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EXHIBIT 10.7
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made effective
as of November 4, 1997 by and among PIMCO Advisors L.P., a Delaware limited
partnership (the "Partnership "), and each of the parties set forth on Exhibit A
hereto who executes this Agreement (the "Holders").
WHEREAS, pursuant to that certain Agreement and Plan of Merger, dated
November 4, 1997 (the "Merger Agreement"), by and among Oppenheimer Group, Inc.,
a Delaware corporation ("Opgroup"), Oppenheimer Financial Corp., a Delaware
corporation, the Partnership, PIMCO Advisors Transitory Merger LLC, a Delaware
limited liability company ("PATM"), the Seller Trust, under Declaration of Trust
dated July 22, 1997, as amended, and the Indemnity Trust, under Declaration of
Trust dated July 22, 1997, as amended, PATM is to be merged with and into
Opgroup (the "Merger"), with Opgroup surviving as a subsidiary of the
Partnership and the stockholders of Opgroup receiving Class A units of limited
partner interest in the Partnership ("Class A LP Units") as well as rights (the
"Exchange Rights") to acquire additional Class A LP Units upon the exchange of
6% Senior Notes due December 1, 2037 of Opgroup (the "6% Senior Notes") in
principal amount equal to the exercise price therefor;
WHEREAS, the Class A LP Units will be issued to the stockholders of
Opgroup in the Merger and pursuant to exercise of the Exchange Rights without
registration under the Securities Act of 1933, as amended (the "Securities Act")
in reliance on an applicable exemption from such registration, and the
Partnership and the Holders desire to provide for the registration of the sale
by the Holders of Registrable Securities (as hereinafter defined) from time to
time, upon the terms and subject to conditions set forth below; and
WHEREAS, it is intended by the Partnership and the Holders that this
Agreement shall become effective immediately upon the issuance of the Class A LP
Units pursuant to the Merger;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Definitions. For the purposes of this Agreement, the
following terms shall have the meanings set forth below:
(a) "1994 Agreement" means that certain Registration Rights
Agreement dated as of November 15, 1994, as it exists on the date hereof,
relating to securities of PIMCO Advisors, a copy of which is attached hereto as
Exhibit A.
(b) "6% Senior Notes" shall have the meaning set forth in the
Recitals to this Agreement.
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(c) "Class A LP Units" has the meaning set forth in the Recitals
to this Agreement.
(d) "Closing Date" means the date of the Closing under the
Merger Agreement.
(e) "Commission" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
(f) "Controlling Holder" shall have the meaning set forth in
Section 3(a)(ii)(B).
(g) "Exchange Act" means the Securities Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
(h) "Exchange Rights" has the meaning set forth in the Recitals
to this Agreement.
(i) "Exchange Right Units" means any Class A LP Units issued
upon exercise of a Exchange Right.
(j) "Holder's Notice" shall have the meaning set forth in
Section 3(b) of this Agreement.
(k) "Material Disclosure Event" means any pending or imminent
event relating to the Partnership or any of its subsidiaries that, in the good
faith, reasonable opinion of the Partnership with the advice of nationally
recognized independent counsel to the Partnership: (i) requires disclosure of
material, non-public information relating to such event in any Partnership
registration statement that may be requested at the time so that such
registration statement would not be materially misleading and (ii) is otherwise
not required to be publicly disclosed at that time (e.g. on Form 8-K or 10-Q)
under applicable federal or state securities laws. Without limitation, "Material
Disclosure Event" could include (i) negotiations relating to a material
potential acquisition, disposition or other business combination or similar
transaction; (ii) litigation, arbitration or other claims or liability or
regulatory or governmental examination, investigation or assessment asserted or
commenced by or against the Partnership or any of its subsidiaries; or (iii)
disagreements with the Partnership's independent public accountants over
financial, accounting or reporting matters.
(l) "Merger Agreement" shall have the meaning set forth in the
Recitals to this Agreement.
(m) "Participating Units" shall have the meaning set forth in
Section 4(a)(ii).
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(n) "Piggyback Notice" shall have the meaning set forth in
Section 3(b)(i).
(o) "Priority Holder Request" shall have the meaning set forth
in Section 2(a) of this Agreement.
(p) "Priority Holders" means any person qualifying as a "Holder"
under the 1994 Agreement.
(q) The terms "register," "registered" and "registration" refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act.
(r) "Registrable Securities" means the Class A LP Units issued
to the Holders in the Merger, as well as any Exchange Right Units; provided,
however, that as to any Registrable Securities, such securities shall cease to
constitute the same for purposes of this Agreement if and when (i) a
Registration Statement with respect to the sale of such securities shall have
been declared effective by the Commission and such securities shall have been
sold pursuant thereto in accordance with the intended plan and method of
distribution therefor set forth in the final prospectus forming part of the
Registration Statement or (ii) such securities shall have been sold in
satisfaction of all applicable resale provisions of Rule 144 under the
Securities Act (or any successor to such rule).
(s) "Registration Expenses" shall have the meaning set forth in
Section 5.
(t) "Registration Statement" shall mean a registration statement
on Form S-3 or any similar form of registration statement adopted by the
Commission from and after the date hereof.
(u) "Section 2(a) Initiating Holder" shall have the meaning set
forth in Section 2(a)(i).
