REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this Agreement) is
entered into as of April 15, 1997, by and among WILLAMETTE VALLEY
VINEYARDS, INC., an Oregon corporation (the Company), and the
following holders of the Company's common stock (each a Holder
and together the Holders): XXXXXXX XXXXXXX, XXXXXXX XXXXXX,
XXXXXXXX XXXXXX, XXXXX XXXXXXX, XXXXX XXXX, XXXXXXX XXXXXXX, XXXX
TEN DOESSCHATE, XXXXX XXXXXXXXX, XXXXX X. XXXXXX, XXXXXX XXXXXXXX
and ACQUISITIONS NORTHWEST, INC. (ANI@).
RECITALS
To (a) induce the Holders (other than Xxxxx X. Xxxxxx,
Xxxxxx Xxxxxxxx and ANI) to exchange their shares of the common
stock of Tualatin Vineyards, Inc., an Oregon corporation
(Tualatin), for the shares of the Company pursuant to a Merger
Agreement, dated as of April 1, 1997 (the Merger Agreement),
between the Company, the Holders (other than ANI) and certain
other parties named in the Merger Agreement, (b) induce Xxxxx X.
Xxxxxx and Xxxxxx Xxxxxxxx, as founders and directors of the
Company, to approve the granting of the rights under this
Agreement, and (c) induce ANI to accept shares of the Company's
Common Stock as payment of its broker's fee arising in connection
with the transactions contemplated by the Merger Agreement, the
Company has agreed to provide the registration rights as set
forth in this Agreement.
Therefore, the parties to this Agreement hereby agree as
follows:
1. Definitions. Unless the context otherwise requires,
the terms defined in this Section 1 shall have the meanings
herein specified for all purposes of this Agreement, applicable
to both the singular and plural forms of any of the terms herein
defined. Capitalized terms used but not defined in this
Agreement shall have the meanings ascribed to them in the Merger
Agreement.
Affiliate means any Person which directly or indirectly
controls, is controlled by, or is under common control with, the
indicated Person.
Agreement means this Registration Rights Agreement.
ANI means Acquisitions Northwest, Inc.
Board means the Board of Directors of the Company.
Common Stock means the Common Stock of the Company.
Commission means the Securities and Exchange Commission
or any other Federal agency from time to time administering the
Securities Act.
Company has the meaning assigned to it in the
introductory paragraph of this Agreement.
Exchange Act means the Securities Exchange Act of 1934,
as amended.
Holder(s) has the meaning assigned to it in the
introductory paragraph of this Agreement, including the Holder(s)
and their respective successors or assigns.
Holders of a Majority of the Registrable Securities
means the Person or Persons who are the Holders of greater than
fifty percent (50%) of the shares of Registrable Securities then
outstanding (which Person or Persons have the authority to
approve, consent, or object to, or require Willamette to take
certain actions in connection with, the registration of the
Registrable Securities pursuant to this Agreement); provided,
however, that for purposes of this definition only, the term
Holders shall not include Xxxxx X. Xxxxxx or Xxxxxx Xxxxxxxx.
Managing Underwriter has the meaning assigned to it in
Section 2(d) hereof.
Merger means the merger of Tualatin into Willamette
pursuant to the Merger Agreement.
Person includes any natural person, corporation, trust,
association, company, partnership, joint venture and other entity
and any government, governmental agency, instrumentality or
political subdivision.
The terms register, registered and registration refer
to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration
statement.
Registrable Securities means (a) all Common Stock now
or hereafter owned by the Holders and (b) any securities issued
or issuable with respect to the Common Stock referred to in
clause (a) above by way of a stock dividend or stock split or in
connection with a combination of shares, reclassification,
recapitalization, merger or consolidation or reorganization;
provided, however, that such shares of Common Stock shall only be
treated as Registrable Securities if and so long as they have not
been (i) sold to or through a broker or dealer or underwriter in
a public distribution or a public securities transaction, or (ii)
sold in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act under Section 4(1)
thereof so that, upon the consummation of such sale, all transfer
restrictions and restrictive legends with respect to such Common
Stock are removed and the seller and purchaser of such Common
Stock receive an opinion of counsel for the Company, in form and
content reasonably satisfactory to such seller and purchaser and
their respective counsel, to the effect that such Common Stock in
the hands of the purchaser is freely transferable without
restriction or registration under the Securities Act in any
public or private transaction.
Securities Act means the Securities Act of 1933, as
amended.
