EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into as of
this 19th day of February, 1999 by and among ABC Rail Products Corporation, a
Delaware corporation ("ABC") and the stockholders listed on the signature page
of this Agreement (each, a "Stockholder" and collectively, the "Stockholders").
WHEREAS, ABC is a party to an Agreement and Plan of Merger with NACO, Inc.,
a Delaware corporation ("NACO"), and ABCR Acquisition Sub, Inc., a Delaware
corporation and wholly owned subsidiary of ABC ("Merger Subsidiary") dated as of
September 17, 1998 and amended and restated as of December 10, 1998, as further
amended as of February 16, 1999 (the "Merger Agreement");
WHEREAS, pursuant to the merger (the "Merger") contemplated by the Merger
Agreement all issued and outstanding shares of common stock, par value $.01 per
share, of NACO ("NACO Common Stock"), including shares beneficially owned by the
Stockholders, will be converted at the Effective Time of the Merger into shares
of common stock, par value $0.01 per share, of ABC ("ABC Common Stock");
WHEREAS, the parties hereto desire to make provisions for the registration
of possible resales of ABC Common Stock beneficially owned immediately after the
Merger by the Stockholders who otherwise are restricted by Rule 144 under the
Act in their resales of ABC Common Stock; and
WHEREAS, the undertakings and agreements of ABC contained herein are a
material inducement to the Stockholders to consummate and effect the
transactions contemplated by the Merger Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
(a) DEFINITIONS. For purposes of this Agreement:
(i) The term "Act" means the Securities Act of 1933, as heretofore
or hereafter amended;
(ii) The terms "register," "registered," and "registration" refer to
a registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document;
(iii) The term "Registrable Securities" means the shares of ABC
Common Stock beneficially owned by the Stockholders immediately after the
Merger, and any securities paid, issued or distributed in respect of such
shares by way of stock dividend or distribution
or stock split or in connection with a combination of shares,
recapitalization, reorganization, merger, consolidation or otherwise.
(iv) The term "Sellers" means the Stockholders who elect to join in
a registration effected pursuant to this Agreement; and
(v) All other capitalized terms not defined herein shall have the
meanings assigned to them in the Merger Agreement.
(b) DEMAND RIGHTS.
(i) If ABC shall receive at any time after 180 days after the
Effective Time of the Merger, a written request from Stockholders
beneficially owning at least two percent (2%) of the then outstanding
shares of ABC Common Stock that ABC file a registration statement under the
Act for a public offering of all or a part of the Registrable Securities
(which written request shall specify the aggregate number of shares of
Registrable Securities requested to be registered), then ABC shall effect
such registration of Registrable Securities in accordance with this
Agreement; provided, however, that ABC shall not be required to take any
action pursuant to this Paragraph (b) unless the requested registration
relates to at least 360,000 shares of Registrable Securities.
(ii) If the Sellers intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so advise
ABC as a part of the request made pursuant to the foregoing Subparagraph
(b)(i), in which event the managing underwriter shall be selected by ABC
with the prior written consent of the Sellers holding a majority in number
of the Registrable Securities covered by the registration request.
(iii) ABC may postpone a registration requested pursuant to
Subparagraph (b)(i) for a period not to exceed 90 days if, at the time ABC
receives a registration request pursuant to Subparagraph (b)(i), ABC is
engaged in confidential negotiations or other confidential business
activities (a "Confidential Transaction"), the disclosure of which, based
upon the written advice of outside counsel, would be required in the
registration statement, and the Board of Directors of ABC determines in
good faith that such disclosure would be materially detrimental to ABC and
its stockholders or would have a material adverse effect on the
Confidential Transaction.
(iv) (a) ABC will not include in any demand registration pursuant
to this Paragraph (b) any securities which are not Registrable Securities
without the prior written consent of the Sellers holding a majority in
number of the Registrable Securities covered by the registration request,
subject to ABC's obligations existing at the date hereof to register
additional shares of ABC Common Stock as set forth on Exhibit A hereto.
