EXHIBIT 10.7
REGISTRATION RIGHTS AGREEMENT
by and between
WELLINGTON PROPERTIES TRUST
and
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
Dated as of March 5th, 1998
TABLE OF CONTENTS
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PAGE
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1. DEFINITIONS................................................................... 1
2. REGISTRATION UNDER THE SECURITIES ACT......................................... 5
2.1 Demand Registration...................................................... 5
2.2 Incidental Registration.................................................. 8
2.3 S-3 Registration; Shelf Registration..................................... 10
2.4 Expenses................................................................. 11
2.5 Underwritten Offerings................................................... 11
2.6 Conversions; Exercises................................................... 12
3. [INTENTIONALLY OMITTED]....................................................... 12
4. REGISTRATION PROCEDURES....................................................... 12
4.1 Obligations of the Company............................................... 12
4.2 Seller Information....................................................... 16
4.3 Notice to Discontinue.................................................... 17
5. INDEMNIFICATION; CONTRIBUTION................................................. 17
5.1 Indemnification by the Company........................................... 17
5.2 Indemnification by Holders............................................... 18
5.3 Conduct of Indemnification Proceedings................................... 18
5.4 Contribution............................................................. 19
5.5 Other Indemnification.................................................... 20
5.6 Indemnification Payments................................................. 20
6. GENERAL....................................................................... 20
6.1 Adjustments Affecting Registrable Securities............................. 20
6.2 Registration Rights to Others............................................ 20
6.3 Availability of Information; Rule 144; Rule 144A; Other Exemptions....... 20
6.4 Amendments and Waivers................................................... 21
6.5 Notices.................................................................. 21
6.6 Successors and Assigns................................................... 23
6.7 Counterparts............................................................. 23
6.8 Descriptive Headings, Etc................................................ 23
6.9 Severability............................................................. 24
6.10 Governing Law........................................................... 24
6.11 Remedies; Specific Performance.......................................... 24
6.12 Entire Agreement........................................................ 24
6.13 Nominees for Beneficial Owners.......................................... 24
6.14 Consent to Jurisdiction; Waiver of Jury................................. 25
6.15 Further Assurances...................................................... 25
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6.16 No Inconsistent Agreements........................................... 25
6.17 Construction......................................................... 25
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REGISTRATION RIGHTS AGREEMENTS (this or the "Agreement") dated as of
March 5th, 1998, by and between WELLINGTON PROPERTIES TRUST, a Delaware
corporation (the "Company"), and CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
(the "Initial Holder").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Initial Holder has agreed to make a loan in an aggregate
amount not to exceed $17,000,000 dollars (the "Loan") to Lake Pointe Apartment
Homes, Inc., a Wisconsin corporation ("Lake Pointe");
WHEREAS, in order to induce the Initial Holder to make the Loan to
Lake Pointe, the Company has agreed to issue warrants to the Initial Holder to
purchase up to 30,000 Common Shares (as hereinafter defined) and provide certain
registration rights on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have the
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following meanings:
"Affiliate" shall mean (i) with respect to any Person, any other
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Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person, and (ii) with respect to any
individual, shall also mean the spouse, sibling, child, stepchild, grandchild,
niece, nephew or parent of such Person, or the spouse thereof.
"Common Shares" shall mean shares of common stock, par value $0.01
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per share, of the Company.
"Company" shall have the meaning set forth in the preamble.
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"Demand Registration" shall mean a registration required to be
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effected by the Company pursuant to Section 2.1.
"Demand Registration Statement" shall mean a registration statement of
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the Company which covers the Registrable Securities requested to be included
therein pursuant to the provisions of Section 2.1 and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference (or deemed to be incorporated by
reference) therein.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Holders" shall mean the Initial Holder for so long as it owns any
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Registrable Securities and such of its respective heirs, successors and
permitted assigns (including any permitted transferees of Registrable
Securities) who acquire or are otherwise the transferee of Registrable
Securities, directly or indirectly, from such Initial Holder (or any subsequent
Holder), for so long as such heirs, successors and permitted assigns own any
Registrable Securities. For purposes of this Agreement, a Person will be deemed
to be a Holder whenever such Person holds an option to purchase, or a security
convertible into or exercisable or exchangeable for, Registrable Securities,
whether or not such purchase, conversion, exercise or exchange has actually been
effected and disregarding any legal restrictions upon the exercise of such
rights. Registrable Securities issuable upon exercise of an option or upon
conversion exchange or exercise of another security shall be deemed outstanding
for the purposes of this Agreement.
"Holders' Counsel" shall mean one firm of counsel (per registration)
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to the Holders of Registrable Securities participating in such registration,
which counsel shall be selected (i) in the case of Demand Registration or an S-3
Registration, by the Initiating Holders holding a majority of the Registrable
Securities for which registration was requested in the Request, and (ii) in all
other cases, by the Majority Holders of the Registration.
"Incidental Registration" shall mean a registration required to be
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effected by the Company pursuant to Section 2.2.
"Incidental Registration Statement" shall mean a registration
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statement of the Company which covers the Registrable Securities requested to be
included therein pursuant to the provisions of Section 2.2 and all amendments an
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference (or deemed to be incorporated by
reference) therein.
"Initial Holder" shall mean the Person specified as such in the
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Preamble.
"Initiating Holders" shall mean, with respect to a particular
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registration, the Holders who initiated the Request for such registration.
"Inspectors" shall have the meaning set forth in Section 4.1(g).
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"Majority Holders" shall mean one or more Holders of Registrable
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Securities who would hold a majority of the Registrable Securities who would
hold a majority of the Registrable Securities to be included in such
registration.
"NASD" shall mean the National Association of Securities Dealers, Inc.
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"Person" shall mean any individual, firm, partnership, corporation,
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professional corporation, trust, joint venture, association, joint stock
company, limited liability company, unincorporated organization or any other
entity or organization, including a government or agency or political
subdivision thereof, and shall include any successor (by merger or otherwise) of
such entity.
"Prospectus" shall mean the prospectus included in a Registration
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Statement (including, without limitation, any preliminary prospectus and any
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), and any such Prospectus as amended or
supplemented by any prospectus supplement, and all other amendments and
supplements to such Prospectus, including post-effective amendments, and in each
case including all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Registrable Securities" shall mean (i) any Warrant Shares issued or
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issuable upon exercise of the Warrants issued to the Initial Holder in
connection with the Loan, (ii) any Common Shares otherwise or hereafter
purchased or acquired by the Holders or their Affiliates and (iii) any other
securities of the Company (or any successor or assign of the Company, whether by
merger, consolidation, sale of assets or otherwise) which may be issued or
issuable with respect to, in exchange for, or in substitution of, Registrable
Securities referenced in clauses (i) and (ii) above by reason of any dividend or
stock split, combination of shares, merger, consolidation, recapitalization,
reclassification, reorganization, sale of assets or similar transaction. As to
any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (A) a registration statement with respect to the
sale of such securities shall have been declared effective under the Securities
Act and such securities shall have been disposed of in accordance with such
registration statement, (B) such securities are sold pursuant to Rule 144 (or
any similar provisions then in force) under the Securities Act, (C) such
securities have been otherwise transferred, a new certificate or other evidence
of ownership for them not bearing the legend restricting further transfer shall
have been delivered by the Company and subsequent public distribution of them
shall not require registration under the Securities Act, or (D) such securities
shall have ceased to be outstanding.
