INVESTOR RIGHTS
AGREEMENT
THIS
INVESTOR RIGHTS AGREEMENT (this “ Agreement ”)
is made as of June 1, 2007, by and among US Power Generating
Company, a Delaware corporation (the “ Company
”), New Astoria Generating Company Holdings, LLC, a Delaware
limited liability company (“ New Astoria ”), the
Persons identified as “New Astoria Members” on
Schedule A hereto as of the date of this Agreement (the
“ New Astoria Members ”), the Persons identified
as “EBG Investors” on Schedule B hereto as of the
date of this Agreement (the “ EBG Investors ”),
and each other Person who becomes a party to this Agreement after
the date hereof pursuant to Section 12(e) or
12(f) . Certain capitalized terms used herein are defined in
Section 11.
Pursuant
to that certain Agreement and Plan of Merger, dated as of
February 28, 2007 (as amended, modified, waived and/or
supplemented from time to time, the “ Merger Agreement
”), by and among the Company, EBG Holdings LLC, EBG Merger
LLC, Astoria Generating Company Holdings, LLC and Astoria Merger
LLC, through certain mergers, EBG Holdings LLC and Astoria
Generating Company Holdings, LLC were contributed to the Company
and, after giving effect to the transactions contemplated by the
Merger Agreement to occur on the Closing Date, (i) New Astoria
will own all of the shares of Class B Common outstanding as of
the Closing Date and (ii) the EBG Investors will, together
with certain other holders of EBG equity securities not party
hereto, own all of the shares of Class A Common outstanding as
of the Closing Date.
The
parties hereto, intending to be legally bound, hereby agree as
follows:
1.
Demand Registrations .
(a)
Requests for Registration . In the event that an
underwriting agreement with respect to a registered public offering
of Class A Common under the Securities Act of 1933, as amended
(the “ Securities Act ”), in which the aggregate
gross proceeds to the Company and/or its stockholders from such
offering is greater than or equal to $300,000,000, has not been
executed by the Company on or prior to the Trigger Date, the New
Astoria Majority Holders or the holders of a majority of the EBG
Investor Registrable Securities may request registration of all or
any portion of their Registrable Securities on Form S-l or any
similar long-form registration (“ Long-Form
Registration ”). At any time after the Company has
completed the IPO, the New Astoria Majority Holders or the holders
of 25% of the EBG Investor Registrable Securities may request
(x) Long-Form Registrations and (y) registration under
the Securities Act of all or any portion of their Registrable
Securities on Form S-2 or S-3 (including pursuant to Rule 415
under the Securities Act) or any similar short-form registration
(“ Short-Form Registrations ”) if available. All
registrations requested pursuant to this Section 1(a)
are referred to herein as “ Demand Registrations
”. Each request for a Demand Registration shall specify the
approximate number of Registrable Securities requested to be
registered and the anticipated per share price range for such
offering. Within 10 days after receipt of any such request,
the Company shall give written notice of such requested
registration to all other holders of Registrable Securities and,
subject to Section 1(d) , shall include in such registration
(and in all related registrations and qualifications under state
blue sky laws or in compliance with other registration requirements
and in any related underwriting) all Registrable Securities with
respect to which the Company has received written requests for
inclusion therein within 15 days after the receipt of the
Company’s notice. For purposes hereof, the term “
Trigger Date ” shall mean November 30, 2007, as
extended by the cumulative number of days during which any Event(s)
of Force Majeure were in effect (e.g., if (x) an Event of
Force Majeure occurred on September 30, 2007 and lasted for a
period of twenty (20) days and (y) an Event of Force
Majeure occurred on November 10,
2007 and lasted
for a period often (10) days, then the “Trigger
Date” would automatically be extended by thirty
(30) days to December 30, 2007).
(b)
Long-Form Registrations . Each of the New Astoria
Majority Holders and the holders of 25% of the EBG Investor
Registrable Securities shall be entitled to request three
(3) Long-Form Registrations; provided that the
aggregate offering value of the Registrable Securities requested to
be registered in any Long-Form Registration must equal at
least $300,000,000 if the registration is the IPO and at least
$150,000,000 in all other Long-Form Registrations; provided
further that the request of holders of a majority of the EBG
Investor Registrable Securities shall be required to request an
IPO. Other than in the case of the IPO, which shall be an
underwritten registration, the holders of a majority of the
Registrable Securities initiating a Long-Form Registration
shall determine if such registration will be an underwritten
registration. The Company shall pay all Registration Expenses in
connection with any registration initiated as a
Long-Form Registration, whether or not it becomes effective. A
registration shall not count as one of the permitted
Long-Form Registrations if (i) the requesting holder of
Registrable Securities determines in good faith to withdraw (prior
to the effective date of the registration statement relating to
such request) the proposed registration due to marketing or
regulatory reasons, (ii) the registration statement relating
to such request is not declared effective within 180 days
after the date such registration statement is first filed with the
Securities and Exchange Commission (other than solely by reason of
the requesting holder having refused to proceed) and such
requesting holder withdraws its Registration Request prior to such
registration statement being declared effective, (iii) prior
to the sale of at least 90% of the Registrable Securities included
in the applicable registration relating to such request, such
registration is adversely affected by any stop order, injunction or
other order or requirement of the Securities and Exchange
Commission or other governmental agency or court for any reason and
the Company fails to have such stop order, injunction or other
order or requirement removed, withdrawn or resolved to the
requesting holder’s reasonable satisfaction within
30 days after the date of such order, or (iv) the
conditions to closing specified in the underwriting agreement or
purchase agreement entered into in connection with the registration
relating to such request are not satisfied (other than as a result
of a material default or breach thereunder by any of the requesting
holders).
(c)
Short-Form Registrations . In addition to the Long-Form
Registrations provided pursuant to Section (b) , each
of the New Astoria Majority Holders and the holders of 25% of the
EBG Investor Registrable Securities shall be entitled to request an
unlimited number of Short-Form Registrations in which the Company
shall pay all Registration Expenses. The holders of a majority of
the Registrable Securities initiating a Short-Form Registration
shall determine if such registration will be an underwritten
registration. Notwithstanding anything contained herein to the
contrary, Demand Registrations shall be
Short-Form Registrations whenever the Company is permitted to
use any applicable short form, provided however , if
any Demand Registration is proposed to be a
Short-Form Registration and an underwritten offering, if the
managing underwriter shall advise the Company that, in its opinion,
it is of material importance to the success of such proposed
offering to file a registration statement on Form S-l (or any
successor or similar registration statement) or to include in such
registration statement information not required to be included in a
Short-Form Registration, then the Company will file a
registration statement on Form S-l (so long as the aggregate
offering value of the Registrable Securities requested to be
registered in any such Demand Registration is equal to or exceeds
$150,000,000) or supplement the Short-Form Registration as
reasonably requested by such managing underwriter (it being
understood and agreed that any such registration shall not count as
a “Long-Form Registration” for purposes of
calculating how many “Long-Form Registrations” a
holder has initiated pursuant to Section (b) hereof). After
the Company has become subject to the reporting requirement of the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), the Company shall use its reasonable
best efforts to make Short-Form Registrations on Form S-3
available for the sale of Registrable Securities.
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(d)
Priority on Demand Registrations . The Company shall not
include in any Demand Registration any securities which are not
Registrable Securities without the prior written consent of the
holders of at least 75% of the Registrable Securities included in
such registration. If a Demand Registration is an underwritten
offering and the managing underwriters advise the Company in
writing (with a copy to each party hereto requesting registration
of Registrable Securities) that in their opinion the number of
Registrable Securities and, if permitted hereunder, other
securities requested to be included in such offering exceeds the
number of Registrable Securities and other securities, if any,
which can be sold in an orderly manner in such offering without
adversely affecting the marketability of the offering (including
the price range acceptable to the holders of a majority of the
Registrable Securities initially requesting registration), the
Company will include in such registration (i) first, the
number of Registrable Securities requested to be included in such
registration which in the opinion of such underwriters can be sold
without adversely affecting the marketability of the offering
(including the acceptable price range), pro rata among the
respective holders thereof on the basis of the number of
Registrable Securities owned by each such holder and
(ii) second, other securities requested to be included in such
Demand Registration, pro rata among the holders of such securities
on the basis of the number of such securities owned by each such
holder. Any Persons other than holders of Registrable Securities
who participate in Demand Registrations which are not at the
Company’s expense must pay their share of the Registration
Expenses as provided in Section 5 hereof.
