable Securities that
may exist under the Company's certificate of incorporation or bylaws or any
agreement between the Company and any of its stockholders.
ARTICLE II
DEFINITIONS
As used in this Agreement, unless the context otherwise requires,
the following terms have the following respective meanings:
"Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean and include the Class A Common Stock, par
value $.01, of the Company, the Class B Stock and each other class of capital
stock of the Company that does not have a preference over any other class of
capital stock of the Company as to dividends or upon liquidation, dissolution or
winding up of the Company and, in each case, shall include any other class of
capital stock of the Company into which such stock is reclassified or
reconstituted.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Securities Exchange Act of 1934, as amended,
shall include a reference to the comparable section, if any, of any such similar
Federal statute.
"Initial Public Offering" means the initial public offering of the
Common Stock and such Common Stock is listed on the New York Stock Exchange,
Inc. or quoted or listed on the National Market System of the Nasdaq Stock
Market.
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"Person" means any individual, firm, corporation, partnership,
limited liability company, trust, incorporated or unincorporated association,
joint venture, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Registrable Securities" means any shares of Class B Stock issued to
the ITCO Stockholders in connection with the ITCO Merger and any Related
Registrable Securities and any shares of Common Stock owned by an ITCO
Stockholder. As to any particular Registrable Securities, once issued, such
securities shall cease to be Registrable Securities when (a) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (b) they shall have been sold
as permitted by Rule 144 (or any successor provision) under the Securities Act
and the purchaser thereof does not receive "restricted securities" as defined in
Rule 144, (c) they shall have been otherwise transferred, new certificates for
them not bearing a legend restricting further transfer shall have been delivered
by the Company and subsequent public distribution of them shall not, in the
opinion of counsel for the holders, require registration of them under the
Securities Act or (d) they shall have ceased to be outstanding. All references
to percentages of Registrable Securities shall be calculated pursuant to Section
3.6.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Article I, including, without limitation, all
registration and filing fees, all fees of the New York Stock Exchange, Inc.,
other national securities exchanges or the National Association of Securities
Dealers, Inc., all fees and expenses of complying with securities or blue sky
laws, all word processing, duplicating and printing expenses, messenger and
delivery expenses, the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of "cold comfort"
letters required by or incident to such performance and compliance, any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities (excluding any underwriting discounts or commissions with respect to
the Registrable Securities) and the reasonable fees and expenses of one counsel
to the Selling Holders (selected by Selling Holders representing at least 50% of
the Registrable Securities covered by such registration). Notwithstanding the
foregoing, in the event the Company shall determine, in accordance with Section
1.2(a) or Section 1.6, not to register any securities with respect to which it
had given written notice of its intention to so register to holders of
Registrable Securities, all of the costs of the type (and subject to any
limitation to the extent) set forth in this definition and incurred by
Requesting Holders in connection with such registration on or prior to the date
the Company notifies the Requesting Holders of such determination shall be
deemed Registration Expenses.
"Related Registrable Securities" means with respect to shares of
Class B Stock, any securities of the Company issued or issuable with respect to
such shares of Class B Stock by way of a dividend or stock split, or in exchange
for or in replacement of the Class B Stock, or in connection with a combination
of shares, recapitalization, merger, consolidation or other reorganization or
otherwise.
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"Securities Act" means the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act of 1933, as amended, shall include a
reference to the comparable section, if any, of any such similar Federal
statute.
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.1. Rule 144 and Rule 144A. Following an Initial Public
Offering, the Company shall take all actions reasonably necessary to enable
holders of Registrable Securities to sell such securities without registration
under the Securities Act within the limitation of the provisions of (a) Rule 144
under the Securities Act, as such Rule may be amended from time to time, (b)
Rule 144A under the Securities Act, as such Rule may be amended from time to
time, or (c) any similar rules or regulations hereafter adopted by the
Commission. Upon the request of any holder of Registrable Securities, the
Company will deliver to such holder a written statement as to whether it has
complied with such requirements.
SECTION 3.2. Amendments and Waivers. 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 to such amendment,
action or omission to act, of the holder or holders of at least 50% of the
Registrable Securities affected by such amendment, action or omission to act.
Each holder of any Registrable Securities at the time or thereafter outstanding
shall be bound by any consent authorized by this Section 3.2, whether or not
such Registrable Securities shall have been marked to indicate such consent.