"Registration Expenses" shall mean any and all expenses incident to
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performance of or compliance with this Agreement by the Company and its
subsidiaries, including, without limitation (i) all SEC, stock exchange, NASD
and other registration, listing and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky laws
and compliance with the rules of any stock exchange (including fees and
disbursements of counsel in connection with such compliance and the preparation
of a blue sky memorandum and legal investment survey), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing, printing,
distributing, mailing and delivering any Registration Statement, any Prospectus,
any underwriting agreements, transmittal letters, securities sales agreements,
securities certificates and other documents relating to the performance of or
compliance with this Agreement, (iv) the fees and disbursements of counsel for
the Company, (v) the fees and disbursements of Holders' Counsel, (vi) the fees
and disbursements of all independent public
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accountants (including the expenses of any audit and/or "cold comfort" letters)
and the fees and expenses of other Persons, including experts, retained by the
Company, (vii) the expenses incurred in connection with making road show
presentations and holding meetings with potential investors to facilitate the
distribution and sale of Registrable Securities which are customarily borne by
the issuer, (viii) any fees and disbursements of underwriters customarily paid
by issuers or sellers of securities, and (ix) premiums and other costs of
policies of insurance against liabilities arising out of the public offering of
the Registrable Securities being registered; provided, however, Registration
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Expenses shall not include discounts and commissions payable to underwriters,
selling brokers, dealer managers or other similar Persons engaged in the
distribution of any of the Registrable Securities; and provided further, that in
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any case where Registration Expenses are not to be borne by the Company, such
expenses shall not include salaries of Company personnel or general overhead
expenses of the Company, auditing fees, premiums or other expenses relating to
liability insurance required by underwriters of the Company or other expenses
for the preparation of financial statements or other data normally prepared by
the Company in the ordinary course of its business or which the Company would
have incurred in any event; and provided, further, that in the event the Company
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shall, in accordance with Section 2.2 or Section 2.6 hereof, not register any
securities with respect to which it had given written notice of its intention to
register to Holders, notwithstanding anything to the contrary in the foregoing,
all of the costs incurred by the Holders in connection with such registration
shall be deemed to be Registration Expenses.
"Registration Statement" shall mean any registration statement of the
----------------------
Company which covers any Registrable Securities and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Request" shall have the meaning set forth in Section 2.1(a).
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"S-3 Registration" shall mean a registration required to be effected
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by the Company pursuant to Section 2.3(a).
"SEC" shall mean the Securities and Exchange Commission, or any
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successor agency having jurisdiction to enforce the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended
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from time to time, and the rules and regulations thereunder, or any successor
statute.
"Shelf Registration" shall have the meaning set forth in Section
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2.1(a).
"Underwriters" shall mean the underwriters, if any, of the offering
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being registered under the Securities Act.
"Underwritten Offering" shall mean a sale of securities of the Company
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to an Underwriter or Underwriters for reoffering to the public.
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"Warrant Shares" shall mean the Common Shares or other equity
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securities issued or issuable upon the exercise of the Warrants.
"Warrants" shall mean the warrants issued to the Initial Holder in
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connection with the Loan, together with any additional warrants issued in
accordance with the terms thereof.
"Withdrawn Demand Registration" shall have the meaning set forth in
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Section 2.1(a).
"Withdrawn Request" shall have the meaning set forth in Section
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2.1(a).
2. REGISTRATION UNDER THE SECURITIES ACT.
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2.1 Demand Registration.
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(a) Right to Demand Registration. Subject to Section 2.1(c), at any
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time or from time to time the Majority Holders shall have the right to request
in writing that the Company register all or part of such Holders' Registrable
Securities (a "Request") (which Request shall specify the amount of Registrable
Securities intended to be disposed of by such Holders and the intended method of
disposition thereof) by filing with the SEC a Demand Registration Statement. As
promptly as practicable, but no later than 10 days after receipt of a Request,
the Company shall give written notice of such requested registration to all
Holders of Registrable Securities. Subject to Section 2.1 (b), the Company shall
include in a Demand Registration (i) the Registrable Securities intended to be
disposed of by the Initiating Holders and (ii) the Registrable Securities
intended to be disposed of by any other Holder which shall have made a written
request (which request shall specify the amount of Registrable Securities to be
registered and the intended method of disposition thereof) to the Company for
inclusion thereof in such registration within 20 days after the receipt of such
written notice from the Company. The Company shall, as expeditiously as possible
following a Request, use its best efforts to cause to be filed with the SEC a
Demand Registration Statement providing for the registration under the
Securities Act of the Registrable Securities which the Company has been so
requested to register by all such Holders, to the extent necessary to permit the
disposition of such Registrable Securities so to be registered in accordance
with the intended methods of disposition thereof specified in such Request or
further requests (including, without limitation, by means of a shelf
registration pursuant to Rule 415 under the Securities Act (a "Shelf
Registration") if so requested and if the Company is then eligible to use such a
registration). The Company shall use its best efforts to have such Demand
Registration Statement declared effective by the SEC as soon as practicable
thereafter and to keep such Demand Registration Statement continuously effective
for the period specified in Section 4.1(b).
A Request may be withdrawn prior to the filing of the Demand
Registration Statement by the Majority Holders of the Registration (a "Withdrawn
Request") and a Demand Registration Statement may be withdrawn prior to the
effectiveness thereof by the Majority Holders of the Registration (a "Withdrawn
Demand Registration"), and such withdrawals shall be treated as a Demand
Registration which shall have been effected pursuant to this Section 2.1, unless
the Holders of Registrable Securities to be included in such Registration
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Statement reimburse the Company for its reasonable out-of-pocket Registration
Expenses relating to the preparation and filing of such Demand Registration
Statement (to the extent actually incurred); provided; however, that if a
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Withdrawn Request or Withdrawn Registration Statement is made (A) because of a
material adverse change in the business, financial condition or prospects of
the Company or (B) because the sole or lead managing Underwriter advises that
the amount of Registrable Securities to be sold in such offering be reduced
pursuant to Section 2.1(b) by more than 25% of the Registrable Securities to be
included in such Registration Statement, then such withdrawal shall not be
treated as a Demand Registration effected pursuant to this Section 2.1 (and
shall not be counted toward the number of Demand Registrations), and the Company
shall pay all Registration Expenses in connection therewith. Any Holder
requesting inclusion in a Demand Registration may, at any time prior to the
effective date of the Demand Registration Statement (and for any reason) revoke
such request by delivering written notice to the Company revoking such requested
inclusion.
The registration rights granted pursuant to the provisions of
this Section 2.1 shall be in addition to the registration rights granted
pursuant to the other provisions of Section 2 hereof.
(b) Priority in Demand Registrations. If a Demand Registration
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involves an Underwritten Offering, and the sole or lead managing Underwriter, as
the case may be, of such Underwritten Offering shall advise the Company in
writing (with a copy to each Holder requesting registration) on or before the
date five days prior to the date then scheduled for such offering that, in its
opinion, the amount of Registrable Securities requested to be included in such
Demand Registration exceeds the number which can be sold in such offering within
a price range acceptable to the Majority Holders of the Registration (such
writing to state the basis of such opinion and the approximate number of
Registrable Securities which may be included in such offering), the Company
shall include in such Demand Registration, to the extent of the number which
the Company is so advised may be included in such offering, the Registrable
Securities requested to be included in the Demand Registration by the Holders
allocated pro rata in proportion to the number of Registrable Securities
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requested to be included in such Demand Registration by each of them. In the
event the Company shall not, by virtue of this Section 2.1(b), include in any
Demand Registration all of the Registrable Securities of any Holder requesting
to be included in such Demand Registration, such Holder may, upon written notice
to the Company given within five days of the time such Holder first is notified
of such matter, reduce the amount of Registrable Securities it desires to have
included in such Demand Registration, whereupon only the Registrable Securities,
if any, it desires to have included will be so included and the Holders not so
reducing shall be entitled to a corresponding increase in the amount of
Registrable Securities to be included in such Demand Registration.