Notwithstanding anything in this Section 1(d) to the
contrary, in the event that the IPO is a Demand Registration, EBG
Investor Registrable Securities shall be included in such Demand
Registration prior to the inclusion of any other Registrable
Securities until the aggregate gross proceeds (i.e., before
underwriters’ discounts or commissions) to the holders of EBG
Investor Registrable Securities from sales pursuant to such Demand
Registration equal $300,000,000 and thereafter the priority among
holders of Registrable Securities in such IPO shall be determined
in accordance with this Section 1(d ); provided
that in the event the IPO is a Demand Registration made on or after
a date that is 24 months after the Trigger Date, Registrable
Securities shall be included in such Demand Registration in
accordance with this Section 1(d) without regard to
this sentence.
(e)
Restrictions on Demand Registrations . The Company shall not
be obligated to effect any Demand Registration within 180 days
after the effective date of a previous Demand Registration in the
case of a Long-Form Registration and 90 days after the
effective date of a previous Demand Registration in the case of a
Short-Form Registration. The Company may postpone for up to
60 days (which period may be extended by the Company for an
additional 60 days with the consent of the holders of a
majority of the Registrable Securities to be included in such
Demand Registration, such consent not to be unreasonably withheld)
the filing or the effectiveness of a registration statement for a
Demand Registration if the Company’s Board determines in its
reasonable good faith judgment that such Demand Registration would
reasonably be expected to have a material adverse effect on any
proposal or plan by the Company or any of its Subsidiaries to
engage in any acquisition of assets or stock (other than in the
ordinary course of business) or any merger, consolidation, tender
offer, recapitalization, reorganization or similar transaction or
require the Company to disclose any material nonpublic information
which would reasonably be likely to be detrimental to the Company
and its Subsidiaries; provided that in such event, the
holders of Registrable Securities initially requesting such Demand
Registration shall be entitled to withdraw such request and, if
such request is withdrawn, such Demand Registration shall not count
as one of the permitted Demand Registrations hereunder and the
Company shall pay all Registration Expenses in connection with such
registration. The Company may delay a Demand Registration hereunder
for a maximum of 120 days in any twelve-month
period.
(f)
Selection of Underwriters . The IPO Committee will have the
right to select the investment banker(s) and manager(s) to
administer the IPO. With respect to all other Demand Registrations
that are underwritten registrations, the holders of a majority of
the Registrable Securities included in any Demand Registration and
the Company shall jointly select the investment banker(s) and
manager(s) to administer the offering; provided that if such
Persons are unable to agree on the investment
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banker(s) and
manager(s) to administer the offering, then each shall select one
underwriter from the following list to jointly-bookrun the
offering: Bank of America, Bear Stearns, Citibank, Credit Suisse,
Deutsche Bank, Goldman Sachs, J.P. Morgan, Lehman Brothers, Merrill
Lynch and Morgan Stanley.
2.
Piggyback Registrations .
(a)
Right to Piggyback . Whenever the Company proposes to
register any of its equity securities (including any proposed
registration of the Company’s securities by any third party)
under the Securities Act (other than (i) pursuant to a Demand
Registration, which is governed by Section 1 , or
(ii) pursuant to a registration on Form S-4 or S-8 or any
successor or similar forms, but including the IPO), whether or not
for sale for its own account, and the registration form to be used
may be used for the registration of Registrable Securities (a
“ Piggyback Registration ”), the Company shall
give prompt written notice to all holders of Registrable Securities
of its intention to effect such a registration (which notice shall
be given at least 30 days prior to the date the applicable
registration statement is to be filed) and, subject to
Sections 2(c) , 2(d) and 2(e) , shall
include in such registration all Registrable Securities with
respect to which the Company has received written requests for
inclusion therein within 15 days after the receipt of the
Company’s notice. Any holder of Registrable Securities that
has made such a written request may withdraw its Registrable
Securities from such Piggyback Registration by giving written
notice to the Company and the managing underwriter, if any, on or
before the 30th day prior to the planned effective date of such
Piggyback Registration.
(b)
Piggyback Expenses . Subject to the qualifications set forth
in Section 5(b) , the Registration Expenses of the
holders of Registrable Securities shall be paid by the Company in
all Piggyback Registrations.
(c)
Priority on Primary Registrations . If a Piggyback
Registration is an underwritten primary registration on behalf of
the Company, and the managing underwriters advise the Company in
writing (with a copy to each party hereto requesting registration
of Registrable Securities) that in their opinion the number of
securities requested to be included in such registration exceeds
the number which can be sold in an orderly manner in such offering
without adversely affecting the marketability of such offering
(including the price range acceptable to the Company), the Company
shall include in such registration (i) first, the securities
the Company proposes to sell, (ii) second, the Registrable
Securities requested to be included in such registration, pro rata
among the holders of such Registrable Securities on the basis of
the amount of such securities owned by each such holder, and
(iii) third, the other securities requested to be included in
such registration pro rata among the holders of such securities on
the basis of the amount of such securities owned by each such
holder.
(d)
Priority on Secondary Registrations . If a Piggyback
Registration is an underwritten secondary registration on behalf of
holders of the Company’s securities other than the holders of
Registrable Securities (a “ Secondary Registration
”), and the managing underwriters advise the Company in
writing (with a copy to each party hereto requesting registration
of Registrable Securities) that in then-opinion the number of
securities requested to be included in such registration exceeds
the number which can be sold without adversely affecting the
marketability of the offering, the Company shall include in such
registration (i) first, except to the extent otherwise
previously agreed to by holders of a majority of the Registrable
Securities, the securities requested to be included therein by the
holders requesting such registration, together with the Registrable
Securities requested to be included in such registration, pro rata
among the holders of such securities and Registrable Securities on
the basis of the amount of such securities owned by each such
holder, and (ii) second, other securities requested to be
included in such registration pro rata among the holders of such
securities on the basis of the amount of such securities owned by
each such holder.
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(e)
Special Rule Related to IPO . Notwithstanding
Section 2(c) and Section 2(d) , the Company
shall target the IPO to generate at least $500,000,000 in gross
proceeds (or, in the case that the IPO is being effected pursuant
to a Demand Registration, such greater or lesser amount as may be
requested by the parties requesting such registration). In the
event of an IPO that is completed prior to the 24-month anniversary
of the Trigger Date, prior to inclusion of any other Registrable
Securities in the IPO, the Company shall include the EBG Investor
Registrable Securities until the aggregate gross proceeds (i.e.,
before underwriters’ discounts or commissions) to the holders
of EBG Investor Registrable Securities from sales in such IPO equal
$300,000,000 and thereafter the priority among holders of
Registrable Securities in such IPO shall be determined in
accordance with Section 2(c) or Section 2(d) ;
provided that, in the event that the gross proceeds from
sales of securities in the IPO that is completed prior to the
24-month anniversary of the Trigger Date are less than
$500,000,000, at least 60% of the Common Stock to be included in
such IPO shall be EBG Investor Registrable Securities.
(f)
Selection of Underwriters . If any Piggyback Registration is
an underwritten offering, the Company (or if the IPO is a Piggyback
Registration, the IPO Committee) will have the right to select the
investment banker(s) and manager(s) for the offering.
(g)
Obligations of Seller . During such time as any holder of
Registrable Securities may be engaged in a distribution of
securities pursuant to an underwritten Piggyback Registration, such
holder shall distribute such securities only under the registration
statement and solely in the manner described in the registration
statement.
(h)
Right to Terminate Registration . Without limiting the
obligations of the Company under Section 4 hereof, the
Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 2 prior
to the effectiveness of such registration, whether or not any
holder of Registrable Securities has elected to include securities
in such registration (with it being understood and agreed that a
holder of Registrable Securities may withdraw its Registrable
Securities from inclusion in such registration prior to the
effectiveness thereof without penalty). The Registration Expenses
of such withdrawn registration shall be borne by the Company in
accordance with Section 5 hereof.
