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EXHIBIT 10.36
CAPSTEAD MORTGAGE CORPORATION
and
FORTRESS INVESTMENT CORP.
---------------
REGISTRATION RIGHTS AGREEMENT
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Dated as of December 9, 1999
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
as of December 9, 1999, is between CAPSTEAD MORTGAGE CORPORATION, a Maryland
corporation (the "Company"), and FORTRESS INVESTMENT CORP., a Maryland
Corporation ("Fortress").
1. Introduction. The Company and Fortress are each a party to
the separate Series C Convertible Preferred Stock and Series D Convertible
Preferred Stock Purchase Agreement (the "Stock Purchase Agreement"), dated as of
even date herewith between the Company and Fortress pursuant to which the
Company has agreed, among other things, to issue 5,378,000 shares of its $______
Series C Convertible Preferred Stock, par value $.10 per share (the "Series C
Preferred Stock"), and 5,378,000 shares of its $0.40 Series D Convertible
Preferred Stock, par value $.10 per share (the "Series D Preferred Stock"), to
Fortress. This Agreement shall become effective upon the issuance of such
securities to Fortress pursuant to the Stock Purchase Agreement. Certain
capitalized terms used in this Agreement are defined in section 3 hereof;
references to sections shall be to sections of this Agreement.
2. Registration under Securities Act, etc.
2.1 Registration on Request.
(a) Request. At any time after the first anniversary
of issuance of the Series C Preferred Stock and the Series D Preferred Stock
pursuant to the Stock Purchase Agreement, upon the written request of one or
more Initiating Holders, requesting that the Company effect the registration
under the Securities Act of at least a majority of the Registrable Securities
and specifying the intended method of disposition thereof, the Company will
promptly give written notice of such requested registration to all Holders of
Registrable Securities, and thereupon the Company will, subject to the terms of
this Agreement, use its best efforts to effect the registration under the
Securities Act of:
(i) the Registrable Securities which the
Company has been so requested to register by such Initiating
Holders for disposition in accordance with the intended method
of disposition stated in such request;
(ii) all other Registrable Securities the
Holders of which shall have made a written request to the
Company for registration thereof within 20 days after
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the giving of such written notice by the Company (which
request shall specify the intended method of disposition of
such Registrable Securities); and
(iii) all securities which the Company may
elect to register in connection with the offering of
Registrable Securities pursuant to this section 2.1;
all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities and the
additional securities, if any, so to be registered. The Holders shall be
entitled to make a request to the Company to register Registered Securities
pursuant to this Section 2.1 on no more than two occasions.
(b) Registration Statement Form. Registrations under
this section 2.1 shall be on such appropriate registration form of the
Commission (i) as shall be selected by the Company and (ii) as shall permit the
disposition of such Registrable Securities in accordance with the intended
method or methods of disposition specified in the request for such registration.
(c) Expenses. Except as set forth in Section 2.1(d),
the Company will pay all Registration Expenses in connection with a registration
requested pursuant to this section 2.1.
(d) Effective Registration Statement. A registration
requested pursuant to this section 2.1 shall not be deemed to have been effected
(i) unless a registration statement with respect thereto has become effective,
provided that a registration which does not become effective after the Company
has filed a registration statement with respect thereto solely by reason of the
refusal to proceed of the Participating Holders (other than a refusal to proceed
based upon the advice of counsel relating to a matter with respect to the
Company) shall be deemed to have been effected by the Company at the request of
such Participating Holders unless the Participating Holders shall have elected
to pay all Registration Expenses in connection with such registration, (ii) if,
after it has become effective, such registration becomes subject to any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason, or (iii) the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied, other than by reason of
some act or omission by such Participating Holders.
(e) Selection of Underwriters. If a requested
registration pursuant to this section 2.1 involves an underwritten offering, the
underwriter or underwriters thereof shall be selected by the Company and shall
be reasonably acceptable to the holders of at least a majority (by number of
shares) of the Registrable Securities as to which registration has been
requested.