(c) Limitations on Registrations. The rights of Holders of
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Registrable Securities to request Demand Registrations pursuant to Section
2.1(a) are subject to the following limitations: In no event shall the Company
be required to effect more than one (1) Demand Registration; provided, however,
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that such number shall be increased to the extent the Company does not include
in what would otherwise be the final registration the number of Registrable
Securities requested to be registered by the Holders by reason of Section
2.1(b).
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(d) Underwriting; Selection of Underwriters. Notwithstanding anything
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to the contrary contained in Section 2.1(a), if the Initiating Holders holding a
majority of the Registrable Securities for which registration was requested in
the Request so elect, the offering of such Registrable Securities pursuant to
such Demand Registration shall be in the form of a firm commitment Underwritten
Offering; and such Initiating Holders may require that all Persons (including
other Holders) participating in such registration sell their Registrable
Securities to the Underwriters at the same price and on the same terms of
underwriting applicable to the Initiating Holders. If any Demand Registration
involves an Underwritten Offering, the sole or managing Underwriters and any
additional investment bankers and managers to be used in connection with such
registration shall be selected by the Initiating Holders holding a majority of
the Registrable Securities for which registration was requested in the Request,
subject to the approval of the Company (such approval not to be unreasonably
withheld).
(e) Registration of Other Securities. Whenever the Company shall
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effect a Demand Registration, no securities other than the Registrable
Securities shall be covered by such registration unless the Majority Holders of
the Registration shal have consented in writing to the inclusion of such other
securities.
(f) Effective Registration Statement; Suspension. A Demand
---------------------------------------------
Registration Statement shall not be deemed to have become effective (and the
related registration will not be deemed to have been effected) (i) unless it has
been declared effective by the SEC and remains effective in compliance with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Demand Registration Statement for the
time period specified in Section 4.1(b), (ii) if the offering of any Registrable
Securities pursuant to such Demand Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, or (iii) if, in the case of an Underwritten
Offering, the conditions to closing specified in an underwriting agreement to
which the Company is a party are not satisfied other than by the sole reason of
any breach or failure by the Holders of Registrable Securities or are not
otherwise waived.
(g) Other Registrations. During the period (i) beginning on the date
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of a Request and (ii) ending on the date that is 90 days after the date that a
Demand Registration Statement filed pursuant to such Request has been declared
effective by the SEC or, if the Holders shall withdraw such Request or such
Demand Registration Statement, on the date of such Withdrawn Request or such
Withdrawn Registration Statement, the Company shall not, without the consent of
the Majority Holders of the Registration, file a registration statement
pertaining to any other securities of the Company.
(h) Registration Statement Form. Registrations under this Section 2.1
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shall be such appropriate registration form of the SEC (i) as shall be selected
by the Initiating Holders holding a majority of the Registrable Securities for
which registration was requested in the Request and (ii) which shall be
available for the sale of Registrable Securities in accordance with the intended
method or methods of disposition specified in the requests for registration. The
Company agrees to include in any such Registration Statement all information
which any selling Holder, upon advice of counsel, shall reasonably request.
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2.2 Incidental Registration.
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(a) Right to Include Registrable Securities. If the Company at any
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time or from to time proposes to register any of its securities under the
Securities Act (other than in a registration on Form S-4 or S-8 or any successor
form to such forms and other than pursuant to Section 2.1 or 2.3) whether or
not pursuant to registration rights granted to other holders of its securities
and whether or not for sale for its own account, the Company shall deliver
prompt written notice (which notice shall be given at least 30 days prior to
such proposed registration) to all Holders of Registrable Securities of its
intention to undertake such registration, describing in reasonable detail the
proposed registration and distribution (including the anticipated range of the
proposed offering price, the class and number of securities proposed to be
registered and the distribution arrangements) and of such Holders' right to
participate in such registration under this Section 2.2 as hereinafter provided.
Subject to the other provisions of this paragraph (a) and Section 2.2(b), upon
the written request of any Holder made within 20 days after the receipt of such
written notice (which request shall specify the amount of Registrable Securities
to be registered and the intended method of disposition thereof), the Company
shall effect the registration under the Securities Act of all Registrable
Securities requested by Holder to be so registered (an "Incidental
Registration"), to the extent requisite to permit the disposition (in accordance
with the intended methods thereof as aforesaid) of the Registrable Securities so
to be registered, by inclusion of such Registrable Securities in the
Registration Statement which covers the securities which the Company proposes to
register and shall cause such Registration Statement to become and remain
effective with respect to such Registrable Securities in accordance with the
registration procedures set forth in Section 4. If an Incidental Registration
involves an Underwritten Offering, immediately upon notification to the Company
from the Underwriter of the price at which such securities are to be sold, the
Company shall so advise each participating Holder. The Holders requesting
inclusion in an Incidental Registration may, at any time prior to the effective
date of the Incidental Registration Statement (and for any reason), revoke such
request by delivering written notice to the Company revoking such requested
inclusion.
If at any time after giving written notice of its intention to
register any securities and prior to the effective date of the Incidental
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder of Registrable Securities and, thereupon, (A) in
the case of a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses
incurred in connection therewith), without prejudice, however, to the rights of
Holders to cause such registration to be effected as a registration under
Section 2.1 or 2.3(a), and (B) in the case of a determination to delay such
registration, the Company shall be permitted to delay the registration of such
Registrable Securities for the same period as the delay in registering such
other securities; provided, however, that if such delay shall extend beyond 120
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days from the date the Company received a request to include Registrable
Securities in such Incidental Registration, then the Company shall again give
all Holders the opportunity to participate therein and shall follow the
notification procedures set forth in the preceding
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paragraph. There is no limitation on the number of such Incidental Registrations
pursuant to this Section 2.2 which the Company is obligated to effect.
The registration rights granted pursuant to the provisions of this
Section 2.2 shall be in addition to the registration rights granted pursuant to
the other provisions of Section 2 hereof.
