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Exhibit
10.2
REGISTRATION RIGHTS
AGREEMENT
Dated December 18,
2007
among
QUALITY DISTRIBUTION,
LLC,
QD CAPITAL
CORPORATION,
THE GUARANTORS NAMED
HEREIN,
and
CREDIT SUISSE SECURITIES
(USA) LLC
REGISTRATION RIGHTS
AGREEMENT
THIS REGISTRATION RIGHTS
AGREEMENT is made and entered into as of December 18, 2007
(the “ Agreement ”), among QUALITY DISTRIBUTION,
LLC, a Delaware limited liability company (the “
Company ”), QD CAPITAL CORPORATION, a Delaware
corporation and wholly owned subsidiary of the Company (“
QD Capital ” and, together with the Company, the
“ Note Issuers ”), the guarantors as set forth
on Annex I hereto (the “ Guarantors ,” together
with the Company and QD Capital, the “ Issuers
”) and CREDIT SUISSE SECURITIES (USA) LLC, (the “
Initial Purchaser ”).
This Agreement is entered
into in connection with the Purchase Agreement, dated as of
December 13, 2007, by and among the Issuers and the Initial
Purchaser (the “ Purchase Agreement ”) that
provides for the sale by the Note Issuers to the Initial Purchaser
of $50,000,000 aggregate principal amount of the Note
Issuers’ Senior Floating Rate Notes due 2012, Series B (the
“ Notes ”). The Notes will be guaranteed (the
“ Guarantees ”) on a senior basis by the
Guarantors. The Notes and the Guarantees together are herein
referred to as the “ Securities .” In order to
induce the Initial Purchaser to enter into the Purchase Agreement,
the Issuers have agreed to provide the registration rights set
forth in this Agreement for the benefit of the Initial Purchaser
and its direct and indirect transferees and assigns. The execution
and delivery of this Agreement is a condition to the Initial
Purchaser’s obligation to purchase the Securities under the
Purchase Agreement.
In consideration of the
foregoing, the parties hereto agree as follows for the benefit of
each other and for the equal and ratable benefit of the Holders of
the Securities:
As used in this Agreement,
the following capitalized defined terms shall have the following
meanings:
“ 1933 Act
” shall mean the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time
to time.
“ 1934 Act
” shall mean the Securities Exchange Act of 1934, as amended,
or any successor federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect from
time to time.
“ Additional
Interest ” shall have the meaning set forth in
Section 2(d) hereof.
“ Affiliate
” shall mean with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common
control with, such Person; for purposes of this definition,
“control” shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership
of voting securities or otherwise.
“ Agreement
” shall have the meaning set forth in the
preamble.
“ Closing Date
” shall have the meaning ascribed thereto in the Purchase
Agreement.
“ Company
” shall have the meaning set forth in the preamble and shall
also include the Company’s successors and assigns.
“ Exchange Dates
” shall have the meaning set forth in Section 2(a)(ii)
hereof.
“ Exchange Offer
” shall mean the exchange offer by the Company and QD Capital
of Exchange Securities for Registrable Securities pursuant to
Section 2(a) hereof.
“ Exchange Offer
Registration ” shall mean a registration under the 1933
Act effected pursuant to Section 2(a) hereof.
“ Exchange Offer
Registration Statement ” shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form) and all amendments and supplements to such
registration statement, in each case including the Prospectus
contained therein, all exhibits thereto and all material
incorporated by reference therein.
“ Exchange
Securities ” shall mean securities issued by the Issuers
under the Indenture containing terms identical to the Securities
(except that the Exchange Securities will not contain restrictions
on transfer) and to be offered to Holders of Securities in exchange
for Securities pursuant to the Exchange Offer.