2. Piggyback Registration Rights.
(a) Each time the Company determines to prepare and
file a registration statement under the Securities Act with
respect to any of its securities (other than on Form X-0, X-0 or
a registration statement covering solely an employee benefit
plan) in connection with the proposed offer and sale for money of
any of its securities either for its own account or on behalf of
any other security holder, the Company agrees to give prompt
written notice of its determination to all Holders of Registrable
Securities, which notice shall offer to such Holders the
opportunity to register the number of shares of Registrable
Securities as each Holder may request. Upon the written request
of a Holder of any shares of Registrable Securities given within
thirty (30) days after the receipt of such written notice from
the Company, the Company agrees to use its best efforts to cause
all such Registrable Securities, the Holders of which have so
requested registration thereof, to be included in such
registration statement and registered under the Securities Act,
all to the extent necessary to permit the sale or other
disposition by the prospective seller or sellers of the
Registrable Securities to be so registered. Notwithstanding the
foregoing, the Holders of Registrable Securities shall have no
such registration rights under this section 2(a) if the managing
underwriter of an underwritten public offering advises the
Company and the Holders of Registrable Securities in writing that
in its good faith judgment that only securities issued by the
Company shall be sold in the offering; provided, however, that if
securities shall be included in such offering other than those
securities to be issued and sold by the Company, then all of the
Registrable Securities requested by the Holders to be registered
shall be included in the registration statement with respect to
such offering before the securities of any other individual or
entity.
(b) If the registration of which the Company gives
written notice pursuant to Section 2(a) is for a public offering
involving an underwriting, in whole or in part, the Company
agrees to so advise the Holders as a part of its written notice.
In such event the right of any Holder to registration pursuant
to this Section 2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent
provided herein. All Holders proposing to distribute their
Registrable Securities through such underwriting agree to enter
into (together with the Company and the other holders
distributing their securities through such underwriting) an
underwriting agreement with the underwriter or underwriters
selected for such underwriting by the Company, provided that such
underwriting agreement is in customary form and is reasonably
acceptable to the Holders of a Majority of the Registrable
Securities requested to be included in such registration.
(c) Notwithstanding any other provision of this
Section 2, if the managing underwriter of an underwritten
distribution advises the Company and the Holders of the
Registrable Securities participating in such registration in
writing that in its good faith judgment the number of shares of
Registrable Securities together with any other securities of the
Company requested to be registered exceeds the number of shares
of Registrable Securities and other securities which can be sold
in such offering, then (i) the number of shares of Registrable
Securities and other securities so requested to be included in
the offering shall be reduced to that number of shares which in
the good faith judgment of the managing underwriter can be sold
in such offering (except for shares to be issued by the Company
in an offering initiated by the Company, which shall have
priority over the shares of Registrable Securities and other
securities), and (ii) such reduced number of shares shall be
allocated first among all participating Holders of Registrable
Securities in proportion, as nearly as practicable, to the
respective number of shares of Registrable Securities requested
to be included in such registration by such Holders and, then,
among the holders of other securities, in proportion, as nearly
as practicable, to the respective number of other securities
requested to be included in such registration by such other
holders. All Registrable Securities and other securities which
are excluded from the underwriting by reason of the underwriter's
marketing limitation and all other Registrable Securities not
originally requested to be so included shall not be included in
such registration and shall be withheld from the market by the
Holders thereof for a period, not to exceed 120 days, which the
managing underwriter reasonably determines is necessary to effect
the underwritten public offering.
3. Standstill Agreement.
(a) Each Holder of a Registrable Security other than
Xxxxx X. Xxxxxx and Xxxxxx Xxxxxxxx, hereby agrees that it shall
not sell or otherwise transfer or dispose (other than to donees
who agree to be similarly bound) any Registrable Securities for
the two-year period following the effective date of the Merger
except pursuant to a registered offering pursuant to Section 2 of
this Agreement.
(b) Notwithstanding the foregoing, each Holder (other
than a donee) shall be entitled to sell or otherwise transfer or
dispose of his or her Registrable Securities prior to two years
from the effective date of the Merger if there is a significant
change in circumstances, including but not limited to health or
financial emergencies, upon 20-days' notice to the Company by the
Holder prior to any such sale. If the Holder gives proper notice
to and confers with the Company prior to such sale, the Company
shall have no right to object to or to prevent such a sale.
4. Registration on Form S-3.
(a) Commencing two years after the effective date of
the Merger, if any Holder requests that the Company file a
registration statement on Form S-3 for a public offering of
shares of the Registrable Securities, and the Company is a
registrant entitled to use Form S-3 to register the Registrable
Securities for such an offering, the Company shall use its best
efforts to cause such Registrable Securities to be registered for
the offering on such form. The Company will (i) promptly give
written notice of the proposed registration to all other Holders
and (ii) as soon as practicable, use its best efforts to effect
such registration (including, without limitation, the execution
of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations
issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would
permit or facilitate the sale and distribution of all or such
portion of such Registrable Securities as are specified in such
request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as
are specified in a written request received by the Company within
thirty (30) days after receipt of such written notice from the
Company. If the registration is for a public offering involving
an underwriting, the substantive provisions of Sections 2(b) and
2(c) shall be applicable to each registration initiated under
this Section 4.