(f) Priority in Requested Registrations. If a
requested registration pursuant to this section 2.1 involves an underwritten
offering, and the managing underwriter shall
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advise the Company in writing (with a copy to each Participating Holder) that,
in its opinion, the number of securities requested to be included in such
registration (including securities of the Company which are not Registrable
Securities) exceeds the number which can be sold in such offering within a price
range acceptable to the holders of a majority of the Registrable Securities so
requested to be included, the Company will include in such registration, to the
extent of the number which the Company is so advised can be sold in such
offering, (i) first, Registrable Securities requested to be included in such
registration by the Initiating Holders, pro rata among the Initiating Holders,
on the basis of the number of such securities requested to be included by the
Initiating Holders, (ii) second, Registrable Securities requested to be included
in such registration by the other Participating Holders, pro rata among such
Participating Holders, on the basis of the number of such securities requested
to be included by such Participating Holders, and (iii) third, securities the
Company proposes to sell and other securities of the Company included in such
registration by the holders thereof.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If the
Company at any time after the first anniversary of the issuance of the Series C
Preferred Stock and the Series D Preferred Stock proposes to register any of its
securities under the Securities Act (other than by a registration on Form S-4 or
S-8, or any successor or similar forms and other than pursuant to section 2.1,
and except for at-the-market offerings under its Stockholder Investment Program
(Common Stock), its Dividend Reinvestment Program (Series B Preferred Stock) and
its shelf offerings of Common Stock and Series B Convertible Preferred Stock
pursuant to one or more Sales Agency Agreements or similar agreements)), whether
or not for sale for its own account, it will each such time give prompt written
notice to all Holders of Registrable Securities of its intention to do so and of
such Holders' rights under this section 2.2. Upon the written request of any
such Holder made within 20 days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be disposed of by
such Holder), the Company will, subject to the terms of this Agreement, use its
best efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the Holders thereof, to the extent requisite to permit the disposition of the
Registrable Securities so to be registered, by inclusion of such Registrable
Securities in the registration statement which covers the securities which the
Company proposes to register, provided that if, at any time after giving written
notice of its intention to register any securities and prior to the effective
date of the registration statement filed in connection with such registration,
the Company shall determine for any reason either not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to each Holder of Registrable Securities and,
thereupon, (i) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), without prejudice, however, to the rights of any Holder
or Holders of Registrable Securities entitled to do so to
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request that such registration be effected as a registration under section 2.1
(unless such registration has already been effected), and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in registering such
other securities. No registration effected under this section 2.2 shall relieve
the Company of its obligation to effect the registration upon request under
section 2.1, nor shall any such registration under this section 2.2 be deemed to
have been effected pursuant to section 2.1. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities requested pursuant to this section 2.2.
(b) Priority in Incidental Registrations. If (i) a
registration pursuant to this Section 2.2 involves an underwritten offering of
the securities so being registered, whether or not for sale for the account of
the Company (the "Piggyback Securities"), to be distributed (on a firm
commitment basis) by or through one or more underwriters of recognized standing
under underwriting terms appropriate for such a transaction, and (ii) the
managing underwriter of such underwritten offering shall inform the Company and
Holders of the Registrable Securities requesting such registration in writing of
its belief that the distribution of all or a specified number of such
Registrable Securities concurrently with the securities being distributed by
such underwriters would interfere with the successful marketing of the
securities being distributed by such underwriters, then the Company may, upon
written notice to all Holders of such Registrable Securities include as many of
the Piggyback Securities as possible, and (before reducing the number of any
Piggyback Securities) reduce pro rata (if and to the extent stated by such
managing underwriter to be necessary to eliminate such effect) the number of
such Registrable Securities the registration of which shall have been requested
by each Holder of Registrable Securities so that the resultant aggregate number
of such Registrable Securities so included in such registration shall be equal
to the number of shares stated in such managing underwriter's letter.
(c) Expenses. The Company will pay all Registration
Expenses in connection with each registration of Registrable Securities
requested pursuant to this section 2.2.