(a) To
the extent not inconsistent with applicable law, during the IPO
Holdback Period or any Following Holdback Period (each, as
hereinafter defined), each holder of Registrable Securities shall
not sell, transfer, make any short sale, loan, grant any option for
the purchase, otherwise dispose or enter into any hedging or
similar transaction with the same economic effect as a sale
(including sales pursuant to Rule 144) (a “ Sale
Transaction ”) of equity securities of the Company, or
any securities, options or rights convertible into or exchangeable
or exercisable for such securities, except as part of an
underwritten registration, if the IPO Committee (in the case of the
IPO) or the Company (in the case of any other registration) agrees
with the managing underwriters of such registration that the
failure of such holder to be subject to restrictions on a Sale
Transaction would adversely affect the marketability of the
offering contemplated thereby based on then-prevailing market
conditions. For each holder of Registrable Securities for which the
IPO Committee or the Company agrees with the managing underwriters
that restrictions on a Sale Transaction shall apply, then the
restrictions on a Sale Transaction approved by the IPO Committee or
the Company, as the case may be, shall survive for such period as
the IPO Committee (in the case of the IPO) or the Company (in the
case of any other registration) may agree with the managing
underwriter (not to exceed (i) in the case of the IPO, the
seven days prior to and the 180-day period beginning on the
effective date of the IPO and (ii) in the case of each other
underwritten Demand Registration and underwritten Piggyback
Registration, the seven days prior to and the 90-day period
beginning on the effective date of such registration). For each
holder of Registrable Securities, the period for which such holder
is, with respect to his, her or its Registrable Securities, subject
to the
5
restrictions on
a Sale Transaction as agreed by the IPO Committee at and around the
time of an IPO is referred to herein as the “ IPO Holdback
Period ” and the period for which such holder is, with
respect to his, her or its Registrable Securities, subject to the
restrictions on a Sale Transaction agreed by the Company at and
around the time of any other registration is referred to herein as
the “ Following Holdback Period .” To the extent
that the IPO Committee (in the case of the IPO) does not, after
receiving the recommendations of the managing underwriters,
unanimously approve the applicability or the non-applicability of
the restrictions on a Sale Transaction at or around the time of the
IPO to a holder of Registrable Securities in light of market
conditions, a third underwriter shall be engaged by the IPO
Committee to determine whether such holder shall be subject to
restrictions on a Sale Transaction at and around the time of an IPO
and for what period and such third underwriters determination shall
be binding on and accepted by the IPO Committee. Each holder of
Registrable Securities for which the IPO Committee (in the case of
an IPO) or the Company (in the case of any other registration)
determines that restrictions on a Sale Transaction should apply
shall by, its execution hereof, be deemed to have agreed to such
restrictions and, when requested by the IPO Committee or the
Company, shall execute a lock-up or similar agreement in favor of
the Company and the managing underwriters consistent with such
determination (but not to exceed the periods specified in this
Section 3(a) ) and, if such holder does not execute
such an agreement, such holder of Registrable Securities shall not
be entitled to participate in such registration. If (i) the
Company issues an earnings release or other material news or a
material event relating to the Company and its Subsidiaries occurs
during the last 17 days of the IPO Holdback Period or any
Following Holdback Period (as applicable) or (ii) prior to the
expiration of the IPO Holdback Period or any Following Holdback
Period (as applicable), the Company announces that it will release
earnings results during the 16-day period beginning upon the
expiration of such period, then to the extent necessary for a
managing or co-managing underwriter of a registered offering
required hereunder to comply with NASD Rule 2711(f)(4), the
IPO Holdback Period or the Following Holdback Period (as
applicable) shall be extended until 18 days after the earnings
release or the occurrence of the material news or event, as the
case may be (such period referred to herein as the “
Holdback Extension ”). The Company may impose
stop-transfer instructions with respect to the securities subject
to the foregoing restriction until the end of such period,
including any period of Holdback Extension.
(b) Notwithstanding
anything herein to the contrary, the restrictions in
Section 3(a) shall not apply in the case of any holder
of Registrable Securities, to the extent that such holder provides
to the Company an opinion of nationally recognized outside counsel
to the effect that such holder is prohibited by applicable law or
exercise of fiduciary duties from agreeing to withhold Registrable
Securities from sale or is acting in its capacity as a fiduciary or
investment advisor. Without limiting the scope of the term
“fiduciary,” a holder shall be deemed to be acting as a
fiduciary or an investment advisor if its actions or the
Registrable Securities proposed to be sold are subject to the
Employee Retirement Income Security Act of 1974, as amended, or the
Investment Company Act of 1940, as amended, or if such Registrable
Securities are held in a separate account under applicable
insurance law or regulation.
(c) The
Company (i) shall not effect any public sale or distribution
of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven
days prior to and during such period of time (not to exceed
180 days in connection with the IPO or 90 days in all
other cases (except in each case as extended during the period of
any Holdback Extension)), as may be determined by the underwriters
managing such underwritten registration, following the effective
date of any underwritten Demand Registration or any underwritten
Piggyback Registration (except as part of such underwritten
registration or pursuant to registrations on Form S-8 or any
successor form), unless the underwriters managing the registered
public offering otherwise agree in writing, and (ii) shall use
reasonable best efforts to cause (x) each holder of at least
5% (on a fully-diluted basis) of its Common Stock, or any
securities convertible into or exchangeable or exercisable for
Common Stock, and (y) each holder of the Company’s
Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock who is also an management employee of
the Company and/or any of its
6
Subsidiaries,
purchased from the Company at any time after the date of this
Agreement (other than in a registered public offering) to agree not
to effect any public sale or distribution (including sales pursuant
to Rule 144) of any such securities during such period (as
extended by any Holdback Extension), except as part of such
underwritten registration, if otherwise permitted, unless the
underwriters managing the registered public offering otherwise
agree in writing.
4.
Registration Procedures . It is agreed by the parties that
the IPO Committee is being formed so that the Company may implement
an IPO as promptly as reasonably practicable (determined after
giving effect to and subject to compliance with the requirements of
the Securities and Exchange Commission with respect to financial
statements for such offering and the timing required to prepare the
same) and the Company agrees to use reasonable best efforts to
cause such IPO to occur as soon as reasonably practicable (giving
effect to the matters referred to in the immediately foregoing
parenthetical). Therefore, in connection with any Demand
Registration or Piggyback Registration that is to include
Registrable Securities, including the IPO, the Company shall use
its reasonable best efforts to effect the registration and the sale
of such Registrable Securities in accordance with the intended
method of disposition thereof, and pursuant thereto the Company
shall as promptly as practicable:
(a) in
accordance with the Securities Act and all applicable rules and
regulations promulgated thereunder, prepare and file as promptly as
reasonably practicable with the Securities and Exchange Commission
a registration statement, and all amendments and supplements
thereto and related prospectuses, make all required filings with
the applicable stock exchange to be made by the Company, and use
its reasonable best efforts to cause such registration statement to
become effective (provided that before filing a registration
statement or prospectus or any amendments or supplements thereto,
the Company shall furnish to the counsel selected by the holders of
a majority of the Registrable Securities covered by such
registration statement copies of all such documents proposed to be
filed), and include in any Long-Form Registration or
Short-Form Registration such additional information reasonably
requested by a majority of the Registrable Securities registered
under the applicable registration statement, or the underwriters,
if any, for marketing purposes, whether or not required by
applicable securities laws, but only to the extent such information
does not contravene applicable securities laws or include
information not readily in the possession of the Company. Unless
the counsel selected by the holders of a majority of the
Registrable Securities covered by such registration statement
earlier informs the Company that it has no objections to the filing
of such registration statement, amendment or supplement, the
Company will not file such registration statement, amendment or
supplement prior to the date that is three business days from the
date that such counsel received such document (it being understood
and agreed, however, that the Company will not have any liability
to any holder of Registrable Securities hereunder or otherwise as a
result any failure to file any such registration statement,
amendment or supplement during any such three business day period).