(b) Priority in Incidental Registration. If an Incidental
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Registration involves an Underwritten Offering (on a firm commitment basis), and
the sole or the lead managing Underwriter, as the case may be, of such
Underwritten Offering shall advise the Company in writing (with a copy to each
Holder requesting registration) on or before the date five days prior to the
date then scheduled for such offering that, in its opinion, the amount of
securities (including Registrable Securities) requested to be included in such
registration exceeds the amount which can be sold in such offering without
materially interfering with the successful marketing of the securities being
offered (such writing to state the basis of such opinion and the approximate
number of such securities which may be included in such offering without such
effect), the Company shall include in such registration, to the extent of the
number which the Company is so advised may be included in such offering without
such effect, (i) in the case of a registration initiated by the Company, (A)
first, the securities that the Company proposes to register for its own account,
(B) second, the Registrable Securities requested to be included in such
registration by the Holders, allocated pro rata in proportion to the number of
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Registrable Securities requested to be included in such registration by each of
them, and (C) third, other securities of the Company to be registered on behalf
of any other Person, and (ii) in the case of a registration initiated by a
Person other than the Company, (A) first, the Registrable Securities requested
to be included in such registration by the Holders and by any Persons initiating
such registration, allocated pro rata in proportion to the number of securities
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requested to be included in such registration by each of them, (B) second, the
securities that the Company proposes to register for its own account, and (C)
third, other securities of the Company to be registered on behalf of any other
Person; provided, however, that in the event the Company will not, by virtue of
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this Section 2.2(b), include in such registration all of the Registrable
Securities of any Holder requested to be included in such registration, such
Holder may, upon written notice to the Company given within three days of the
time such Holder first is notified of such matter, reduce the amount of
Registrable Securities it desires to have included in such registration,
whereupon only the Registrable Securities, if any, it desires to have included
will be so included and the Holders not so reducing shall be entitled to a
corresponding increase in the amount of Registrable Securities to be included in
such registration.
(c) Selection of Underwriters. If any Incidental Registration
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involves an Underwritten Offering, the sole or managing Underwriter(s) and any
additional investment bankers and managers to be used in connection with such
registration shall be subject to the approval of the Majority Holders of the
Registration (such approval not to be unreasonably withheld).
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2.3 S-3 Registration; Shelf Registration.
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(a) S-3 Registration. If at any time (i) one or more Holders of
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Registrable Securities representing 25% or more of the Registrable Securities
then outstanding request that the Company file a registration statement on Form
S-3 or any successor form thereto for a public offering of all or any portion of
the shares of Registrable Securities held by such Holder or Holders, the
reasonably anticipated aggregate price to the public of which would exceed
$1,000,000, and (ii) the Company is a registrant entitled to use Form S-3 or any
successor form thereto to register such securities, then the Company shall, as
expeditiously as possible following such Request, use its best efforts to
register under the Securities Act on Form S-3 or any successor form thereto, for
public sale in accordance with the intended methods of disposition specified in
such Request or any subsequent requests (including, without limitation, by means
of a Shelf Registration) the Registrable Securities specified in such Request
and any subsequent requests; provided, that if such registration is for an
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Underwritten Offering, the terms of Sections 2.1(b) and 2.1(d) shall apply (and
any reference to "Demand Registration" therein shall, for purposes of this
Section 2.3, instead be deemed a reference to "S-3 Registration").Whenever the
Company is required by this Section 2.3 to use its best efforts to effect the
registration of Registrable Securities, each of the procedures and requirements
of Section 2.1(a) and 2.1(e) (including but not limited to the requirements that
the Company (A) notify all Holders of Registrable Securities from whom such
Request for registration has not been received and provide them with the
opportunity to participate in the offering and (B) use its best efforts to have
such S-3 Registration Statement declared and remain effective for the time
period specified herein) shall apply to such registration (and any reference in
such Sections 2.1(a) and 2.1(e) to "Demand Registration" shall, for purposes of
this Section 2.3, instead be deemed a reference to "S-3 Registration").
Notwithstanding anything to the contrary contained herein, no Request may be
made under this Section 2.3 within 90 days after the effective date of a
Registration Statement filed by the Company covering a firm commitment
Underwritten Offering in which the Holders of Registrable Securities shall have
been entitled to join pursuant to this Agreement in which there shall have been
effectively registered all shares of Registrable Securities as to which
registration shall have been requested. There is no limitation on the number of
S-3 Registrations that the Company is obligated to effect.
The registration rights granted pursuant to the provisions of this
Section 2.3(a) shall be in addition to the registration rights granted pursuant
to the other provisions of this Section 2.
(b) Shelf Registration. If a request made pursuant to Section 2.1 or
------------------
2.3(a) is for a Shelf Registration, the Company shall use its best efforts to
keep the Shelf Registration continuously effective through the date on which all
of the Registrable Securities covered by such Shelf Registration may be sold
pursuant to Rule 144(k) under the Securities Act (or any successor provision
having similar effect); provided, however, that prior to the termination of such
-------- -------
Shelf Registration, the Company shall first furnish to each Holder of
Registrable Securities participating in such Shelf Registration (i) an opinion,
in form and substance satisfactory to the Majority Holders of the Registration,
of counsel for the Company satisfactory to the Majority Holders of the
Registration stating that such Registrable Securities are freely salable
pursuant to
10
Rule 144(k) under the Securities Act (or any successor provision having similar
effect) or (ii) a "No-Action Letter" from the staff of the SEC stating that the
SEC would not recommend enforcement action if the Registrable Securities
included in such Shelf Registration were sold in a public sale other than
pursuant to an effective registration statement.
2.4 Expenses. The Company shall pay all Registration Expenses in
--------
connection with any Demand Registration, Incidental Registration, S-3
Registration or Shelf Registration, whether or not such registration shall
become effective and whether or not all Registrable Securities originally
requested to be included in such registration are withdrawn or otherwise
ultimately not included in such registration, except as otherwise provided with
respect to a Withdrawn Request and a Withdrawn Demand Registration in Section
2.1(a). Each Holder shall pay all discounts and commissions payable to
underwriters, selling brokers, managers or other similar Persons engaged in the
distribution of such Holder's Registrable Securities pursuant to any
registration pursuant to this Section 2.
2.5 Underwritten Offerings.
----------------------
(a) Demand Underwritten Offerings. If requested by the sole or lead
-----------------------------
managing Underwriter for any Underwritten Offering effected pursuant to a Demand
Registration or an S-3 Registration, the Company shall enter into a customary
underwriting agreement with the Underwriters for such offering, such agreement
to be reasonably satisfactory in substance and form to each Holder of
Registrable Securities participating in such offering and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnification and contribution to the effect and to the extent provided in
Section 5.
(b) Holders of Registrable Securities to be Parties to Underwriting
---------------------------------------------------------------
Agreement. The Holders of Registrable Securities to be distributed by
---------
Underwriters in an Underwritten Offering contemplated by Section 2 shall be
parties to the underwriting agreement between the Company and such Underwriters
and may, at such Holders' option, require that any or all of the representations
and warranties by, and the other agreements on the part of, the Company to and
for the benefit of such Underwriters shall also be made to and for the benefit
of such Holders of Registrable Securities and that any or all of the conditions
precedent to the obligations of such Underwriters under such underwriting
agreement be conditions precedent to the oblgation of such Holders of
Registrable Securities; provided, however, that the Company shall not be
-------- -------
required to make any representations or warranties with respect to written
information specifically provided by a selling Holder for inclusion in the
Registration Statement. No Holder shall be required to make any representations
or warranties to, or agreements with, the Company or the Underwriters other than
representations, warranties or agreements regarding such Holder, such Holder's
Registrable Securities and such Holder's intended method of disposition.
(c) Participation in Underwritten Registration. Notwithstanding
------------------------------------------
anything herein to the contrary, no Person may participate in any underwritten
registration hereunder unless such Person (i) agrees to sell its securities on
the same terms and conditions provided in
11
any underwritten arrangements approved by the Persons entitled hereunder to
approve such arrangement and (ii) accurately completes and executes in a timely
manner all questionnaires, powers of attorney, indemnities, custody agreements,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
2.6 Conversions; Exercises. Notwithstanding anything to the contrary
----------------------
herein, in order for any Registrable Securities that are issuable upon the
exercise of warrants to be included in any registration pursuant to Section 2
hereof, the exercise of such warrants must be effected no later than immediately
prior to the closing of any sales under the Registration Statement pursuant to
which such Registrable Securities are to be sold.