2.3 Registration Procedures. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in sections 2.1 and 2.2, the
Company shall, as expeditiously as possible:
(a) prepare and in the case of an incidental
registration under Section 2.2, within 60 days after the end of the period
within which requests for registration may be given to the Company hereunder or
in any event as soon thereafter as possible, or, in the case of a registration
pursuant to section 2.1, within 90 days after the initial request of one or more
Initiating Holders of Registrable Securities or in any event as soon thereafter
as possible, file with the Commission the requisite registration statement to
effect such registration (including such audited financial statements as may be
required by the Securities Act or the rules and regulations promulgated
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thereunder) and thereafter use its best efforts to cause such registration
statement to become and remain effective, provided however that the Company may
discontinue any registration of its securities which are not Registrable
Securities (and, under the circumstances specified in section 2.2(a), its
securities which are Registrable Securities) at any time prior to the effective
date of the registration statement relating thereto, provided further that
before filing such registration statement or any amendments thereto, the Company
will furnish to the counsel selected by the Holders of a majority of the
Registrable Securities which are to be included in such registration copies of
all such documents proposed to be filed, which documents will be subject to the
reasonable review of such counsel;
(b) prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement until the earlier of such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement or (i) in the case
of a registration pursuant to section 2.1, the expiration of 180 days after such
registration statement becomes effective, or (ii) in the case of a registration
pursuant to section 2.2, the expiration of 90 days after such registration
statement becomes effective;
(c) furnish to each seller of Registrable Securities
covered by such registration statement and each underwriter, if any, of the
securities being sold by such seller such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as such seller and under writer, if any, may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities laws or blue sky laws of such
jurisdictions as any seller thereof and any underwriter of the securities being
sold by such seller shall reasonably request, to keep such registrations or
qualifications in effect for so long as such registration statement remains in
effect, and take any other action which may be reasonably necessary or advisable
to enable such seller and underwriter to consummate the disposition in such
jurisdictions of the securities owned by such seller, except that the Company
shall not for any such purpose be required to qualify generally to do business
as a foreign corporation in any jurisdiction wherein it would not but for the
requirements of this paragraph (d) be obligated to be so qualified,
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o subject itself to taxation in any such jurisdiction or to consent to general
service of process in any such jurisdiction;
(e) use its best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof to consummate the disposition of such
Registrable Securities;
(f) furnish to each seller of Registrable Securities
a signed counterpart, addressed to such seller and the underwriters, if any, of:
(i) an opinion of counsel for the Company,
dated the effective date of such registration statement (or,
if such registration includes an underwritten public offering,
an opinion dated the date of the closing under the
underwriting agreement), reasonably satisfactory in form and
substance to such seller, and
(ii) a "comfort" letter (or, in the case of
any such Person which does not satisfy the conditions for
receipt of a "comfort" letter specified in Statement on
Auditing Standards No. 72, an "agreed upon procedures"
letter), dated the effective date of such registration
statement (and, if such registration includes an under written
public offering, a letter of like kind dated the date of the
closing under the underwriting agreement), signed by the
independent public accountants who have certified the
Company's financial statements included in such registration
statement, covering substantially the same matters with
respect to such registration statement (and the prospectus
included therein) and, in the case of the accountants' letter,
with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions
of issuer's counsel and in accountants' letters delivered to
the underwriters in underwritten public offerings of
securities (with, in the case of an "agreed upon procedures"
letter, such modifications or deletions as may be required
under Statement on Auditing Standards No. 35) and, in the case
of the accountants' letter, such other financial matters, and,
in the case of the legal opinion, such other legal matters, as
such seller (or the underwriters, if any) may reasonably
request;
(g) notify the Holders of Registrable Securities and
the managing underwriter or underwriters, if any, promptly and confirm such
advice in writing promptly thereafter:
(i) when the registration statement, the
prospectus or any prospectus supplement related thereto or
post-effective amendment to the registration
statement has been filed, and, with respect to the
registration statement or any post-effective amendment
thereto, when the same has become effective;
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(ii) of any request by the Commission for
amendments or supplements to the registration statement or the
prospectus or for additional information;
(iii) of the issuance by the Commission of
any stop order suspending the effectiveness of the
registration statement or the initiation of any proceedings by
any Person for that purpose;
(iv) if at any time the representations and
warranties of the Company made as contemplated by section 2.4
below cease to be true and correct; and
(v) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of any Registrable Securities for sale under the
securities or blue sky laws of any jurisdiction or the
initiation or threat of any proceeding for such purpose;
(h) notify each seller of Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon the
Company's discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, and at the request of any such seller promptly prepare and furnish to such