(b) Notwithstanding the foregoing, the Company shall
not be obligated to take any action pursuant to this Section 4:
(i) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in
effecting such registration, qualification or compliance unless
the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act; (ii) if the
Company, within ten (10) days of the receipt of the request of
the Holder, gives notice of its bona fide intention to effect the
filing of a registration statement with the Commission within
ninety (90) days of receipt of such request (other than with
respect to a registration statement relating to a Rule 145
transaction, an offering solely to employees or any other
registration which is not appropriate for the registration of
Registrable Securities); (iii) during the period starting with
the date sixty (60) days prior to the filing of, and ending on a
date three (3) months following the effective date of, a
registration statement (other than with respect to a registration
statement relating to a Rule 145 transaction, an offering solely
to employees or any other registration which is not appropriate
for the registration of Registrable Securities), provided that
the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective;
(iv) if the Company has, within the 12-month period preceding the
date of such request, already effected one such registration on
Form S-3 for the Holders of a Majority of the Registrable
Securities pursuant to this Section 4; (v) if the Company has,
within the 12-month period preceding the date of such request,
already effected a registration of securities in which the
Holders of the Registrable Securities requesting registration
pursuant to this Section 4 were entitled to participate to the
fullest extent they desired pursuant to Section 2; (vi) if the
Holders together with holders of any other securities of the
Company entitled to inclusion in such registration, propose to
sell Registrable Securities and such other securities, if any, at
an aggregate price to the public (net of underwriters' discounts
and commissions) of less than $250,000; or (vii) if the Company
shall furnish to such Holder a certificate signed by the
President of the Company stating that in the good faith judgment
of the Board of Directors it would be seriously detrimental to
the Company or its stockholders for registration statements to be
filed in the near future or for any disclosure to be made that,
in the opinion of the Board of Directors duly advised by counsel,
is required to be made in connection with the offer or sale of
Registrable Securities pursuant to such registration, provided
that the Company's obligation to use its best efforts to file a
registration statement shall be deferred for a period not to
exceed ninety (90) days from the receipt of the request to file
such registration by such Holder, and provided, further, that the
Company shall not exercise its right under this clause to defer
such obligation more than once in any twelve-month period.
5. Registration Procedures. If the Company causes the
registration of Registrable Securities under the Securities Act,
the Company, at its expense and as expeditiously as possible,
agrees to:
(a) In accordance with the Securities Act and all
applicable rules and regulations, prepare and file with the
Commission a registration statement with respect to such
securities and use its best efforts to cause such registration
statement to become and remain effective until the securities
covered by such registration statement have been sold, and
prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus
contained therein as may be necessary to keep such registration
statement effective and such registration statement and
prospectus accurate and complete until the securities covered by
such registration statement have been sold; provided, however,
that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company shall furnish to
one firm of counsel for the selling security holders, selected by
the Holders of a Majority of the Registrable Securities covered
by the registration statement, copies of all documents proposed
to be filed and shall take into consideration, to the extent
appropriate, any comments received from such counsel with respect
to such registration statement, prospectus, amendment or
supplement;
(b) If the offering is to be underwritten in whole or
in part, enter into a written underwriting agreement in form and
substance reasonably satisfactory to the managing underwriter of
the public offering and the Holders of a Majority of the
Registrable Securities participating in such offering;
(c) Furnish to the Holders of securities participating
in such registration and to the underwriters of the securities
being registered such number of copies of the registration
statement and each amendment and supplement thereto, preliminary
prospectus, final prospectus and such other documents as such
underwriters and Holders may reasonably request in order to
facilitate the public offering of such securities;
(d) Use its best efforts to register or qualify the
securities covered by such registration statement under such
state securities or blue sky laws of such jurisdictions as such
participating Holders and underwriters may reasonably request
within 10 days prior to the original filing of such registration
statement, except that the Company shall not for any purpose be
required to execute a general consent to service of process or to
qualify to do business as a foreign corporation in any
jurisdiction where it is not so qualified;
(e) Notify the Holders participating in such
registration, promptly after it shall receive notice thereof, of
the date and time when such registration statement and each
post-effective amendment thereto has become effective or a
supplement to any prospectus forming a part of such registration
statement has been filed;
(f) Notify such Holders promptly of any request by the
Commission for the amending or supplementing of such registration
statement or prospectus or for additional information;
(g) Prepare and file with the Commission, promptly
upon the request of any such Holders, any amendments or
supplements to such registration statement or prospectus which,
in the opinion of counsel for such Holders, is required under the
Securities Act or the rules and regulations thereunder in
connection with the distribution of the Registrable Securities by
such Holders;
(h) Promptly notify each Holder of Registrable