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(b) If a demand registration pursuant to this Paragraph (b) is
an underwritten offering and the managing underwriter advises ABC in
writing that in its opinion the number of Registrable Securities requested
to be included in such offering and, if permitted, the number of securities
which are not Registrable Securities requested to be included in such
offering exceed the number of securities which can be sold in an orderly
manner in such offering within a price range acceptable to the Sellers
holding a majority in number of Registrable Securities covered by the
registration request, ABC will include in such registration, FIRST, prior
to the inclusion of any securities which are not Registrable Securities,
the number of Registrable Securities requested to be included which in the
opinion of such underwriter can be sold in an orderly manner within the
price range of such offering, pro rata (as nearly as practicable) among the
Sellers on the basis of the number of Registrable Securities proposed to be
sold by each such Seller; and SECOND, the number of securities which are
not Registrable Securities requested to be included which in the opinion of
such underwriter can be sold in an orderly manner within the price range of
such offering, pro rata (as nearly as practicable) among the holders of
such securities on the basis of the number of securities proposed to be
sold by each such holder.
(v) Upon the closing of a demand registration pursuant to this
Paragraph (b), each Seller agrees not to effect any public sale or
distribution of equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, of ABC for a period of at
least 90 days after such closing.
(vi) ABC agrees:
(a) not to effect any public sale or distribution of its
equity securities, or any securities convertible into or exchangeable
or exercisable for such securities, during the 25-day period prior to
and during the 90-day period beginning on the effective date of any
underwritten registration under this Paragraph (b) (except pursuant to
(i) registrations on Form S-8 or any successor form, and (ii)
registrations on a form which does not include substantially the same
information as would be required to be included in a registration
statement covering the sale of the Registrable Securities or which
does not permit the inclusion of shares of persons other than ABC)
unless the underwriters managing the registered public offering
otherwise agree, and
(b) after the date hereof not to grant, directly or
indirectly, any other persons the right to request ABC to register any
equity securities of ABC in excess of the number of shares equal to
four percent (4%) of the then outstanding shares of ABC Common Stock.
(c) PIGGYBACK RIGHTS. If ABC proposes to register shares of its Common
Stock for a public offering (including an offering by stockholders other than
the Sellers but excluding an offering to employees on Form S-8 or any other
offering on a form which does not include
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substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities or which
does not permit the inclusion of shares of persons other than ABC), ABC shall
promptly give the Stockholders written notice of such proposed registration.
Upon the written request of any Stockholder given within 20 days after mailing
of such notice by ABC, ABC shall, subject to the provisions of Paragraph (g)
hereof, use its reasonable best efforts to register under the Act all of the
Registrable Securities that any Stockholder has requested to have included. The
Sellers' participation in a registration pursuant to this Paragraph (c) shall be
conditioned upon the Sellers' complete and full cooperation on a timely basis
with all requirements reasonably established by ABC and/or the managing
underwriter in the course of such registration.