seller and each underwriter, if any, a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made;
(i) make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of the registration
statement at the earliest possible moment;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
months, beginning with the first day of the Company's first full calendar
quarter after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder, and will furnish to each such seller at least five
business days prior to the filing thereof a copy of any amendment or supplement
to such
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registration statement or prospectus (provided, however that a filing on Form
10-K, 10-Q or 8-K (or similar or successor form) shall not be deemed such an
amendment or supplement) and shall not file any thereof to which any such seller
shall have reasonably objected on the grounds that such amendment or supplement
does not comply in all material respects with the requirements of the Securities
Act or of the rules or regulations thereunder;
(k) make available for inspection by a representative
or representatives of the Holders of Registrable Securities, each such
representative representing the Holders of not less than a majority of the
Registrable Securities included in the registration, any underwriter partici-
pating in any disposition pursuant to the registration statement and any
attorney or accountant retained by such selling Holders or underwriter (each, an
"Inspector"), all financial and other records, pertinent corporate documents and
properties of the Company (the "Records"), and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such Inspector in connection with such registration in order to permit a
reasonable investigation within the meaning of Section 11 of the Securities Act,
provided that the Company shall not be required to comply with this paragraph
(k) if there is a reasonable likelihood, in the judgment of the Company, that
such delivery could result in the loss of any attorney-client privilege related
thereto;
(l) provide and cause to be maintained a transfer
agent and registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement; and
(m) use its best efforts to list all Registrable
Securities covered by such registration statement on any securities exchange on
which any of the securities of the same class as the Registrable Securities are
then listed.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such seller and the distribution of such securities as the Company may from time
to time reasonably request in writing.
The Company will not file any registration statement or
amendment thereto or any prospectus or any supplement thereto (including such
documents incorporated by reference and proposed to be filed after the initial
filing of the registration statement) to which the Holders of at least a
majority of the Registrable Securities covered by such registration statement or
the underwriter or underwriters, if any, shall reasonably object, provided that
the Company may file such document in a form required by law or upon the advice
of its counsel.
Each Holder of Registrable Securities shall be deemed to have agreed by
acquisition of such Registrable Securities that, upon receipt of any notice from
the Company of the occurrence of any event of the kind described in paragraph
(h) of this section 2.3, such Holder will forthwith
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discontinue such holder's disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until such
Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by paragraph (h) of this section 2.3 and, if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such Holder's possession of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice, the
period mentioned in paragraph (b) of this section 2.3 shall be extended by the
length of the period from and including the date when each seller of any
Registrable Securities covered by such registration statement shall have
received such notice to the date on which each such seller has received the
copies of the supplemented or amended prospectus contemplated by paragraph (h)
of this section 2.3.
If any such registration statement refers to any Holder of Registrable
Securities by name or otherwise as the Holder of any securities of the Company,
then such Holder shall have the right to require (i) the insertion therein of
language, in form and substance satisfactory to such Holder, to the effect that
the holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the Company, or (ii)
in the event that such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force, the
deletion of the reference to such Holder.
2.4 Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by the underwriters for any
underwritten offering by holders of Registrable Securities pursuant to a
registration requested under section 2.1, the Company will enter into an
underwriting agreement with such underwriters for such offering, such agreement
to be satisfactory in substance and form to the Company and the underwriters,
and to contain such representations and warranties by the Company and such other
terms as are generally prevailing in agreements of this type, including, without
limitation, indemnities to the effect and to the extent provided in section 2.6.
The Holders of the Registrable Securities will cooperate with the Company in the
negotiation of the underwriting agreement and will give consideration to the
reasonable suggestions of the Company regarding the form thereof, provided that
nothing herein contained shall diminish the foregoing obligations of the
Company. The Holders of Registrable Securities to be distributed by such
underwriters shall be parties to such underwriting agreement and may, at their
option, require that any or all of the representations and warranties by, and
the other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such Holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such Holders of Registrable
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Securities. Any such Holder of Registrable Securities shall not be required to
make any representations or warranties to or agreements with the Company or the
underwriters other than representations and warranties contained in a writing
furnished by such holder expressly for use in such registration statement or
agreements regarding such Holder, such Holder's Registrable Securities and such
Holder's intended method of distribution and any other representation required
by law.