SECTION 3.3. Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable Securities for purposes of
any request or other action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any number or percentage of
shares of Registrable Securities held by any holder or holders of Registrable
Securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
SECTION 3.4. Notices. All notices, demands and other communications
provided for or permitted under this Agreement shall be made in writing and
shall be by registered or certified first-class mail, return receipt requested,
telecopier, courier service or personal delivery (a) if to any ITCO Stockholder,
addressed to it in the manner set forth in the Merger Agreement, or at such
other address as it shall have furnished to the Company in writing in the manner
set forth herein; (b) if to any other holder of Registrable Securities, at the
address that such holder shall have furnished to the Company in writing in the
manner set forth herein, or, until any such other holder so furnishes to the
Company an address, then to and at the address of the last holder of such
Registrable Securities who has furnished an address to the Company; or (c) if to
the
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Company, addressed to it in the manner set forth in the Merger Agreement, or at
such other address as the Company shall have furnished to each holder of
Registrable Securities at the time outstanding in the manner set forth herein.
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; when delivered to a courier, if
delivered by overnight courier service; five Business Days after being deposited
in the mail, postage prepaid, if mailed; and when receipt is acknowledged, if
sent by facsimile.
SECTION 3.5. Assignment. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and, with
respect to the Company, its respective successors and permitted assigns and,
with respect to any holder of any Registrable Securities, subject to the
provisions respecting the minimum numbers of percentages of shares of
Registrable Securities required in order to be entitled to certain rights, or
take certain actions, contained herein. Except by operation of law, this
Agreement may not be assigned by the Company without the prior written consent
of the holders of a majority in interest of the Registrable Securities
outstanding at the time such consent is requested.
SECTION 3.6. Calculation of Percentage Interests in Registrable
Securities. For purposes of this Agreement, all references to a percentage of
the Registrable Securities shall be calculated based upon the number of shares
of Registrable Securities outstanding at the time such calculation is made.
SECTION 3.7. No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the holders of Registrable Securities in
this Agreement. Without limiting the generality of the foregoing, the Company
will not hereafter enter into any agreement with respect to its securities that
grants, or modify any existing agreement with respect to its securities to
grant, to the holder of its securities in connection with an incidental
registration of such securities higher priority to the rights granted to the
ITCO Stockholders under Section 1.2(b).
SECTION 3.8. Remedies. Each holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
SECTION 3.9. Certain Distributions. The Company shall not at any
time make a distribution on or with respect to the Class B Stock (including any
such distribution made in connection with a consolidation or merger in which the
Company is the resulting or surviving corporation and such Registrable
Securities are not changed or exchanged) of securities of another issuer if
holders of Registrable Securities are entitled to receive such securities in
such distribution as holders of Registrable Securities and any of the securities
so distributed are registered under the Securities Act, unless the securities to
be distributed to the holders of Registrable Securities are also registered
under the Securities Act.
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SECTION 3.10. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
Purchaser shall be enforceable to the fullest extent permitted by law.
SECTION 3.11. Entire Agreement. This Agreement, together with the
Class B Stockholder Agreement and the Merger Agreement (in each case, including
the exhibits and schedules thereto), is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. This Agreement, the Class B
Stockholder Agreement and the Merger Agreement (in each case, including the
exhibits and schedules thereto) supersede all prior agreements and
understandings between the parties with respect to such subject matter.
SECTION 3.12. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
SECTION 3.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
SECTION 3.14. Counterparts. This Agreement may be executed in
multiple counterparts, each of which when so executed shall be deemed an
original and all of which taken together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective representatives hereunto duly
authorized as of the date first above written.
THE J.H. HEAFNER COMPANY, INC.
By: /s/ Michael Gaither
--------------------------------------
Name: Michael Gaither
Title: Senior Vice President and General
Counsel
ITCO STOCKHOLDERS:
WINGATE PARTNERS II, L.P.
750 North St. Paul, Suite 1200
Dallas, Texas 75201
By: WINGATE MANAGEMENT COMPANY II, L.P.,
its general partner
By: WINGATE MANAGEMENT LIMITED, L.L.C.,
its sole general partner
By: /s/ V. Edward Easterling, Jr.,
--------------------------------------
V. Edward Easterling, Jr., Principal
------------------------------------------
Armistead Burwell, Jr.
3214 Rutherford Drive
Raleigh, NC 27609
------------------------------------------
William E. Berry
1213 Waverly Road
Wilson NC 27896
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective representatives hereunto duly
authorized as of the date first above written.
THE J.H. HEAFNER COMPANY, INC.
