Registration Rights Agreement - Keystone Holdings Partners LP, Federal Deposit Insurance Corp. and Washington Mutual Inc.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of July 21, 1996, by and among Keystone Holdings Partners L.P.,
a Texas limited partnership (the "Partnership"), the Federal Deposit Insurance
Corporation ("FDIC"), as manager of the FSLIC Resolution Fund (the "FRF")
(collectively with the FDIC, the "Initial Securities Holders"), and Washington
Mutual, Inc., a Washington corporation (the "Company").
WHEREAS, the Partnership owns all of the outstanding capital stock of
Keystone Holdings Inc., a Delaware corporation ("Keystone");
WHEREAS, the Partnership, Keystone, the Company, and certain direct and
indirect subsidiaries of Keystone are concurrently with the execution of this
Agreement entering into an Agreement for Merger (the "Merger Agreement"),
providing for the merger of Keystone with and into the Company in exchange for
26,000,000 newly issued shares of Common Stock, no par value, of the Company
("Common Stock") to be issued to the Partnership, all in accordance with the
terms of the Merger Agreement;
WHEREAS, the Partnership, the FDIC, the Company, Keystone, certain of
Keystone's direct and indirect subsidiaries and certain other parties are,
concurrently with the execution of this Agreement, entering into that certain
agreement (the "Warrant Exchange Agreement") pursuant to which the FDIC is to
transfer at the Effective Time (as defined in the Merger Agreement) warrants
that the FRF holds for capital stock of N.A. Capital Holdings, Inc. to the
Company in exchange for 14,000,000 newly issued shares of Common Stock, all in
accordance with the terms of the Warrant Exchange Agreement;
WHEREAS, pursuant to the Merger Agreement and the Warrant Exchange
Agreement, the Company will issue at the Effective Time an additional 8,000,000
newly issued shares of Common Stock (the "Litigation Shares") and deliver such
shares to an escrow agent for release on a proportional basis to the Initial
Securities Holders, or their permitted assigns, in the event of a cash recovery
in the Case after the Closing, all in accordance with the terms of the Merger
Agreement, the Warrant Exchange Agreement and the Escrow Agreement (as defined
in the Merger Agreement);
WHEREAS, the transactions contemplated by the Merger Agreement and the
Warrant Exchange Agreement are to be consummated at the Closing;
WHEREAS, in connection with the Merger Agreement and the Warrant
Exchange Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS.
1.1 Defined Terms. (a) As used in this Agreement, the following terms
shall have the following meanings:
"affiliate" shall have the meaning ascribed thereto in Rule 12b-2
promulgated by the Commission under the Exchange Act as in effect on
the date hereof.
"Agreement" shall mean this Registration Rights Agreement, as it
may be amended, supplemented or otherwise modified from time to time.
"Closing" shall have the meaning assigned to such term in the
Recitals.
"Closing Date" shall mean the date on which the Closing occurs.
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"Commission" shall mean the United States Securities and
Exchange Commission or any successor thereto.
"Common Stock" shall have the meaning assigned to such term in
the Recitals.
"Company" shall have the meaning assigned to such term in the
Preamble.
"Company Public Sale Event" shall mean any sale by the Company
of Common Stock for its own account as contemplated by subsection 4.1
pursuant to an effective Registration Statement filed by the Company,
filed on Form S-1 or any other form for the general registration of
securities with the Commission (other than a Registration Statement
filed by the Company on either Form S-4 or Form S-8 or any registration
in connection with a standby underwriting in connection with the
redemption of outstanding convertible securities).
"Company Sale Notice" shall mean a Notice of Offering pursuant
to Subsection 4.1 from the Company to each Security Holder stating that
the Company proposes to effect a Company Public Sale Event.
"Effective Time" shall have the meaning assigned to such term
in the Recitals.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and any rules and regulations promulgated thereunder, and
any successor federal statute, rules or regulations.
"FDIC" shall have the meaning assigned to such term in the
Preamble.
"Form S-1" shall mean such form of registration statement
under the Securities Act as in effect on the date hereof or any
successor form thereto.
"Form S-3" shall mean such form of registration statement
under the Securities Act as in effect on the date hereof or any
successor form thereto.
"Form S-4" shall mean such form of registration statement
under the Securities Act as in effect on the date hereof or any
successor form thereto.
"Form S-8" shall mean such form of registration statement
under the Securities Act as in effect on the date hereof or any
successor form thereto.
"FRF" shall have the meaning assigned to such term in the
Preamble.
"Initial Merger Shares" shall mean the aggregate of 40,000,000
newly issued shares of Common Stock issued by the Company pursuant to
the terms of the Merger Agreement and the Warrant Exchange Agreement at
the Effective Time, which shall consist of the 26,000,000 Keystone
Initial Shares (as defined in the Merger Agreement) and the 14,000,000
FRF Initial Shares (as defined in the Merger Agreement).
Notwithstanding the foregoing, if an Adjustment Event (as defined in
the Merger Agreement) shall have occurred, then the Keystone Initial
Shares shall be reduced to 25,883,333 shares of Common Stock, and the
numbers 40,000,000 and 26,000,000 in this Agreement, shall be changed
to the numbers 39,883,333 and 25,883,333, respectively, subject to
Section 2.2(c) of the Merger Agreement.
"Initial Securities Holders" shall have the meaning assigned
to such term in the Preamble of this Agreement.
"Initial Underwriting" shall mean the underwritten public
offering referred to in Section 2.
"Keystone" shall have the meaning assigned in the first
Recital.
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"Litigation Shares" shall have the meaning assigned to such
term in the Recitals.
"Litigation Shelf" shall have the meaning assigned to such
term in subsection 3.1(b) hereof.
"Merger Agreement" shall have the meaning assigned to such
term in the Recitals.
"NASD" shall mean the National Association of Securities
Dealers, Inc. or any successor thereto.
"Notice of Offering" shall mean a written notice with respect
to (a) the Initial Underwriting, or (b) a proposed underwritten public
offering pursuant to the Shelf Registration Statement or (c) a Company
Public Sale Event, in each case setting forth (i) the expected maximum
and minimum number of shares of Registrable Common or Common Stock, as
the case may be, proposed to be offered and sold, (ii) the lead
managing underwriter, if applicable or selected and (iii) the proposed
method of distribution and the expected timing of the offering.
"Partnership" shall have the meaning assigned to such term in
the Preamble of this Agreement.
"Person" shall mean an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority or
other entity of whatever nature.
"Piggybacking Securities Holder" shall mean Securities Holders
selling Registrable Common in connection with a Company Public Sale
Event pursuant to subsection 4.3.
"Preliminary Prospectus" shall mean each preliminary
prospectus included in a Registration Statement or in any amendment
thereto prior to the date on which such Registration Statement is
declared effective under the Securities Act, including any prospectus
filed with the Commission pursuant to Rule 424(a) under the Securities
Act.
"Prospectus" shall mean each prospectus included in a
Registration Statement (including, without limitation, a prospectus
that discloses information previously omitted from a prospectus filed
as part of an effective Registration Statement in accordance with Rule
430A), together with any supplement thereto, and any material
incorporated by reference into such Prospectus, all as filed with, or
transmitted for filing to, the Commission pursuant to Rule 424(b) under
the Securities Act.
"Public Sale Event" shall mean the Initial Underwriting, an
underwritten public offering under the Shelf Registration Statement or
the Litigation Shelf, or a Company Public Sale Event, as the case may
be.
"Purchase Agreement" shall mean any written agreement entered
into by any Securities Holder providing for the sale of Registrable
Common in the manner contemplated by a related Registration Statement,
including the sale thereof to an underwriter for an offering to the
public.
"Registrable Common" shall mean (a) the Initial Merger Shares
and (b) any other securities issued as (or issuable upon the conversion
or exercise of any warrant, right, option or other security which is
issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, the Initial Merger Shares; provided,
however, that any such Registrable Common shall cease to be Registrable
Common when (i) a Registration Statement with respect to the sale of
such Registrable Common has been declared effective under the
Securities Act and such securities have been disposed of in accordance
with the plan of distribution set forth in such Registration Statement,
(ii) such shares are disposed of pursuant to Rule 144 (or any similar
provisions then in force) under the Securities Act, (iii) such
Registrable Common shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer
under the Securities Act shall have been delivered by the Company and
they may be resold without subsequent registration or qualification
under the Securities Act or any state securities laws then in force, or
(iv) such securities shall cease to be outstanding; provided, further,
that any securities that have
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ceased to be Registrable Common cannot thereafter become Registrable
Common, and any security that is issued or distributed in respect to
securities that have ceased to be Registrable Common shall not be
Registrable Common.
"Registrable Litigation Shares" shall mean (a) the Litigation
Shares and (b) any other securities issued as (or issuable upon the
conversion or exercise of any warrant, right, option or other security
which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, the Litigation Shares;
provided, however, that any such Registrable Litigation Shares shall
cease to be Registrable Litigation Shares when (i) a Registration
Statement with respect to the sale of such Registrable Litigation
Shares has been declared effective under the Securities Act and such
securities have been disposed of in accordance with the plan of
distribution set forth in such Registration Statement, (ii) such shares
are disposed of pursuant to Rule 144 (or any similar provisions then in
force) under the Securities Act, (iii) such Registrable Litigation
Shares shall have been otherwise transferred, new certificates for them
not bearing a legend restricting further transfer under the Securities
Act shall have been delivered by the Company and they may be resold
without subsequent registration or qualification under the Securities
Act or any state securities laws then in force, or (iv) such securities
shall cease to be outstanding; provided, further, that any securities
that have ceased to be Registrable Litigation Shares cannot thereafter
become Registrable Litigation Shares, and any security that is issued
or distributed in respect to securities that have ceased to be
Registrable Litigation Shares shall not be Registrable Litigation
Shares.
"Registration" shall mean a registration of securities
pursuant to the Securities Act.
"Registration Statement" shall mean any registration statement
(including the Preliminary Prospectus, the Prospectus, any amendments
(including any post-effective amendments) thereof, any supplements and
all exhibits thereto and any documents incorporated therein by
reference pursuant to the rules and regulations of the Commission),
filed by the Company with the Commission under the Securities Act in
connection with any Public Sale Event.
"Responsible Officer" shall mean, as to the Company, the chief
executive officer, the president, the chief financial officer or any
executive or senior vice president of the Company.
"Rule 144" shall mean Rule 144 promulgated by the Commission
under the Securities Act, or any successor to such Rule.
"Rule 415" shall mean Rule 415 promulgated by the Commission
under the Securities Act, or any successor to such Rule.
"Rule 424" shall mean Rule 424 promulgated by the Commission
under the Securities Act, or any successor to such Rule.
"Rule 430A" shall mean Rule 430A promulgated by the Commission
under the Securities Act, or any successor to such Rule.