3. [INTENTIONALLY OMITTED]
-----------------------
4. REGISTRATION PROCEDURES.
-----------------------
4.1 Obligations of the Company. Whenever the Company is required to effect
--------------------------
the registration of Registrable Securities under the Securities Act pursuant to
Section 2 of this Agreement, the Company shall, as expeditiously as possible:
(a) prepare and file with the SEC (promptly, and in any event within
30 days after receipt of a request to register Registrable Securities) the
requisite Registration Statement to effect such registration, which Registration
Statement shall comply as to form in all material respects with the requirements
of the applicable form and include all financial statements required by the SEC
to be filed therewith, and the Company shall use its best efforts to cause such
Registration Statement to become effective (provided, that the Company may
--------
discontinue any registration of its securities that are not Registrable
Securities, and, under the circumstances specified in Section 2.2, its
securities that are Registrable Securities); provided, however, that before
-------- -------
filing a Registration Statement or Prospectus or any amendments or supplements
thereto, or comparable statements under securities or blue sky laws of any
jurisdiction, the Company shall (i) provide Holders' Counsel and any other
Inspector with an adequate and appropriate opportunity to participate in the
preparation of such Registration Statement and each Prospectus included therein
(and each amendment or supplement thereto or comparable statement) to be filed
with the SEC, which documents shall be subject to the review and comment of
Holders' Counsel, and (ii) not file any such Registration Statement or
Prospectus (or amendment or supplement thereto or comparable statement) with the
SEC to which Holder's Counsel, any selling Holder or any other Inspector shall
have reasonably objected on the grounds that such filing does not comply in all
material respects with the requirements of the Securities Act or of the rules or
regulations thereunder;
(b) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith as
may be necessary (i) to keep such Registration Statement effective, and (ii) to
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities covered by such Registration Statement, in each
case until such time as all of such Registrable Securities have been disposed of
in accordance with the intended methods of disposition by the seller(s) thereof
set forth in such Registration Statement; provided, that except with respect to
--------
any Shelf
12
Registration, such period need not extend beyond nine months after the effective
date of the Registration Statement; and provided further, that with respect to
-------- -------
any Shelf Registration, such period need not extend beyond the time period
provided in Section 2.3, and which periods, in any event, shall terminate when
all Registrable Securities covered by such Registration Statement have been sold
(but not before the expiration of the 90 day period referred to in Section 4(3)
of the Securities Act and Rule 174 thereunder, if applicable);
(c) furnish, without charge, to each selling Holder of such Registrable
Securities and each Underwriter, if any, of the securities covered by such
Registration Statement, such number of copies of such Registration Statement,
each amendment and supplement thereto (in each case including all exhibits), and
the Prospectus included in such Registration Statement (including each
preliminary Prospectus) in conformity with the requirements of the Securities
Act, and other documents, as such selling Holder and Underwriter may reasonably
request in order to facilitate the public sale or other disposition of the
Registrable Securities owned by such selling Holder (the Company hereby
consenting to the use in accordance with applicable law of each such
Registration Statement (or amendment or post-effective amendment thereto) and
each such Prospectus (or preliminary prospectus or supplement thereto) by each
such selling Holder of Registrable Securities and the Underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Registration Statement or Prospectus);
(d) prior to any offering of Registrable Securities, use its best efforts
to register or qualify all Registrable Securities and other securities covered
by such Registration Statement under such other securities of blue sky laws of
such jurisdictions as any selling Holder of Registrable Securities covered by
such Registration Statement or the sole or lead managing Underwriter, if any,
may reasonably request to enable such selling Holder to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
selling Holder and to continue such registration or qualification in effect in
each such jurisdiction for as long as such Registration Statement remains in
effect (including through new filings or amendments or renewals), and do any and
all other acts and things which may be necessary or advisable to enable any such
selling Holder to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such selling Holder; provided, however, 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
Section 4.1 (d), (ii) subject itself to taxation in any such jurisdiction, or
(iii) consent to general service of process in any such jurisdiction;
(e) use its best efforts to obtain all other approvals, consents,
exemptions or authorizations from such governmental agencies or authorities as
may be necessary to enable the selling Holders of such Registrable Securities to
consummate the disposition of such Registrable Securities:
(f) promptly notify Holders' Counsel, each Holder of Registrable
Securities covered by such Registration Statement and the sole or lead managing
Underwriter, if any: (i) when the Registration Statement, any pre-effective
amendment, the Prospectus or any prospectus supplement related thereto or post-
effective amendment to the Registration Statement has been filed and, with
respect to the Registration Statement or any post-effective amendment,
13
when the same has become effective, (ii) of any request by the SEC or any state
securities or blue sky authority for amendments or supplements to the
Registration Statement or the Prospectus related thereto or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threat of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
existence of any fact of which the Company becomes aware or the happening of any
event which results in (A) the Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein not misleading, or
(B) the Prospectus included in such Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein, in the light of the
circumstances under which they were made, not misleading, (vi) if at any time
the representations and warranties contemplated by Section 2.5 (b) cease to be
true and correct in all material respects, and (vii) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate or that there exists circumstances not yet disclosed to the
public which make further sales under such Registration Statement inadvisable
pending such disclosure and post-effective amendment; and, if the notification
relates to an event described in any of the clauses (ii) through (vii) of this
Section 4.1 (f), the Company shall promptly prepare a supplement or
post-effective amendment to such Registration Statement or related Prospectus or
any document incorporated therein by reference or file any other required
document so that (1) such Registration Statement shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(2) as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder, such Prospectus shall not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein in the light of the circumstances
under which they were made not misleading (and shall furnish to each such Holder
and each Underwriter, if any, a reasonable number of copies of such Prospectus
so supplemented or amended); and if the notification relates to an event
described in clause (iii) of this Section 4.1 (f), the Company shall take all
reasonable action required to prevent the entry of such stop order or to remove
it if entered;
(g) make available for inspection by any selling Holder of
Registrable Securities, any sole or lead managing Underwriter participating in
any disposition pursuant to such Registration Statement, Holders' Counsel and
any attorney, accountant or other agent retained by any such seller or any
Underwriter (each, an "Inspector" and, collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of the
Company and any subsidiaries thereof as may be in existence at such time
(collectively, the "Records") as shall be necessary, in the opinion of such
Holders' and such Underwriters' respective counsel, to enable them to exercise
their due diligence responsibility and to conduct a reasonable investigation
within the meaning of the Securities Act, and cause the Company's and any
subsidiaries' officers, directors and employees, and the independent public
accountants of the Company, to supply all information reasonably requested by
any such Inspectors in connection with such Registration Statement;
14
(h) obtain an opinion from the Company's counsel and a "cold comfort"
letter from the Company's independent public accountants who have certified the
Company's financial statements included or incorporated by reference in such
Registration Statement, in each case dated the effective date of such
Registration Statement (and if such registration involves an Underwritten
Offering, dated the date of the closing under the underwriting agreement), in
customary form and covering such matters as are customarily covered by such
opinions and "cold comfort" letters delivered to underwriters in underwritten
public offerings, which opinion and letter shall be reasonably satisfactory to
the sold or lead managing Underwriter, if any, and to the Majority Holders of