Securities, 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 such prospectus or
any other prospectus then in effect contains an untrue statement
of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein
not misleading, and prepare and file promptly with the
Commission, and promptly notify such Holders of the filing of,
such amendments or supplements to such prospectus as may be
necessary so that such prospectus would not contain any 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;
(i) In case any of such Holders 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 of the
Commission, prepare promptly upon request such amendments or
supplements to such registration statement and such prospectus as
may be necessary in order for such prospectus to comply with the
requirements of the Securities Act and such rules and
regulations;
(j) Advise such Holders, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of
any stop order by the Commission suspending the effectiveness of
such registration statement or the initiation or threatening of
any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued;
(k) Not file any registration statement or prospectus
or any amendment or supplement to such registration statement or
prospectus to which the Holders of a Majority of the Registrable
Securities included or to be included in a registration have
reasonably objected on the grounds that such registration
statement or prospectus or amendment or supplement thereto does
not comply in all material respects with the requirements of the
Securities Act or the rules and regulations thereunder, after
having been furnished with a copy thereof at least five (5)
business days prior to the filing thereof; provided, however,
that the failure of such Holders or their counsel to review or
object to any registration statement or prospectus or any
amendment or supplement to such registration statement or
prospectus shall not affect the rights of such Holders or their
respective officers, directors, partners, legal counsel,
accountants or controlling Persons or any underwriter or any
controlling Person of such underwriter under Section 7 hereof;
(l) Make available for inspection upon request by any
Holder of Registrable Securities covered by such registration
statement, by any managing underwriter of any distribution to be
effected pursuant to such registration statement and by any
attorney, accountant or other agent retained by any such Holder
or any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and
cause all of the Company's officers, directors and employees to
supply all information reasonably requested by any such Holder,
underwriter, attorney, accountant or agent in connection with
such registration statement;
(m) At the request of any Holder of Registrable
Securities covered by such registration statement, furnish to
such Holder on the effective date of the registration statement
or, if such registration includes an underwritten public
offering, at the closing provided for in the underwriting
agreement, (i) an opinion dated such date of the counsel
representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to the Holder or
Holders making such request, covering such matters with respect
to the registration statement, the prospectus and each amendment
or supplement thereto, proceedings under state and federal
securities laws, other matters relating to the Company, the
securities being registered and the offer and sale of such
securities as are customarily the subject of opinions of issuer's
counsel provided to underwriters in underwritten public
offerings, and such opinion of counsel shall additionally cover
such legal and factual matters with respect to the registration
as such requesting Holder or Holders may reasonably request, and
(ii) letters dated each of such effective date and such closing
date, from the independent certified public accountants of the
Company, addressed to the underwriters, if any, and to the Holder
or Holders making such request, stating that they are independent
certified public accountants within the meaning of the Securities
Act and dealing with such matters as the underwriters may request
or, if the offering is not underwritten, that in the opinion of
such accountants the financial statements and other financial
data of the Company included in the registration statement or the
prospectus or any amendment or supplement thereto comply in all
material respects with the applicable accounting requirements of
the Securities Act, and additionally covering such other
accounting and financial matters, including information as to the
period ending not more than five (5) business days prior to the
date of such letter with respect to the registration statement
and prospectus, as such requesting Holder or Holders may
reasonably request;
(n) Cause all such Registrable Securities to be listed
on each securities exchange on which similar securities issued by
the Company are then listed and, if not so listed, to be listed
on such an exchange or on the NASD automated quotation system,
use its best efforts to secure NASDAQ authorization for such
Registrable Securities and, without limiting the generality of
the foregoing, to arrange for at least two market makers to
register as such with respect to such Registrable Securities with
the NASDAQ;
(o) Appoint a transfer agent and registrar for all
such Registrable Securities not later than the effective date of
such registration statement;
(p) Enter into such customary agreements (including
underwriting agreements in customary form) and take all such
other actions as the Holders of a Majority of the Registrable
Securities being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of
such Registrable Securities;
(q) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission;
(r) Permit any Holder of Registrable Securities which
Holder might be deemed to be an underwriter or a controlling
person of the Company, to participate, to the extent reasonable,
in the preparation of such registration or comparable statement
and to require the insertion therein of material, furnished to
the Company in writing, which in the reasonable judgment of such
Holder and its counsel should be included; and
(s) Use its best efforts to cause such Registrable
Securities covered by such registration statement to be
registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the sellers thereof
to consummate the disposition of such Registrable Securities.