“ Filing Date
” means (i) with respect to an Exchange Offer
Registration Statement or the Shelf Registration Statement required
to be filed pursuant to Section 2(b)(i) or (ii), the earlier
of the date of the filing thereof with the SEC and the 120th day
after the Closing Date and (ii) with respect to the Shelf
Registration Statement required to be filed pursuant to
Section 2(b)(iii), the 60th day after the delivery of a notice
pursuant to Section 2(b)(iii).
“ Guarantors
” shall have the meaning ascribed thereto in the
preamble.
“ Holder ”
shall mean a holder of Registrable Securities, for so long as such
holder owns any Registrable Securities, and each of such
holder’s successors, assigns and direct and indirect
transferees who become registered owners of Registrable Securities
under the Indenture or who become beneficial owners of Registrable
Securities, so long as in the case of beneficial owners, such
owners have so notified the Company in writing; provided that for
purposes of Sections 4 and 5 of this Agreement, the term
“Holder” shall include Participating
Broker-Dealers.
“ Indenture
” shall mean the Indenture relating to the Securities dated
as of December 18, 2007 among the Issuers and The Bank of New
York, as trustee, pursuant to which the Securities are being
issued, and as the same may be amended from time to time in
accordance with the terms thereof.
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“ Initial
Purchaser ” shall have the meaning set forth in the
preamble.
“ Issuers
” shall have the meaning set forth in the
preamble.
“ Majority
Holders ” shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities;
provided that whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Issuers, or any of
their respective Affiliates shall not be counted in determining
whether such consent or approval was given by the Holders of such
required percentage or amount.
“ Participating
Broker-Dealer ” shall have the meaning set forth in
Section 4(a) hereof.
“ Person ”
shall be construed broadly and shall include, without limitation,
an individual, a partnership, a corporation, an association, a
joint stock company, a limited liability company, a trust, a joint
venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision
thereof.
“ Prospectus
” shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement,
including a prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by a
Shelf Registration Statement, and by all other amendments and
supplements to such prospectus, and in each case including all
material incorporated by reference therein.
“ Purchase
Agreement ” shall have the meaning set forth in the
preamble.
“ QD Capital
” shall have the meaning set forth in the preamble and shall
also include QD Capital’s successors and assigns.
“ Registrable
Securities ” shall mean the Securities; provided,
however, that the Securities shall cease to be Registrable
Securities (i) when, in the case of a Holder of such
Securities who was entitled to participate in the Exchange Offer,
an Exchange Offer Registration Statement with respect to such
Securities shall have been declared effective under the 1933 Act
and either (a) such Securities shall have been exchanged
pursuant to the Exchange Offer for Exchange Securities or
(b) such Securities were not tendered by the Holder thereof in
the Exchange Offer, (ii) when a Shelf Registration Statement
with respect to such Securities shall have been declared effective
under the 1933 Act and such Securities shall have been disposed of
pursuant to such Shelf Registration Statement, (iii) when such
Securities have been sold to the public pursuant to Rule 144 (or
any similar provision then in force, but not Rule 144A) under the
1933 Act or (iv) when such Securities shall have ceased to be
outstanding.
“ Registration
Default ” shall have the meaning set forth in
Section 2(g) hereof.
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“ Registration
Expenses ” shall mean any and all expenses incident to
performance of or compliance by the Issuers with this Agreement,
including, without limitation: (i) all SEC, stock exchange or
Financial Industry Regulatory Authority registration and filing
fees, (ii) all fees and expenses incurred in connection with
compliance with state securities or blue sky laws (including
reasonable fees and disbursements of counsel for any underwriters
or Holders in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities) within the United
States (x) where the Holders are located, in the case of the
Exchange Securities, or (y) as provided in Section 3(d)
hereof, in the case of Registrable Securities to be sold by a
Holder pursuant to a Shelf Registration Statement, (iii) all
expenses of any Persons in preparing or assisting in preparing,
word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto,
any underwriting agreements, Securities sales agreements and other
documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, (v) all fees and
disbursements relating to the qualification of the Indenture under
applicable securities laws, (vi) the fees and disbursements of
the Trustee and its counsel, (vii) the fees and disbursements
of counsel for the Issuers and, in the case of a Shelf Registration
Statement, the fees and disbursements of one counsel for the
Holders (which counsel shall be selected by the Majority Holders)
and (viii) the fees and disbursements of the independent
public accountants of the Issuers, including the expenses of any
special audits or “cold comfort” letters required by or
incident to such performance and compliance, but excluding fees and
expenses of counsel to the underwriters (other than fees and
expenses set forth in clause (ii) above) or the Holders and
underwriting discounts and commissions and out-of-pocket expenses
incurred by the Holders and transfer taxes, if any, relating to the
sale or disposition of Registrable Securities by a
Holder.