The Company will not file any registration statement or amendment
or post-effective amendment or supplement to such registration
statement to which such counsel will have reasonably objected in
writing on the grounds that (and explaining why) such amendment or
supplement does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations
thereunder (it being understood and agreed, however, that the
Company will not have any liability to any holder of Registrable
Securities hereunder or otherwise as a result of any failure to
file any such registration statement, amendment or supplement for
such reason);
(b) notify
each holder of Registrable Securities of the effectiveness of each
registration statement filed hereunder and prepare and file with
the Securities and Exchange 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 for a period of not less than
180 days or, if such registration statement relates to an
underwritten offering, such longer period as in the opinion of
counsel for the underwriters a prospectus is required by law to be
delivered in connection with
7
sales of
Registrable Securities by an underwriter or dealer, and comply with
the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration
statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such
registration statement; provided , however , that at
any time, and without duplicating any other delay or suspension
period under this Agreement, upon written notice to the
participating holders of Registrable Securities and for a period
not to exceed sixty (60) days thereafter (the “
Suspension Period ”), the Company may delay the filing
or effectiveness of any registration statement or suspend the use
or effectiveness of any registration statement (and the holders of
Registrable Securities hereby agree not to offer or sell any
Registrable Securities pursuant to such registration statement
during the Suspension Period) if the Company reasonably believes
that there is or may be in existence material nonpublic information
or events involving the Company or any of its Subsidiaries, the
failure of which to be disclosed in the prospectus included in the
registration statement could result in a Violation (as defined
below). During any such Suspension Period, and as may be extended
hereunder, the Company shall use its reasonable best efforts to
correct or update any disclosure causing the Company to provide
notice of the Suspension Period and to file and cause to become
effective or terminate the suspension of use or effectiveness, as
the case may be, of the subject registration statement. In the
event that the Company shall exercise its right to delay or suspend
the filing or effectiveness of a registration hereunder, the
applicable time period during which the registration statement is
to remain effective shall be extended by a period of time equal to
the duration of the Suspension Period. The Company may extend the
Suspension Period for an additional consecutive sixty
(60) days with the consent of the holders of a majority of the
Registrable Securities registered under the applicable registration
statement, which consent shall not be unreasonably withheld. If so
directed by the Company, all holders of Registrable Securities
registering shares under such registration statement shall
(i) not offer to sell any Registrable Securities pursuant to
the registration statement during the period in which the delay or
suspension is in effect after receiving notice of such delay or
suspension; and (ii) use their reasonable best efforts to
deliver to the Company (at the Company’s expense) all copies,
other than permanent file copies then in such holders’
possession, of the prospectus relating to such Registrable
Securities current at the time of receipt of such
notice;
(c) furnish
to each seller of Registrable Securities thereunder such number of
copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus), each Free
Writing Prospectus and such other documents as such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(d) use
its reasonable best efforts to register or qualify the securities
to be sold (including Registrable Securities) under such other
securities or blue sky laws of such jurisdictions as any seller
reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of such securities
(provided that the Company shall not be required to
(i) qualify generally to do business in any jurisdiction where
it would not otherwise be required to qualify but for this
subsection, (ii) consent to general service of process in any such
jurisdiction or (iii) subject itself to taxation in any such
jurisdiction);
(e) use
its reasonable best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or
approved by such other governmental agencies, authorities or
self-regulatory bodies as may be necessary or reasonably advisable
in light of the business and operations of the Company to enable
the seller or sellers thereof to consummate the disposition of such
Registrable Securities in accordance with the intended method or
method of disposition thereof;
(f) notify
each seller of such Registrable Securities, (i) promptly after
it receives notice thereof, of the date and time when such
registration statement and each post-effective amendment
thereto
8
has become
effective or a prospectus or supplement to any prospectus relating
to a registration statement has been filed and when any
registration or qualification has become effective under a state
securities or blue sky law or any exemption thereunder has been
obtained, (ii) promptly after receipt thereof, of any request
by the Securities and Exchange Commission for the amendment or
supplementing of such registration statement or prospectus or for
additional information, (iii) of the issuance by the
Securities and Exchange Commission of any stop order suspending the
effectiveness of such registration statement or the initiation of
any proceedings for any of such purposes, and (iv) at any time
when a prospectus relating thereto is required to be delivered
under the Securities 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 fact
necessary to make the statements therein not misleading, and, at
the request of any such seller, the Company shall prepare a
supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact
or omit to state any fact necessary to make the statements therein
not misleading;
(g) prepare
and file promptly with the Securities and Exchange Commission, and
notify such holders of Registrable Securities prior to the filing
of, such amendments or supplements to such registration statement
or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act,
when any event has occurred as the result of which any such
prospectus or any other prospectus as then in effect would include
an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading, and, in case any of such
holders of Registrable Securities or any underwriter for any such
holders is required to deliver a prospectus at a time when the
prospectus then in circulation is not in compliance with the
Securities Act or the rules and regulations promulgated thereunder,
the Company shall use its reasonable best efforts to prepare and
furnish promptly upon request of any such holder or underwriter
such amendments or supplements to such registration statement and
prospectus as may be necessary in order for such prospectus to
comply with the requirements of the Securities Act and such rules
and regulations;
(h) cause
all such securities to be sold (including Registrable Securities)
to be listed on each securities exchange on which similar
securities issued by the Company are then listed (with it being
understood that the IPO Committee shall have the sole and exclusive
right to determine which exchange the Company will be listed in
connection with the IPO);
(i) provide
a transfer agent and registrar for all securities to be sold
(including Registrable Securities) not later than the effective
date of such registration statement;
(j) in
the event that the registration is a Demand Registration or, to the
extent requested by a third party, a Piggyback Registration, enter
into and perform such customary agreements (including underwriting
agreements in customary form) and take all such other actions as
the holders of a majority of the 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, reasonable participation
by the Company in “road shows” and investor
presentations and marketing events for such registrations),
provided that the Company shall only be required to effect a
stock split or a combination of shares in connection with the
IPO;
(k) make
available for inspection by any seller of Registrable Securities,
any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the
Company for use in such offering, and cause the Company’s
officers, directors, employees and independent accountants to
supply all information reasonably requested by any
9
such seller,
underwriter, attorney, accountant or agent in connection with such
registration statement for use in such offering;
(1) take
all reasonable actions to ensure that any Free-Writing Prospectus
complies in all material respects with the Securities Act, is filed
in accordance with the Securities Act to the extent required
thereby, is retained in accordance with the Securities Act to the
extent required thereby and, when taken together with the related
prospectus, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading;
(m) otherwise
use its reasonable best efforts to comply with all applicable rules
and regulations of the Securities and Exchange Commission, and make
available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least
twelve months beginning with the first day of the Company’s
first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(n) use
its reasonable best efforts to prevent the issuance of any stop
order suspending the effectiveness of a registration statement, or
of any order suspending or preventing the use of any related
prospectus or suspending the qualification of any common stock
included in such registration statement for sale in any
jurisdiction, and in the event of the issuance of any such stop
order or other such order the Company shall advise such holders of
Registrable Securities of such stop order or other such order
promptly after it shall receive notice or obtain knowledge thereof
and shall use its reasonable best efforts promptly to obtain the
withdrawal of such order;
(o) use
its reasonable best efforts to obtain one or more comfort letters,
signed by the Company’s independent public accountants in
customary form and covering such matters of the type customarily
covered by comfort letters as the holders of a majority of the
Registrable Securities being sold in such offering reasonably
request;
(p) use
its reasonable best efforts to obtain a legal opinion of the
Company’s outside counsel with respect to the registration
statement, each amendment and supplement thereto (including the
preliminary prospectus) and such other documents relating thereto
in customary form and covering such matters of the type customarily
covered by legal opinions of such nature; and
(q) request
that its accountants and attorneys address the comfort letters and
legal opinions, respectively, referenced in clause (o) and
(p) respectively to the holders of Registrable
Securities.