6. Expenses.
(a) With respect to each inclusion of shares of
Registrable Securities in a registration statement pursuant to
this Agreement, the Company agrees to bear all fees, costs and
expenses of and incidental to such registration and the public
offering in connection therewith; provided, however, that
security holders participating in any such registration agree to
bear their pro rata share of the underwriting discount and
commissions, and provided further that with respect to any
registration on Form S-3 pursuant to Section 4 of this Agreement,
the Company shall only be required to bear all fees, costs and
expenses of such registration once in any 12-month period.
(b) The fees, costs and expenses of registration to be
borne as provided in paragraph (a) above, shall include, without
limitation, all registration, filing, NASD and listing fees,
printing expenses, fees and disbursements of counsel and
accountants for the Company, fees and disbursements of counsel
for the underwriter or underwriters of such securities (if the
Company and/or selling security holders are otherwise required to
bear such fees and disbursements), all legal fees and
disbursements and other expenses of complying with state
securities or blue sky laws of any jurisdictions in which the
securities to be offered are to be registered or qualified,
reasonable fees and disbursements of one firm of counsel for the
selling security holders, selected by the Holders of a Majority
of the Registrable Securities to be included in such
registration, and the premiums and other costs of policies of
insurance against liability to the Company, its directors and/or
officers arising out of such public offering.
7. Indemnification.
(a) The Company hereby agrees to indemnify and hold
harmless each Holder of Registrable Securities which are included
in a registration statement pursuant to the provisions of this
Agreement and each of such Holder's officers, directors,
partners, employees, Affiliates, legal counsel and accountants,
and each Person who controls such Holder within the meaning of
the Securities Act and any underwriter (as defined in the
Securities Act) for such Holder, and any Person who controls such
underwriter within the meaning of the Securities Act, from and
against, and agrees to reimburse such Holder, its officers,
directors, partners, employees, Affiliates, legal counsel,
accountants and controlling Persons and each such underwriter and
controlling Person of such underwriter with respect to, any and
all claims, actions (actual or threatened), demands, losses,
damages, liabilities, costs and expenses to which such Holder,
its officers, directors, partners, employees, Affiliates, legal
counsel, accountants or controlling Persons, or any such
underwriter or controlling Person of such underwriter may become
subject under the Securities Act or otherwise, insofar as such
claims, actions, demands, losses, damages, liabilities, costs or
expenses arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the
Company will not be liable in any such case to the extent that
any such claim, action, demand, loss, damage, liability, cost or
expense is caused by an untrue statement or alleged untrue
statement or omission or alleged omission so made in strict
conformity with written information furnished by such Holder,
such underwriter or such controlling Person specifically for use
in the preparation thereof.
(b) Each Holder of shares of Registrable Securities
which are included in a registration statement pursuant to the
provisions of this Agreement hereby agrees, severally and not
jointly, to indemnify and hold harmless the Company, its
officers, directors, employees, Affiliates, legal counsel and
accountants and each Person who controls the Company within the
meaning of the Securities Act, from and against, and agrees to
reimburse the Company, its officers, directors, employees,
Affiliates, legal counsel, accountants and controlling Persons
with respect to, any and all claims, actions, demands, losses,
damages, liabilities, costs or expenses to which the Company, its
officers, directors, employees, Affiliates, legal counsel,
accountants or such controlling Persons may become subject under
the Securities Act or otherwise, insofar as such claims, actions,
demands, losses, damages, liabilities, costs or expenses are
caused by any untrue or alleged untrue statement of any material
fact contained in such registration statement, any prospectus
contained therein or any amendment or supplement thereto, or are
caused by the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which
they were made, not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance
upon and in strict conformity with written information furnished
by such Holder specifically for use in the preparation thereof.
Notwithstanding the foregoing, no Holder of Registrable
Securities shall be obligated hereunder to pay more than the net
proceeds realized by it upon its sale of Registrable Securities
included in such registration statement.
(c) Promptly after receipt by a party indemnified
pursuant to the provisions of subsection (a) or (b) of this
Section 7 of notice of the commencement of any action involving
the subject matter of the foregoing indemnity provisions, such
indemnified party will, if a claim therefor is to be made against
the indemnifying party pursuant to the provisions of subsection
(a) or (b), notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 7 and shall
not relieve the indemnifying party from liability under this
Section 7 unless such indemnifying party is prejudiced by such
omission. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly
with any other indemnifying parties similarly notified, to assume
the defense thereof, with counsel satisfactory to such
indemnified party; provided, however, that if the defendants in
any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available
to it and/or other indemnified parties which are different from
or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select
separate counsel (in which case the indemnifying party shall not
have the right to direct the defense of such action on behalf of
the indemnified party or parties). Upon the permitted assumption
by the indemnifying party of the defense of such action, and
approval by the indemnified party of counsel, the indemnifying
party shall not be liable to such indemnified party under
subsection (a) or (b) for any legal or other expenses
subsequently incurred by such indemnified party in connection
with the defense thereof (other than reasonable costs of
investigation) unless (i) the indemnified party shall have
employed separate counsel in connection with the assertion of
legal defenses in accordance with the proviso to the next
preceding sentence, (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time,
(iii)the indemnifying party and its counsel do not actively and
vigorously pursue the defense of such action, or (iv) the
indemnifying party has authorized the employment of counsel for
the indemnified party at the expense of the indemnifying party.