“ Registration
Statement ” shall mean any registration statement of the
Issuers that covers any of the Exchange Securities or Registrable
Securities pursuant to the provisions of this Agreement and all
amendments and supplements to any such Registration Statement,
including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
“ SEC ”
shall mean the Securities and Exchange Commission.
“ Securities
” shall have the meaning set forth in the
preamble.
“ Shelf
Registration ” shall mean a registration effected
pursuant to Section 2(b) hereof.
“ Shelf Registration
Statement ” shall mean a “shelf” registration
statement of the Issuers pursuant to the provisions of
Section 2(b) of this Agreement which covers all of the
Registrable Securities (but no other securities unless approved by
the Holders whose Registrable Securities are covered by such Shelf
Registration Statement) on an
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appropriate form under Rule
415 under the 1933 Act, or any similar rule that may be adopted by
the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
“ TIA ”
shall have the meaning set forth in Section 3(l)
hereof.
“ Trustee
” shall mean the trustee with respect to the Securities under
the Indenture.
“ Underwriters
” shall have the meaning set forth in Section 3
hereof.
“ Underwritten
Offering ” shall mean a registration in which Registrable
Securities are sold to an Underwriter for reoffering to the
public.
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2. |
Registration Under the 1933 Act . |
(a) To the extent not
prohibited by any applicable law or applicable interpretation of
the Staff of the SEC, the Issuers shall file an Exchange Offer
Registration Statement covering the offer by the Issuers to the
Holders within 120 days after the Closing Date to exchange all of
the Registrable Securities for Exchange Securities and to use their
respective commercially reasonable efforts to cause the Exchange
Offer Registration Statement to be declared effective on or prior
to the 180th day after the Closing Date and to have such
Registration Statement remain effective until the closing of the
Exchange Offer. The Issuers shall commence the Exchange Offer as
promptly as practicable after the Exchange Offer Registration
Statement has been declared effective by the SEC and use their
respective best efforts to have the Exchange Offer consummated not
later than 40 days after such effective date.
The Issuers shall commence
the Exchange Offer by mailing the related exchange offer Prospectus
and accompanying documents to each Holder stating, in addition to
such other disclosures as are required by applicable
law:
(i) that the Exchange Offer
is being made pursuant to this Registration Rights Agreement and
that all Registrable Securities validly tendered will be accepted
for exchange;
(ii) the dates of acceptance
for exchange (which shall be a period of at least 20 business days
from the date such notice is mailed) (the “ Exchange
Dates ”);
(iii) that any Registrable
Security not tendered by a Holder who was eligible to participate
in the Exchange Offer will remain outstanding and continue to
accrue interest, but will not retain any rights under this
Registration Rights Agreement;
(iv) that Holders electing to
have a Registrable Security exchanged pursuant to the Exchange
Offer will be required to surrender such Registrable Security,
together with the enclosed letters of transmittal, to the
institution and at the address (located in the Borough of
Manhattan, The City of New York) specified in the notice prior to
the close of business on the last Exchange Date; and
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(v) that Holders will be
entitled to withdraw their election, not later than the close of
business, New York City time, on the last Exchange Date, by sending
to the institution and at the address (located in the Borough of
Manhattan, The City of New York) specified in the notice a
telegram, telex, facsimile transmission or letter setting forth the
name of such Holder, the principal amount of Registrable Securities
delivered for exchange and a statement that such Holder is
withdrawing such Holder’s election to have such Securities
exchanged.