(b) Incidental Underwritten Offerings. If the Company
at any time proposes to register any of its securities under the Securities Act
as contemplated by section 2.2 and such securities are to be distributed by or
through one or more underwriters, the Holders of Registrable Securities to be
distributed by such underwriters shall be parties to the underwriting agreement
between the Company and such underwriters and may, at their option, require that
any or all of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of such Holders of Registrable Securities and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of such Holders of Registrable Securities. Any such Holder of
Registrable Securities shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Holder, such Holder's
Registrable Securities and such Holder's intended method of distribution and any
other representation required by law.
(c) Holdback Agreements.
(i) Each Holder of Registrable Securities
agrees by acquisition of such Registrable Securities, if so
required by the managing underwriter, not to sell, make any
short sale of, loan, grant any option for the purchase of,
effect any public sale or distribution of or otherwise dispose
of any equity securities of the Company, during such period as
the managing underwriter may request (not to exceed the two
days prior to and the 90 days after any underwritten
registration pursuant to section 2.1 or 2.2 has become
effective or such lesser period of time, prior to and/or after
the date of effectiveness, as may be requested by the managing
underwriter with respect to the disposition of equity
securities of the Company held by the Company and/or its
management stockholders) except as part of such underwritten
registration, whether or not such Holder participates in such
registration. Notwithstanding the foregoing sentence, each
Holder of Registrable Securities subject to the foregoing
sentence shall be entitled to sell during the foregoing period
securities in a private sale. Each Holder of Registrable
Securities agrees that the Company may instruct its transfer
agent to place stop transfer notations in its records to
enforce this section 2.4(c).
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(ii) The Company agrees (x) if so required
by the managing underwriter, not to sell, make any short sale
of, loan, grant any option for the pur chase of, effect any
public sale or distribution of or otherwise dispose of its
equity securities or securities convertible into or
exchangeable or exercisable for any of such securities during
such period of time as the managing underwriter may request
(not to exceed the two days prior to and the 90 days after any
underwritten registration pursuant to section 2.1 or 2.2 has
become effective, except as part of such under written
registration and except pursuant to registrations on Form ▇-▇,
▇-▇, or any successor or similar forms thereto and except for
at-the-market offerings under its Stockholder Investment
Program (Common Stock), its Dividend Reinvestment Program
(Series B Preferred Stock) and its shelf offerings of Common
Stock and Series B Convertible Preferred Stock pursuant to one
or more Sales Agency Agreements or similar agreements and (y)
to cause each holder of more than 1% of its equity securities
or any securities convertible into or exchangeable or
exercisable for any of such securities, in each case purchased
directly from the Company (or indirectly from the Company as
the first purchaser in a Rule 144A Offering) at any time after
the date of this Agreement (other than in a public offering)
to agree not to sell, make any short sale of, loan, grant any
option for the purchase of, effect any public sale or
distribution of or otherwise dispose of such securities during
such period except as part of such underwritten registration.
(d) Participation in Underwritten Offerings. No
Person may participate in any underwritten offering hereunder unless such Person
(i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved, subject to the terms and condi tions hereof,
by the Company and the Holders of a majority of Registrable Securities to be
included in such underwritten offering and (ii) completes and executes all
questionnaires, indemnities, underwriting agreements and other documents (other
than powers of attorney) required under the terms of such underwriting
arrangements. Notwithstanding the foregoing, no underwriting agreement (or other
agreement in connection with such offering) shall require any Holder of
Registrable Securities to make any representations or warranties to or
agreements with the Company or the underwriters other than representations and
warranties contained in a writing furnished by such Holder expressly for use in
the related registration statement or agreements regarding such Holder, such
Holder's Registrable Securities and such Holder's intended method of
distribution and any other representation required by law.