(d) OBLIGATIONS OF ABC. Whenever required under this Agreement to effect
the registration of any Registrable Securities, ABC shall, as expeditiously as
possible:
(i) Prepare and file with the Securities and Exchange Commission
(the "SEC") (or any successor agency) a registration statement with respect
to such Registrable Securities (provided that before filing a registration
statement or prospectus or any amendments or supplements thereto, ABC will
furnish on a timely basis to the counsel selected by Sellers copies of all
such documents required to be filed, which documents in the case of a
registration under Paragraph (b) will be subject to review by such
counsel), and use its reasonable best efforts to cause such registration
statement to become effective, and, upon the request of the Sellers, use
its reasonable best efforts to keep such registration statement effective
for up to 120 days;
(ii) Prepare and file with the SEC such supplements and amendments
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 Act with respect to the disposition of all securities
covered by such registration statement during an effective period, if
requested by the Sellers, of not to exceed 120 continuous days;
(iii) Furnish to the Sellers such numbers of copies of the
prospectus, including a preliminary prospectus in conformity with the
requirements of the Act, and such other documents as the Sellers may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them;
(iv) Use its reasonable best efforts to expeditiously register or
qualify the Registrable Securities under such securities or Blue Sky laws
of such jurisdictions within the United States as shall be appropriate or
reasonably requested by the Sellers;
(v) In the case of a registration under Paragraph (b), enter into
such customary agreements (including underwriting agreements in customary
form) and take all such other actions as the holders of a majority of the
shares of Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of
such Registrable Securities, including, without limitation:
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(a) making such representations and warranties to the
underwriters in form, substance and scope, reasonably satisfactory to
the managing underwriter, as are customarily made by issuers to
underwriters in underwritten secondary offerings;
(b) obtaining opinions and updates thereof of counsel, which
counsel and opinions to ABC (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriter, addressed to the
managing underwriter covering the matters customarily covered in
opinions requested in underwritten secondary offerings and such other
matters as may be reasonably requested by the managing underwriter;
(c) causing the underwriting agreements to set forth in full
the indemnification provisions and procedures of Paragraph (j) below
(or such other substantially similar provisions and procedures as the
managing underwriter shall reasonably request) with respect to all
parties to be indemnified pursuant to said Paragraph (j); and
(d) delivering such documents and certificates as may be
reasonably requested by the Sellers to evidence compliance with the
provisions of this Subparagraph (d)(v) and with any customary
conditions contained in the under-writing agreement or other agreement
entered into by ABC; and
(vi) Promptly notify each Seller at any time when a prospectus
relating thereto is required to be delivered under the Act, of the
happening of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact or
omits any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
and, at the request of any such Seller, ABC will promptly prepare and
furnish such Seller a supplement or amendment to such prospectus so that,
as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(e) SELLER INFORMATION. It shall be a condition precedent to the
obligations of ABC to take any action pursuant to this Agreement that the
Sellers shall furnish to ABC such information regarding themselves, the
Registrable Securities held by them, and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities.
(f) EXPENSES. ABC shall pay all fees and expenses incurred in connection
with any registration pursuant to this Agreement, including, without limitation,
all registration, filing and qualification fees and expenses, accounting fees,
fees and disbursements of counsel for ABC, printing fees, listing fees,
miscellaneous travel and other out-of-pocket expenditures incurred by ABC.
Sellers shall pay all fees and disbursements of counsel for Sellers and all
underwriting
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discounts and all commissions or brokerage fees applicable to the Registrable
Securities sold by them and all miscellaneous travel and other out-
of-pocket expenditures incurred by them.
(g) UNDERWRITING REQUIREMENTS. In connection with any offering involving
an underwriting of shares, ABC shall not be required under Paragraph (c) to
include any of the Registrable Securities in such underwriting unless Sellers
accept the terms of the underwriting as agreed upon between ABC and the
underwriters selected by it, and then only in such quantity as will not, in the
opinion of the underwriters, jeopardize the success of the offering by ABC. If
the total number of Registrable Securities that Sellers request be included in
such offering exceeds (when combined with the securities being offered by ABC
and any other selling stockholders having rights to participate in such
offering) the number of securities that the underwriters reasonably believe
compatible with the success of the offering by ABC, then ABC shall be required
to include in the offering only that number of securities, including Registrable
Securities, which the underwriters believe will not jeopardize the success of
the offering by ABC, the securities so included to be allocated pro rata (as
nearly as practicable) among the Sellers and other selling stockholders on the
basis of the number of securities proposed to be sold by each.
(h) SUCCESSORS AND ASSIGNS. The registration rights provided by this
Agreement shall be binding upon and inure to the benefit of ABC (and its
successors and assigns), and the Stockholders (and any affiliates thereof to
whom the Registrable Securities are transferred, sold or disposed). Except as
expressly stated in the foregoing sentence, the registration rights provided by
this Agreement may not be assigned by the Stockholders without the prior written
consent of ABC.
(i) LIMITS ON RIGHTS. The right of the Stockholders to require a
registration pursuant to Paragraph (b) shall be limited to two registrations.