(v) "Section 2(a) Requesting Holder" shall have the meaning set
forth in Section 2(a)(ii).
(w) "Section 2(a) Participating Holders" shall have the meaning
set forth in Section 2(a)(ii).
(x) "Section 2(a) Participating Units" shall have the meaning
set forth in Section 2(a)(ii).
(y) "Section 3(a) Participating Holder" shall have the meaning
set forth in Section 3(a)(i).
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(z) "Section 3(a) Participating Class A LP Units" shall have the
meaning set forth in Section 3(a)(ii)(B).
(aa) "Section 3(b) Participating Holder" shall have the meaning
set forth in Section 3(b)(ii)(B).
(ab) "Section 3(b) Participating Class A LP Units" shall have
the meaning set forth in Section 3(b) of this Agreement.
(ac) "Securities Act" has the meaning set forth in the Recitals
to this Agreement.
(ad) "Subsequent Holder" means any person or entity to whom the
Partnership has granted or does grant registration rights other than the Holders
and Priority Holders.
(ae) "Subsequent Holder Registrable Securities" means the Class
A LP Units held by any Subsequent Holder which are subject to registration
rights granted by the Partnership.
(af) "Third Party Holder" means any Priority Holder or
Subsequent Holder.
(ag) "Third Party Holder Registrable Securities" means the Class
A LP Units held by any Third Party Holder which are subject to registration
rights granted by the Partnership.
2. Underwritten Offerings.
(a) Request for Underwritten Offerings and Related Procedures.
(i) The Holders shall have the right, subject to the
conditions and procedures set forth herein, to cause the Partnership to
participate in the sale of Registrable Securities in a firm-commitment
underwritten offering. If any Holder or group of Holders (a "Section 2(a)
Initiating Holder") proposes to sell Registrable Securities in a firm-commitment
underwriting, the Section 2(a) Initiating Holder may request the Partnership in
writing to effect such underwritten public offering, stating the proposed
managing underwriter (which shall be subject to the Partnership's reasonable
approval) and the number of Registrable Securities proposed to be sold. Within
ten (10) days after receipt of the Section 2(a) Initiating Holders' notice, the
Partnership shall give written notice thereof to the other Holders and the Third
Party Holders (a "Section 2(a) Notice").
(ii) Within twenty (20) days after receipt of a Section 2(a)
Notice, any Holder or Subsequent Holder other than the Section 2(a) Initiating
Holder (a "Section 2(a) Requesting Holder") may deliver to the Partnership a
request to include some or all of its Registrable Securities in the underwritten
public offering effected in response to the request of the
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Section 2(a) Initiating Holder. Each Section 2(a) Requesting Holder's notice
shall state the number of his or its Registrable Securities proposed to be
included in the offering. Subject to the provisions of Section 2(b) below,
following the expiration of the above-referenced twenty (20) day period, the
Partnership shall cooperate in the preparation of a registration statement or,
if a shelf registration statement is then in effect under which the units may be
registered, a prospectus supplement, and all other documentation necessary to
effect the underwritten public offering of all of the Registrable Securities and
Subsequent Holder Registrable Securities (the "Section 2(a) Participating
Units") specified in the request of the Section 2(a) Initiating Holder pursuant
to Section 2(a)(i) and the requests, if any, of the Section 2(a) Requesting
Holders pursuant to this Section 2(a)(ii); provided, however, that if the
Partnership receives a request for registration from a Priority Holder pursuant
to Section 2(a)(iii), then, instead of effecting an underwritten public offering
pursuant to this Section 2(a)(ii), the Partnership shall follow the procedures
specified in Section 2(a)(iii).
If, in the case of an underwritten public offering pursuant
to Section 2(a)(ii), the managing underwriter determines that the Section 2(a)
Participating Units requested to be sold by the Section 2(a) Initiating Holder
and the Section 2(a) Requesting Holders (collectively, the "Section 2(a)
Participating Holders") should be limited due to market conditions or marketing
considerations, the Holders shall have priority over the Subsequent Holders and
shall not be required to withdraw any of their Registrable Securities from such
public offering until such time as all of the Subsequent Holder Registrable
Securities have been withdrawn. If, after all of the Subsequent Holder
Registrable Securities, if any, have been withdrawn, the managing underwriter
determines that the remaining Section 2(a) Participating Units should be limited
due to market conditions or marketing considerations, the Holders shall
participate in such public offering in such manner as they shall agree or, in
the absence of such an agreement, pro rata based upon the ratio of the
Registrable Securities (and Registrable Security equivalents), respectively,
owned by them to the total number Registrable Securities (and Registrable
Security equivalents) then outstanding. If, in such case, any Holder desires to
include in such underwriting fewer than its pro rata number of Section 2(a)
Participating Units, and as a result the offering can accommodate additional
Section 2(a) Participating Units, then all Holders who have already committed
their full pro rata share of Section 2(a) Participating Units shall be entitled
to include additional Section 2(a) Participating Units in such underwriting, up
to that number that can be accommodated pro rata based upon the relative numbers
of Section 2(a) Participating Units already included by such Holders in the
underwriting.