2.5 Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement under the Securities
Act pursuant to this Agreement, the Company will give the Holders of Registrable
Securities registered under such registration state ment, their underwriters, if
any, each Requesting Holder and their respective counsel and accountants, the
opportunity to participate in the preparation of such registration statement,
each prospectus included
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therein or filed with the Commission, and each amendment thereof or supplement
thereto, and will give each of them such access to its books and records and
such opportunities to discuss the business of the Company with its officers and
the independent public accountants who have certified its financial statements
as shall be necessary, in the opinion of such Holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
2.6 Indemnification.
(a) Indemnification by the Company. In the event of
any registration of any securities of the Company under the Securities Act, the
Company will, and hereby does agree to, indemnify and hold harmless (i) in the
case of any registration statement filed pursuant to section 2.1 or 2.2, the
Holder of any Registrable Securities covered by such registration statement, its
directors and officers, each other Person who participates as an underwriter in
the offering or sale of such securities and each other Person, if any, who
controls such Holder or any such underwriter within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such Holder or any such director or officer or underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Company will reimburse such Holder and each such
director, officer, underwriter and controlling person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding, provided that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by such Holder
specifically stating that it is for use in the preparation thereof and, provided
further that the Company shall not be liable to any Person who participates as
an underwriter in the offering or sale of Registrable Securities or to any other
Person, if any, who controls such underwriter within the meaning of the
Securities Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of such Person's failure to send or give a copy of the final prospectus, as
the same may be then supplemented or amended, within the time required by the
Securities Act to the Person asserting the existence of an untrue statement or
alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of Registrable Securities to such Person
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if such statement or omission was corrected in such final prospectus. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Holder or any such director, officer, underwriter
or controlling person and shall survive the transfer of such securities by such
holder.
(b) Indemnification by the Sellers. The Company may
require, as a condition to including any Registrable Securities in any
registration statement filed pursuant to section 2.3, that the Company shall
have received an undertaking satisfactory to it from the prospective seller of
such Registrable Securities, to indemnify and hold harmless (in the same manner
and to the same extent as set forth in paragraph (a) of this section 2.6) the
Company, each director of the Company, each officer of the Company and each
other person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company through an instrument duly executed
by such seller specifically stating that it is for use in the preparation of
such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Any such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly after receipt by
an indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding paragraphs of this section 2.6,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding paragraphs of this section 2.6, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that the indemnifying party may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an unconditional term thereof the
giving by
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the claimant or plaintiff to such indemnified party of a release from all
liability, or a covenant not to ▇▇▇, in respect to such claim or litigation. No
indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party.
(d) Other Indemnification. Indemnification similar to
that specified in the preceding paragraphs of this section 2.6 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any Federal or state law or regulation of any governmental
authority, other than the Securities Act.
(e) Indemnification Payments. The indemnification
required by this section 2.6 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.
(f) Contribution. If the indemnification provided for
in the preceding paragraphs of this section 2.6 is unavailable to an indemnified
party in respect of any expense, loss, claim, damage or liability referred to
therein, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such expense, loss, claim, damage or liability (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Holder or underwriter, as the case may be, on
the other from the distribution of the Registrable Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Holder or underwriter, as the case may be, on the other
in connection with the statements or omissions which resulted in such expense,
loss, damage or liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Holder or underwriter, as the case may be, on the other in connection
with the distribution of the Registrable Securities shall be deemed to be in the
same proportion as the total net proceeds received by the Company from the
initial sale of the Registrable Securities by the Company to the purchasers
pursuant to the Purchase Agreement bear to the gain, if any, realized by the
selling Holder or the underwriting discounts and commissions received by the
underwriter, as the case may be. The relative fault of the Company on the one
hand and of the holder or underwriter, as the case may be, on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission to state a material fact relates
to information supplied by the Company, by the Holder or by the underwriter and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission, provided that the foregoing
contribution agreement shall not inure to the benefit of any indemnified party
if indemnification would be unavailable to such
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indemnified party by reason of the provisions contained in the first sentence of
paragraph (a) of this section 2.6, and in no event shall the obligation of any
indemnifying party to contribute under this paragraph (f) exceed the amount that
such indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided for under paragraphs (a) or (b)
of this sec tion 2.6 had been available under the circumstances.
The Company and the Holders of Registrable Securities agree
that it would not be just and equitable if contribution pursuant to this
paragraph (f) were determined by pro rata allocation (even if the Holders and
any underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth in the preceding sentence and
paragraph (c) of this section 2.6, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim.