Participation in a registration pursuant to Paragraph (c) shall be limited, as
to any Stockholder, to a single registration and any Stockholder participating
in a registration pursuant to Paragraph (c) shall have no right to participate
in any further registration pursuant thereto unless such Stockholder was not
allowed to register at least seventy-five percent (75%) of the Registrable
Securities requested for inclusion in such registration due to the operation of
Paragraph (g) above. The failure of the Sellers to sell all of the Registrable
Securities offered in a registration effected pursuant to Paragraph (b) shall
not entitle any of the Sellers to require or participate in any further
registration under Paragraph (b) of ABC securities.
(j) INDEMNIFICATION.
(i) ABC agrees to indemnify, to the extent permitted by law, each
holder of Registrable Securities, its officers, directors, stockholders,
partners and employees and each person who controls (within the meaning of
the Act) such holder against all losses, claims, damages, liabilities and
expenses whatsoever, as incurred, and reasonable fees and expenses of
counsel incurred in investigating, preparing or defending against, or
aggregate amounts paid in settlement of any litigation, action,
investigation or proceeding by any governmental agency or body, commenced
or threatened, in each case whether or not a party, or any claim whatsoever
based upon, caused by or arising out of any untrue or alleged untrue
statement
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of material fact contained in any registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or
any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same are caused by or contained in any information furnished
in writing to ABC by such holder expressly for use therein or by such
holder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after ABC has furnished
such holder with a sufficient number of copies of the same. In connection
with an underwritten offering, ABC will indemnify such underwriters, their
officers and directors and each person who controls (within the meaning of
the Act) such underwriters to the same extent as provided above with
respect to the indemnification of the holders of Registrable Securities.
(ii) In connection with any registration statement in which a holder
of Registrable Securities is participating, each such holder will furnish
to ABC in writing such information as ABC reasonably requests for use in
connection with any such registration statement or prospectus and, to the
extent permitted by law, will indemnify ABC, its directors, stockholders,
employees and officers and each person who controls (within the meaning of
the Act) ABC against any losses, claims, damages, liabilities and expenses
whatsoever, as incurred, and reasonable fees and expenses of counsel
incurred in investigating, preparing or defending against, or aggregate
amounts paid in settlement of any litigation, action, investigation or
proceeding by any governmental agency or body, commenced or threatened, in
each case whether or not a party, or any claim whatsoever based upon,
caused by or arising out of any untrue or alleged untrue statement of
material fact contained in the registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or
any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained in
any information so furnished in writing by such holder expressly for such
purpose and is reasonably relied upon in conformity with such written
information.
(iii) Any person entitled to indemnification hereunder will (a) give
reasonably prompt written notice to the indemnifying party of any claim
with respect to which he or it seeks indemnification and (b) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. If such defense
is assumed, the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without his or its consent
(but such consent will not be unreasonably withheld). An indemnifying
party who is not entitled to, or elects not to, assume the defense of a
claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect
to such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other
of such indemnified parties with respect to such claim.
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(iv) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
person of such indemnified party and will survive the transfer of
securities. ABC also agrees to make such provisions, as are reasonably
requested by any indemnified party, for contribution to such party in the
event ABC's indemnification is unavailable for any reason. Such right to
contribution shall be in such proportion as is appropriate to reflect the
relative fault of and benefits to ABC on the one hand and the Sellers on
the other (in such proportions that the Sellers are severally, not jointly,
responsible for the balance), in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative benefits to the indemnifying party and indemnified parties shall
be determined by reference to, among other things, the total proceeds
received by the indemnifying party and the indemnified parties in
connection with the offering to which losses, claims, damages, liabilities
or expense relate. The relative fault of the indemnifying party and
indemnified parties shall be determined by reference to, among other
things, whether the action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied
by, such indemnifying party or the indemnified parties, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such action.
The parties hereto agree that it would not be just or equitable
if contribution pursuant hereto were determined by pro rata allocation or
by any other method of allocation which does not take account of the
equitable considerations referred to in the immediate preceding paragraph.