(iii) Within twenty (20) days after receipt of the Section
2(a) Notice, any Priority Holder which otherwise has demand registration rights
may deliver to the Partnership a request (a "Priority Holder Request")
obligating the Partnership to effect a Priority Holder-initiated registration
rather than effect an underwritten public offering pursuant to this Section
2(a). If the Partnership receives a Priority Holder Request, it shall effect a
Priority Holder-initiated registration and the Section 2(a) Initiating Holder
and Section 2(a) Requesting Holders
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shall have only those registration rights with respect to such registration as
set forth in Section 3(a) of this Agreement.
(b) Limitations on Underwritten Offerings.
(i) The Partnership shall not be required to effect more
than a total of two (2) underwritten public offerings at the Holders' request
pursuant to Section 2(a) hereof (which number shall not be reduced if the
Partnership effects a Priority Holder-initiated registration rather than an
underwritten public offering pursuant to Section 2(a)).
(ii) The Partnership shall not be required to effect an
underwritten public offering of Registrable Securities under Section 2(a) unless
the Section 2(a) Initiating Holder proposes to sell Registrable Securities
having a fair market value, as determined by the Partnership, of at least
$40,000,000.
(iii) Any underwritten offering pursuant to Section 2(a)
shall be managed by the Holder which contributes Registrable Securities having
the greatest fair market value, as determined by the Partnership, to the
offering, which Holder shall have the power to select the underwriter or
underwriters for such offering (subject to the reasonable approval of the
Partnership) and shall in consultation with the underwriter or underwriters have
the power to determine the number of Registrable Securities to be included in
such offering (subject to applicable limitations set forth herein), the offering
price of the Registrable Securities, the underwriting discounts and commissions,
the terms of the underwriting agreement (subject to the reasonable approval of
the Partnership), the timing of the registration and related offering, counsel
to the Holders and all other administrative matters related to the offering. Any
underwritten offering pursuant to a Priority Holder-initiated registration
pursuant to Section 2(a)(iii) shall be managed in accordance with the provisions
of Section 3(a)(ii)(B) hereof.
(iv) The Partnership shall not be required to prepare, file
or use its reasonable best efforts to cause to effect an underwritten public
offering or registration pursuant to Section 2(a): (A) which would become
effective within six months following the effective date of a registration
statement filed with the Commission pertaining to an underwritten public
offering of securities of the Partnership for cash for the account of the
Partnership or any Third Party Holder; or (B) if the Section 2(a) Initiating
Holders' request for an underwritten offering is received by the Partnership
subsequent to such time as the Partnership in good faith gives written notice to
the Holders that the Partnership is commencing to prepare a
Partnership-initiated registration statement (other than on Form S-8) or a
Priority Holder-initiated registration statement and the Partnership is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective.
(v) The Partnership may defer its obligations under Section
2(a) for a period not to exceed one hundred twenty (120) days from the date of
receipt of the written
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request from the Holders if (A) in the good faith judgment of the Partnership's
Board of Directors it would be seriously detrimental to the Partnership or its
stockholders for an underwritten public offering of Registrable Securities to be
effected in the near future and (B) the Partnership shall furnish to the Holders
a certificate to that effect signed by the Chief Executive Officer of the
Partnership. During any period in which the Partnership defers its obligations
pursuant to this Section 2(b)(iv), it may not effect any registration of its
securities.
(vi) The Partnership may defer its obligations under Section
2(a) during the pendency of a Material Disclosure Event, provided that the Board
of Directors of the Partnership shall have made a good faith, reasonable
determination that disclosure at such time would have a material adverse effect
on the business or financial condition of the Partnership. The foregoing
deferral shall expire upon the earliest to occur of: (A) ninety (90) days from
the date of receipt of the written request from the Holders; (B) public
disclosure of the Material Disclosure Event in question; and (C) the termination
or cessation of such event, or the need to disclose such event.
(c) Holdback Restrictions. The right of the Holders to effect
any distribution of Registrable Securities pursuant to Section 2 is subject to
the holdback restrictions set forth in Section 8.
(d) Cooperation in Marketing Efforts. In the event of an
underwritten offering pursuant to Section 2(a), the Partnership shall provide to
the Holders the reasonable assistance of members of its management in connection
with marketing efforts for such offering, except, and to the extent, that no
such assistance shall be required of the Partnership where it would cause a
significant disruption in the management duties of its management personnel.
3. Incidental Registrations.
(a) Registrations by Third Party Holders.
(i) Registration Obligations. If the Partnership receives a
request from one or more Third Party Holders obligating the Partnership to
effect a registration of the Third Party Holder Registrable Securities, then
within ten (10) days after receipt of such registration request, the Partnership
shall give written notice thereof to the Holders. Within twenty (20) days after
receipt of the Partnership's notice, any Holder may deliver to the Partnership a
request to include some or all of his or its Registrable Securities in the
registration effected in response to the request of the Third Party Holders.
Each Holders' notice shall state the number of their Registrable Securities
proposed to be included in the registration. Subject to the provisions of
Section 3(a)(ii) below, the Partnership shall use its reasonable best efforts to
effect promptly the registration under the Securities Act of all Third Party
Holder Registrable Securities and Registrable Securities (collectively, the
"Section 3(a) Participating Class A LP Units") specified in
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the requests of the Third Party Holders and the Holders (collectively, the
"Section 3(a) Participating Holders").