As soon as practicable after
the last Exchange Date, the Issuers shall:
(i) accept for exchange
Registrable Securities or portions thereof validly tendered and not
properly withdrawn pursuant to the Exchange Offer; and
(ii) deliver, or cause to be
delivered, to the Trustee for cancellation all Registrable
Securities or portions thereof so accepted for exchange by the
Issuers and issue, and cause the Trustee to promptly authenticate
and mail to each Holder, an Exchange Security equal in principal
amount to the principal amount of the Registrable Securities
surrendered by such Holder; provided, that in the case of any
Registrable Securities held in global form by a depositary,
authentication and delivery to such depositary of one or more
Exchange Securities in global form in an equivalent principal
amount thereto for the account of such Holders in accordance with
the Indenture shall satisfy such authentication and delivery
requirement.
Each Holder (including,
without limitation, each Participating Broker-Dealer (as defined))
who participates in the Exchange Offer will be required to
represent to the Issuers, in writing (which may be contained in the
applicable letter of transmittal) that: (i) any Exchange
Securities acquired in exchange for Registrable Securities tendered
are being acquired in the ordinary course of business of the Person
receiving such Exchange Securities, whether or not such recipient
is a Holder of Registrable Securities, (ii) at the time of the
commencement of the Exchange Offer, neither such Holder nor, to the
actual knowledge of such Holder, any other Person receiving
Exchange Securities from such Holder has an arrangement or
understanding with any Person to participate in the distribution of
the Exchange Securities in violation of the provisions of the 1933
Act, (iii) the Holder is not an Affiliate of any Issuer,
(iv) if such Holder is not a Participating Broker-Dealer, that
it has not engaged in, and does not intend to engage in, the
distribution of Exchange Securities, and (v) if such Holder is
a Participating Broker-Dealer, such Holder acquired the Registrable
Securities as a result of market-making activities or other trading
activities and that it will comply with the applicable provisions
of the Securities Act with respect to resale of any Exchange
Securities.
The Issuers shall comply with
the applicable requirements of the 1933 Act, the 1934 Act and other
applicable laws and regulations in connection with the
Exchange
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Offer. The Exchange Offer
shall not be subject to any conditions, other than (i) that
the Exchange Offer does not violate applicable law or any
applicable interpretation of the staff of the SEC, (ii) no
action or proceeding shall have been instituted or threatened in
any court or by any governmental agency with respect to the
Exchange Offer and no material adverse development shall have
occurred with respect to the Issuers, (iii) all governmental
approvals shall have been obtained, which approvals the Issuers
deem necessary for the consummation of the Exchange Offer,
(iv) the conditions precedent to the obligations of the
Issuers under this Agreement shall have been fulfilled and
(v) such other conditions as shall be deemed necessary or
appropriate by the Issuers in their reasonable judgment.
(b) In the event that
(i) the Issuers determine that the Exchange Offer Registration
provided for in Section 2(a) above is not available or may not
be consummated as soon as practicable after the last Exchange Date
because it would violate applicable law or the applicable
interpretations of the Staff of the SEC, (ii) the Exchange
Offer is not for any other reason consummated by the 220th day
after the Closing Date or (iii) if any Holder is not entitled
to participate in the Exchange Offer, and any such Holder so
requests in writing on or prior to the 60th day after the
consummation of the Exchange Offer, the Issuers shall cause to be
filed as soon as practicable after receipt of such notice a Shelf
Registration Statement providing for the sale by the Holders of all
of the Registrable Securities and shall use their commercially
reasonable efforts to have such Shelf Registration Statement
declared effective by the SEC; provided that any Holder known to
the Issuers who is not entitled to participate in the Exchange
Offer because such Holder is an Affiliate of an Issuer shall
automatically be deemed to have requested on the date hereof that
the Issuers cause to be filed a Shelf Registration
Statement.