Notwithstanding the provisions of this paragraph (f), no
Holder of Registrable Securities or underwriter shall be required to contribute
any amount in excess of the amount by which (i) in the case of any such holder,
the net proceeds received by such holder from the sale of Registrable Securities
or (ii) in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such Holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
2.7 Restrictions on Transfer.
(a) Restrictive Legends. Except as otherwise
permitted by this section 2.7, each certificate or other instrument evidencing
any Registrable Securities (including each such certificate or other instrument
issued upon the transfer of any Registrable Securities) shall be stamped or
otherwise imprinted with a legend in substantially the following form:
"The shares of Series C Convertible Preferred Stock, Series D
Convertible Preferred Stock or Common Stock (as the case may be)
represented by this certificate have not been registered under the
Securities Act of 1933 and may not be transferred in the absence of
such registration or an exemption therefrom under such Act."
(b) Notice of Proposed Transfer; Opinions of Counsel.
Prior to any transfer of any Registrable Securities which are not registered
under an effective registration state-
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ment under the Securities Act, the Holder thereof will give written notice to
the Company of such Holder's intention to effect such transfer and to comply in
all other respects with this section 2.7(b). Each such notice (i) shall describe
the manner and circumstances of the proposed transfer in sufficient detail to
enable counsel to render the opinions referred to below, and (ii) shall
designate counsel for the Holder giving such notice (who may be house counsel
for such Holder). The Holder giving such notice will submit a copy thereof to
the counsel designated in such notice and the Company will promptly submit a
copy thereof to its counsel. The following provisions shall then apply:
(x) If (A) in the opinion of such counsel for the Holder the
proposed transfer may be effected without registration of such
Registrable Securities under the Securities Act, and (B) counsel for
the Company shall not have rendered an opinion within 15 days after
receipt by the Company of such written notice that such registration is
required, such Holder shall thereupon be entitled to transfer such
Registrable Securities in accordance with the terms of the notice
delivered by such Holder to the Company.
(y) If in the opinion of either or both of such counsel the
proposed transfer may not legally be effected without registration of
such Registrable Securities under the Securities Act (such opinion or
opinions to state the basis of the legal conclusions reached therein),
the Company will promptly so notify the holder thereof and thereafter
such holder shall not be entitled to transfer such Registrable
Securities until receipt of a further notice from the Company under
clause (x) above or until registration of such Registrable Securities
under the Securities Act has become effective.
3. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
Commission: The Securities and Exchange Commission or any
other Federal agency at the time administering the Securities
Act.
Common Stock: The Common Stock, par value $.01, of the
Company.
Company: As defined in the introductory paragraph of this
Agreement.
Exchange Act: The Securities Exchange Act of 1934, or any
similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at
the time. Reference to a particular section of the Securities
Exchange Act of 1934 shall include a reference to the
comparable section, if any, of any such similar Federal
statute.
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Initiating Holders: Any Holder or Holders of Registrable
Securities initiating a request pursuant to section 2.1 for
the registration of at least a majority of the Registrable
Securities.
Holders: As defined in Section 7.
Stock Purchase Agreement: As defined in section 1.
Person: A corporation, an association, a partnership, a
limited liability company, an organization, business, an
individual, a governmental or political paragraph thereof or a
governmental agency.
Participating Holders: Holders who have elected to have their
Registrable Securities registered in accordance with the
provisions of Section 2.1.
Piggyback Securities: As defined in Section 2.2(b).
Registrable Securities: Any of the shares of Common Stock into
which shares of Series C Preferred Stock and Series D
Preferred Stock issued to Fortress pursuant to the Stock
Purchase Agreement are convertible.
Registration Expenses: All expenses incident to the Company's
performance of or compliance with section 2.1 through 2.5,
including, without limitation, all registration, filing and
NASD fees, all stock exchange listing fees, all fees and ex
penses of complying with securities or blue sky laws, all word
processing, dupli cating and printing expenses, messenger and
delivery expenses, the fees and disbursements of counsel for
the Company and of its independent public accountants,
including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and
compliance, the fees and disbursements of a single counsel and
accountants retained by the Holders of the Registrable
Securities being registered, premiums and other costs of
policies of insurance against liabilities arising out of the
public offering of the Registrable Securities being registered
and any fees and disbursements of underwriters customarily
paid by issuers or sellers of securities, but excluding
underwriting discounts and commissions and transfer taxes, if
any, provided that, in any case where Registration Expenses
are not to be borne by the Company, such expenses shall not
include salaries of Company personnel or general overhead
expenses of the Company, auditing fees, premiums or other
expenses relating to liability insurance required by
underwriters of the Company or other expenses for the
preparation of financial statements or other data normally
prepared by the Company in the ordinary course of its business
or which the Company would have incurred in any event.