No indemnifying party shall be liable to an indemnified party for
any settlement of any action or claim without the consent of the
indemnifying party and no indemnifying party may unreasonably
withhold its consent to any such settlement. No indemnifying
party will consent to 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 with respect to
such claim or litigation. To the extent that Xxxxx X. Xxxxxx or
Xxxxxx Xxxxxxxx and any other Holder are together either the
indemnifying parties or the undemnified party, then any action to
be taken or decisions to be made by such group under this Section
7(c) shall be approved by the Holders of a Majority of the
Registrable Securities participating in such group.
(d) If the indemnification provided for in subsection
(a) or (b) of this Section 7 is held by a court of competent
jurisdiction to be unavailable to a party to be indemnified with
respect to any claims, actions, demands, losses, damages,
liabilities, costs or expenses referred to therein, then each
indemnifying party under any such subsection, in lieu of
indemnifying such indemnified party thereunder, hereby agrees to
contribute to the amount paid or payable by such indemnified
party as a result of such claims, actions, demands, losses,
damages, liabilities, costs or expenses 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
in connection with the statements or omissions which resulted in
such claims, actions, demands, losses, damages, liabilities,
costs or expenses, as well as any other relevant equitable
considerations. 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 or alleged 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.
Notwithstanding the foregoing, the amount any Holder of
Registrable Securities shall be obligated to contribute pursuant
to this subsection (d) shall be limited to an amount equal to the
per share public offering price (less any underwriting discount
and commissions) multiplied by the number of shares of
Registrable Securities sold by such Holder pursuant to the
registration statement which gives rise to such obligation to
contribute (less the aggregate amount of any damages which such
Holder has otherwise been required to pay in respect of such
claim, action, demand, loss, damage, liability, cost or expense
or any substantially similar claim, action, demand, loss, damage,
liability, cost or expense arising from the sale of such
Registrable Securities).
No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution hereunder from any person who was not
guilty of such fraudulent misrepresentation.
(e) In addition to its other obligations under this
Section 7, the Company further agrees to reimburse each Holder of
Registrable Securities included in a registration statement
pursuant to this Agreement (and each of such Holder's controlling
Persons, officers, directors, parties, employees, Affiliates,
legal counsel, accountants and underwriters (and controlling
Persons of such underwriters)) on a monthly basis for all
reasonable legal fees and other expenses incurred in connection
with investigating or defending any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or admission,
described in subsection (a) of this Section 7, notwithstanding
the possibility that such payments might later be field to be
improper. To the extent that any payment is ultimately held to
be improper, each Person receiving such payment shall promptly
refund such payment.
8. Reporting Requirements Under the Exchange Act. The
Company agrees to keep effective the registration of its Common
Stock under Section 12 of the Exchange Act and to file timely
such information, documents and reports as the Commission may
require or prescribe under Section 13 of the Exchange Act. The
Company agrees to file timely such information, documents and
reports as the Commission may require or prescribe under Section
13 or 15(d) (whichever is applicable) of the Exchange Act. The
Company forthwith on request agrees to furnish to any Holder of
Registrable Securities (a) a written statement by the Company
that it has complied with such reporting requirements, (b) a copy
of the most recent annual or quarterly report of the Company and
(c) such other reports and documents filed by the Company with
the Commission as such Holder may reasonably request in availing
itself of an exemption for the sale of Registrable Securities
without registration under the Securities Act. The Company
acknowledges and agrees that the purposes of the requirements
contained in this Section 8 are (a) to enable any such Holder to
comply with the current public information requirement contained
in paragraph (c) of Rule 144 under the Securities Act should such
Holder ever wish to dispose of any of the securities of the
Company acquired by it without registration under the Securities
Act in reliance upon Rule 144 (or any other similar exemptive
provision) and (b) to qualify the Company for the use of
registration statements on Form S- 3. In addition, the Company
agrees to take such other measures and file such other
information, documents and reports, as shall be required of it
hereafter by the Commission as a condition to the availability of
Rule 144 under the Securities Act (or any similar exemptive
provision hereafter in effect) and the use of Form S-3. The
Company also covenants to use its best efforts, to the extent
that it is reasonably within its power to do so, to qualify for
the use of Form S-3.