In the event the Issuers are
required to file a Shelf Registration Statement solely as a result
of the matters referred to in clause (iii) of the preceding
sentence, the Issuers shall file and use their commercially
reasonable efforts to have declared effective (unless it becomes
effective automatically upon filing) by the SEC both an Exchange
Offer Registration Statement pursuant to Section 2(a) with
respect to all Registrable Securities and a Shelf Registration
Statement (which may be a combined Registration Statement with the
Exchange Offer Registration Statement) with respect to offers and
sales of Registrable Securities held by such other Holders after
completion of the Exchange Offer.
The Issuers agree to use
their commercially reasonable efforts to keep the Shelf
Registration Statement continuously effective until the expiration
of the period referred to in Rule 144 (or any successor rule that
permits the Registrable Securities to be eligible for resale
without registration and without being subject to volume
restrictions or public information requirements, but not Rule 144A)
with respect to the Registrable Securities or such shorter period
that will terminate when all of the Registrable Securities covered
by the Shelf Registration Statement have been sold pursuant to the
Shelf Registration Statement. The Issuers further agree to
supplement or amend the Shelf Registration Statement if required by
the rules, regulations or instructions applicable to the
registration form used by the Issuers for such Shelf Registration
Statement or by the
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1933 Act or by any other
rules and regulations thereunder for shelf registration or if
reasonably requested by a Holder with respect to information
relating to such Holder, and to use their best efforts to cause any
such amendment to become effective and such Shelf Registration
Statement to become usable as soon as thereafter practicable. The
Issuers agree to furnish to the Holders of Registrable Securities
copies of any such supplement or amendment promptly after its being
used or filed with the SEC.
(c) The Issuers shall pay all
Registration Expenses in connection with the registration pursuant
to Section 2(a) or Section 2(b). Each Holder shall pay
all underwriting discounts and commissions and transfer taxes, if
any, relating to the registration of such Holder’s
Registrable Securities pursuant to the Exchange Offer Registration
Statement or the Shelf Registration Statement.
(d) An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a
Shelf Registration Statement pursuant to Section 2(b) hereof
will not be deemed to have become effective unless it has been
declared effective by the SEC; provided, however, that, if, after
it has been declared effective, the offering of Registrable
Securities pursuant to a Shelf Registration Statement is interfered
with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such
Registration Statement will be deemed not to have become effective
during the period of such interference until the offering of
Registrable Securities pursuant to such Registration Statement may
legally resume. As provided for in the Indenture, in the event the
Exchange Offer is not consummated and the Shelf Registration
Statement is not declared effective as set forth below, then, the
annual interest rate on the Securities will be increased (the
“Additional Interest”) as follows:
(i) if (A) neither the
Exchange Offer Registration Statement nor a Shelf Registration
Statement has been filed with the SEC on or prior to the 120th day
after the Closing Date or (B) the Issuers are required to file
a Shelf Registration Statement pursuant to Section 2(b)(iii)
hereof and such Shelf Registration Statement is not filed on or
prior to the Filing Date applicable thereto then, commencing on the
day after either such 120th day in the case of clause (A) or
such Filing Date in the case of clause (B), Additional Interest
shall accrue on the principal amount of the Registrable Securities
at a rate of 0.25% per annum for the first 90 days immediately
following thereafter, and such Additional Interest rate shall
increase by an additional 0.25% per annum at the beginning of
each subsequent 90-day period; or
(ii) if (A) neither the
Exchange Offer Registration Statement nor a Shelf Registration
Statement is declared effective by the SEC on or prior to the 180th
day after the Closing Date or (B) the Issuers are required to
file a Shelf Registration Statement pursuant to
Section 2(b)(iii) hereof and such Shelf Registration Statement