(ii) Limitations on Third Party Holder Registrations.
A. If the registration referred to in Section 3(a)(i)
relates to a firm commitment underwriting and the managing underwriter
determines, in its sole discretion, that the number of shares of Section 3(a)
Participating Class A LP Units included in a registration initiated pursuant to
Section 3(a)(i) which are to be sold by the Section 3(a) Participating Holders
should be limited due to market conditions or marketing considerations, the
Holders and the Third Party Holders proposing to sell their Section 3(a)
Participating Class A LP Units in such underwriting and registration shall
participate in such registration in such manner as they shall agree or, in the
absence of such an agreement, (x) if none of the Section 3(a) Participating
Holders are Priority Holders pro rata based upon the ratio of the Registrable
Securities and Third Party Holder Registrable Securities, respectively, owned by
them to the total number of Registrable Securities and Third Party Holder
Registrable Securities then outstanding, unless any of the Subsequent Holders
who are Section 3(a) Participating Holders have priority rights with respect to
registrations initiated by them, in which case the Holders shall participate in
such registrations subject to the priority rights held by such Subsequent
Holders or (y) if some of the Section 3(a) Participating Holders are Priority
Holders, then the participation by the Priority Holders shall not be reduced and
the participation by the other Section 3(a) Participating Holders shall be as
determined in clause (x) above, after taking account of the Class A LP Units to
be sold by the Priority Holders. If any of the Section 3(a) Participating
Holders desire to include in such underwriting and registration fewer than its
pro rata number of Section 3(a) Participating Class A LP Units, and as a result
the offering can accommodate additional Section 3(a) Participating Class A LP
Units, then all Section 3(a) Participating Holders who have already committed
their full pro rata share of Section 3(a) Participating Class A LP Units shall
be entitled to include additional Section 3(a) Participating Class A LP Units in
such underwriting and registration, up to that number that can be accommodated
pro rata based upon the relative numbers of Section 3(a) Participating Class A
LP Units already included by such Section 3(a) Participating Holders in such
underwriting and registration.
B. Any registration and offering initiated pursuant to
Section 3(a)(i) shall be managed by either (a) the Priority Holder entitled to
so manage the registration under the 1994 Agreement or (b) if no such Priority
Holder is participating, by the Section 3(a) Participating Holder contributing
the greatest number of Class A LP Units to such registration (the "Controlling
Holder"), which Controlling Holder shall have the power to select the
underwriter or underwriters for the offering related to such registration, and
shall in consultation with the underwriter or underwriters have the power to
determine on behalf of all Section 3(a) Participating Holders the number of
Class A LP Units to be included in such registration (subject to applicable
limitations set forth herein), the offering price per Class A LP Unit, the
underwriting discounts and commissions, the terms of the underwriting agreement,
the timing of the
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registration and related offering, counsel to the Section 3(a) Participating
Holders, and all other administrative matters related to the registration and
related offering. If any Holder participates in any registration or offering
pursuant to Section 3(a)(i), such Holder shall sell his or its Registrable
Securities only pursuant to the underwriting arranged by the Controlling Holder
and shall either commit to attend the closing of the offering and take such
other actions as may be reasonably necessary to effect the Holder's
participation in the offering and to provide any assurances reasonably requested
by the Partnership, the underwriters, and other Section 3(a) Participating
Holders in that regard, or shall deliver to the Controlling Holder in custody
certificates representing all Registrable Securities of such Holder to be
included in the registration and shall execute and deliver to the Controlling
Holder a custody agreement and a power of attorney, each in form and substance
reasonably appropriate for the purpose of effecting the Holder's participation
in the registration and sale and otherwise reasonably satisfactory to the
Controlling Holder. If any Holder disapproves of the features of the
registration, he or it may elect to withdraw therefrom (in whole or part) by
written notice to the Partnership, the underwriters and the other Section 3(a)
Participating Holders (including the Controlling Holder) delivered no later than
ten (10) days prior to the effectiveness of the applicable registration
statement (provided that if the Holder disapproves of the offering price or
underwriter's discount or commission, he or it may withdraw immediately upon
being advised thereof), and the Registrable Securities of the Holder shall
thereupon be withdrawn from such registration.
(b) Partnership Registrations.
(i) Partnership Registrations. Each time the Partnership
proposes to register any Class A LP Units for sale for its own account (other
than pursuant to a registration statement on Form S-8 or Form S-4 or otherwise
in connection with an acquisition, merger or consolidation), it shall at its
expense give the Holders written notice of its intention to do so (the
"Piggyback Notice") at least twenty-five (25) days prior to the filing with the
Commission of a registration statement with respect to such registration. If any
Holder desires to include all or part of his or its Registrable Securities in
such registration, he or it may request registration thereof in connection with
the Partnership's registration by delivering to the Partnership, within fifteen
(15) days after receipt of the Piggyback Notice, written notice of such request
(a "Holder's Notice") stating the number of Registrable Securities proposed to
be included. The Partnership shall use its reasonable best efforts to cause all
Registrable Securities specified in each Holder's Notice to be included in such
registration so as to permit the sale by the applicable Holders of the
Registrable Securities so registered, subject, however, to the limitations set
forth in Section 3(b)(ii).
(ii) Limitations on Partnership Registrations.