the Registration, and furnish to each Holder participating in the offering and
to each Underwriter, if any, a copy of such opinion and letter addressed to such
Holder (in the case of the opinion) and Underwriter, (in the case of the opinion
and the "cold comfort" letter);
(i) provide a CUSIP number for all Registrable Securities and provide
and cause to be maintained a transfer agent and registrar for all such
Registrable Securities covered by such Registration Statement not later than the
effectiveness of such Registration Statement;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC and any other governmental agency or authority
having jurisdiction over the offering, and make available to its security
holders, as soon as reasonably practicable but no later than 90 days after the
end of any 12-month period, an earnings statement (i) commencing at the end of
any month in which Registrable Securities are sold to Underwriters in an
Underwritten Offering and (ii) commencing with the first day of the Company's
calendar month next succeeding each sale of Registrable Securities after the
effective date of a Registration Statement, which statement shall cover such
12-month periods, in a manner which satisfies the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder;
(k) if so requested by the Majority Holders of the Registration, use
its best efforts to cause all such Registrable Securities to be listed (i) on
each national securities exchange on which the Company's securities are then
listed or (ii) if securities of the Company are not at the time listed on any
national securities exchange (or if the listing of Registrable Securities is not
permitted under the rules of each national securities exchange on which the
Company's securities are then listed), on a national securities exchange
designated by the Majority Holders of the Registration;
(l) keep each selling Holder of Registrable Securities advised in
writing as to the initiation and progress of any registration under Section 2
hereunder;
(m) enter into and perform customary agreements (including, if
applicable, an underwriting agreement in customary form) and provide officers'
certificates and other customary closing documents;
(n) cooperate with each selling Holder of Registrable Securities and
each Underwriter participating in the disposition of such Registrable Securities
and their respective counsel in connection with any filings required to be made
with the NASD and make reasonably available its employees and personnel and
otherwise provide reasonable assistance to the
15
Underwriters (taking into account the needs of the Company's businesses and the
requirements of the marketing process) in the marketing of Registrable
Securities in any Underwritten Offering;
(o) furnish to each Holder participating in the offering and the sole
or lead managing Underwriter, if any, without charge, at least one manually-
signed copy of the Registration Statement and any post-effective amendments
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those deemed to be
incorporated by reference);
(p) cooperate with the selling Holders of Registrable Securities and
the sole or lead managing Underwriter, if any, to facilitate the timely
preparation and delivery of certificates not bearing any restrictive legends
representing the Registrable Securities to be sold, and cause such Registrable
Securities to be issued in such denominations and registered in such names in
accordance with the underwriting agreement prior to any sale of Registrable
Securities to the Underwriter or, if not an Underwritten Offering, in accordance
with the instructions of the selling Holders of Registrable Securities at least
three business days prior to any sale of Registrable Securities;
(q) if requested by the sole or lead managing Underwriter or any
selling Holder of Registrable Securities, immediately incorporate in a
prospectus supplement or post-effective amendment such information concerning
such Holder of Registrable Securities, the Underwriters or the intended method
of distribution as the sole or lead managing Underwriter or the selling Holder
of Registrable Securities reasonably requests to be included therein and as is
appropriate in the reasonable judgment of the Company, including, without
limitation, information with respect to the number of shares of the Registrable
Securities being sold to the Underwriters, the purchase price being paid
therefor by such Underwriters and with respect to any other terms of the
Underwritten Offering of the Registrable Securities to be sold in such offering;
make all required filings of such Prospectus supplement or post-effective
amendment as soon as notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; and supplement or make
amendments to any Registration Statement if requested by the sole or lead
managing Underwriter of such Registrable Securities; and
(r) use its best efforts to take all other steps necessary to
expedite or facilitate the registration and disposition of the Registrable
Securities contemplated hereby.
4.2 Seller Information. The Company may require each selling Holder of
------------------
Registrable Securities as to which any registration is being effected to furnish
to the Company such information regarding such Holder, such Holder's Registrable
Securities and such Holder's intended method of disposition as the Company may
from time to time reasonably request in writing; provided that such information
--------
shall be used only in connection with such registration. If any Registration
Statement or comparable statement under "blue sky" laws refers to any Holder by
name or otherwise as the Holder of any securities of the Company, then such
Holder shall have the right to require (i) the insertion therein of language, in
form and substance satisfactory to such Holder and the Company, to the effect
that 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
16
quality of the Company's securities covered thereby and that such holding does
not imply that such Holder will assist in meeting any future financial
requirements of the Company, and (ii) in the event that such reference to such
Holder by name or otherwise is not in the judgment of the Company, as advised by
counsel, required by the Securities Act or any similar federal statute or any
state "blue-sky" or securities law then in force, the deletion of the reference
to such Holder.
4.3 Notice to Discontinue. Each Holder of Registrable Securities agrees by
---------------------
acquisition of such Registrable Securities that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
4.1(f)(ii) through (vii), such Holder shall forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 4.1(f) and, if so
directed by the Company, such Holder shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in such
Holder's possession of the Prospectus covering such Registrable Securities which
is current at the time of receipt of such notice. If the Company shall give any
such notice, the Company shall extend the period during which such Registration
Statement shall be maintained effective pursuant to this Agreement (including,
without limitation, the period referred to in Section 4.1(b)) by the number of
days during the period from and including the date of the giving of such notice
pursuant to Section 4.1(f) to and including the date when the Holder shall have
received the copies of the supplemented or amended prospectus contemplated by
and meeting the requirements of Section 4.1(f).
5. INDEMNIFICATION; CONTRIBUTION.
-----------------------------
5.1 Indemnification by the Company. The Company agrees to indemnify and
------------------------------
hold harmless, to the fullest extent permitted by law, each Holder of
Registrable Securities, its officers, directors, partners, members,
shareholders, employees, Affiliates and agents (collectively, "Agents") and each
Person who controls such Holder (within the meaning of the Securities Act) and
its Agents with respect to each registration which has been effected pursuant to
this Agreement, against any and all losses, claims, damages or liabilities,
joint or several, actions or proceedings (whether commenced or threatened) in
respect thereof, and expenses (as incurred or suffered and including, but not
limited to, any and all expenses incurred in investigating, preparing or
defending any litigation or proceeding, whether commenced or threatened, and the
reasonable fees, disbursements and other charges of legal counsel) in respect
thereof (collectively, "Claims"), insofar as such Claims arise out of or are
based upon any untrue or alleged untrue statement of a material fact contained
in any Registration Statement or Prospectus (including any preliminary, final or
summary prospectus and any amendment or supplement thereto) related to any such
registration or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration, or
any qualification or compliance incident thereto; provided, however, that the
-------- -------
Company will not be liable in any such case to the extent that any such Claims
arise out of or are based upon untrue statement or alleged untrue statement of a
material fact or omission or alleged omission of a material fact so made in
reliance upon and in
17
conformity with written information furnished to the Company in an instrument
duly executed by such Holder specifically stating that it was expressly for use
therein. The Company shall also indemnify any Underwriters of the Registrable
Securities, their Agents and each Person who controls any such Underwriter
(within the meaning of the Securities Act) to the same extent as provided above
with respect to the indemnification of the Holders of Registrable Securities.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any Person who may be entitled to
indemnification pursuant to this Section 5 and shall survive the transfer of
securities by such Holder or Underwriter.