"Sale Event" shall mean any sale by the Company of Common
Stock pursuant to a Company Public Sale Event or any sale by any
Securities Holder of Registrable Common pursuant to the Initial
Underwriting or the Shelf Registration Statement, or Registrable
Litigation Shares pursuant to the Litigation Shelf.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and any rules and regulations promulgated thereunder and, any
successor federal statutes, rules or regulations.
"Securities Holder" shall mean any Initial Securities Holder
and any transferee thereof to whom are transferred the rights and
obligations of a Securities Holder pursuant to subsection 6.8.
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"Securities Holders' Counsel" shall mean the single law firm
from time to time representing the Securities Holders collectively as
appointed by Securities Holders owning a majority of the Registrable
Common and Registrable Litigation Shares held by Securities Holders at
the time of such appointment.
"Securities Holder's Questionnaire" shall mean the questionnaire
to be provided by each Securities Holder to the Company, substantially
in the form of Annex A, as the same from time to time may be amended,
supplemented or otherwise modified.
"Shelf Registration Statement" shall have the meaning assigned to
such term in subsection 3.1.
"Significant Securities Holder" shall mean, on any date of
determination thereof, a Securities Holder then holding or beneficially
owning in the aggregate more than 5% of the number of shares of the
Common Stock then outstanding.
"Supplemental Addendum" shall mean a Supplemental Addendum
substantially in the form of Annex B to this Agreement.
"Termination Date" shall mean the later of the respective dates on
which the Company has no further obligation under the terms of this
Agreement to file or keep effective the Shelf Registration Statement or
the Litigation Shelf, as the case may be.
"Warrant Exchange Agreement" shall have the meaning assigned to it
in the Recitals.
(b) 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. Unless otherwise specified,
references to sections, subsections, schedules and exhibits are references to
such in this Agreement.
SECTION 2. INITIAL UNDERWRITING.
2.1 Underwritten Offering. The Company will use its best efforts to
cause to be effective on the Closing Date, or as soon as practicable thereafter
(recognizing that time is of the essence), a Registration Statement with respect
to an underwritten public offering of not less than 7.5 million and not more
than 20 million shares of Registrable Common; provided, however, that the
Company agrees that it shall not cause such Registration Statement to be
effective on the Closing Date or as soon as practicable thereafter if the
Company and the holders of a majority of the Registrable Common participating in
the Initial Underwriting mutually agree prior to the Closing Date, or
thereafter, to cause such Registration Statement to be declared effective on
another date, which date shall not be under any circumstances later than the
date three (3) days after the Company publishes financial results covering
thirty (30) days or more of post-Merger combined operations. Promptly after the
execution hereof, the Company shall send a Notice of Offering to the Initial
Securities Holders with respect to the Initial Underwriting. The Initial
Securities Holders shall thereafter have thirty (30) days within which to submit
a written response to the Company expressing their interest in participating in
the Initial Offering and specifying the number of shares of Registrable Common
they desire to sell in the Offering. Subject to subsection 2.3 hereof, all
Securities Holders will be entitled to participate in the Initial Underwriting
in accordance with the related Notice of Offering to the full extent of their
Registrable Common; provided, however, that no Securities Holder shall be
entitled to participate in the Initial Underwriting if such participation would
be a violation of the pooling representation letter given by such Securities
Holder to the Company pursuant to the Merger Agreement.
2.2 Underwriters. The underwriters for the Initial Underwriting will
be nationally recognized underwriters chosen by Securities Holders owning a
majority of the Registrable Common held by Securities Holders anticipated to be
participating in the Initial Underwriting, as previously identified to the
Company.
2.3 Allocation in Initial Underwriting. If all the eligible shares of
Registrable Common requested to be included in the Initial Underwriting cannot
be so included as a result of the limit on the aggregate number of
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shares of Registrable Common set forth in subsection 2.1, the number of shares
of Registrable Common that may be so included shall be allocated among the
Securities Holders pro rata on the basis of the number of shares of Registrable
Common held by such eligible Securities Holders; provided, however, that such
allocation shall not operate to reduce the aggregate number of shares of
Registrable Common that may be so included in such underwriting. If any
Securities Holder does not request inclusion of the maximum number of eligible
shares of Registrable Common allocated to it pursuant to the above-described
procedure, the remaining portion of its allocation shall be reallocated among
those requesting eligible Securities Holders whose allocation did not satisfy
their requests pro rata on the basis of the number of shares of Registrable
Common held by such Securities Holders, and this procedure shall be repeated
until all of the shares of Registrable Common which may be included in the
underwriting have been so allocated.
SECTION 3. SHELF REGISTRATION.
3.1 Shelf Registration. (a) The Company agrees to prepare and file
with the Commission a "shelf" Registration Statement on Form S-3 for an offering
to be made on a continuous basis pursuant to Rule 415 covering all of the
Registrable Common not previously sold in the Initial Underwriting (the "Shelf
Registration Statement"). The permitted methods of distribution of shares of
Registrable Common under the Shelf Registration Statement shall be limited to
transactions complying with the provisions of Rule 144(f) and underwritten
offerings of shares of Registrable Common under the Shelf Registration Statement
in accordance with this Section 3. The Company will use its best efforts to have
such Registration Statement declared effective by the Commission on or as soon
as practicable after the date that is nine (9) months after the Effective Date
(as defined in the Merger Agreement). The Company shall use its best efforts to
keep the Shelf Registration Statement continuously effective until the earlier
of (A) the date three (3) years after the effective date of the Shelf
Registration Statement (subject to any "black-out" periods and extensions of
such three-year period pursuant to subsection 5.1) and (B) the date on which no
Registrable Common remains outstanding.
(b) The Company agrees to prepare and file with the Commission a
"shelf" Registration Statement on Form S-3 for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of the Litigation Shares that
are distributed to the Initial Securities Holders or their permitted assigns
pursuant to the Merger Agreement (the "Litigation Shelf"). The permitted method
of distribution of such Litigation Shares shall be limited to transactions
complying with the provisions of Rule 144(f). The Company will use its best
efforts to (i) have such Registration Statement declared effective by the
Commission on or as soon as practicable after the first date any Litigation
Shares are distributed from the escrow established at the Closing under the
Merger Agreement, and (ii) to keep such Registration Statement continuously
effective until the earlier of (A) the date three (3) years thereafter (subject
to any "black-out" periods and extensions of such three-year period pursuant to
subsection 5.1), and (B) the date on which no Registrable Litigation Shares
remain outstanding. Notwithstanding the foregoing, in the event any Aggregate
Escrow Distribution (as defined in the Merger Agreement) is made over time as a
result of Installments (as defined in the Merger Agreement), the Company shall
be obligated to use its best efforts to keep the Litigation Shelf continuously
effective until the earlier of (I) the date one (1) year after the last
distribution of Litigation Shares from the escrow (so long as such date is at
least three (3) years after the first date any Litigation Shares are distributed
from such escrow) and (II) the date on which no Registrable Litigation Shares
remain outstanding.
3.2 Demand Underwritings. (a) If the Company shall at any time receive
a Notice of Offering from any Securities Holder or Securities Holders holding a
minimum of 15% of the Registrable Common then outstanding (but in no event less
than 3,000,000 shares) requesting an underwritten public offering of Registrable
Common under the Shelf Registration Statement that has anticipated aggregate
proceeds at the time of the request (net of underwriting discounts, commissions
and expenses) in excess of $10,000,000, the Company shall, subject to the terms
and conditions hereof, be obligated to use its best efforts to facilitate such
proposed underwritten public offering pursuant to the terms of this Agreement.
The provisions of this subsection 3.2 shall not be applicable to Registrable
Litigation Shares.
(b) Following receipt of the notice referred to in subsection
3.2(a), the Company shall promptly give a Notice of Offering to all Securities
Holders (other than the demanding Securities Holders), which
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shall set forth the right of such Securities Holders to include any or all
shares of Registrable Common held by such Securities Holders in the proposed
offering, subject to the terms of this Agreement. Subject to subsection 3.2(e),
the Company shall use its best efforts to facilitate the inclusion in the
proposed underwritten public offering of the number of shares of Registrable
Common specified in written requests from such Securities Holders that are
received by the Company within fifteen (15) days after the Company provides its
Notice of Offering to all Securities Holders.
(c) The Securities Holders shall be entitled to a total of four
(4) underwritten public offerings of Registrable Common under the Shelf
Registration Statement during the three (3) year period following the effective
date of the Shelf Registration Statement (subject to any "black out" periods and
extensions of such three (3) year period pursuant to subsection 5.1); provided,
that no more than two of such underwritten public offerings may take place in
any twelve (12) month period.
(d) All underwritten public offerings of Registrable Common under
the Shelf Registration Statement shall be broadly distributed. If at any time
any of the Securities Holders of the Registrable Common covered by the Shelf
Registration Statement desire to sell Registrable Common in an underwritten
offering in accordance with the limitations of this subsection 3.2, the
investment banker or investment bankers that will manage the offering will be
nationally recognized underwriters selected jointly by the Company and by the
Securities Holders owning a majority of the Registrable Common held by
Securities Holders included in such offering.
(e) If all the shares of Registrable Common requested to be
included in any underwritten public offering pursuant to this Section 3 cannot
be so included as a result of any reasonable limit established by the
underwriters on the aggregate number of shares of Registrable Common included in
such underwriting, the number of shares of Registrable Common that may be so
included shall be allocated among the Securities Holders pro rata on the basis
of the number of shares of Registrable Common held by such Securities Holders;
provided, however, that such allocation shall not operate to reduce the
aggregate number of shares of Registrable Common that may be so included in such
underwriting. If any Securities Holder does not request inclusion of the maximum
number of shares of Registrable Common allocated to it pursuant to the
above-described procedure, the remaining portion of its allocation shall be
reallocated among those requesting Securities Holders whose allocation did not
satisfy their requests pro rata on the basis of the number of shares of
Registrable Common held by such Securities Holders, and this procedure shall be
repeated until all of the Registrable Shares which may be included in the
underwriting have been so allocated.
(f) Securities Holders holding a majority of the Registrable
Common exercising a demand right for an underwritten public offering under this
subsection 3.2 may withdraw the exercise of such right on behalf of all such
exercising Securities Holders as a result of a material adverse change in the
earnings, condition, financial or otherwise, or prospects of the Company, or a
material adverse change in the market for equity securities generally by giving
written notice to the Company prior to the date the Purchase Agreement for such
underwritten public offering is signed, and such withdrawn demand registration
right shall not be deemed to be one of the four demand rights provided under
Section 3.2(c); provided, however, that the Company shall not be required to
deliver a Notice of Offering with respect to a renewed or new demand for an
underwritten public offering pursuant to subsection 3.2 or to take any other
action with respect to any such renewed or new demand for a period of ninety
(90) days following any such notice of withdrawal.
SECTION 4. COMPANY SALE EVENTS.