9. Stockholder Information. The Company may request each
Holder of Registrable Securities as to which any registration is
to be effected pursuant to this Agreement to furnish the Company
with such information with respect to such Holder and the
distribution of such Registrable Securities as the Company may
from time to time reasonably request in writing and as shall be
required by law or by the Commission in connection therewith, and
each Holder of Registrable Securities as to which any
registration is to be effected pursuant to this Agreement agrees
to furnish the Company with such information.
10. Forms. All references in this Agreement to particular
forms of registration statements are intended to include, and
shall be deemed to include, references to all successor forms
which are intended to replace, or to apply to similar
transactions as, the forms herein referenced.
11. Miscellaneous.
11.1 Waivers and Amendments. With the written consent
of the Holders of a Majority of the Registrable Securities, the
obligations of the Company and the rights of all Holders under
this Agreement, including Xxxxx X. Xxxxxx and Xxxxxx Xxxxxxxx,
may be waived (either generally or in a particular instance,
either retroactively or prospectively and either for a specified
period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board, may enter
into a supplementary agreement for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of any supplemental agreement or
modifying in any manner the rights and obligations hereunder of
the Holders and the Company; provided, however, that no such
waiver or supplemental agreement shall preclude Xxxxx X. Xxxxxx
or Xxxxxx Xxxxxxxx from exercising their registration rights in
Sections 2 and 4 or reduce the aforesaid proportion of
Registrable Securities, the Holders of which are required to
consent to any waiver or supplemental agreement, without the
consent of the Holders of all of the Registrable Securities. Upon
the effectuation of each such waiver, consent or agreement of
amendment or modification, the Company agrees to give prompt
written notice thereof to the Holders of the Registrable
Securities who have not previously consented thereto in writing.
Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally or by course of dealing,
but only by a statement in writing signed by the party against
which enforcement of the change, waiver, discharge or termination
is sought, except to the extent provided in this Section 11.1.
Specifically, but without limiting the generality of the
foregoing, the failure of any Holder at any time or times to
require performance of any provision hereof by the Company shall
in no manner affect the right of any Holder at a later time to
enforce the same. No waiver by any party of the breach of any
term or provision contained in this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach
of any other term or covenant contained in this Agreement.
11.2 Notices. All notices, requests, consents and
other communications required or permitted hereunder shall be in
writing and shall be delivered, or mailed first class postage
prepaid, registered or certified mail,
(a) If to any Holder of Registrable Securities,
addressed to such Holder either at its address shown on
Annex A hereto or as it may appear on the records of the
Company, or at such other address as such Holder may specify
by written notice to the Company, or
(b) If to the Company, at 0000 Xxxxxxxxx Xxx XX,
Xxxxxx, Xxxxxx 00000, or at such other address as the
Company may specify by written notice to the Holders of
Registrable Securities, with a copy also sent to Xxxx X.
Xxxxxxxxxxxxxx, Xx., at Xxxx Xxxxx Xxxxxx Xxxxxx & Xxxxxxxx,
LLP, 000 XX Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxx
00000, and each such notice, request, consent and other
communication shall for all purposes of the Agreement be
treated as being effective or having been given when
delivered, if delivered personally, or, if sent by mail, at
the earlier of its actual receipt or 3 days after the same
has been deposited in a regularly maintained receptacle for
the deposit of U.S. mail, addressed and postage prepaid as
aforesaid.
11.3 Severability. Should any one or more of the
provisions of this Agreement or of any agreement entered into
pursuant to this Agreement be determined to be illegal or
unenforceable, all other provisions of this Agreement and of each
other agreement entered into pursuant to this Agreement, shall be
given effect separately from the provision or provisions
determined to be illegal or unenforceable and shall not be
affected thereby.
11.4 Parties in Interest. All the terms and provisions
of this Agreement shall be binding upon and inure to the benefit
of and be enforceable by the respective successors and assigns of
the parties hereto, whether so expressed or not and, in
particular, shall inure to the benefit of and be enforceable by
the Holder or Holders at the time of any of the Registrable
Securities. Subject to the immediately preceding sentence, this
Agreement shall not run to the benefit of or be enforceable by
any Person other than a party to this Agreement and its
successors and assigns.
11.5 Headings. The headings of the sections,
subsections and paragraphs of this Agreement have been inserted
for convenience of reference only and do not constitute a part of
this Agreement.