If any such
registration or comparable statement refers to any holder by name
or otherwise as the holder of any securities of the Company and if,
in its sole and exclusive judgment, such holder is or might be
deemed to be an underwriter or a controlling person of the Company,
such holder shall have the right to require (i) the insertion
therein of language, in form and substance satisfactory to such
holder and presented to the Company in writing, to the effect that
the holding by such holder of such securities is not to be
construed as a recommendation by such holder of the investment
quality of the Company’s securities covered thereby and that
such holding does not imply that such holder shall assist in
meeting any future financial requirements of the Company, or
(ii) in the event that such reference to such holder by name
or otherwise is not required by the Securities Act or any similar
Federal statute then in force, the deletion of the reference to
such holder; provided that with respect to this clause
(ii) such holder shall furnish to the Company an opinion of
counsel to such effect, which opinion and counsel shall be
reasonably satisfactory to the Company. The Company may require
each holder of Registrable Securities as to which any
10
registration is
being effected to furnish the Company with such information
regarding such holder and pertinent to the disclosure requirements
relating to the registration and the distribution of such
securities as the Company may from time to time reasonably request
in writing
5.
Registration Expenses .
(a) Subject
to Section 5(b) , all expenses incident to the
Company’s performance of or compliance with this Agreement,
including without limitation all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws,
printing expenses, travel expenses, filing expenses, messenger and
delivery expenses, fees and disbursements of custodians, fees and
disbursements of counsel for the Company and fees and disbursements
of all independent certified public accountants, underwriters
(including, if necessary, a “qualified independent
underwriter” within the meaning of the rules of the National
Association of Securities Dealers, Inc.) (excluding underwriting
discounts and commissions) and other Persons retained by the
Company (all such expenses being herein called “
Registration Expenses ”), shall be borne by the
Company, except as otherwise expressly provided in this Agreement,
except that the Company shall, in any event, pay its internal
expenses (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting
duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for
listing the securities to be registered on each securities exchange
on which similar securities issued by the Company are then listed
or on the NASD automated quotation system (or any successor or
similar system).
(b) In
connection with each Demand Registration and each Piggyback
Registration, the Company shall reimburse the holders of
Registrable Securities included in such registration for the
reasonable fees and disbursements of (i) one counsel (in addition
to local counsel) chosen by the holders of 75% of the Registrable
Securities included in such registration and (ii) each
additional counsel retained by any holder of Registrable
Securities, but in the case of this clause (ii) only to the
extent such fees and disbursements were incurred for the purpose of
rendering a legal opinion on behalf of such holder in connection
with any underwritten Demand Registration or Piggyback
Registration. Otherwise, all fees and expenses of such counsel
shall be borne by the holder or holders of Registrable Securities
for whom such services were rendered.
(c) To
the extent Registration Expenses are not required to be paid by the
Company or, in accordance with the last sentence of
Section 5(b) , borne by a particular holder of
Registrable Securities, each holder of securities included in any
registration hereunder shall pay those Registration Expenses
allocable to the registration of such holder’s securities so
included, and any Registration Expenses not so allocable shall be
borne by all sellers of securities included in such registration in
proportion to the aggregate selling price of the securities to be
so registered. All underwriting discounts, selling commissions and
transfer taxes applicable to the sale of Registrable Securities
hereunder pursuant to any particular registration and any other
Registration Expenses required by law to be paid by selling holders
in connection therewith shall be borne by all selling holders of
securities included in such registration in proportion to the
aggregate selling price of the Registrable Securities included in
such registration by such selling holders.
(a) The
Company agrees to indemnify, to the extent permitted by law, each
holder of Registrable Securities and each such holder’s
Related Persons against and for all losses, claims, actions,
damages, liabilities and expenses, joint or several, suffered by
any such holder of Registrable Securities or such holder’s
Related Persons and arising out of or caused by any of the
following statements, omissions or violations (each a “
Violation ”): (i) any untrue or alleged untrue
statement of material fact contained or
11
incorporated by
reference in any registration statement, prospectus, preliminary
prospectus or Free-Writing Prospectus of the Company or any
amendment thereof or supplement thereto or any document
incorporated by reference therein, or in any other such disclosure
document of the Company (including reports and other documents
filed under the Exchange Act and any document incorporated by
reference therein) or other document or report of the Company
furnished by or on behalf of the Company in connection with any
registration hereunder, except to the extent that the Violation is
a result of information supplied to the Company by such holder of
Registrable Securities and/or any of such holder’s Related
Persons (excluding the Company and its Subsidiaries) for inclusion
therein, (ii) any omission or alleged omission of a material
fact required to be stated therein or necessary to make the
statements therein not misleading, except to the extent that the
Violation is a result of information supplied to the Company by
such holder of Registrable Securities and/or any of such
holder’s Related Persons (excluding the Company and its
Subsidiaries) for inclusion therein, or (iii) any violation or
alleged violation by the Company of the Securities Act or any other
similar federal or state securities laws or any rule or regulation
promulgated thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any
such registration, qualification or compliance. The Company shall
pay to each holder of Registrable Securities and such
holder’s Related Persons, as incurred, any legal and any
other expenses reasonably incurred by such Person in connection
with investigating, preparing, defending or settling any such
claim, loss, damage, liability or action, except insofar as the
same are caused by or contained in any information furnished in
writing to the Company by such holder expressly for use therein. In
connection with an underwritten offering, the Company shall
indemnify such underwriters, their officers and directors and each
Person who controls such underwriters (within the meaning of the
Securities Act) to the same extent as provided above with respect
to the indemnification of holders of Registrable Securities and
their Related Persons.
(b) In
connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder shall
furnish to the Company in writing such information and affidavits
as the Company reasonably requests for use in connection with any
such registration statement or prospectus and, to the extent
permitted by law, shall indemnify the Company, its directors and
officers and each Person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses resulting from 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 or affidavit so furnished in writing by such holder for
inclusion therein; provided that the obligation to indemnify
shall be individual, not joint and several, for each holder and
shall be limited to the net amount of proceeds received by such
holder from the sale of Registrable Securities pursuant to such
registration statement.
(c) Any
Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the
failure to give prompt notice shall not impair any Person’s
right to indemnification hereunder except to the extent such
failure has prejudiced the indemnifying party) and (ii) 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 shall not be subject to any liability for
any settlement made by the indemnified party without the
indemnifying party’s consent (but such consent shall not be
unreasonably withheld, conditioned or delayed). An indemnifying
party who is not entitled to, or elects not to, assume the defense
of a claim shall 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
12
parties with
respect to such claim. In such instance, the conflicting
indemnified parties shall have a right to retain one separate
counsel, chosen by the holders of a majority of the Registrable
Securities included in the registration, at the expense of the
indemnifying party. No indemnifying party, in the defense of such
claim or litigation, shall, except with the consent of each
indemnified party, consent to the entry of any judgment or enter
into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect to such claim or
litigation.
(d) If
the indemnification provided for in this Section 6 is
held by a court of competent jurisdiction to be unavailable to an
indemnified party or is otherwise unenforceable with respect to any
loss, claim, damage, liability or action referred to herein, then
the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amounts paid or payable by
such indemnified party as a result of such loss, claim, damage,
liability or action in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and of
the indemnified party on the other hand in connection with the
statements or omissions which resulted in such loss, claim, damage,
liability or action as well as any other relevant equitable
considerations; provided that the maximum amount of
liability in respect of such contribution shall be limited, in the
case of each seller of Registrable Securities, to an amount equal
to the net proceeds actually received by such seller from the sale
of Registrable Securities effected pursuant to such registration
(less the aggregate amount of any damages which such seller has
otherwise been required to pay in respect of such loss, claim,
damage, liability or action or any substantially similar loss,
claim, damage, liability or action arising from the sale of
Registrable Securities pursuant to such registration). The relative
fault of the indemnifying party and of the indemnified party shall
be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied
by the indemnifying party or by the indemnified party and the
parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just or equitable if
the contribution pursuant to this Section 6(d) were to
be determined by pro rata allocation or by any other method of
allocation that does not take into account such equitable
considerations. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages, liabilities or expenses
referred to herein shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending against any action or
claim which is the subject hereof. 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 is not guilty of such fraudulent misrepresentation.
(e) The
indemnification and contribution provided for under this Agreement
shall 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 shall survive the transfer of securities.
(f) No
indemnifying party shall, except with the consent of the
indemnified party, consent to the entry of any judgment or enter
into any settlement that does not include as an unconditional term
thereof giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect to such claim or
litigation.
7.