4.1 Determination. Subject to subsection 5.2, the Company may at any
time effect a Company Public Sale Event pursuant to a Registration Statement
filed by the Company if the Company gives each Securities Holder a Company Sale
Notice, provided that such Company Sale Notice is given not less than 21 days
prior to the initial filing of the related Registration Statement. The
obligation of the Company to give to each Securities Holder a Company Sale
Notice and to permit piggyback registration rights to Securities Holders with
respect to Registrable Common in connection with Company Sale Events in
accordance with this Section 4 shall terminate on the earlier of (A) the date
three (3) years after the effective date of the Shelf Registration Statement
(subject to any "black-out" periods and extensions of such three-year period
pursuant to subsection 5.1) and (B) the date on which no
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Registrable Common remains outstanding. The provisions of this Section 4 shall
not be applicable to Registrable Litigation Shares.
4.2 Notice. The Company Sale Notice shall offer the Securities Holders
the opportunity to participate in such offering and include the number of shares
of Registrable Common which represents the best estimate of the lead managing
underwriter (or, if not known or applicable, the Company) that will be available
for sale by the Securities Holders in the proposed offering.
4.3 Piggyback Rights of Securities Holders. (a) If the Company shall
have delivered a Company Sale Notice, Securities Holders shall be entitled to
participate on the same terms and conditions as the Company in the Company
Public Sale Event to which such Company Sale Notice relates and to offer and
sell shares of Registrable Common therein only to the extent provided in this
subsection 4.3. Each Securities Holder desiring to participate in such offering
shall notify the Company no later than ten (10) days following receipt of a
Company Sale Notice of the aggregate number of shares of Registrable Common that
such Securities Holder then desires to sell in the offering.
(b) Each Securities Holder desiring to participate in a Company Public
Sale Event may include shares of Registrable Common in any Registration
Statement relating to a Company Public Sale Event to the extent that the
inclusion of such shares shall not reduce the number of shares of Common Stock
to be offered and sold by the Company to be included therein. If the lead
managing underwriter selected by the Company for a Company Public Sale Event
advises the Company in writing that the total number of shares of Common Stock
to be sold by the Company together with the shares of Registrable Common which
such holders intend to include in such offering would be reasonably likely to
adversely affect the price or distribution of the Common Stock offered in such
Company Public Sale Event or the timing thereof, then there shall be included in
the offering only that number of shares of Registrable Common, if any, that such
lead managing underwriter reasonably and in good faith believes will not
jeopardize the marketing of the offering; provided that if the lead managing
underwriter determines that such factors require a limitation on the number of
shares of Registrable Common to be offered and sold as aforesaid and so notifies
the Company in writing, the number of shares of Registrable Common to be offered
and sold by Securities Holders desiring to participate in the Company Public
Sale Event, shall be allocated among those Securities Holders desiring to
participate in such Company Public Sale Event on a pro rata basis based on their
holdings of Registrable Common. If any Securities Holder does not request
inclusion of the maximum number of shares of Registrable Common allocated to it
pursuant to the above-described procedure, the remaining portion of its
allocation shall be reallocated among those requesting Securities Holders whose
allocation did not satisfy their requests pro rata on the basis of the number of
shares of Registrable Common held by such Securities Holders, and this procedure
shall be repeated until all of the shares of Registrable Common which may be
included in the underwriting have been so allocated.
4.4 Discretion of the Company. In connection with any Company Public
Sale Event, subject to the provisions of this Agreement, the Company, in its
sole discretion, shall determine whether (a) to proceed with, withdraw from or
terminate such Company Public Sale Event, (b) to enter into a purchase agreement
or underwriting agreement for such Company Public Sale Event, and (c) to take
such actions as may be necessary to close the sale of Common Stock contemplated
by such offering, including, without limitation, waiving any conditions to
closing such sale which have not been fulfilled. No public offering effected
pursuant to this Section 4 shall be deemed to have been effected pursuant to
Section 2 or Section 3 hereof.
SECTION 5. BLACK-OUT PERIODS.
5.1 Black-Out Periods for Securities Holders. (a) No Securities Holder
shall offer to sell or sell any shares of Registrable Common pursuant to the
Shelf Registration Statement or Registrable Litigation Shares pursuant to the
Litigation Shelf during the 60-day period immediately following the effective
date of any Registration Statement filed by the Company in respect of a Company
Public Sale Event.
(b) No Securities Holder shall offer to sell or sell any shares
of Registrable Common pursuant to the Shelf Registration Statement or
Registrable Litigation Shares pursuant to the Litigation Shelf, and the
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Company shall not be required to supplement or amend any Registration Statement
or otherwise facilitate the sale of Registrable Common or Registrable Litigation
Shares pursuant thereto, during the 90-day period (or such lesser number of days
until the Company makes its next required filing under the Exchange Act)
immediately following the receipt by each Securities Holder of a certificate of
an authorized officer of the Company to the effect that the Board of Directors
of the Company has determined in good faith that such offer, sale, supplement or
amendment is likely to (1) interfere with or affect the negotiation or
completion of any transaction that is being contemplated by the Company (whether
or not a final decision has been made to undertake such transaction) at the time
the right to delay is exercised, or (2) involve initial or continuing disclosure
obligations that might not be in the best interest of the Company or its
stockholders. If any proposed sale is so postponed as provided herein,
Securities Holders having filed the Notice of Offering pursuant to subsection
3.2 to which the deferral relates may, within 30 days after receipt of the
notice of postponement, advise the Company in writing that it has determined to
withdraw its request for registration, and such demand registration request
shall be deemed to be withdrawn and such request shall be deemed not have been
exercised for purposes of determining whether such holders retain the right to
demand registrations pursuant to Section 3.2(c). Any period described in
subsection 5.1(a) or 5.1(b) during which Securities Holders are not able to sell
shares of Registrable Common pursuant to the Shelf Registration Statement or
Registrable Litigation Shares pursuant to the Litigation Shelf is herein
referred to as a "black-out" period. The Company shall notify each Securities
Holder of the expiration or earlier termination of any "black-out" period (the
nature and pendency of which need not be disclosed during such "black-out"
period).
(c) The period during which the Company is required pursuant to
subsection 3.1(a) or 3.1(b), respectively, to keep the Shelf Registration
Statement or the Litigation Shelf continuously effective shall be extended by a
number of days equal to the number of days, if any, of any "black-out" period
applicable to Securities Holders pursuant to this subsection 5.1 occurring
during such period, plus a number of days equal to the number of days during
such period, if any, of any period during which the Securities Holders are
unable to sell any shares of Registrable Common pursuant to the Shelf
Registration Statement or Registrable Litigation Shares pursuant to the
Litigation Shelf as a result of the happening of any event of the nature
described in subsection 6.3(c)(ii), 6.3(c)(iii) or 6.3(c)(v).
5.2 Black-Out Period for the Company. Except for offers to sell and
sales of Common Stock pursuant to a Registration Statement on Form S-8 or on
Form S-4, standby underwritings in connection with the redemption of outstanding
convertible securities, the conversion of outstanding convertible securities or
in connection with the acquisition by the Company of another company or
business, the Company shall not publicly offer to sell or sell any shares of
capital stock of the Company during the 60-day period immediately following the
initial sale of shares by any Securities Holder in an underwritten public
offering of shares of Registrable Common pursuant to Sections 2 or 3.
5.3 Financial Reporting. The Company agrees that during the period
from and after the Effective Time to and including the date 90 days thereafter,
it will not publish financial results covering 30 or more days of post-Merger
combined operations, except as part of the publication of financial results in
the ordinary course for a quarterly operating period that includes such
post-Merger combined operations, unless otherwise required by law.
SECTION 6. AGREEMENTS CONCERNING OFFERINGS.
6.1 Obligations of Securities Holders. (a) Each Securities Holder
shall, upon the reasonable request of the Company, advise the Company of the
number of shares of Registrable Common and Registrable Litigation Shares then
held or beneficially owned by it.
(b) It shall be a condition precedent to the obligations of the
Company to effect a Registration of, or facilitate any Public Sale Event with
respect to, any shares of Registrable Common or Registrable Litigation Shares
for any Securities Holder that such Securities Holders shall have furnished to
the Company a complete Securities Holder's Questionnaire and such additional
information regarding such Securities Holder, the Registrable Common or
Registrable Litigation Shares held by them and the intended method of
disposition of such securities as shall be required by law, the Commission or
the NASD, and any other information relating to such Registration reasonably
required by the Company.
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<PAGE> 10
6.2 Obligations of the Company. Whenever required under this Agreement
to proceed with a Registration of any Registrable Common or Registrable
Litigation Shares, the Company shall, subject to the terms and conditions of
this Agreement, use its best efforts to proceed as expeditiously as reasonably
possible to:
(a) Prepare and file with the Commission a Registration Statement
with respect to such Registrable Common or Registrable Litigation Shares and use
its best efforts to cause such Registration Statement to become effective;
provided, however, that before filing a Registration Statement or Prospectus or
any amendments or supplements thereto, the Company will furnish to the Security
Holders covered by such Registration Statement and to Securities Holders'
counsel copies of any such Registration Statement or Prospectus proposed to be
filed.
(b) Prepare and file with the Commission such amendments
(including post-effective amendments) to such Registration Statement and
supplements to the related Prospectus used in connection with such Registration
Statement, and otherwise use its best efforts, to the end that such Registration
Statement reflects the plan of distribution of the securities registered
thereunder that is included in the relevant Notice of Offering and is effective
until the completion of the distribution contemplated by such Registration
Statement or so long thereafter as a broker or dealer is required by law to
deliver a Prospectus in connection with the offer and sale of the shares of
Registrable Common or Registrable Litigation Shares covered by such Registration
Statement and/or as shall be necessary so that neither such Registration
Statement nor the related Prospectus shall 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 so that such
Registration Statement and the related Prospectus will otherwise comply with all
applicable legal and regulatory requirements. The Company shall not be deemed to
have effected a Registration for any purpose under this Agreement unless and
until such Registration Statement is declared effective by the Commission.
(c) Provide to any Securities Holder requesting to include
Registrable Common or Registrable Litigation Shares in such Registration
Statement and any managing underwriter(s) participating in any distribution
thereof and to any attorney, accountant or other agent retained by such
Securities Holder or managing underwriter(s), reasonable access to appropriate
officers and directors of the Company, its independent auditors and counsel to
ask questions and to obtain information (including any financial and other
records and pertinent corporate documents) reasonably requested by any such
Securities Holder, managing underwriter(s), attorney, accountant or other agent
in connection with such Registration Statement or any amendment thereto,
provided, however, that (i) in connection with any such access or request, any
such requesting Persons shall cooperate to the extent reasonably practicable to
minimize any disruption to the operation by the Company of its business and (ii)
any records, information or documents shall be kept confidential by such
requesting Persons, unless (i) such records, information or documents are in the
public domain or otherwise publicly available or (ii) disclosure of such
records, information or documents is required by court or administrative order
or by applicable law (including, without limitation, the Securities Act).