A. If the registration of which the Partnership gives
notice pursuant to Section 3(b)(i) is for the purpose of permitting an issuance
of Class A LP Units by the Partnership pursuant to a firm commitment
underwritten offering, the notice shall so state, and the Partnership shall have
the right to limit the aggregate size of the offering or the number of
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Registrable Securities to be included therein by the Holders if requested to do
so in good faith by the managing underwriters of the offering.
B. Whenever the number of Class A LP Units that may be
registered pursuant to Section 3(b)(i) is limited pursuant to the provisions of
Section 3(b)(ii)(A) above, the Partnership shall have priority over the Holders
and any Third Party Holders and the Holders hereby agree that they shall
withdraw their Registrable Securities from such registration to the extent
necessary to allow the Partnership to include all the Class A LP Units that the
Partnership desires to sell for its own account to be included within such
registration; provided that in no event shall the aggregate of the Registrable
Securities requested to be included pursuant to Section 3(b)(i) and the Third
Party Holder Registrable Securities requested to be included by the Third Party
Holders (collectively, the "Section 3(b) Participating Class A LP Units") be
reduced below forty percent (40%) of the total amount of Class A LP Units
included in such registration. The Holders and the Third Party Holders who
request inclusion (collectively, the "Section 3(b) Participating Holders") shall
share (as a single class) in the available portion of the registration in
question pro rata based upon the ratio of the number of Registrable Securities
and Third Party Holder Registrable Securities, respectively, owned by them to
the total number of Section 3(b) Participating Class A LP Units and other
Registrable Securities then outstanding; provided, however, that any such
participation shall be established only after any Priority Holders have been
allowed the full amount of participation in such offering to which they may be
entitled under the 1994 Agreement. If any of the Section 3(b) Participating
Holders desire to include in such underwriting and registration fewer than their
pro rata number of Section 3(b) Registrable Securities, and as a result the
offering can accommodate additional Section 3(b) Participating Class A LP Units,
then the Section 3(b) Participating Holders who have already committed their
full pro rata share of Section 3(b) Participating Class A LP Units shall be
entitled to include additional Section 3(b) Participating Class A LP Units in
such underwriting and registration, up to that number that can be accommodated
pro rata based upon the relative numbers of Section 3(b) Participating Class A
LP Units already included by the Section 3(b) Participating Holders in such
underwriting and registration.
C. Any registration and offering initiated by the
Partnership shall be managed by the Partnership, and all Registrable Securities
included in such a registration and offering pursuant to Section 3(b)(i) shall
be included upon the same terms and conditions as applicable to Class A LP Units
included for the Partnership's account, as such may be determined by the
Partnership in consultation with the underwriter. If any Holder participates in
any registration or offering pursuant to Section 3(b)(i), he or it shall sell
his or its Registrable Securities only pursuant to the underwriting arranged by
the Partnership, and shall either commit to attend the closing of the offering
and take such other actions as may be reasonably necessary to effect his or its
participation in the offering and to provide any assurances reasonably requested
by the Partnership, the underwriters, and participating Third Party Holders in
that regard, or shall deliver to the Partnership in custody certificates
representing all Registrable Securities of such Holder being included in the
registration, and shall execute and deliver to the Partnership a
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custody agreement and power of attorney, each in form and substance reasonably
appropriate for the purpose of effecting the Holders' participation in the
registration and sale and otherwise reasonably satisfactory to the Partnership.
If any Holder disapproves of the features of the registration, it may elect to
withdraw therefrom (in whole or part) by written notice to the Partnership, the
underwriters and the participating Third Party Holders delivered no later than
ten (10) days prior to the effectiveness of the applicable registration
statement (provided that if a Holder disapproves of the offering price or
underwriter's discount or commission, the Holder may withdraw immediately upon
being advised thereof), and the Registrable Securities of the Holder shall be
withdrawn from registration. The Partnership may determine, in its sole
discretion, to withdraw the registration.
4. Registration Procedures.
(a) If and when the Partnership is required by the provisions of
this Agreement to use its reasonable best efforts to effect the registration of
Registrable Securities, the Partnership shall:
(i) prepare and file with the Commission a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become and remain effective for the
applicable period in which all Registrable Securities covered by the
registration statement have been sold or withdrawn;
(ii) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectuses used in
connection therewith as may be necessary to keep such registration statement
effective and current and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of all Registrable Securities
covered by such registration statement, including such amendments and
supplements as may be reasonably required by the Holders participating in the
registration (the "Participating Holders"), in their discretion, to accommodate
their intended method of disposition from time to time;
(iii) furnish to the Participating Holders such number of
copies of each prospectus, including each preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents, as may be
reasonably requested in order to facilitate the public sale or other disposition
of the Registrable Securities;
(iv) use its reasonable best efforts to register or qualify
the Registrable Securities covered by such registration statement under such
other securities or blue sky or other applicable laws of such jurisdictions as
the Participating Holders shall reasonably request to enable the Participating
Holders to consummate the public sale or other disposition of the Registrable
Securities; provided that the Partnership shall not be required in connection
therewith to qualify to do business or to file a general consent to service of
process in any such jurisdiction;
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(v) upon written request, cause its attorneys or
accountants, as applicable, to furnish to the Participating Holders a signed
counterpart, addressed to the Participating Holders and their underwriters, if
any, of: (A) an opinion of counsel for the Partnership, dated the effective date
of the registration statement, covering substantially the same matters with
respect to the registration statement (and the prospectus included therein) as
are customarily covered (at the time of such registration) in the opinions of
issuers' counsel delivered to the underwriters in connection with comparable
underwritten public offerings; and (B) such negative assurances or agreed upon
procedures reports from the Partnership's independent public accountants as and
to the extent that the same may be available to the Participating Holders under
then outstanding statements and pronouncements of the Auditing Standards Board
or other similar accounting industry bodies;
(vi) cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Partnership
are then listed;
(vii) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(viii) enter into such customary agreements (including an
underwriting agreement) and take all such other customary actions as the
Participating Holders reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities; and
(ix) make available for inspection by any Participating
Holder, any participating underwriter, and any attorney, accountant or other
agent retained by the Participating Holder in a registration pursuant to
Sections 2(a) (if the Participating Holder is the manager of such registration)
and 3(a) (if the Participating Holder is the Controlling Holder), all financial
and other records, pertinent documents and properties of the Partnership, and
cause the Partnership's affiliates and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with the preparation of such registration statement.