No person found guilty of any fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not found guilty of such fraudulent misrepresentation.
Notwithstanding the provisions of this Subparagraph (j)(iv), no Seller
shall be required to contribute any amount in excess of the net amount of
proceeds received by such Seller from the sale of Registrable Securities
pursuant to the registration statement.
(k) ENTIRE AGREEMENT; MODIFICATION; AMENDMENT. This Agreement constitutes
the entire Agreement between the parties covering the subject matter hereof and
supersedes all prior agreements or understandings whether written or oral. This
Agreement may not be modified or amended other than in a writing signed by ABC
and Stockholders holding a majority of the Registrable Securities.
(l) NO INCONSISTENT AGREEMENTS. ABC will not hereafter enter into any
agreement with respect to its securities which is inconsistent with or violates
the rights granted to the holders of Registrable Securities in this Agreement.
(m) ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. ABC will not take any
action, or permit any change to occur, with respect to its securities which
would materially and adversely affect
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the ability of the holders of Registrable Securities to include such Registrable
Securities in a registration undertaken pursuant to this Agreement provided that
this Paragraph (m) shall not apply to actions or changes with respect to ABC's
business, earnings, revenues, financial conditions or prospects.
(n) TERMINATION. This Agreement, other than the provisions of
Paragraph (j) above, shall terminate on the sixth anniversary of the date
hereof; PROVIDED, HOWEVER, that such termination shall not be effective until
completion of any registration of Registrable Securities requested prior to such
sixth anniversary in accordance with this Agreement; and PROVIDED FURTHER, that
with respect to any Stockholder, this Agreement shall terminate on the date on
which such Stockholder may sell Registrable Securities in accordance with Rule
145(d)(2) or (3) under the Act.
(o) REMEDIES. Any person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of the
Agreement.
(p) SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provisions will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
(q) DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(r) GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware applicable to contracts
executed in and to be performed entirely within the State, without regard to the
conflicts of laws provision thereof.
(s) NOTICES. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
as of the date of receipt and shall be delivered personally or mailed by
registered or certified mail (postage prepaid, return receipt requested), sent
by overnight courier or sent by telecopy, to the Parties at the following
addresses or telecopy numbers (or at such other address or telecopy number for a
Party as shall be specified by like notice):
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(a) If to ABC:
ABC Rail Products Corporation
200 South Michigan Avenue
13th Floor
Chicago, IL 60604
Attention: Donald W. Ginter
Telecopy No.: (312) 322-0397
(b) If to a Stockholder, at the address specified by such
holder to ABC.
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IN WITNESS WHEREOF, this Agreement has been entered into by the parties
hereto as of the date first written above.
ABC RAIL PRODUCTS CORPORATION
By: /s/ James P. Singsank
----------------------------------------
Name: James P. Singsank
Title: Assistant Secretary
STOCKHOLDERS:
/s/ Joseph A. Seher
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Joseph A. Seher
/s/ Vaughn W. Makary
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Vaughn W. Makary
/s/ Wayne R. Rockenbach
---------------------------------------------
Wayne R. Rockenbach
/s/ John W. Waite
---------------------------------------------
John W. Waite
/s/ John M. Lison
---------------------------------------------
John M. Lison
/s/ Stephen W. Becker
---------------------------------------------
Stephen W. Becker
/s/ John M. Giba
---------------------------------------------
John M. Giba
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/s/ Brian L. Greenburg
---------------------------------------------
Brian L. Greenburg
/s/ Michael B. Heisler
---------------------------------------------
Michael B. Heisler
/s/ Jack R. Long
---------------------------------------------
Jack R. Long
/s/ Wilbur G. Streams
---------------------------------------------
Wilbur G. Streams
/s/ Richard A. Drexler
---------------------------------------------
Richard A. Drexler
/s/ Daniel W. Duval
---------------------------------------------
Daniel W. Duval
/s/ Willard H. Thompson
---------------------------------------------
Willard H. Thompson
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