(d) Furnish at the Company's expense to the participating
Securities Holders and any managing underwriter(s) and to any attorney,
accountant or other agent retained by such Securities Holder or managing
underwriter(s), such number of copies of any Registration Statement and
Prospectus, including any Preliminary Prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the shares of
Registrable Common or Registrable Litigation Shares owned by them.
(e) Prior to any Public Sale Event, use its best efforts to
register and qualify the securities covered by such Registration Statement (to
the extent exemptions are not available) under securities or "Blue Sky" laws of
such other jurisdictions as shall be reasonably requested by the Securities
Holders or the managing underwriter(s) and to keep each such registration or
qualification effective during the period required for such Public Sale Event to
be consummated; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions in
which it has not already done so.
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<PAGE> 11
(f) Enter into and perform its obligations under a Purchase
Agreement, if the offering is an underwritten offering, in usual and customary
form, with the managing underwriter(s) of such underwritten offering; provided,
however, that each Securities Holder participating in such Public Sale Event
shall also enter into and perform its obligations under such Purchase Agreement
so long as such obligations are usual and customary obligations of selling
stockholders in a registered public offering.
(g) Use its best efforts to cause the Registrable Common or
Registrable Litigation Shares covered by the Registration Statement to be listed
on each national securities exchange in the United States on which the Common
Stock is then listed or quoted on each inter-dealer quotation system on which
the Common Stock is then quoted.
(h) Provide for or designate a transfer agent and registrar
(which may be the same entity) for the Registrable Common or Registrable
Litigation Shares covered by the Registration Statement from and after the
effective date of such Registration Statement.
(i) Cooperate with the selling Securities Holders of Registrable
Common and any managing underwriters to facilitate the timely issuance and
delivery to any underwriters to which any Securities Holder may sell Registrable
Common in such offering certificates evidencing shares of the Registrable Common
not bearing any restrictive legends and in such denominations and registered in
such names as the managing underwriters may request.
6.3 Agreements Related to Offerings. Subject to the terms and
conditions hereof, in connection with the Registration Statement covering the
Initial Underwriting, any Company Public Sale Event, the Shelf Registration
Statement and the Litigation Shelf, as applicable:
(a) The Company will cooperate with the underwriters for any
underwritten public offering of Registrable Common proposed to be sold pursuant
to a Registration Statement, and will, unless the parties to the Purchase
Agreement otherwise agree, use its best efforts to enter into a Purchase
Agreement not inconsistent with the terms and conditions of this Agreement and
containing such other terms and conditions of a type and form reasonable and
customary for companies of similar size and credit rating (including, but not
limited to, such provisions for delivery of a "comfort letter" and legal opinion
as are customary), and use its best efforts to take all such other reasonable
actions as are necessary or advisable to permit, expedite and facilitate the
disposition of such shares of Registrable Common in the manner contemplated by
such Registration Statement in each case to the same extent as if all the shares
of Registrable Common then being offered were for the account of the Company.
(b) Neither such Registration Statement nor any amendment or
supplement thereto will be filed by the Company until Securities Holders'
Counsel shall have had a reasonable opportunity to review the same and to
exercise its rights under subsection 6.2(c) with respect thereto. No amendment
to such Registration Statement naming any Securities Holder as a selling
security holder shall be filed with the Commission until such Securities Holder
shall have had a reasonable opportunity to review such Registration Statement as
originally filed. Neither such Registration Statement nor any related Prospectus
or any amendment or supplement thereto shall be filed by the Company with the
Commission which shall be disapproved (for reasonable cause) by the managing
underwriters named therein or Securities Holders' Counsel within a reasonable
period after notice thereof.
(c) The Company will use its reasonable efforts to keep the
Securities Holders informed of the Company's best estimate of the earliest date
on which such Registration Statement or any post-effective amendment thereto
will become effective and will notify each Securities Holder, Securities
Holders' Counsel and the managing underwriter(s), if any, participating in the
distribution pursuant to such Registration Statement promptly (i) when such
Registration Statement or any post-effective amendment to such Registration
Statement is filed or becomes effective, (ii) of any request by the Commission
for an amendment or any supplement to such Registration Statement or any related
Prospectus, or any other information request by any other governmental agency
directly relating to the offering, and promptly deliver to each Securities
Holder participating in the offering and the managing underwriter(s), if any,
copies of all correspondence between the Commission or any such governmental
agency or self-regulatory body and all written memoranda relating to discussions
with the Commission
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<PAGE> 12
or its staff with respect to the Registration Statement or proposed sale of
shares, to the extent not covered by attorney-client privilege or constituting
attorney work product, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of such Registration Statement or of any order
preventing or suspending the use of any related Prospectus or the initiation or
threat of any proceeding for that purpose, (iv) of `the suspension of the
qualification of any shares of Common Stock included in such Registration
Statement for sale in any jurisdiction or the initiation or threat of a
proceeding for that purpose, (v) of any determination by the Company that an
event has occurred (the nature and pendency of which need not be disclosed
during a "black-out period" pursuant to subsection 5.1(b)) which makes untrue
any statement of a material fact made in such Registration Statement or any
related Prospectus or which requires the making of a change in such Registration
Statement or any related Prospectus in order that the same will 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, in light of the
circumstances under which they were made, not misleading, (vi) of the completion
of the distribution contemplated by such Registration Statement if it relates to
a Company Sale Event, and (vii) if at any time the representations and
warranties of the Company under Section 7 cease to be true and correct in all
material respects.
(d) In the event of the issuance of any stop order suspending the
effectiveness of such Registration Statement or of any order suspending or
preventing the use of any related Prospectus or suspending the qualification of
any shares of Common Stock included in such Registration Statement for sale in
any jurisdiction, the Company will use its reasonable best efforts to obtain its
withdrawal at the earliest possible time.
(e) The Company agrees to otherwise use its best efforts to
comply with all applicable rules and regulations of the Commission, and make
available to the Security Holders, as soon as reasonably practicable, but not
later than fifteen months after the effective date of such Registration
Statement, an earnings statement covering the period of at least twelve months
beginning with the first full fiscal quarter after the effective date of such
Registration Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act.
(f) The Company shall, subject to permitted "black-out" periods,
upon the happening of any event of the nature described in subsection
6.3(c)(ii), 6.3(c)(iii) or 6.3(c)(v), as expeditiously as reasonably possible,
prepare a supplement or post-effective amendment to the applicable Registration
Statement or a supplement to the related Prospectus or any document incorporated
therein by reference or file any other required documents and deliver a copy
thereof to each Securities Holder so that, as thereafter delivered to the
purchasers of the Registrable Common or Registrable Litigation Shares being sold
thereunder, such Prospectus will not contain 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 light of the circumstances under which they
were made, not misleading.
6.4 Certain Expenses. The Company shall pay all fees, disbursements
and expenses in connection with the Initial Underwriting, any Company Sale
Event, the Shelf Registration Statement and the Litigation Shelf and the
performance of its obligations hereunder (including those pursuant to Section
3.2 hereof), including, without limitation, to the extent applicable, all
registration and filing fees, printing, messenger and delivery expenses, fees of
the Company's auditors, listing fees, registrar and transfer agents' fees,
reasonable fees and disbursements of Securities Holders' Counsel in connection
with the registration but not the disposition of the Registrable Common and
Registrable Litigation Shares (provided that the Company shall have no
obligation to reimburse the fees and disbursements of any other counsel to any
Securities Holder), fees and disbursements for counsel for the Company, fees and
expenses (including reasonable fees and disbursements of counsel) of complying
with applicable state securities or "Blue Sky" laws and the fees of the NASD in
connection with its review of any offering contemplated in any such Registration
Statement, but not including underwriting discounts and commissions or brokerage
commissions on any shares of Registrable Common or Registrable Litigation Shares
sold in any such offering.
6.5 Reports Under the Exchange Act. (a) From the date hereof to the
Termination Date, the Company agrees to:
(i) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act or
the Exchange Act; and
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<PAGE> 13
(ii) furnish to any Securities Holder, forthwith upon request
(A) a written statement by the Company that it has complied with the
current public information and reporting requirements of Rule 144 and
the Exchange Act, (B) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by
the Company, and (C) such other information as may be reasonably
requested in connection with any Securities Holder availing itself of
any rule or regulation of the Commission which permits the selling of
any such securities without Registration or pursuant to such rule or
regulation.
(b) If any Securities Holder is required to file a Form 144 with
respect to any sale of shares of Registrable Common or Registrable Litigation
Shares, such Securities Holder shall promptly deliver to the Company a copy of
such completed Form 144 filed with the Commission.
6.6 Limitations on Subsequent Registration Rights. From the date
hereof to the Termination Date, the Company shall not, without the prior written
consent of Securities Holders owning a majority of the shares of Registrable
Common and Registrable Litigation Shares held by Securities Holders at such
time, enter into any agreement (other than this Agreement) which would allow any
holder or prospective holder of Common Stock to include such securities in the
Shelf Registration Statement or the Litigation Shelf, or which would provide any
holder or prospective holder of Common Stock piggyback registration rights for
such Common Stock unless the piggyback registration rights provided to the
Securities Holders hereunder shall have priority in the event of any cutback.
6.7 Indemnification and Contribution. (a) In connection with (x) the
Shelf Registration Statement and the Litigation Shelf, subsections 6.7(a)(i),
(ii) and (v), 6.7(c) and 6.5(e) hereof shall be in full force and effect upon
the effective date of the Shelf Registration Statement or the Litigation Shelf,
as the case may be, and (y) a Registration Statement which covers the Initial
Underwriting or Registrable Common being sold by Piggybacking Securities Holders
or in connection with an underwritten offering pursuant to the Shelf
Registration Statement under subsection 3.2, provisions substantially in
conformity with the following provisions shall be contained in the related
Purchase Agreement unless the parties to such Purchase Agreement agree otherwise
(references in such provisions to a Securities Holder or an underwriter being
references to a Securities Holder or an underwriter participating in the
offering covered by such Registration Statement):
(i) The Company agrees to indemnify and hold harmless each
Securities Holder and each Person, if any, who controls such Securities
Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each of their respective officers,
directors and employees against any losses, claims, damages or
liabilities, joint or several, or actions in respect thereof to which
such Securities Holder or Persons may become subject under the
Securities Act, or otherwise (collectively, "Losses"), insofar as such
Losses arise out of, or are based upon, any untrue statement or alleged
untrue statement of any material fact contained in such Registration
Statement, any related Preliminary Prospectus or any related
Prospectus, or any amendment or supplement thereto, or arise out of, or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such Securities
Holder or Persons for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such Losses;
provided, however, that the Company shall not be so liable to the
extent that any such Losses arise out of, or are based upon, an untrue
statement or alleged untrue statement of a material fact or an omission
or alleged omission to state a material fact in said Registration
Statement in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of such Securities Holder
specifically for use therein. Notwithstanding the foregoing, the
Company shall not be liable in any such instance to the extent that any
such Losses arise out of, or are based upon, an untrue statement or
alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus if (i) after the Company had made available
sufficient number of copies of the Prospectus, such Securities Holder
failed to send or deliver a copy of the Prospectus with or prior to the
delivery of written confirmation of the sale of Registrable Common to
the Person asserting such Losses or who purchased the Registrable
Common the purchase of which is the basis of the action if, in either
instance, such delivery by such Securities Holder is required by the
Securities Act and (ii) the Prospectus would have corrected such untrue
statement
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<PAGE> 14
or alleged untrue statement or alleged omission; and the Company shall
not be liable in any such instance to the extent that any such Losses
arise out of, or are based upon, an untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact in the Prospectus, if such untrue statement or alleged
untrue statement, omission or alleged omission is corrected in an
amendment or supplement to the Prospectus and if, having previously
been furnished by or on behalf of the Company with copies of the
Prospectus as so amended or supplemented, such Securities Holder
thereafter fails to deliver such Prospectus as so amended or
supplemented, prior to or concurrently with the sale of Registrable
Common if such delivery by such Securities Holder is required by the
Securities Act. This indemnity agreement will be in addition to any
liability which the Company may otherwise have and shall remain in full
force and effect regardless of any investigation made by or on behalf
of such holder or any such Person and shall survive the Termination
Date and the transfer of Registrable Common by such holder as otherwise
permitted hereby.