(b) The Holders' rights to exercise registration rights under
Section 2 or 3 with respect to Registrable Securities which are Exchange Right
Units shall be contingent upon the offering of the Exchange Right Units being
effected through: (i) the sale by the Holders to the underwriters in such
offering of Exchange Rights and 6% Senior Notes sufficient upon exercise to
provide for the issuance of the number of Exchange Right Units desired to be
sold in the offering, (ii) the exercise of such Exchange Rights by the
underwriters and the tender to the Partnership of 6% Senior Notes sufficient in
principal amount to pay the exercise price thereof, and (iii) the sale to the
public by the underwriters of the Exchange Right Units received upon exercise of
the Exchange Rights. The Partnership agrees that if any Holder has prior to such
an offering already exercised Exchange Rights and desires to sell the Exchange
Right Units, the Holder may present
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the Exchange Right Units to the Partnership for redemption at the exchange rate
then in effect under the Exchange Rights in exchange for Exchange Rights for an
equivalent number of Exchange Right Units and 6% Senior Notes in principal
amount equal to the aggregate exercise price of such Exchange Rights.
(c) The Participating Holders shall (i) furnish to the
Partnership such information regarding the Participating Holders, their
Registrable Securities, and the intended method of distribution of the
Registrable Securities to be included by the Participating Holders in the
registration as the Partnership may reasonably require from the Participating
Holders for inclusion in the registration statement (and the prospectus included
therein) pursuant to applicable securities laws and rules; and (ii) enter into
such customary agreements as may be reasonably required by the Partnership or
the underwriter in order to facilitate the registration and offering.
(d) The Participating Holders shall not effect sales of the
Registrable Securities covered by the registration statement after receipt of
telegraphic or written notice from the Partnership to suspend sales in order to
permit the Partnership promptly and expeditiously to correct or update a
registration statement or prospectus until such time as the Participating
Holders shall have received from the Partnership a written notice that the
registration statement or prospectus has been corrected or updated.
(e) When participating in any underwriting pursuant to this
Agreement, the Participating Holders shall deliver to the underwriter and the
Partnership the opinion of its outside counsel to the effect that inclusion of
such Registrable Securities in the underwriting has been duly authorized and
will not conflict with charter documents or contracts known to such counsel of
the Participating Holders, and such other matters as are customary and
reasonable under the circumstances.
5. Expenses of Registration.
(a) All expenses incurred in connection with underwritten public
offerings pursuant to Section 2(a) in which no Third Party Holders or the
Partnership sell securities of the Partnership for their own account (other than
the expenses incurred in maintaining any shelf registration), including, without
limitation, all registration and filing fees, listing fees, underwriting
discounts and commissions, printing expenses, expenses of compliance with blue
sky laws, reasonable fees and disbursements of counsel for the Partnership, fees
and disbursements of counsel for the Participating Holders, expenses of any
audits incidental to or required by any such registration, and expenses of all
marketing and promotional efforts requested by the managing underwriter
(collectively, "Registration Expenses") shall be borne by the Participating
Holders and divided among them pro rata based on the fair market value of the
Registrable Securities included by each Participating Holder.
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(b) All expenses incurred in effecting and maintaining a shelf
registration pursuant to Section 2(b) (other than the expenses of underwritten
public offerings pursuant to such a shelf registration) and all Registration
Expenses incurred in effecting any registration in which any Holders participate
pursuant to Section 3(b) shall be borne by the Partnership, provided that such
Holders shall bear their own attorney's fees and expenses and all underwriting
discounts and commissions applicable to their Registrable Securities.
(c) All Registration Expenses incurred in effecting any
registration (other than a shelf registration) in which the any Holders
participate pursuant to Sections 2(a) and 3(a) shall be borne pro rata by the
Participating Holders, the participating Third Party Holders and/or the
Partnership, in each case for whose account Class A LP Units are included in
such registration, based upon a fraction, the numerator of which shall be the
number of Registrable Securities of each Participating Holder, Third Party
Holder Registrable Securities of each participating Third Party Holder or Class
A LP Units being offered by the Partnership to be included in such requested
registration by the Participating Holder, participating Third Party Holder or
the Partnership, as the case may be, and the denominator of which shall be the
total number of all Registrable Securities, Third Party Holder Registrable
Securities and/or Class A LP Units being offered by the Partnership to be
included in the requested registration. All Registration Expenses paid by the
Partnership or the participating Third Party Holders for which a Participating
Holder is liable hereunder shall be reimbursed by the Participating Holder to
the Partnership or participating Third Party Holders upon demand, including,
without limitation, out of offering proceeds.