5.2 Indemnification by Holders. Each Holder, if Registrable Securities
--------------------------
held by it are included in the securities as to which a registration is being
effected, agrees to, severally and not jointly, indemnify and hold harmless, to
the fullest extent permitted by law, the Company, its directors and officers,
each other Person who participates as an Underwriter in the offering or sale of
such securities and its Agents and each Person who controls the Company or any
such Underwriter (within the meaning of the Securities Act) and its Agents
against any and all Claims, insofar as such Claims arise out of or are based
upon any untrue or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (including any preliminary, final or
summary prospectus and any amendment or supplement thereto) related to such
registration, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, to the extent, but only to the extent, that such untrue
statement or alleged untrue or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company in an
instrument duly executed by such Holder specifically stating that it was
expressly for use therein; provided, however, that the aggregate amount which
-------- -------
any such Holder shall be required to pay pursuant to this Section 5.2 shall in
no event be greater than the amount of the net proceeds received by such Holder
upon the sale of the Registrable Securities pursuant to the Registration
Statement giving rise to such Claims less all amounts previously paid by such
Holder with respect to any such Claims. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by such
Holder or Underwriter.
5.3 Conduct of Indemnification Proceedings. Promptly after receipt by an
--------------------------------------
indemnified party of notice of any Claim or the commencement of any action or
proceeding involving a Claim under this Section 5, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party
pursuant to Section 5, (i) notify the indemnifying party in writing of the Claim
or the commencement of such proceeding; provided, that the failure of any
--------
indemnified party to provide such notice shall not relieve the indemnifying
party of its obligations under this Section 5, except to the extent the
indemnifying party is materially and actually prejudiced thereby and shall not
relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Section 5, and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided; however, that any indemnified
-------- -------
party shall have the right to employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (A) the indemnifying party has agreed
in writing to pay such fees and expenses, (B) the indemnifying
18
party shall have failed to assume the defense of such claim and employ counsel
reasonably satisfactory to such indemnified party within 10 days after receiving
notice form such indemnified party that the indemnified party believes it has
failed to do so, (C) in the reasonable judgment of any such indemnified party,
based upon advice of counsel, a conflict of interest may exist between such
indemnified party and the indemnifying party with respect to such claims (in
which case, if the indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such indemnifying party) or (D) such indemnified party
is a defendant in an action or proceeding which is also brought against the
indemnifying party and reasonably shall have concluded that there may be one or
more legal defenses available to such indemnified party which are not available
to the indemnifying party. No indemnifying party shall be liable for any
settlement of any such claim or action effected without its written consent,
which consent shall not be unreasonably withheld. In addition, without the
consent of the indemnified party (which consent shall not be unreasonably
withheld), no indemnifying party shall be permitted to consent to entry of any
judgment with respect to, or to effect the settlement or compromise of any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim), unless such settlement,
compromise or judgment (1) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim, (2) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party, and (3) does not provide for any
action on the part of any party other than the payment of money damages which is
to be paid in full by the indemnifying party.
5.4 Contribution. If the indemnification provided for in Section 5.1 or
------------
5.2 from the indemnifying party for any reason is unavailable to (other than by
reason of exceptions provided therein), or is insufficient to hold harmless, an
indemnified party hereunder in respect of any Claim, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such Claim in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and the indemnified party, on the other
hand, in connection with the actions which resulted in such Claim, as well as
any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. If, however, the foregoing allocation is not permitted by applicable
law, then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not
only such relative faults but also the relative benefits of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.4 were determined by pro rata allocation
--- ----
or by any other method of
19
allocation which does not take into account the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by a party as a result of any Claim referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth in
Section 5.3, any legal or other fees, costs or expenses reasonably incurred by
such party in connection with any investigation or proceeding. Notwithstanding
anything in this Section 5.4 to the contrary, no indemnifying party (other than
the Company) shall be required pursuant to this Section 5.4 to contribute any
amount in excess of the net proceeds received by such indemnifying party from
the sale of the Registrable Securities pursuant to the Registration Statement
giving rise to such Claims, less all amounts previously paid by such
indemnifying party with respect to such Claims. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
5.5 Other Indemnification. Indemnification similar to that specified in
---------------------
the preceding Sections 5.1 and 5.2 (with appropriate modifications) shall be
given by the Company and each selling Holder of Registrable Securities with
respect to any required registration or other qualification of securities under
any Federal or state law or regulation of any governmental authority, other than
the Securities Act. The indemnity agreements contained herein shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract.
5.6 Indemnification Payments. The indemnification and contribution
------------------------
required by this Section 5 shall be made by periodic payments of the amount
thereof during the course of any investigation or defense, as and when bills are
received or any expense, loss, damage or liability is incurred.
6. GENERAL.
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6.1 Adjustments Affecting Registrable Securities. The Company agrees that
--------------------------------------------
it shall not effect or permit to occur any combination or subdivision of shares
which would adversely affect the ability of the Holder of any Registrable
Securities to include such Registrable Securities in any registration
contemplated by this Agreement or the marketability of such Registrable
Securities in any such registration.
6.2 Registration Rights to Others. The Company has not previously entered
-----------------------------
into an agreement with respect to its securities granting any registration
rights to any Person. If the Company shall at any time hereafter provide to any
holder of any securities of the Company rights with respect to the registration
of such securities under the Securities Act, (i) such rights shall not be in
conflict with or adversely affect any of the rights provided in this Agreement
to the Holders and (ii) if such rights are provided on terms or conditions more
favorable to such holder than the terms and conditions provided in this
Agreement, the Company shall provide (by way of amendment to this Agreement or
otherwise) such more favorable terms or conditions to the Holders.
6.3 Availability of Information; Rule 144; Rule 144A; Other Exemptions. So
------------------------------------------------------------------
long as the Company shall not have filed a registration statement pursuant to
Section 12 of the Exchange
20
Act or a registration statement pursuant to the requirements of the Securities
Act, the Company shall, at any time and from time to time, upon the request of
any Holder of Registrable Securities and upon the request of any Person
designated by such Holder as a prospective purchaser of any Registrable
Securities, furnish in writing to such Holder or such prospective purchaser, as
the case may be, a statement as of a date not earlier than 12 months prior to
the date of such request of the nature of the business of the Company and the
products and services it offers and copies of the Company's most recent balance
sheet and profit and loss and retained earnings statements, together with
similar financial statements for such part of the two preceding fiscal years as
the Company shall have been in operation, all such financial statements to be
audited to the extent audited statements are reasonable available, provided
--------
that, in any event the most recent financial statements so furnished shall
include a balance sheet as of a date less than 16 months prior to the date of
such request, statements of profit and loss and retained earnings for the 12
months preceding the date of such balance sheet, and, if such balance sheet is
not as of a date less than 6 months prior to the date of such request,
additional statements of profit and loss and retained earnings for the period
from the date of such balance sheet to a date less than 6 months prior to the
date of such request. If the Company shall have filed a registration statement
pursuant to the requirements of Section 12 of the Exchange Act or a registration
statement pursuant to the requirements of the Securities Act, the Company
covenants that it shall timely file any reports required to be filed by it under
the Securities Act or the Exchange Act (including, but not limited to, the
reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) of Rule 144 under the Securities Act), and that it shall take
such further action as any Holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (i) Rule 144 and Rule 144A under
the Securities Act, as such rules may be amended from time to time, or (ii) any
other rule or regulation now existing or hereafter adopted by the SEC. Upon the
request of any Holder of Registrable Securities, the Company shall deliver to
such Holder a written statement as to whether it has complied with such
requirements.