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Securities Act: The Securities Act of 1933, or any similar
Federal statute, and the rules and regulations of the
Commission thereunder, all as of the same shall be in effect
at the time. References to a particular section of the
Securities Act of 1933 shall include a reference to the
comparable section, if any, of any such similar Federal
statute.
4. Rules 144 and 144A. The Company shall file the reports
required to be filed by it under the Securities Act and the Exchange Act
(including but not limited to the reports under sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder (or, if the Company is not required to file such
reports, will, upon the request of any holder of Registrable Securities, make
publicly available other information) and will take such further action as any
holder of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any Holder of Registrable
Securities, the Company will deliver to such Holder a written statement as to
whether it has complied with the requirements of this Section 4.
5. Amendments and Waivers. This Agreement may be amended and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall agree and shall
have obtained the written consent to such amendment, action or omission to act,
of the Holder or Holders of 66 2/3 % or more of the shares of Registrable
Securities and, in the case of any such amendment, action or omission to act in
respect of the first sentence of Section 4, the written consent of each Holder
affected thereby. Each Holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any consent authorized by this section
5, whether or not such Registrable Securities shall have been marked to indicate
such consent.
6. Notices. Except as otherwise provided in this Agreement,
all notices, requests and other communications to any Person provided for
hereunder shall be in writing and shall be given to such Person (a) in the case
of Fortress, in the manner set forth in the Stock Purchase Agreement or at such
other address as Fortress shall have furnished to the Company in writing, or (b)
in the case of any other Holder of Registrable Securities, at the address that
such Holder shall have furnished to the Company in writing, or, until any such
other Holder so furnishes to the Company an address, then to and at the address
of the last Holder of such Registrable Securities who
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has furnished an address to the Company, or (c) in the case of the Company, at
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ to the attention
of its Chairman, or at such other address, or to the attention of such other
officer, as the Company shall have furnished to each holder of Registrable
Securities at the time outstanding. Each such notice, request or other
communication shall be effective (i) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (ii) if given by any other means (including, without
limitation, by air courier), when delivered at the address specified above,
provided that any such notice, request or communication to any holder of
Registrable Securities shall not be effective until received.
7. Assignment. Except as set forth in the next sentence, this
Agreement shall not be assignable except in one or more cases by and among
Fortress and its affiliates (provided that each such assignment shall assign the
full rights and obligations of Fortress or, as the case may be, its affiliate
(if Fortress has already assigned its full rights and obligations hereunder to
such affiliate) and each such assignment shall be made between Fortress or, as
the case may be, such affiliate to only one of Fortress' affiliates per
assignment (i.e., Fortress may not distribute its rights and obligations
hereunder among more than one affiliate at any time)). The provisions of this
Agreement which are for the benefit of the parties hereto other than the Company
shall only be assignable to transferees of at least 25% of the Registrable
Securities (which transferees, together with Fortress or such affiliate (as long
as Fortress or such affiliate, as the case may be, holds any Registrable
Securities), shall be termed "Holders"), subject to the provisions respecting
the minimum numbers or percentages of shares of Registrable Securities required
in order to be entitled to certain rights, or take certain actions, contained
herein. Any attempt to assign any portion of this Agreement outside of the scope
set forth in this Section 7 shall be null and void.
8. Descriptive Headings. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for reference
only and shall not limit or otherwise affect the meaning hereof.
9. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE PRINCIPLES OF
CONFLICTS OF LAWS.
10. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute one and the same
instrument.
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11. Entire Agreement. This Agreement embodies the entire
agreement and understanding between the Company and each other party hereto
relating to the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter.
12. Severability. If any provision of this Agreement, or the
application of such provisions to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to Persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their respective officers thereunto duly authorized
as of the date first above written.
CAPSTEAD MORTGAGE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President - Finance
FORTRESS INVESTMENT CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Operating Officer
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