6. Indemnification.
(a) In the event of any registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, the Partnership
shall indemnify and hold harmless the Holders requesting or joining in a
registration of such Registrable Securities, each underwriter (as defined in the
Securities Act) and each controlling person of any underwriter (within the
meaning of the Securities Act), if any, and the officers, directors, direct and
indirect beneficial owners, employees, and agents of the Holders, underwriters
or controlling persons, and the successors and assigns of any of them (each an
"Indemnitee"), against any losses, claims, damages or liabilities, joint or
several (or actions in respect thereof), to which such Indemnitee may be subject
under the Securities Act, under any other statute or at common law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement (or alleged untrue
statement) of any material fact contained in any registration statement under
which such Registrable Securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any summary
prospectus issued in connection with any securities being registered, or any
amendment or supplement thereto, or (ii) 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, or (iii) any violation by the Partnership
of the Securities Act or any rule or regulation promulgated under the Securities
Act ((i), (ii) and (iii) are
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each referred to hereafter as a "Violation"), and shall reimburse each such
Indemnitee for any legal or other expenses reasonably incurred by such
Indemnitee in connection with investigating or defending any such loss, claim,
damage, liability or action, such reimbursement to be paid on a current basis as
such expenses are incurred; provided, however, that the Partnership shall not be
liable to any Indemnitee in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or omission made in such registration statement, preliminary
prospectus, summary prospectus, prospectus, or amendment or supplement thereto,
in reliance upon and in conformity with written information furnished to the
Partnership by or on behalf of such Indemnitee, specifically for use therein
unless such written information is subsequently corrected in writing and
provided to the Partnership at least one business day prior to the effectiveness
of the registration statement relating to such registration. The indemnity
provided for herein shall remain in full force and effect regardless of any
investigation made by or on behalf of the Partnership or Indemnitee.
(b) In the event of any registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, each
Participating Holder shall (severally, and not jointly) indemnify and hold
harmless the Partnership, each underwriter (within the meaning of the Securities
Act), if any, and each officer, director and controlling person of the
Partnership or underwriter (within the meaning of the Securities Act), if any,
and the officers, directors, direct and indirect beneficial owners, employees,
and agents of the Partnership, underwriters or controlling persons, and the
successors and assigns of any of them (each a "Partnership Indemnitee"), against
any losses, claims, damages or liabilities, joint or several (or actions in
respect thereof), to which the Partnership Indemnitee may be subject under the
Securities Act, under any other statute or at common law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon written information
furnished by or on behalf of the Holder expressly for use in connection with
such registration unless such information was corrected in writing and provided
to the Partnership at least one business day prior to the effectiveness of the
registration statement relating to such registration, and shall reimburse the
Partnership Indemnitee for any legal or other expenses reasonably incurred by
the Partnership Indemnitee in connection with investigating or defending any
such loss, claim, damage, liability or action, such reimbursement to be paid on
a current basis as such expenses are incurred; provided, however, that a
Participating Holder shall be liable to the Partnership Indemnitee in any such
case only to the extent of, in the aggregate, the lesser of (i) the amount of
such loss, claim, damage or liability or (ii) the net proceeds actually received
by the Participating Holder in such offering. The indemnity provided for herein
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Participating Holder or any Partnership Indemnitee. Nothing
provided herein shall preclude the Participating Holders from receiving
indemnities from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in any registration to the same
extent as customarily furnished by such persons in similar circumstances and the
existence of such other indemnities shall not reduce, terminate or otherwise
diminish the Partnership's obligations under Section 6(a).
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(c) If the indemnification provided for in Section 6(a) or 6(b)
is unavailable to an indemnified party in respect of any losses, claims, damages
or liabilities referred to therein, then the indemnifying party in lieu of
indemnifying such indemnified party thereunder shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party, or by the indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The parties agree that it would not be just and equitable if
contribution pursuant to this Section 6(c) were determined by pro rata
allocation or by any other method of allocation which does not take into account
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 or actions in respect thereof referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, 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 Section 6(c), the
Participating Holders shall not be required to contribute any amount which in
the aggregate exceeds the lesser of (i) the amount of such loss, claim, damage
or liability or (ii) the net proceeds actually received by the Participating
Holders in such offering. No person guilty of fraudulent misrepresentations
(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
misrepresentations.