6.4 Amendments and Waivers. The provisions of this Agreement may not be
----------------------
amended, modified, supplemented or terminated, and waivers or consents to
departures from the provisions hereof may not be given, without the written
consent of the Company and the Holders holding more than 50% of the Registrable
Securities then outstanding; provided, however, that no such amendment,
-------- -------
modification, supplement, waiver or consent to departure shall reduce the
aforesaid percentage of Registrable Securities without the written consent of
all of the Holders of Registrable Securities; and provide further, that nothing
------- -------
herein shall prohibit any amendment, modification, supplement, termination,
waiver or consent to departure the effect of which is limited only to those
Holders who have agreed to such amendment, modification, supplement,
termination, waiver or consent to departure.
6.5 Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand delivery, telecopier, and
courier guaranteeing overnight delivery or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to the applicable
party at the address set forth below or such other address as
21
may hereafter be designated in writing by such party to the other parties in
accordance with the provisions of this Section:
(i) If to the Company, to:
Wellington Properties Trust
00000 Xxxx Xxxxxxxxx Xxxxx
Xxxxx 000
P.O. Box 0919
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxx
Telecopier: (000) 000-0000
With a copy to:
Wellington Properties Trust
00000 Xxxx Xxxxxxxxx Xxxxx
Xxxxx 000
P.O. Box 0919
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxx
Telecopier: (000) 000-0000
(ii) If to the Initial Holder, to:
Credit Suisse First Boston Mortgage Capital LLC
Principal Transactions Group
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Re: Wellington/Lake Pointe/Xxxxxxx Xxxxx
Telecopier: (000) 000-0000
With a copy to:
Credit Suisse First Boston Mortgage Capital LLC
Legal & Compliance Department
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Re: Wellington/Lake Pointe/Xxxxxxx Xxxxx
Telecopier: (000) 000-0000
22
With a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000)000-0000
(iii) If to any subsequent Holder, to the address
of such Person set forth in the records of
the Company.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; when receipt is
acknowledged, if telecopied; on the next business day, if timely delivered to a
courier guaranteeing overnight delivery; and five days after being deposited in
the mail, if sent first class or certified mail, return receipt requested,
postage prepaid.
6.6 Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and be binding upon the parties hereto and their respective heirs, successors
and permitted assigns (including any permitted transferee of Registrable
Securities. Any Holder may assign to any permitted transferee of its Registrable
Securities (other than a transferee that acquires such Registrable Securities in
a registered public offering or pursuant to a sale under Rule 144 of the
Securities Act (or any successor rule)), its rights and obligations under this
Agreement; provided, however, if any permitted transferee shall take and hold
-------- -------
Registrable Securities, such transferee shall promptly notify the Company and by
taking and holding such Registrable Securities such permitted transferee shall
automatically be entitled to receive the benefits of and be conclusively deemed
to have agreed to be bound by and to perform all of the terms and provisions of
this Agreement as if it were a party hereto (and shall, for all purposes, be
deemed a Holder under this Agreement). If the Company shall so request, any
heir, successor or permitted assign (including any permitted transferee) shall
agree in writing to acquire and hold the Registrable Securities subject to all
of the terms hereof. For purposes of this Agreement, "successor" for any entity
other than a natural person shall mean a successor to such entity as a result of
such entity's merger, consolidation, sale of substantially all of its assets, or
similar transaction. Except as provided above or otherwise permitted by this
Agreement, neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by any Holder or by
the Company without the consent of the other parties hereto.
6.7 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original, but all of which counterparts, taken together, shall constitute
one and the same instrument.
6.8 Descriptive Headings, Etc. The headings in this Agreement are for
-------------------------
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (1) words of any gender shall be
23
deemed to include each other gender; (2) words using the singular or plural
number shall also include the plural or singular number, respectively; (3) the
words "hereof", "herein" and "hereunder" and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and paragraph references are
to be Sections and paragraphs of this Agreement unless otherwise specified; (4)
the word "including" and words of similar import when used in this Agreement
shall mean "including, without limitation," unless otherwise specified; (5) "or"
is not exclusive; and (6) provisions apply to successive events and
transactions.
6.9 Severability. In the event that any one or more of the provisions,
------------
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
6.10 Governing Law. This Agreement shall be governed by, and construed in
-------------
accordance with, the laws of the State of New York (without giving effect to the
conflict of laws principles thereof).
6.11 Remedies; Specific Performance. The parties hereto acknowledge that
------------------------------
money damages would not be an adequate remedy at law if any party fails to
perform in any material respect any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to seek to compel
specific performance of the obligations of any other party under this Agreement,
without the posting of any bond, in accordance with the terms and conditions of
this Agreement in any court of the United States or any State thereof having
jurisdiction, and if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law. Except as otherwise provided by
law, a delay or omission by a party hereto in exercising any right or remedy
accruing upon any such breach shall not impair the right or remedy or constitute
a waiver of or acquiescence in any such breach. No remedy shall be exclusive of
any other remedy. All available remedies shall be cumulative.
6.12 Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
representations, warranties, covenants or understandings relating to such
subject matter, other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings between the Company and the
other parties to this Agreement with respect to such subject matter.
6.13 Nominees for Beneficial Owners. In the event that any Registrable
------------------------------
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its
24
election in writing delivered to the Company, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
6.14 Consent to Jurisdiction; Waiver of Jury. Each party to this Agreement
---------------------------------------
hereby irrevocably and unconditionally agrees that any legal action, suit or
proceeding arising out of or relating to this Agreement or any agreements or
transactions contemplated hereby may be brought in any federal court of the
Southern District of New York or any state court located in New York County,
State of New York, and hereby irrevocably and unconditionally expressly submits
to the personal jurisdiction and venue of such courts for the purposes thereof
and hereby irrevocably and unconditionally waives any claim (by way of motion,
as a defense or otherwise) of improper venue, that it is not subject personally
to the jurisdiction of such court, that such courts are an inconvenient forum or
that this Agreement or the subject matter may not be enforced in or by such
court. The Company irrevocably submits to the exclusive jurisdiction of the
aforementioned courts in such action, suit or proceeding. The Company hereby
irrevocably and unconditionally consents to the service of process of any of the
aforementioned courts in any such action, suit or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the address
set forth or provided for in Section 6.5 of this Agreement, such service to
become effective 10 days after such mailing. Nothing herein contained shall be
deemed to affect the right of any party to serve process in any manner permitted
by law or commence legal proceedings or otherwise proceed against any other
party in any other jurisdiction to enforce judgments obtained in any action,
suit or proceeding brought pursuant to this Section. THE COMPANY HEREBY
IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING, WHETHER AT
LAW OR EQUITY, BROUGHT IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
6.15 Further Assurances. Each party hereto shall do and perform or cause
------------------
to be done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments and documents as
any other party hereto reasonably may request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated herein.
6.16 No Inconsistent Agreements. The Company will not hereafter enter into
--------------------------
any agreement which is inconsistent with the rights granted to the Holders in
this Agreement.
6.17 Construction. The Company and the Initial Holder acknowledge that
------------
each of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and that
this Agreement shall be construed as if jointly drafted by the Company and the
Holders.
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
COMPANY: INITIAL HOLDER:
WELLINGTON PROPERTIES TRUST CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC
By: /s/ Xxxxxx X. Xxxx By: /s/ [SIGNATURE ILLEGIBLE]^^
----------------------------- -----------------------------
Title: President Title: Authorized Signature