(ii) Each Securities Holder severally agrees to indemnify and
hold harmless the Company, each other Securities Holder and each
Person, if any, who controls the Company or such other Securities
Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and their respective officers,
directors and employees, against any Losses to which the Company, such
other Securities Holder or such Persons may become subject under the
Securities Act, or otherwise, insofar as such Losses arise out of, or
are based upon, any untrue statement or alleged untrue statement of any
material fact contained in such Registration Statement, any related
Preliminary Prospectus or any related Prospectus, or any amendment or
supplement thereto, or arise out of, or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse the Company, such other Securities Holder or such
Persons for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such Losses, in each
instance to the extent, but only to the extent, that any such Losses
arise out of, or are based upon, an untrue statement or alleged untrue
statement of a material fact or an omission or alleged omission to
state a material fact in said Registration Statement, said Preliminary
Prospectus or said Prospectus, or any said amendment or supplement
thereto in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of such Securities Holder
specifically for use therein; provided, however, that the liability of
each Securities Holder under this subsection 6.7(a)(ii) shall be
limited to an amount equal to the proceeds of the sale of shares of
Registrable Common by such Securities Holder in the offering which gave
rise to the liability (net of all costs and expenses (including
underwriting commissions and disbursements) paid or incurred by such
Securities Holder in connection with the registration, if any, and
sale).
(iii) The Company will indemnify and hold harmless each
underwriter and each Person, if any, who controls any such underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and their respective officers, directors and
employees, against any Losses to which such underwriter or Persons may
become subject under the Securities Act, or otherwise, insofar as such
Losses arise out of, or are based upon, any untrue statement or alleged
untrue statement of any material fact contained in such Registration
Statement, any related Preliminary Prospectus or any related
Prospectus, or any amendment or supplement thereto, or arise out of, or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such underwriter
or Persons for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such Losses;
provided, however, that (i) the Company shall not be so liable to the
extent that any such Losses arise out of, or are based upon, an untrue
statement or alleged untrue statement of a material fact or an omission
or alleged omission to state a material fact in said Registration
Statement, said Preliminary Prospectus or said Prospectus or any said
amendment or supplement in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of such
underwriter specifically for use therein; and (ii) such indemnity with
respect to any Preliminary Prospectus shall not inure to the benefit of
any underwriter (or any Person controlling such underwriter) from whom
the Person asserting any such Losses purchased shares of Common Stock
if such Person did not receive a copy of the Prospectus (or the
Prospectus as amended or supplemented) at or prior to the confirmation
of the sale of such shares of
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<PAGE> 15
Common Stock to such Person in any case where such delivery is required
by the Securities Act and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact in such
Preliminary Prospectus was corrected in the Prospectus (or the
Prospectus as amended or supplemented); provided, further, that the
Company shall only be required to provide the indemnification described
in this subsection 6.7(a)(iii) to an underwriter and each Person, if
any, who controls such underwriter, and their respective officers,
directors and employees, if such underwriter agrees to indemnification
provisions substantially in the form set forth in subsection 6.7(b).
(iv) Each Securities Holder will severally indemnify and hold
harmless each underwriter and each Person, if any, who controls such
underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and their respective officers,
directors and employees, against any Losses to which such underwriter
or such Persons may become subject under the Securities Act, or
otherwise, insofar as such Losses arise out of, or are based upon, any
untrue statement or alleged untrue statement of any material fact
contained in such Registration Statement, any related Preliminary
Prospectus or any related Prospectus, or any amendment or supplement
thereto, or arise out of, or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will
reimburse such underwriter or such Persons for any legal or other
expenses reasonably incurred by them in connection with investigating
or defending any such Losses, in each case to the extent, but only to
the extent, that any such Losses arise out of, or are based upon, an
untrue statement or alleged untrue statement of a material fact or an
omission or alleged omission to state a material fact in said
Registration Statement in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of such
Securities Holder specifically for use therein; provided, however, that
such Securities Holder shall only be required to provide the
indemnification described in this subsection 6.7(a)(iv) to an
underwriter and each Person, if any, who controls such underwriter if
such underwriter agrees to indemnification provisions substantially in
the form set forth in subsection 6.7(b); and provided, further, that
such Securities Holder shall not be liable in any such case to the
extent that any such Losses arise out of, or are based upon, an untrue
statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus if (i) such underwriter failed to
send or deliver a copy of the Prospectus with or prior to the delivery
of written confirmation of the sale of Registrable Common to the Person
asserting such Loss who purchased the Registrable Common which is the
subject thereof where such delivery is required by the Securities Act
and (ii) the Prospectus would have corrected such untrue statement or
omission or alleged untrue statement or alleged omission; and such
Securities Holder shall not be liable in any such case to the extent
that any such Losses arises out of, or are based upon, an untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact in the Prospectus, if such
untrue statement or alleged untrue statement, omission or alleged
omission is corrected in an amendment or supplement to the Prospectus
and if, having previously been furnished by or on behalf of such
Securities Holder with copies of the Prospectus as so amended or
supplemented, such underwriter thereafter fails to deliver such
Prospectus as so amended or supplemented, prior to or concurrently with
the sale of Registrable Common to the Person asserting such Loss who
purchased such Registrable Common which is the subject thereof or where
such delivery is required by the Securities Act, and provided, further,
that the liability of such Securities Holder under this subsection
6.7(a)(iv) shall be limited to an amount equal to the proceeds of the
sale of shares of Common Stock by such Securities Holder in the
offering which gave rise to the liability (net of all costs and
expenses (including underwriting commissions and disbursements) paid or
incurred by such Securities Holders in connection with the
registration, if any, and sale).
(v) Promptly after any Person entitled to indemnification
under this subsection 6.7 or such Purchase Agreement receives notice of
any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to the indemnification provisions of this
subsection 6.7 or such Purchase Agreement, notify the indemnifying
party in writing of the claim or the commencement of such action;
provided, however, that the failure or delay to so notify the
indemnifying party shall not relieve it from any liability which it may
have to the indemnified party hereunder unless and to the extent such
failure or delay has materially prejudiced the rights of the
indemnifying party and shall not, in any event, relieve it from any
liability which it may have
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<PAGE> 16
to the indemnified party other than pursuant to the indemnification
provisions of this subsection 6.7 or such Purchase Agreement. If any
such claim or action shall be brought against an indemnified party, and
it has notified the indemnifying party thereof in accordance with the
terms hereof, the indemnifying party shall be entitled to participate
in the defense of such claim, or, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the
defense thereof with counsel reasonably satisfactory to the indemnified
party, upon written notice to the indemnified party of such assumption.
After notice from the indemnifying party to the indemnified party of
its election to assume the defense of such claim or action, (i) the
indemnifying party shall not be liable to the indemnified party
pursuant to the indemnification provisions hereof or of such Purchase
Agreement for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than
reasonable costs of investigation, (ii) the indemnifying party shall
not be liable for the costs and expenses of any settlement of such
claim or action unless such settlement was effected with the consent of
the indemnifying party (which consent shall not be unreasonably
withheld or delayed) and (iii) the indemnified party shall be obligated
to cooperate with the indemnifying party in the investigation of such
claim or action; provided, however, that any indemnified party
hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim assumed by the indemnifying
party, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (a) the employment of such
counsel has been specifically authorized in writing by the indemnifying
party, (b) the indemnifying party shall have failed to assume the
defense of such claim from the Person entitled to indemnification
hereunder and failed to employ counsel within a reasonable period
following such assumption, or (c) in the reasonable judgment of the
indemnified party, based upon advice of its counsel, a material
conflict of interest may exist between such indemnified party and the
indemnifying party with respect to such claims or there may be one or
more material legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which
case, if the indemnified party notifies the indemnifying party in
writing that the indemnified party 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 the
indemnified party). Notwithstanding the foregoing, the Securities
Holders (together with their respective controlling Persons and
officers, directors and employees) and the underwriters (together with
their respective controlling Persons and officers, directors and
employees) shall, each as a separate group, have the right to employ at
the expense of the Company only one separate counsel for each such
group to represent such Securities Holders and such underwriters (and
their respective controlling Persons and officers, directors and
employees) who may be subject to liability arising out of any one
action (or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or
circumstances) in respect of which indemnity may be sought by such
Securities Holders and underwriters against the Company pursuant to the
indemnification provisions of this subsection 6.7 or such Purchase
Agreement. If such defense is not assumed by the indemnifying party,
the indemnifying party will not be subject to any liability for any
settlement made without its consent (but such consent will not be
unreasonably withheld or delayed). No indemnifying party will consent
to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in
respect to such claim or litigation. All fees and expenses to be paid
by the indemnifying party hereunder shall be paid a commercially
reasonable time after they are billed to the indemnified party, subject
to receipt of a written undertaking from the indemnified party to repay
such fees and expenses if indemnity is not ultimately determined to be
available to such indemnified party under this subsection 6.7.