Participation in Underwritten Registrations .
(a) No
Person may participate in any registration hereunder which is
underwritten unless such Person (i) enters into an
underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting, (ii) agrees to
sell such Person’s securities on the basis provided in any
underwriting arrangements approved by the Person or Persons
entitled hereunder to
13
approve such
arrangements (including, without limitation, pursuant to the terms
of any over-allotment or “green shoe” option requested
by the managing underwriter(s), provided that no holder of
Registrable Securities will be required to sell more than the
number of Registrable Securities that such holder of Registrable
Securities has requested the Company to include in any
registration) and (iii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such
underwriting arrangements; provided that in no event shall
any holder of Registrable Securities be required to indemnify any
underwriter or other Person in any manner other than that which is
specifically set forth in Section 6(b) with respect to
its indemnification obligations to the Company and other holders of
Registrable Securities; provided , further , that if
any holder disapproves of the terms of the underwriting, such
holder may elect to withdraw therefrom (and not participate in such
underwritten registration) upon written notice to the Company and
the managing underwriter(s) in accordance with the terms hereof.
Each holder of Registrable Securities agrees to execute and deliver
such other agreements as may be reasonably requested by the Company
and the lead managing underwriter(s) that are consistent with such
holder’s obligations under Section 3 or that are necessary to
give further effect thereto.
(b) Each
Person that is participating in any registration hereunder agrees
that, upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 4(f)
above, such Person will forthwith discontinue the disposition of
its Registrable Securities pursuant to the registration statement
until such Person’s receipt of the copies of a supplemented
or amended prospectus as contemplated by such Section 4(f) .
In the event the Company shall give any such notice, the applicable
time period mentioned in Section 4(b) during which a
Registration Statement is to remain effective shall be extended by
the number of days during the period from and including the date of
the giving of such notice pursuant to this Section 7(b)
to and including the date when each seller of a Registrable
Security covered by such registration statement shall have received
the copies of the supplemented or amended prospectus contemplated
by Section 4(f) .
8.
Rule 144 and Rule 144A Reporting . With a view to
making available the benefits of certain rules and regulations of
the Securities and Exchange Commission that may permit the sale of
Registrable Securities to the public without registration, the
Company agrees at all times after the Company has filed a
registration statement with the Securities and Exchange Commission
pursuant to the requirements of either the Securities Act or the
Exchange Act to use its reasonable best efforts to: (a) make
and keep public information regarding the Company available as
those terms are understood and defined in Rule 144 and
Rule 144A under the Securities Act; (b) file with the
Securities and Exchange Commission in a timely manner all reports
and other documents required of the Company under the Securities
Act and the Exchange Act at any time after it has become subject to
such reporting requirements; and (c) so long as a holder owns
any Registrable Securities, furnish to the holder forthwith upon
written request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 and
Rule 144A, and of the Securities Act and the Exchange Act, a
copy of the most recent annual or quarterly report of the Company,
and such other reports and documents so filed as a holder may
reasonably request (to the extent available) in availing itself of
any rule or regulation of the Securities and Exchange Commission
allowing a holder to sell any such securities without registration.
At any time when the Company is not subject to Sections 13 or
15(d) of the Exchange Act, upon the request of a transferor of
Registrable Securities that is transferring or selling, offering to
Transfer or accepting a bona fide offer to Transfer all or
any amount of its Registrable Securities in compliance with any
restrictions imposed by applicable law, this Agreement and the
Company’s Certificate of Incorporation and Bylaws, the
Company shall promptly furnish or cause to be furnished
Rule 144A Information to such transferor, or a proposed
transferee designated by such transferor, to permit compliance (but
only to the extent thereof) by such Transferor with Rule 144A
under the Securities Act in connection with such Transfer, offer to
Transfer or acceptance of a bona fide offer to Transfer such
Registrable Securities. Notwithstanding the foregoing, the
Company’s obligations under this Section 8
as
14
it applies to
public information requirements under Rule 144 shall only be
enforceable against the Company at such times as it is then
required to file reports and documents pursuant to the Exchange
Act.
(i)
Subject to Section 9(a)(v) , at least 30 days
prior to any proposed Transfer of any Common Stock by New Astoria
or an Affiliate thereof (other than an Exempt Transfer), such
Person proposing to make such Transfer (the “ Transferring
Equityholder ”) shall deliver a written notice (the
“ Sale Notice ”) to the Company and to the
holders of the EBG Investor Registrable Securities at the most
current record addresses for such holders on the Company’s
books and records, specifying in reasonable detail the identity of
the prospective Transferee(s), the number of shares of Common Stock
to be Transferred, the price per share to be paid for such Common
Stock in such Transfer and the other terms and conditions of the
Transfer. The holders of the EBG Investor Registrable Securities
may elect to participate in the contemplated Transfer, and sell
Common Stock on the terms set forth herein, by delivering written
notice to the Transferring Equityholder within 20 days after
delivery of the Sale Notice.
(ii)
At the election of a holder of EBG Investor Registrable Securities,
such holder shall have the right to participate in the proposed
Transfer by transferring to the proposed Transferee(s) up to that
number of shares of Common Stock owned by such holder which is
equal to such holder’s Applicable Percentage (as hereinafter
defined) (or, if such holder shall elect, any lesser percentage) of
the Common Stock to be purchased by the prospective Transferee(s),
at the same price per security and on substantially the same terms
and conditions as are applicable to the proposed Transfer by the
Transferring Equityholder (and, if and to the extent such holder
shall exercise such right, then the number of shares of Common
Stock to be sold by the Transferring Equityholder in such
transaction shall be correspondingly reduced). If holders of EBG
Investor Registrable Securities have not elected to participate in
the contemplated Transfer (through notice to such effect or
expiration of the 20-day period after delivery of the Sale Notice),
then the Transferring Equityholder may Transfer the Common Stock
specified in the Sale Notice at a price and on terms not materially
more favorable to the Transferring Equityholder than specified in
the Sale Notice during the 90-day period immediately following the
date of the delivery of the Sale Notice. Any Transferring
Equityholder’s Common Stock not Transferred within such
90-day period shall be subject to the provisions of this
Section 9(a) upon subsequent Transfer. As used herein,
the term “ Applicable Percentage ” as applied to
any holder on any date means a fraction (expressed as a
percentage), the numerator of which is the aggregate number of
shares of Common Stock owned by such holder on such date and the
denominator of which is the total number of shares of Common Stock
issued and outstanding on such date.
(iii)
Each Transferring Equityholder shall use reasonable best efforts to
obtain the agreement of the prospective Transferee(s) to the
participation of the holders of the EBG Investor Registrable
Securities in any contemplated Transfer for which such holders have
elected to participate, and no Transferring Equityholder shall
Transfer any of its Common Stock to any prospective Transferee
unless concurrently with such Transfer, the prospective
Transferee(s) purchase from such participating holders of EBG
Investor Registrable Securities the shares of Common Stock which
such holders are entitled to sell to such prospective transferee(s)
pursuant to this Section 9(a)(ii) . To the extent the
holders of EBG Investor Registrable Securities have elected to
participate in any contemplated Transfer and the holders of EBG
Investor Registrable Securities participate in such Transfer,
directly or indirectly, each such holder shall bear its pro rata
portion (based on the number of shares of Common Stock transferred
by it in
15
such Transfer
relative to the total number of shares of Common Stock transferred
in such Transfer) of the expenses incurred in connection with such
Transfer and shall be obligated to join (based on such
holder’s Applicable Percentage) in any indemnification or
other obligations that the Transferring Equityholder agrees to
provide in connection with such Transfer. As a condition to any
holder of EBG Investor Registrable Securities’ participation
in such Transfer, the Transferring Equityholder may require an
acknowledgment and release, in form and substance reasonably
satisfactory to the Transferring Equityholder, from such holder
that such holder is making its own investment decision to
participate in such Transfer, without reliance, representation or
warranty on or of the Transferring Equityholder or any its
Affiliates.
(iv)
In no event shall New Astoria be required to offer participation in
any sale of Registrable Securities pursuant to this
Section 9(a) to any holder that is not an
“accredited investor” within the meaning of applicable
securities law or if such holder’s participation would make
the Transfer contemplated to be completed materially more
burdensome from a regulatory compliance perspective for the
remaining holders of Registrable Securities participating in such
Transfer.