11.6 Dispute Resolution. If a dispute arises out of or
relates to this Agreement or the breach of this Agreement, and if
such dispute cannot be settled through direct discussions, the
Holders and the Company agree to first endeavor to settle the
dispute in an amicable manner by mediation to be held in
Portland, Oregon under the Commercial Mediation Rules of the
American Arbitration Association, before resorting to
arbitration. Thereafter, any unresolved controversy or claim
arising out of or relating to this Agreement, or breach of this
Agreement, shall be settled by arbitration to be held in
Portland, Oregon. The arbitration will be governed by the
Commercial Arbitration Rules of the American Arbitration
Association, and the parties shall be allowed discovery in
accordance with the Federal Rules of Civil Procedure. If
Willamette and the Holders cannot jointly select a single
arbitrator to determine the matter, one arbitrator shall be
chosen by each of Willamette and the Holders of a Majority of the
Registrable Securities (or, if a party fails to make a choice, by
the American Arbitration Association on behalf of such party) and
the two arbitrators so chosen will select a third. The decision
of the single arbitrator jointly selected by Willamette and the
Holders of a Majority of the Registrable Securities, or, if three
arbitrators are selected, the decision of any two of them, will
be final and binding on the parties and the judgment of a court
of competent jurisdiction may be entered on such decision. Fees
of the arbitrators and costs of arbitration shall be borne by
Willamette and the Holders in such manner as shall be determined
by the arbitrators.
11.7 Governing Law. This Agreement shall be construed
under and governed by the laws of the State of Oregon, exclusive
of choice of law or conflicts of law rules and principles.
11.8 Expenses. The Company agrees to pay and hold the
Holders of the Registrable Securities harmless from liability for
the payment of, (i) the fees and expenses incurred in connection
with any requested waiver of the right of any Holder or the
consent of any Holder to contemplated acts of the Company not
otherwise permissible by the terms of this Agreement, (ii) the
fees and expenses incurred with respect to any amendment to this
Agreement proposed by the Company (whether or not the same
becomes effective), (iii) the fees and expenses incurred in
respect of the enforcement of the rights granted under this
Agreement, and (iv) all costs of the Company's performance of and
compliance with this Agreement.
11.9 Counterparts. This Agreement may be execu4ted in
any number of counterparts and by different parties hereto in
separate counterparts, with the same effect as if all parties had
signed the same document. All such counterparts shall be deemed
an original, shall be construed together and shall constitute one
and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed personally or by a duly authorized representative thereof as of the day
and year first above written.
WILLAMETTE VALLEY VINEYARDS, INC..
By: /s/ X. X. Xxxxxx
Xxxxx X. Xxxxxx
President
By: /s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Vice President/General Manager
HOLDERS:
/s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxxx, Attorney-in-Fact
Xxxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxxx, Attorney-in-Fact
Xxxxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxxx, Attorney-in-Fact
Xxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxxx, Attorney-in-Fact
Xxxxx Xxxx
/s/ Xxxxxxx Xxxxxxx, Attorney-in-Fact
Xxxxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxxx, Attorney-in-Fact
Xxxx Ten Doesschate
/s/ Xxxxxxx Xxxxxxx, Attorney-in-Fact
Xxxxx Xxxxxxxxx
/s/ X. X. Xxxxxx
Xxxxx X. Xxxxxx
/s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
ACQUISITIONS NORTHWEST, INC.
B
by: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: President
ANNEX A
Name of Holder Address of Holder
Xxxxxxx Xxxxxxx 000 Xxxxxxxxx Xxx
Xxxxxxxx, XX 00000
Xxxxxxx Xxxxxx Tualatin Vineyards
00000 XX Xxxxxx Xxxx
Xxxxxx Xxxxx, XX 00000
Xxxxxxxx Xxxxxx 0000 XX 000xx Xxxxxx
Xxxxxxxx, XX 00000
Xxxxx Xxxxxxx 000 Xxxxxx Xxxxxx, Xxxxx X
Xxxxxx, XX 00000
Xxxxx Xxxx XX Xxx 0000
Xxxxxx, XX 00000
Xxxxxxx Xxxxxxx 0000 Xxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Xxxx Ten Doesschate 000 Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
Xxxxx Xxxxxxxxx 00 XXXXX
Xxxxxxxxxxx, XX 00000
Xxxxx X. Xxxxxx c/o Willamette Valley Vineyards, Inc.
0000 Xxxxxxxxx Xxx XX
Xxxxxx, XX 00000
Xxxxx Xxxxxxxx c/o Willamette Valley Vineyards, Inc.
0000 Xxxxxxxxx Xxx XX
Xxxxxx, XX 00000
Acquisitions Northwest, Inc. 000 XX Xxxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Status: DOCUMENT CONVERTED TO FINAL ON April 14, 1997.
DATES MAY BE DATE CODES AND NOT HARD DATES.
PDX4-49164.4 75100-0005
3
PDX4-49164.4 75100-0005