(b) As a condition to agreeing in any Purchase Agreement to the
indemnification provisions set forth in subsections 6.7(a)(iii) and 6.7(a)(iv)
in favor of an underwriter participating in the offering covered by the related
Registration Statement, its controlling Persons, if any, and their respective
officers, directors and employees, the Company and the Securities Holders
participating in an offering pursuant to such Registration Statement may require
that such underwriter agree in the Purchase Agreement to provisions
substantially in the form set forth in subsection 6.7(a)(v) and to severally
indemnify and hold harmless the Company, each Securities Holder participating in
such offering, each Person, if any, who controls the Company or such Securities
Holder within the meaning of the Securities Act, and their respective officers,
directors and employees against any Loss to which the Company, such Securities
Holder or such Persons may become subject under the Securities Act, or
otherwise,
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insofar as such Losses arise out of, or are based upon, any untrue statement or
alleged untrue statement of any material fact contained in such Registration
Statement in which such underwriter is named as an underwriter, any related
Preliminary Prospectus or any related Prospectus, or any amendment or supplement
thereto, or arise out of, or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and to reimburse the Company, such
Securities Holder or such Persons for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such Losses
in each case to the extent, but only to the extent, that any such Loss arises
out of, or are based upon, an untrue statement or alleged untrue statement of a
material fact in said Registration Statement, said Preliminary Prospectus or
said Prospectus or any said amendment or supplement in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
such underwriter specifically for use therein.
(c) In order to provide for just and equitable contribution
between the Company and such Securities Holders in circumstances in which the
indemnification provisions of this subsection 6.7 or the related Purchase
Agreement are for any reason insufficient or inadequate to hold the indemnified
party harmless, the Company and such Securities Holders shall contribute to the
aggregate Losses (including any investigation, legal and other fees and expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claims asserted, but after deducting any
contribution actually received from Persons other than the Company and such
Securities Holders) to which the Company and one or more of its directors or its
officers who sign such Registration Statement or such Securities Holders or any
controlling Person of any of them, or their respective officers, directors or
employees may become subject, under the Securities Act, under any other statute,
at common law or otherwise, insofar as such Losses or actions in respect thereof
arise out of, or are based upon, any untrue statement or alleged untrue
statement of any material fact contained in such Registration Statement or arise
out of, or are based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading. Such contributions shall be in such amounts that the
portion of such Losses for which each such Securities Holder shall be
responsible under this subsection 6.7(c) shall be limited to the portion of such
Losses which are directly attributable to an untrue statement of a material fact
or an omission to state a material fact in said Registration Statement in
reliance upon, and in conformity with, written information furnished to the
Company by or on behalf of any such Securities Holder specifically for use
therein, and the Company shall be responsible for the balance of such Losses;
provided, however, that the liability of each such Securities Holder to make
such contribution shall be limited to an amount equal to the proceeds of the
sale of shares of Registrable Common by such Securities Holder in the offering
which gives rise to the liability (net of all cost and expenses (including
underwriting commissions and disbursements) paid or incurred in connection with
the registration, if any, and sale). As among themselves, such Securities
Holders agree to contribute to amounts payable by other such Securities Holders
in such manner as shall, to the extent permitted by law, give effect to the
provisions in subsection 6.7(a)(ii) and those provisions in the Purchase
Agreement comparable to such subsection 6.7(a)(ii). The Company and such
Securities Holders agree that it would not be just and equitable if their
respective obligations to contribute pursuant to this subsection were to be
determined by pro rata allocation (other than as set forth above) of the
aggregate Losses by reference to the proceeds realized by such Securities
Holders in a sale pursuant to said Registration Statement or said Prospectus or
by any other method of allocation which does not take account of the
considerations set forth in this subsection 6.7(c). No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution under this subsection from any
Person who was not guilty of such fraudulent misrepresentation.
(d) The Company and the Securities Holders participating in an
offering pursuant to a Registration Statement agree that, if the underwriters
participating in a Public Sale Event are agreeable, the Purchase Agreement, if
any, relating to such Registration Statement shall contain provisions to the
effect that in order to provide for just and equitable contribution between such
underwriters on the one hand and the Company and such Securities Holders on the
other hand in circumstances in which the indemnification provisions of such
Purchase Agreement are for any reason insufficient or inadequate to hold the
indemnified party harmless, the Company and such Securities Holders on the one
hand and such underwriters on the other hand will contribute on the basis herein
set forth to the aggregate Losses, (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or claims asserted, but after deducting any
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<PAGE> 18
contribution actually received from Persons other than the Company and such
Securities Holders and such underwriters) to which the Company and one or more
of its directors or its officers who sign such Registration Statement or such
Securities Holders or such underwriters or any controlling Person of any of
them, or their respective officers, directors or employees may become subject,
under the Securities Act, under any other statute, at common law or otherwise
insofar as such Losses, arise out of, or are based upon an untrue statement or
alleged untrue statement of any material fact contained in such Registration
Statement, any related Preliminary Prospectus or any related Prospectus, or any
amendment or supplement thereto, or arise out of, or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading. Such
contribution shall be in such proportions as is appropriate to reflect the
relative benefits received by the Company and such Securities Holders on the one
hand and such underwriters on the other hand from the offering of the shares of
Common Stock covered by such offering. The relative benefits received by the
Company and such Securities Holders on the one hand and such underwriters on the
other hand shall be deemed to be in the same proportion as the aggregate total
net proceeds from the offering (before deducting expenses) received by the
Company and such Securities Holders bear to the total underwriting discounts and
commissions received by such underwriters for such offering. Notwithstanding the
provisions set forth above, no underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the shares of
Common Stock underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution under the provision set forth above from any
Person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company and the Securities Holders
under the provisions of this subsection 6.7 and provisions in any Purchase
Agreement substantially similar to subsections 6.7(a), 6.7(b) 6.7(c) or 6.7(d)
shall survive the termination of any or all of the other provisions of this
Agreement or such Purchase Agreement.
6.8 Transfer of Rights Under this Agreement; Transfers of Registrable
Common. (a) During the period from the date hereof to the Termination Date, the
rights and obligations of a Securities Holder under this Agreement may be
transferred by a Securities Holder to a transferee of Registrable Common or
Registrable Litigation Shares (subject to the provisos to the definitions of
Registrable Common and Registrable Litigation Shares), provided that, within a
reasonable period of time (but in no event less than five (5) days) prior to
such transfer, (i) the transferring Securities Holder shall have furnished the
Company and the other Securities Holders written notice of the name and address
of such transferee and the number of shares of Registrable Common or Registrable
Litigation Shares with respect to which such rights are being transferred and
(ii) such transferee shall furnish the Company and the Securities Holders (other
than the transferring Securities Holder) a copy of a duly executed Supplemental
Addendum by which such transferee (A) assumes all of the obligations and
liabilities of its transferor hereunder, (B) enjoys all of the rights of its
transferor hereunder and (C) agrees itself to be bound hereby.
(b) If the stock certificates of a transferring Securities Holder
bear a restrictive legend pursuant to subsection 6.10, the stock certificates of
its transferee to whom the rights hereunder are being transferred shall, subject
to such subsection 6.10, also bear such a restrictive legend.
(c) Except with respect to transfers pursuant to paragraph (a)
above, and subject to the provisions of paragraph (b) above, a transferee of
Registrable Common or Registrable Litigation Shares shall neither assume any
liabilities or obligations nor enjoy any rights hereunder and shall not be bound
by any of the terms hereof.
(d) Each Securities Holder hereby agrees that any transfer of
shares of Registrable Common or Registrable Litigation Shares by such Securities
Holder shall be made (i) in compliance with, or in a transaction exempt from,
the registration requirements set forth in the Securities Act and (ii) in
compliance with all other applicable laws. The Company may request, as a
condition to the transfer of any Registrable Common or Registrable Litigation
Shares, that the transferring Securities Holder provide the Company with (A)
evidence that the proposed transferee is an "accredited investor" as defined in
Rule 501 under the Securities Act and appropriate
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<PAGE> 19
"private placement" representations pursuant to Section 4(2) of the Securities
Act, and (B) an opinion of securities counsel reasonably satisfactory to it with
regard to compliance with this subsection (d).
6.9 Restrictive Legend. Each certificate evidencing shares of
Registrable Common or Registrable Litigation Shares shall, unless and until such
shares are sold or otherwise transferred pursuant to an effective Registration
Statement under the Securities Act or unless, in the absence of such a
Registration Statement, the Company receives an opinion of counsel reasonably
satisfactory to it that the restrictive legend set forth below may be removed
without violation of applicable law (including, without limitation, the
Securities Act), be stamped or otherwise imprinted with a conspicuous legend in
substantially the following form:
"The transfer of the securities evidenced by this certificate is
subject to a Registration Rights Agreement dated as of July 21, 1996,
with the issuer as from time to time amended, and no transfer of the
securities evidenced by this certificate shall be valid or effective
unless made in accordance with said Agreement. A copy of said agreement
is on file and may be inspected at the principal executive office of
the issuer. The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
offered or sold unless there is in effect with respect thereto a
registration statement under said Act or unless an opinion of counsel
reasonably satisfactory to the issuer has been furnished to the issuer
that registration is not required under said Act."
SECTION 7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
In connection with the Shelf Registration Statement and the Litigation
Shelf, the Company shall, on the respective date of effectiveness of each such
Registration Statement with the Commission (the "effective date"), certify to
each Securities Holder in a certificate of a Responsible Officer of the Company
to the effect that the representations and warranties set forth below are true
and correct at and as of such effective date. In connection with any other Sale
Event in which Securities Holders participate, except as otherwise may be agreed
upon by such participating Securities Holders and the Company, the Company shall
represent and warrant in the Purchase Agreement relating to such Sale Event to
the Securities Holders and any underwriters participating in such Sale Event as
follows (except as otherwise indicated, each reference in this Section to the
"Registration Statement" shall refer to the Shelf Registration Statement, the
Litigation Shelf or a Registration Statement in respect of any other such Sale
Event in which Securities Holders participate, as the case may be, including all
information deemed to be a part thereof, as amended, and each reference to "the
Prospectus" shall refer to the related Prospectus):
(a) At the time of filing, the Registration Statement (i)
complied in all material respects with the applicable requirements of the
Securities Act and (ii) did not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein in light of the circumstances under which
they were made not misleading; provided, however, that the Company makes no
representations or warranties as to the information contained in or omitted from
the Registration Statement in reliance upon and in conformity with the
information furnished in writing to the Company by or on behalf of any
Securities Holder specifically for use in connection with the preparation
thereof or any information furnished in writing to the Company by or on behalf
of any underwriter specifically for use in connection with the preparation
thereof, other than that the Company has no knowledge of any such untrue
statement or omission in respect of such information.
(b) (i) When the Registration Statement became (in the case of a
Registration Statement filed pursuant to Rule 415) or shall become effective,
the Registration Statement did or will comply in all material respects with the
applicable requirements of the Securities Act; (ii) when the Prospectus is filed
in accordance with Rule 424(b), the Prospectus (and any supplements thereto)
will comply in all material respects with the applicable requirements of the
Securities Act; (iii) the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; and (iv) the Prospectus, if not filed pursuant to Rule 424(b), did
not or will not, and on the date of any filing pursuant to Rule 424(b), the
Prospectus (together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the
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<PAGE> 20
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to the information contained in or omitted from
the Registration Statement, or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Securities Holder specifically for use in
connection with the preparation of the Registration Statement or the Prospectus
(or any supplement thereto) or any information furnished in writing to the
Company by or on behalf of any underwriter specifically for use in connection
with the preparation of the Registration Statement or the Prospectus (or any
supplement thereto), other than that the Company has no knowledge of any such
untrue statement or omission in respect of such information.