(v)
Until the provisions of this Section 9(a) terminate,
New Astoria shall not Transfer any shares of Common Stock other
than pursuant to (I) an Exempt Transfer or (II) subject
to compliance with the tag-along rights provided for in the
foregoing clauses of this Section 9(a) . Transfers by
New Astoria of up to 30% (less the aggregate percentage of the
membership interests in New Astoria theretofore transferred by all
Initial New Astoria Institutional Members pursuant to clause
(X) of the immediately succeeding sentence) in the aggregate
(excluding any Transfers permitted under clause (I) hereof) of
the Common Stock owned by New Astoria. New Astoria, each of the
Initial New Astoria Institutional Members and each of the Initial
New Astoria Management Members agree that, until the provisions of
this Section 9(a) terminate, no New Astoria Member shall
Transfer any of its membership interests in New Astoria other than
(X) Transfers by any Initial New Astoria Institutional Member
of up to 30% (less the aggregate percentage of the Common Stock
owned by New Astoria theretofore transferred by New Astoria
pursuant to clause (II) of the immediately preceding sentence)
in the aggregate (excluding any Transfers permitted under clause
(Y) hereof) of the membership interests in New Astoria owned
by such Initial New Astoria Institutional Member, and its permitted
transferees, or (Y) pursuant to an Exempt Astoria Transfer.
New Astoria and each of the New Astoria Members further agree that,
until the provisions of this Section 9(a) terminate,
New Astoria shall not issue new equity interests to a member and
use the proceeds to redeem membership interests of New Astoria or
make a distribution with the proceeds thereof if a principal
purpose thereof was to avoid the provisions of this
Section 9(a)(v) .
(vi)
The rights and obligations of the respective parties to this
Section 9(a) shall terminate upon the initial closing
of the IPO.
(b)
Approved Sale; Drag Along Obligations .
(i)
If the Board approves a Sale of the Company (an “ Approved
Sale ”), each holder of Stockholder Shares shall vote
for, consent to and raise no objections against, and not otherwise
impede or delay, such Approved Sale, regardless of the
consideration being paid in such Approved Sale, provided that such
consideration complies with the requirements of this
Section 9(b) . In furtherance of the foregoing, if the
Approved Sale is structured as (i) a merger or consolidation,
each holder of Stockholder Shares shall vote such holder’s
Stockholder Shares to approve such merger or consolidation, whether
by written consent or at a stockholders meeting, and waive all
dissenters rights, appraisal rights and similar rights (if any) in
connection with such
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merger or
consolidation, (ii) a sale of stock, each holder of
Stockholder Shares shall agree to sell, and shall sell, all of such
holder’s Stockholder Shares and rights to acquire Stockholder
Shares (or, if such Sale of the Company is structured as a sale of
less than all of the stock of the Company, a pro rata share of such
holder’s Stockholder Shares and rights to acquire Stockholder
Shares, based upon the portion of the stock of the Company being
sold) on the terms and conditions approved by the Board, as
applicable, or (iii) a sale of assets, each holder of
Stockholder Shares shall vote such holder’s Stockholder
Shares to approve such sale and any subsequent liquidation of the
Company or other distribution of the proceeds therefrom, whether by
written consent or at a stockholders meeting, and waive all
dissenters rights, appraisal rights and similar rights (if any) in
connection with such sale of assets.
(ii)
In furtherance of its obligations under Section 9(b)(i)
above, (i) each holder of Stockholder Shares will take all
necessary or desirable actions reasonably requested by the Board in
connection with the consummation of the Approved Sale and
(ii) each holder of Stockholder Shares will make the same
indemnities and agreements as each other holder, including without
limitation, voting to approve such transaction and executing all
documents reasonably requested by the Board to be executed by such
holder, including the applicable purchase agreement, stockholders
agreement and/or indemnification and/or contribution agreement.
Each holder of Stockholder Shares shall be obligated to make
affirmative representations and warranties only as to such
holder’s title to and ownership of Stockholder Shares (free
and clear of all liens), authorization, execution and delivery of
relevant documents by such holder, enforceability of relevant
agreements against such holder and other matters relating to such
holder, to enter into covenants in respect of a Transfer of such
holder’s Stockholder Shares (or portion thereof) in
connection with such Approved Sale (including, without limitation,
the delivery of certificates, stock powers and other instruments of
transfer) and to enter into indemnification obligations (which
shall be on a several basis) with respect to the foregoing, in each
case to the extent that the New Astoria Majority Holders are
similarly obligated; provided that no holder shall be
obligated to enter into indemnification obligations with respect to
any of the foregoing to the extent relating to any other holder of
Stockholder Shares or such other holder’s Stockholder Shares,
and in no event shall any holder of Stockholder Shares be liable in
respect of any indemnity obligations pursuant to any Approved Sale
in an aggregate amount in excess of the net total consideration
payable to such holder in such Approved Sale. Each holder of
Stockholder Shares shall enter into any indemnification or
contribution agreement requested by the Board to ensure compliance
with this Section 9(b)(ii) and the provisions of this
Section 9(b) shall be deemed complied with if the
requirement for several liability is addressed through such
agreement, even if the purchase and sale agreement or merger
agreement related to the Approved Sale provides for joint and
several liability. Notwithstanding anything herein to the contrary,
this Section 9(b)(ii) shall also be deemed complied
with if a portion of the consideration otherwise payable in an
Approved Sale is withheld through an escrow which provides for
indemnification, in whole or in part, through such
escrow.
(iii)
The obligations of the holders of Stockholder Shares with respect
to an Approved Sale are subject to the satisfaction of the
following conditions: (i) upon the consummation of the
Approved Sale, each holder of Stockholder Shares shall receive in
exchange for the Stockholder Shares held by such holder the same
amount of the aggregate consideration that such holder of
Stockholder Shares would have received, if such aggregate
consideration had been distributed by the Company in complete
liquidation pursuant to the rights and preferences in the
Company’s Certificate of Incorporation in effect immediately
prior to the Approved Sale (as reduced in the case of holders of
rights to acquire any class of Stockholder Shares by the applicable
purchase price or exercise price per share thereof, if any);
provided , however , in the event that some or all of
the consideration to be received by the holders of Stockholder
Shares in
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an Approved
Sale is not cash, such consideration shall be deemed to have the
fair market value determined by the Board (whose determination
shall, absent bad faith or manifest error, be final and binding and
not subject to any challenge whatsoever) and the portion of
aggregate consideration delivered hereunder shall be treated as if
such non-cash consideration were cash in an amount equal to such
fair market value; (ii) if any holders of Stockholder Shares
are given an option as to the form and amount of consideration to
be received, each holder of the same type and class of Stockholder
Shares shall be given the same option; and (iii) each holder of
then currently exercisable rights to acquire shares of a class of
Stockholder Shares shall be given the opportunity to either (A)
exercise such rights prior to the consummation of the Approved Sale
and participate in such sale as a holder of such class of
Stockholder Shares or (B) upon the consummation of the
Approved Sale, receive in exchange for such rights consideration
equal to the amount determined by multiplying (1) the same
amount of consideration per share of such class of Stockholder
Shares received by the holders of such class of Stockholder Shares
in connection with the Approved Sale less the applicable purchase
price or exercise price (if any) per share of such class of
Stockholder Shares by (2) the number of Stockholder Shares
represented by such rights.
(iv)
If the Company enters into any negotiation or transaction for which
Rule 506 under the Securities Act (or any similar rule then in
effect) promulgated by the Securities and Exchange Commission may
be available with respect to such negotiation or transaction
(including a merger, consolidation or other reorganization), the
other holders of Stockholder Shares, if required under the
Securities Act, will, at the request of the Company, appoint a
purchaser representative (as such term is defined in Rule 501)
designated by the Board. If any such holder so appoints a purchaser
representative, the Company shall pay the fees of such purchaser
representative. However, if any such holder declines to appoint the
purchaser representative designated by the Company, such holder
shall appoint another purchaser representative, and such holder
shall be responsible for the fees of the purchaser representative
so appointed.