By:
--------------------------------------
Name: Michael Gaither
Title: Senior Vice President and
General Counsel
ITCO STOCKHOLDERS:
WINGATE PARTNERS II, L.P.
750 North St. Paul, Suite 1200
Dallas, Texas 75201
By: WINGATE MANAGEMENT COMPANY II, L.P.,
its general partner
By: WINGATE MANAGEMENT LIMITED, L.L.C.,
its sole general partner
By:
--------------------------------------
V. Edward Easterling, Jr., Principal
/s/ Armistead Burwell, Jr.
------------------------------------------
Armistead Burwell, Jr.
3214 Rutherford Drive
Raleigh, NC 27609
------------------------------------------
William E. Berry
1213 Waverly Road
Wilson NC 27896
19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective representatives hereunto duly
authorized as of the date first above written.
THE J.H. HEAFNER COMPANY, INC.
By:
--------------------------------------
Name: Michael Gaither
Title: Senior Vice President and
General Counsel
ITCO STOCKHOLDERS:
WINGATE PARTNERS II, L.P.
750 North St. Paul, Suite 1200
Dallas, Texas 75201
By: WINGATE MANAGEMENT COMPANY II, L.P.,
its general partner
By: WINGATE MANAGEMENT LIMITED, L.L.C.,
its sole general partner
By:
--------------------------------------
V. Edward Easterling, Jr., Principal
------------------------------------------
Armistead Burwell, Jr.
3214 Rutherford Drive
Raleigh, NC 27609
/s/ William E. Berry
------------------------------------------
William E. Berry
1213 Waverly Road
Wilson NC 27896
20
/s/ Richard P. Johnson
------------------------------------------
Richard P. Johnson
4229 Lomo Alto Court
Dallas, TX 75219
------------------------------------------
Leon R. Ellin
7308 Bay Hill Court
Raleigh, NC 27615
WINGATE AFFILIATES II, L.P.
750 North St. Paul, Suite 1200
Dallas, Texas 75201
By: WINGATE MANAGEMENT LIMITED, L.L.C.,
its sole general partner
By:
--------------------------------------
V. Edward Easterling, Jr., Principal
CALLIER INVESTMENT COMPANY
c/o Wingate
750 North St. Paul, Suite 1200
Dallas, Texas 75201
By:
--------------------------------------
James T. Callier
Managing Partner
21
------------------------------------------
Richard P. Johnson
4229 Lomo Alto Court
Dallas, TX 75219
/s/ Leon R. Ellin
------------------------------------------
Leon R. Ellin
7308 Bay Hill Court
Raleigh, NC 27615
WINGATE AFFILIATES II, L.P.
750 North St. Paul, Suite 1200
Dallas, Texas 75201
By: WINGATE MANAGEMENT LIMITED, L.L.C.,
its sole general partner
By:
--------------------------------------
V. Edward Easterling, Jr., Principal
CALLIER INVESTMENT COMPANY
c/o Wingate
750 North St. Paul, Suite 1200
Dallas, Texas 75201
By:
--------------------------------------
James T. Callier
Managing Partner
22
------------------------------------------
Richard P. Johnson
4229 Lomo Alto Court
Dallas, TX 75219
------------------------------------------
Leon R. Ellin
7308 Bay Hill Court
Raleigh, NC 27615
WINGATE AFFILIATES II, L.P.
750 North St. Paul, Suite 1200
Dallas, Texas 75201
By: WINGATE MANAGEMENT LIMITED, L.L.C.,
its sole general partner
By: /s/ V. Edward Easterling, Jr.
--------------------------------------
V. Edward Easterling, Jr., Principal
CALLIER INVESTMENT COMPANY
c/o Wingate
750 North St. Paul, Suite 1200
Dallas, Texas 75201
By:
--------------------------------------
James T. Callier
Managing Partner
23
------------------------------------------
Richard P. Johnson
4229 Lomo Alto Court
Dallas, TX 75219
------------------------------------------
Leon R. Ellin
7308 Bay Hill Court
Raleigh, NC 27615
WINGATE AFFILIATES II, L.P.
750 North St. Paul, Suite 1200
Dallas, Texas 75201
By: WINGATE MANAGEMENT LIMITED, L.L.C.,
its sole general partner
By:
--------------------------------------
V. Edward Easterling, Jr., Principal
CALLIER INVESTMENT COMPANY
c/o Wingate
750 North St. Paul, Suite 1200
Dallas, Texas 75201
By: /s/ James T. Callier
--------------------------------------
James T. Callier
Managing Partner