(c) The public accountants who certified the Company's financial
statements in the Registration Statement are independent certified public
accountants within the meaning of the Securities Act; the historical
consolidated financial statements, together with the related schedules and
notes, forming part of the Registration Statement and the Prospectus comply in
all material respects with the requirements of the Securities Act and have been
prepared, and present fairly the consolidated financial condition, results of
operations and changes in financial condition of the Company and its
consolidated subsidiaries at the respective dates and for the respective periods
indicated, in accordance with generally accepted accounting principles applied
consistently throughout such periods (except as specified therein); and the
historical consolidated financial data set forth in the Prospectus is derived
from the accounting records of the Company and its consolidated subsidiaries,
and is a fair presentation of the data purported to be shown; and the pro forma
consolidated financial statements (if any), together with the related notes,
forming part of the Registration Statement and the Prospectus, comply in all
material respects with the requirements of Regulation S-X under the Securities
Act.
SECTION 8. REPRESENTATIONS AND WARRANTIES OF THE SECURITIES HOLDERS.
Each participating Securities Holder shall, in connection with a Public
Sale Event, if required by the terms of a Purchase Agreement, if any, relating
to such Public Sale Event, for itself severally and not jointly represent and
warrant to the underwriter or underwriters and each other Securities Holder
participating in such Public Sale Event as follows:
(a) Such Securities Holder has all requisite power and authority
(or with respect to the FDIC statutory authority) to enter into and carry out
the terms of this Agreement and such Purchase Agreement and the other agreements
and instruments related to such agreements to which it is a party.
(b) Each of this Agreement and such Purchase Agreement has been
duly authorized, executed and delivered by or on behalf of such Securities
Holder and constitutes the legal, valid and binding obligation of such
Securities Holder, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles.
(c) Such Securities Holder, immediately prior to any sale of
shares of Registrable Common pursuant to such Purchase Agreement, will have good
title to such shares of Registrable Common, free and clear of all liens,
encumbrances, equities or claims (other than those created by this Agreement);
and, upon payment therefor, good and valid title to such shares of Registrable
Common will pass to the purchaser thereof, free and clear of any lien, charge or
encumbrance created or caused by such Securities Holder.
(d) Such Securities Holder has not taken and will not take,
directly or indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result in, under the Exchange Act or
other applicable law, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of shares of Registrable Common.
(e) Written information furnished by or on behalf of such
Securities Holder to the Company expressly for use in the Registration Statement
or related Prospectus or amendment thereof or supplement thereto will not
contain as of the effective date of such Registration Statement or as of the
date of any Prospectus or as of
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<PAGE> 21
the date of any amendment thereof or supplement thereto any untrue statement of
a material fact or omit to state any material fact required be stated or
necessary to make the statements in such information not misleading.
SECTION 9. DELIVERY OF COMFORT LETTERS AND LEGAL OPINIONS.
(a) On (i) the respective dates that the Shelf Registration
Statement and the Litigation Shelf are declared effective by the Commission,
(ii) the date a post-effective amendment to the Shelf Registration Statement or
the Litigation Shelf, if any, covering the most recent annual or quarterly
financial statements of the Company is declared effective by the Commission and
(iii) the date that a Registration Statement relating to a Sale Event in which
Securities Holders participate is declared effective by the Commission, the
Company shall comply with the following:
(x) The Company shall have received, and delivered to each
Securities Holder participating in such Sale Event, a copy of a "comfort" letter
or letters, or updates thereof according to customary practice, of the
independent certified public accountants who have certified the Company's
financial statements included in the Registration Statement covering
substantially the same matters with respect to the Registration Statement
(including the Prospectus) and with respect to events subsequent to the date of
the Company's financial statements as are reasonably customarily covered in
accountants' letters delivered to underwriters in underwritten public offerings
of securities. The Company will use its best efforts to cause such "comfort"
letters to be addressed to such Securities Holders.
(y) Each Securities Holder participating in such offering
shall have received an opinion and any updates thereof of outside counsel to the
Company reasonably satisfactory to such Securities Holders and any underwriters
or purchasers covering substantially the same matters as are customarily covered
in opinions of issuer's counsel delivered to underwriters in underwritten public
offerings of securities, addressed to each of such Securities Holders and any
underwriters or purchasers participating in such offering and dated the closing
date thereof.
(b) On the Closing Date, the Company shall deliver to each
Initial Securities Holder an opinion of Gibson, Dunn & Crutcher, special outside
counsel to the Company, substantially to the effect that:
(i) The Company has the corporate power and authority to
enter into and carry out the terms of this Agreement; and
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Company and, assuming the due authorization,
execution and delivery thereof by the other parties hereto, constitutes the
valid and binding obligation of the Company, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
(c) On the Closing Date, the FDIC shall deliver to the Company an
opinion of the General Counsel of the FDIC, substantially to the effect that:
(i) The FDIC has statutory authority to enter into and
carry out the terms of this Agreement; and except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of the FDIC and, assuming the due authorization,
execution and delivery thereof by the other parties thereto, constitutes the
valid and binding obligation of the FDIC, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
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<PAGE> 22
(d) On the Closing Date the Partnership shall deliver to the
Company an opinion of Kelly, Hart & Hallman, special counsel to the Partnership,
substantially to the effect that:
(i) The Partnership has all requisite power and authority
to enter into and carry out the terms of this Agreement; and
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Partnership and, assuming the due
authorization, execution and delivery thereof by the other parties thereto,
constitutes the valid and binding obligation of the Partnership, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
SECTION 10. MISCELLANEOUS.
10.1 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and shall be mailed by United States registered mail,
postage prepaid, return receipt requested, sent by facsimile or delivered by
hand or by courier or overnight delivery service. Unless otherwise expressly
provided herein, all such notices, requests and demands shall be deemed to have
been duly given or made, as the case may be, (a) five (5) days after deposit in
the United States mail, (b) when actually delivered by hand or by courier or
overnight delivery service to the designated address, or, (c) in the case of
facsimile transmission, when received and telephonically confirmed. All notices
shall be addressed as follows or to such other address as may be hereafter
designated in writing by the respective parties hereto:
The Company: Marc R. Kittner
Senior Vice President
Washington Mutual, Inc.
1201 Third Avenue, Suite 1500
Seattle, WA 98101
with copies to: Todd H. Baker, Esq.
Gibson, Dunn & Crutcher
One Montgomery Street, Telesis Tower
San Francisco, CA 94104-4505
Fay L. Chapman, Esq.
Foster Pepper & Shefelman
1111 Third Avenue, Suite 3400
Seattle, WA 98101
The Securities Holders: Keystone Holdings Partners, L.P.
201 Main Street, 23rd Floor
Fort Worth, TX 76102
Attn: Ray L Pinson
Federal Deposit Insurance Corporation
801 17th Street, N.W.
Washington, D.C. 20434-0111
Attn: Director, Division of Resolutions
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<PAGE> 23
with copies to: Legal Division
Federal Deposit Insurance Corporation
1717 H Street, N.W., Room H-10025
Washington, D.C. 20434-00001
Attn: David M. Gearin, Senior Counsel
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Attn: Michael L. Ryan
Kelly, Hart & Hallman
201 Main Street, Suite 2500
Fort Worth, TX 76102
Attn: Billy J. Ellis
Dewey Ballantine
1775 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Attn: John K. Hughes
Telecopy (202) 862-1093
10.2 Amendments and Waivers. The Securities Holders of not less than
75% of the Registrable Common and Registrable Litigation Shares held or
beneficially owned by Securities Holders at any point in time and the Company
may from time to time enter into written amendments, supplements or
modifications to this Agreement for the purpose of adding any provisions hereto
or changing in any manner the rights of the Securities Holders or the Company
hereunder, and the Securities Holders of no less than 75% of the Registrable
Common and Registrable Litigation Shares held or beneficially owned by
Securities Holders at any time may execute a written instrument waiving, on such
terms and conditions as may be specified therein, any of the requirements of
this Agreement which are solely for the benefit of the Securities Holders and
where such waiver does not adversely affect the interests of the Company;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) adversely affect the rights of a Securities Holder under
Section 2, 3, 4 or 5 hereof or (ii) amend, modify or waive any provision of
Section 6 or this subsection 10.2, in each case without the written consent of
each Securities Holder. Any such waiver and any such amendment, modification or
supplement shall apply equally to each of the Securities Holders and the
Company.
10.3 Termination. This Agreement and the respective obligations and
agreements of the parties hereto, except as otherwise expressly provided herein,
shall terminate on the Termination Date.
10.4 Survival of Representations and Warranties. Except as they may
by their terms relate to an earlier date, all representations and warranties
made hereunder and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the termination of any or all of the provisions of this
Agreement.
10.5 Headings. The descriptive headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
10.6 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all of such
counterparts shall together one and the same agreement.
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<PAGE> 24
10.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO CHOICE OF LAW PROVISIONS.
10.8 Adjustment of Shares. Each reference to a number of shares of
Common Stock in this Agreement shall be adjusted proportionately to reflect any
stock dividend, subdivision, split or reverse split or the like affected with
respect to all outstanding shares of Common Stock.
10.9 No Inconsistent Agreements. The Company will not on or after
the date of this Agreement enter into, and is not presently a party to, any
agreement with respect to its securities which is inconsistent with the rights
granted to the Securities Holders in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Securities Holders pursuant to
this Agreement shall be superior to, and take precedence over, any similar
rights granted to any other Person by the Company subsequent to the date hereof.
10.10 Severability. Any provisions of this Agreement prohibited or
rendered unenforceable by any applicable law of any jurisdiction shall as to
such jurisdiction be ineffective to the extent of such prohibition or
unenforceability, without invalidating the remaining provisions hereof, any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
10.11 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns to each of
the parties hereunder as otherwise provided herein.
10.12 Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the matters
referred to herein and supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.
10.13 Result if No Merger. Notwithstanding any provision of this
Agreement, or any rights that the Initial Securities Holders may have hereunder,
if the Closing does not occur for any reason, this Agreement shall be
terminated, shall be deemed null and void ab initio, and the Company shall have
no obligations or liabilities whatsoever to any Person under any of the terms of
this Agreement.
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<PAGE> 25
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
WASHINGTON MUTUAL, INC.
By /s/ Craig E. Tall
-----------------------------------------------------
Name: Craig E. Tall
---------------------------------------------------
Title: Executive Vice President
--------------------------------------------------
KEYSTONE HOLDINGS PARTNERS, L.P.