is not declared effective by the SEC on or prior to the 60th day
following the Filing Date applicable thereto then, commencing on
the day after either such 180th day in the case of clause
(A) or such 60th day in the case of clause (B), Additional
Interest
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shall accrue on the principal
amount of the Registrable Securities at a rate of 0.25% per
annum for the first 90 days immediately following thereafter, and
such Additional Interest rate shall increase by an additional
0.25% per annum at the beginning of each subsequent 90-day
period; or
(iii) subject to Sections
2(f) and 2(g) if (A) the Issuers have not exchanged Exchange
Securities for all Securities validly tendered in accordance with
the terms of the Exchange Offer on or prior to the 220th day after
the Closing Date or (B) if applicable, the Shelf Registration
Statement has been declared effective and such Shelf Registration
Statement ceases to be effective at any time prior to the second
anniversary of the Closing Date or, if earlier, the date when all
Securities have been disposed of thereunder, then Additional
Interest shall accrue on the principal amount of the Registrable
Securities at a rate of .25% per annum for the first 90 days
commencing on (x) the 221st day after the Closing Date, in the
case of (A) above, or (y) the day such Shelf Registration
Statement ceases to be effective in the case of (B) above, and
such Additional Interest rate shall increase by an additional
.25% per annum at the beginning of each subsequent 90-day
period (it being understood and agreed that, notwithstanding any
provision to the contrary, so long as any Securities not registered
under an Exchange Offer Registration Statement are then covered by
an effective Shelf Registration, no Additional Interest shall
accrue on such Securities);
provided, however, that the
Additional Interest rate on the Securities may not exceed in the
aggregate 1.0% per annum; provided, further, however, that in
no event shall the Issuers be obligated to pay Additional Interest
under more than one of the clauses in this Section 2(d) at any
one time; provided, further, however, that (1) upon the filing
of the Exchange Offer Registration Statement or a Shelf
Registration Statement (in the case of clause (i)(A) above) or a
Shelf Registration Statement (in the case of clause (ii)(B) above),
(2) upon the effectiveness of the Exchange Offer Registration
or a Shelf Registration Statement (in the case of clause (ii)(A)
above) or a Shelf Registration Statement (in the case of clause
(i)(B) above), or (3) upon the exchange of Exchange Securities
for all Securities tendered (in the case of clause (iii)(A) above),
or upon the effectiveness of the Shelf Registration Statement which
had ceased to remain effective (in the case of clause (iii)(B)
above), Additional Interest on the Securities as a result of such
clause (or the relevant subclause thereof), as the case may be,
shall cease to accrue; provided, further, however, that in the case
of clauses (i)(B), (ii)(B) and (iii)(B) above, it is expressly
understood that Additional Interest should be payable only with
respect to the Registrable Securities so requested to be registered
pursuant to Section 2(b)(iii) hereof.
(e) Without limiting the
remedies available to the Holders, the Issuers acknowledge that any
failure by the Issuers to comply with their obligations under
Section 2(a) and Section 2(b) hereof may result in
material irreparable injury to the Holders for which there is no
adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any
such failure, any Holder may obtain such relief as may be required
to specifically enforce the obligations of the Issuers under
Section 2(a) and Section 2(b) hereof.
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(f) No Holder of Registrable
Securities may include any of its Registrable Securities in any
Shelf Registration unless and until such Holder furnishes to the
Issuers, in writing within 30 days after receipt of a request
therefor, the information with respect to such Holder specified in
Items 507 and 508 (as applicable) of Regulation S-K under the 1933
Act and any other applicable rules, regulations or policies of the
SEC for use in connection with any Shelf Registration or Prospectus
included therein, on a form to be provided by the Issuers. No
Holder of Registrable Securities shall be entitled to Additional
Interest pursuant to Section 2(d) hereof unless and until such
Holder shall have provided all such information. Each selling
Holder agrees to furnish
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