(v)
Holders of Stockholder Shares will bear their pro rata share (as if
such expenses reduced the aggregate proceeds available for
distribution in such Approved Sale) of the costs of any sale of
Stockholder Shares pursuant to an Approved Sale to the extent such
costs are approved by the Board and incurred for the benefit of all
holders of Stockholder Shares and are not otherwise paid by the
Company or the acquiring party, provided, however, that no holder
of Stockholder Shares shall be obliged to make any out-of-pocket
expenditures prior to the consummation of the Approved
Sale.
(vi)
The rights and obligations of the parties under this
Section 9(b) shall terminate upon the initial closing
of the Company’s IPO.
(c)
Approval of Certain Activities .
(i)
Prior to the completion of the initial closing of the IPO, subject
to Section 9(c)(ii), to the extent applicable, the Company
shall not take, or permit any Subsidiary or any officer, employee
or agent of the Company or any of its Subsidiaries to take (on
behalf of the Company or any of its Subsidiaries), any of the
following actions without the approval of at least a majority of
the voting power of the members of the entire Board:
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(A)
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the
approval of each proposed annual budget for the Company and its
Subsidiaries and any amendments thereto;
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(B)
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the
approval of any category of expenditure of the Company or any
Subsidiary in excess of the greater of (1) $5,000,000 in excess of
the budget approved by the Company’s Board and (2) 25%
greater than the amount approved by the Company;
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(C)
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the
retention or dismissal of outside auditors and/or accountants for
the Company and/or any Subsidiary;
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(D)
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the
commencement of any litigation, arbitration or mediation proceeding
against another Person (or series of related proceedings of these
types) by the Company or any Subsidiary or settlement of any legal
claims (whether in litigation, arbitration or mediation) against or
by the Company or any Subsidiary, in each case with respect to an
amount in excess of $25,000,000;
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(E)
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the
establishment or amendment of material accounting policies of the
Company or any Subsidiary, including the Company’s fiscal
year;
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(F)
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approval of the consolidated’
annual audited financial statements of the Company and its
Subsidiaries and approval of all tax returns of the Company and any
Subsidiary;
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(G)
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any
tax election or entry into any agreement in respect of taxes,
including the settlement of any tax controversy, or similar action
relating to the filing of any tax return or the payment of any
tax;
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(H)
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making ministerial amendments,
alterations, repeals or other immaterial modifications to this
Agreement, including for the purpose of effecting any action or
transaction approved in accordance with the terms and provisions of
Section 9(b) ;
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(I)
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the
decision to announce the abandoning of, abandon, or commence
actions to abandon any project operated by the Company or any of
its Subsidiaries as of the date of this Agreement or substantially
cease operation of such project for a period of more than ninety
(90) consecutive days for any reason (other than maintenance
or dispatch of such project or an event of force
majeure);
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(J)
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the
engagement by the Company or any Subsidiary in any line of business
other than the direct or indirect ownership of the projects of the
Company and its Subsidiaries as of the date hereof and lines of
business in which those entities are currently engaged;
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(K)
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any
incurrence of indebtedness by the Company or any of its
Subsidiaries, any guarantee made by the Company or any of its
Subsidiaries or any contingent liability of the Company or any of
its Subsidiaries in excess of $25,000,000 (other than pursuant to
debt financing and credit arrangements (1) outstanding as of the
Closing Date or (2) that have otherwise been approved by the
Company’s Board);
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(L)
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(1) except with respect to
forward trades that are consistent with the then current risk
management policy of the Company and are otherwise permitted under
credit facilities to which the Company and its Subsidiaries are
party, entering into any agreement, contract, commitment,
undertaking or expenditure involving, in each case (without
duplication), any amount in-excess of $25,000,000, or any
amendment, modification or extension of or suspension of
performance under any such agreement, contract, commitment,
undertaking or expenditure, unless such amendment, modification,
extension or suspension would not materially alter the financial
obligations of the Company or any Subsidiary with respect to such
agreement, contract, commitment, undertaking or expenditure, or
(2) except and to the extent relating to an expenditure
authorized in the Company’s annual budget, any action or
inaction that might cause the material breach or termination of any
such agreement, contract, commitment, undertaking or expenditure to
which the Company or any Subsidiary is a party;
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(M)
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any
acquisition by the Company or any Subsidiary of an equity ownership
interest in any Person or the acquisition of a substantial portion
of the assets or business of any Person or any division or line of
business thereof;
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(N)
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the
approval by the Company, for itself or with respect to, any
Subsidiary of any action by a Subsidiary as to which approval of
the Company, in its capacity as stockholder, member or partner of
such Subsidiary, is required or requested pursuant to the
organizational documents of such Subsidiary; and
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(O)
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the
entry into any contract or binding commitment or arrangement (other
than customary confidentiality obligations) to take any of the
foregoing actions.
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(ii)
Prior to the completion of the initial closing of the IPO, the
Company shall not take, or permit any Subsidiary or any officer,
employee or agent of the Company or any of its Subsidiaries to take
(on behalf of the Company or any of its Subsidiaries), any of the
following actions without the approval of at least 75% of the
voting power of the members of the entire Board or, in the event
such action is being taken in connection with the IPO, the IPO
Committee:
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(A)
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settlement of any litigation against
the Company or any Subsidiary of the Company, with respect to an
amount in excess of $50,000,000, or settlement of any litigation
claiming injunctive relief against the Company or any Subsidiary
that materially impairs the operations of the Company and its
Subsidiaries or which involves criminal liability of the Company or
any Subsidiary;
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(B)
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any
agreements or transactions between the Company or any Subsidiary,
on the one part, and MDCP IV, New Astoria or any Affiliate of
either, on the other part; provided , however, that
no such approval shall be required in respect of transactions among
any of the Company and any of its wholly-owned Subsidiaries, any
transactions approved or entered into on
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or prior to the
date hereof and disclosed on Schedule 3.18 of the Astoria
Disclosure Letter pursuant to the Merger Agreement and/or any
rights or obligations under, or transactions or agreements
expressly contemplated by, this Agreement, the Company’s
Certificate of Incorporation or the Company’s
Bylaws;
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(C)
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any
declaration or payment of any dividend or other distribution in
respect of, or any repurchase or redemption of, the Company’s
capital stock, except (1) as expressly contemplated by the
Company’s Certificate of Incorporation, as amended from time
to time, and (2) repurchases from management upon termination
of employment and reallocations of such repurchased equity to other
members of management;
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(D)
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any
tax election or entry into any agreement in respect of taxes where
such tax election or agreement in respect of taxes would reasonably
be expected to adversely affect the EBG Investors, including the
settlement of any tax controversy with respect thereto;
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(E)
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(1) any amendment of, or grant
of any waiver or consent under, on the part of the Company or any
of its Subsidiaries, this Agreement or the Merger Agreement, or
(2) any amendment of the certificate of incorporation or
bylaws of the Company;
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(F)
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any
borrowing, refinancing or incurrence of indebtedness for borrowed
money and any capital lease of the Company or any Subsidiary or any
guarantee thereof, except (1) any indebtedness for borrowed
money, capital leases and guarantees of the Company or any of its
Subsidiaries outstanding as of the Closing Date (and borrowings
from time to time after the Closing Date under, and any guarantee
or additional incurrence of indebtedness permitted from time to
time under, any debt financing or credit agreements of the Company
and/or any of its Subsidiaries in effect as of the Closing Date or
entered into in connection with any refinancing permitted under
clause (2)), and (2) any indebtedness for borrowed money or
capital leases or any guarantees thereof incurred by the Company or
its Subsidiaries in connection with the refinancing of any
indebtedness referred to in clause (1), in aggregate principal
amount or with aggregate facility size not to exceed 120% of the
indebtedness being refinanced;
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(G)
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(1) approval of a budget that
differs significantly from the combined 2007 operating budgets of
EBG and its Subsidiaries, on the one hand, and Astoria and its
Subsidiaries, on the other hand (other than for such changes as
management of the Company deems necessary and reasonable for the
operation of the Company and its Subsidiaries and other than in
connection with the financing of development projects of the
Company and its Subsidiaries in the New York City or Boston
metropolitan areas), (2) any expe
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