By: KH Group Management, Inc., Its General Partner
By /s/ Ray L.Pinson
-----------------------------------------------------
Name: Ray L. Pinson
---------------------------------------------------
Title: Vice President
--------------------------------------------------
FEDERAL DEPOSIT INSURANCE CORPORATION, AS
MANAGER OF THE FSLIC RESOLUTION FUND
By /s/ James A. Meyer
-----------------------------------------------------
Name: James a. Meyer
---------------------------------------------------
Title: Assistant Director
--------------------------------------------------
-25-
<PAGE> 26
ANNEX A
SECURITIES HOLDER'S QUESTIONNAIRE
Please complete and return immediately to Washington Mutual, Inc. (the
"Company") at the following address:
Washington Mutual, Inc.
1201 Third Avenue, Suite 1500
Seattle, WA 98101
Attention:
The information requested below is required for purposes of any Public
Sale Event pursuant to the Registration Rights Agreement dated as of July 21,
1996 (the "Agreement"), that may be initiated from time to time. If you do not
furnish the Company with the requested information, you will not be entitled to
participate in any such registration. Unless otherwise defined herein,
capitalized terms shall have the meanings ascribed thereto in the Agreement
Please do not leave any request for information unanswered. If your
response to a request is "no" or "not applicable", please so state. If
additional space is required, please attach additional sheets to the end of this
Questionnaire, clearly identifying the portion hereof to which they relate.
If you have any questions regarding this Questionnaire, please contact
___________________.
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<PAGE> 27
I. Information required for notices.
Institution Name: _______________________________
Street Address: _______________________________
Post Office Box: _______________________________
City/State/Zip: _______________________________
Fed. Tax ID. No.
(if any): _______________________________
Telecopier Number: __________ Type of Telecopier:____________
Contacts (Please include alternative contacts).
1. Name: _______________________________
Title: _______________________________
Function: _______________________________
Business Telephone: _______________________________
Home Telephone: _______________________________
2. Name: _______________________________
Title: _______________________________
Function: _______________________________
Business Telephone:
Home Telephone: _______________________________
II. Information required by the Securities Act of 1933, as amended, and
related regulations.
A. Federal Securities Laws
1. Name and Address. Give your name and address exactly as they
should appear in any Prospectus.
_______________________________
_______________________________
_______________________________
_______________________________
2. Ownership of Registrable Common. State the number of shares
of Registrable Common and Registrable Litigation Shares, if any, owned by you or
your affiliates as of a recent practicable date.
Shares of Registrable Common: ____________
Shares of Registrable Litigation Shares (assuming distribution of
the maximum amount thereof): ____________________________
3. Beneficial Ownership of Common Stock. Please furnish the
following information, in the tabular form indicated, as to the shares of Common
Stock beneficially owned (see definition at end of Questionnaire) by you
(including amounts held in your Trust Department in discretionary accounts):
If such ownership is
shared with others,
indicate nature and
Number of Nature of extent of such shared
Shares* Beneficial Ownership** ownership
----------- ---------------------- ---------------------
A-2
<PAGE> 28
____________________
* Include shares which you have the right to acquire on or before 60
days after the estimated date of the Prospectus.
** Please indicate the extent to which you have sole voting power,
shared voting power, sole investment power and shared investment power with
respect to shares of Common Stock you beneficially own.
4. Disclaimer of Beneficial Ownership. Please indicate below the
number and description of any shares of Common Stock with respect to which you
disclaim beneficial ownership and whether such shares are included in the
figure(s) reported above.
5. Underwriters. Please describe briefly and state the nature of
any relationship or interest that you have or any associate of yours (see
definition at end of Questionnaire) has, in any underwriter of the securities to
be offered. If you are a member or controlling Person of a firm that may be an
underwriter of the securities to be offered, briefly describe your relationship
to, and interest in, such underwriter.
NOTE: The underwriters will be listed in the final amendment to the
Registration Statement, a copy of which will be sent to you at a later date.
B. NASD Relations.
6. NASD Membership. State whether you are a "member" of the
National Association of Securities Dealers, Inc. (the "NASD"), a "Person
associated with a member" or an "underwriter or a related Person" with respect
to the proposed offering. Yes _____ No _____
NOTES: (1) The NASD By-Laws define "member" to mean either any
broker or dealer admitted to membership in the NASD.
(2) The NASD By-Laws define "Person associated with a
member" to mean every sole proprietor, partner, officer, director or
branch manager of any member, or any natural Person occupying a
similar status or performing similar functions, or any natural Person
engaged in the investment banking or securities business who is
directly or indirectly controlling or controlled by such member,
whether or not any such Person is registered or exempt from
registration with the NASD.
(3) The NASD has interpreted "underwriter or a related
Person" with respect to a proposed offering to include an
underwriter, underwriters' counsel, financial consultants and
advisers, finders, members of the selling or distribution group, and
any and all other Persons "associated with" or "related to" any of
such Persons.
7. Purchase by NASD Affiliates. If your answer to the preceding question
was "yes", please furnish the following information, in the tabular form
indicated, as to all purchases and acquisitions (including contracts to purchase
or to acquire) by you, of warrants, options or any other securities of the
Company or any subsidiary thereof, during the preceding 12 months, as well as
all proposed purchases or acquisitions by you which are to be consummated in
whole or in part prior to, at the time of or within twelve (12) months after the
effectiveness of the Registration Statement.
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<PAGE> 29
Purchaser or Seller or Amount and Price or
Prospective Prospective Name of Other
Date Purchaser Seller Securities Consideration
---- ------------ ----------- ---------- -------------
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
8. Dealings with Company. Please describe any other dealings within
the preceding 12 months not already described in response to the foregoing
questions between the Company or any subsidiary or controlling shareholder
thereof and any underwriter, related Person of such underwriter, NASD member or
Person associated with such member affiliated with you, as such terms are
defined in the Notes to Question 7, including compensation or other items of
value received or to be received from the Company.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS TO ANY PERSON WHO MAY BE
LIABLE IN RESPECT OF A REGISTRATION OR OTHER OFFERING PURSUANT TO THE AGREEMENT
THAT THE ANSWERS GIVEN IN THIS QUESTIONNAIRE ARE CORRECTLY STATED TO THE BEST OF
THE KNOWLEDGE, INFORMATION AND BELIEF OF THE UNDERSIGNED. THE UNDERSIGNED HEREBY
AGREES TO PROMPTLY NOTIFY THE COMPANY OF ANY CHANGE IN THE SUCH ANSWERS WHICH
MAY OCCUR DURING THE PERIOD BEGINNING WITH THE DATE BELOW AND ENDING ON THE DATE
90 DAYS AFTER THE EFFECTIVE DATE OF ANY REGISTRATION STATEMENT RELATING TO A
REGISTRATION OR OTHER OFFERING PURSUANT TO THE AGREEMENT. THE UNDERSIGNED HEREBY
AGREES, FOLLOWING NOTICE OF ANY PROPOSED REGISTRATION TO UPDATE AND AMEND THIS
QUESTIONNAIRE IF THERE IS ANY MATERIAL CHANGE IN THE ABOVE INFORMATION AND TO
PROVIDE ANY ADDITIONAL INFORMATION REQUESTED BY THE COMPANY PURSUANT TO THE
AGREEMENT
Dated: , 19 .
------------------------- --
[Name of Holder]
By
----------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
A-4
<PAGE> 30
DEFINITIONS
As used in this Questionnaire:
"affiliate" means a Person or organization that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Company.
An "associated person" means (1) any corporation or organization (other
than the Company or a majority owned subsidiary) of which you are an executive
officer or partner or are, directly or indirectly, the beneficial owner of 10%
or more of any class or equity securities and (2) any trust or other estate in
which you have substantial beneficial interest or to which you serve as trustee
or in a similar fiduciary capacity.
Securities "owned beneficially" by you are securities (whether or not
registered in your name) in which, you have or share (directly or indirectly
through any contract, arrangement, understanding, relationship or otherwise) (i)
voting power, which includes the power to vote or direct the voting of the
securities, or (ii) investment power, which includes the power to dispose, or
direct the disposition, of the securities. You are also deemed to be the
beneficial owner of any securities which you have the right to acquire
immediately or within 60 days (a) through the exercise of any option, warrant or
right, (b) through the conversion of a security or (c) pursuant to the power to
revoke, or the automatic termination of, a trust, discretionary account or
similar arrangement.
Thus, securities held in the name of other individuals, in the name of
an estate or trust or pursuant to a pledge agreement where you have either the
power to direct the voting of the securities or the disposition of such
securities should be listed as "owned beneficially" by you. The Commission has
also taken the position that securities held by your spouse, minor children, or
other relatives sharing your home should be shown as "owned beneficially" by you
on the theory that, absent special circumstances you are able to exercise a
controlling influence over the purchase, sale or voting of such securities.
A-5
<PAGE> 31
ANNEX B
SUPPLEMENTAL ADDENDUM
The undersigned is a holder of Common Stock of Washington Mutual, Inc.
(the "Company"). The undersigned hereby agrees as follows:
The undersigned hereby accepts the terms of and becomes a party to (as
a Securities Holder) the Registration Rights Agreement dated as of July 21,
1996, by and among the Company and each Securities Holder named therein. In
connection therewith, the undersigned agrees to (A) assume all obligations and
liabilities thereunder, (B) enjoy all of the rights thereunder, (C) be bound
thereby and (D) perform and comply with the agreements and commitments on the
part of the undersigned set forth in the Registration Rights Agreement.
In connection with the acquisition of shares of Common Stock of the
Company by the undersigned, the undersigned makes the following representations
and warranties to the Company:
1. The undersigned understands that the Company is relying upon the
representations and covenants contained herein. If more than one person is
signing this document, each understanding, representation and warranty made
herein shall be a joint and several understanding, representation or warranty of
each such person.
2. The undersigned is familiar with Regulation D promulgated by the
Securities and Exchange Commission under the Securities Act of 1933 (the
"Securities Act"), and the undersigned is an "accredited investor" as defined
therein.
3. The undersigned represents that the shares of Registrable Common
or Registrable Litigation Shares are being acquired by the undersigned for its
own account, for investment and not with a view to, or for resale in connection
with, any distribution.
4. The undersigned understands that the shares of Registrable Common
or Registrable Litigation Shares may be "restricted securities" within the
meaning of Rule 144 under the Securities Act and that unregistered resales may
be made only in conformity with Rule 144 or pursuant to another available
exemption from registration under the Securities Act, or pursuant to an
effective Registration Statement.
5. The undersigned represents and acknowledges that by reason of its
business or financial experience or the business or financial experience of its
professional advisors who are unaffiliated with and who are not compensated by
the Company or any affiliate, either directly or indirectly, the undersigned has
B-1
<PAGE> 32
the capacity to protect its own interests in connection with the investment. The
undersigned understands the financial risks with respect to the investment.
As used in this Supplemental Addendum, capitalized terms defined in the
Registration Rights Agreement shall have their respective defined meanings.
Address: Name of
Holder:
----------------------------
By
---------------------------------
Title:
Date: , 199
-------------------------------- ----
B-2