(d) Promptly after receipt by an indemnified party under Section
6(a) or 6(b) of notice of the commencement of any action, such indemnified party
shall notify the indemnifying party in writing of the commencement thereof; but
the omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under such
Sections or to the extent that it has not been prejudiced as a proximate result
of such failure. In case any such action shall be brought against any
indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the
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indemnifying party, the indemnified party or parties shall have the right to
select one single separate counsel to assert such legal defenses at the
indemnifying party's expense (in which case the indemnifying party shall not
have the right to direct the defense of such action on behalf of the indemnified
party or parties). The selection of one single separate counsel to indemnified
parties entitled to a separate defense shall be made by concurrence of
indemnified parties who have received at least 51% of the proceeds received by
all indemnified parties entitled to a separate defense in the offering giving
rise to the claim for indemnity. Upon the permitted assumption by the
indemnifying party of the defense of such action, and approval by the
indemnified party of counsel, the indemnifying party shall not be liable to such
indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed one single separate
counsel in connection with the assertion of different or additional legal
defenses in accordance with this Section 6(d), (ii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time, (iii) the indemnifying
party and its counsel do not actively and vigorously pursue the defense of such
action, or (iv) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party.
7. Rule 144 Requirements. The Partnership shall undertake to make
publicly available, and available to the Holders, such information as is
necessary to enable the Holders to make sales of Registrable Securities pursuant
to Rule 144 of the Commission under the Securities Act, or any successor to such
rule. The Partnership shall furnish to the Holders, upon request, a written
statement executed by the Partnership as to the steps it has taken to comply
with the current public information requirements of Rule 144, or any successor
to such rule.
8. Holdback. If the Partnership files a registration statement in
connection with an underwritten public offering for its own account or for the
account of any securityholder, the Holders shall not, pursuant to a shelf
registration statement or otherwise, effect any sale or distribution of any
Registrable Securities (except pursuant to such registration statement) or other
securities of the Partnership, whether now owned or hereafter acquired, during
the period requested by the underwriters commencing with the effective date of
such registration statement and ending on the close of business on a date which
is not more than one hundred twenty (120) days thereafter or such time as the
registration statement is withdrawn, whichever is earlier.
9. Assignment of Registration Rights. The rights of the Holders pursuant
to this Agreement may be assigned (but only with all related obligations) to
transferees or assignees (other than competitors of the Partnership that have
publicly traded securities or assets under management in excess of $100 million)
of Registrable Securities, provided the Partnership is, within a reasonable time
after such transfer, furnished with written notice of the name and address of
such transferee or assignee and the securities with respect to which such
registration rights are being assigned.
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10. Rights Which May Be Granted to Other Persons; Termination of Rights.
The Holders acknowledge and agree that the Partnership may grant registration
rights to other holders of Class A LP Units that are pari passu with the
registration rights granted to the Holders in this Agreement; provided, however,
that the Holders shall maintain their rights with respect to Holder-initiated
public offerings as set forth in Section 2, and Subsequent Holders may be
granted rights with respect to Subsequent Holder-initiated public offerings
similar to those set forth in Section 2. The Holders shall not be entitled to
exercise any registration right provided for in this Agreement (and the
Partnership may cease and withdraw any pending registration) after the date that
securities of the Partnership are no longer publicly traded. If the securities
of the Partnership cease to be publicly traded, and if the Partnership is able
to cause the issuer of the successor security, if any, to the publicly traded
securities of the Partnership to enter into a registration rights agreement with
the Priority Holders, then the Holders will be granted by the issuer of the
successor security to the publicly traded securities of the Partnership
registration rights providing to the Holders, as nearly as practicable,
registration rights with respect to the successor security to the publicly
traded units of the Partnership that are substantially similar to those granted
hereunder. The Holders acknowledge and agree that under the terms of the 1994
Agreement, the Partnership would be obligated under such circumstances to grant
to the Priority Holders rights with respect to the successor security comparable
to the rights under the 1994 Agreement.
11. Miscellaneous.
(a) Notices. All notices, requests, demands, and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally or telecopied (with a confirmation copy marked as described
below) or mailed by certified or registered mail, postage prepaid, return
receipt requested, addressed as follows:
If to the Partnership: c/o PIMCO Advisors L.P.
800 Newport Center Drive
Newport Beach, CA 92660
Attn: Kenneth M. Poovey, Esq.
Fax: (714) 717-7076
with copies to: Latham & Watkins
650 Town Center Drive, Suite 2000
Costa Mesa, CA 92626
Attn: David C. Flattum, Esq.
Fax: (714) 755-8290
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If to the Holders:: c/o Oppenheimer & Co., Inc.
Oppenheimer Tower
One World Financial Center
200 Liberty Street
New York, NY 10281
Attn: Roger W. Einiger
Fax: (212) 667-7000
and to: The Indemnity Trust
Oppenheimer Tower
One World Financial Center
200 Liberty Street
New York, NY 10281
Attn: Roger W. Einiger and Robert I.
Kleinberg
Fax: (212) 667-2369
with copies to: Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attn: Robert Todd Lang, Esq.
Fax: (212) 310-8007
(b) Governing Law; Jurisdiction. This Agreement shall be
governed by, and construed and enforced in accordance with, the internal laws,
but not the laws pertaining to choice or conflicts of laws, of the State of
Delaware. Each of the parties to this Agreement hereby irrevocably and
unconditionally agrees (i) to be subject to the jurisdiction of the courts of
the State of Delaware and of the federal courts sitting in the State of
Delaware, and (ii) (A) to the extent such party is not otherwise subject to
service of process in the State of Delaware, to appoint and maintain an agent in
the State of Delaware as such party's agent for acceptance of legal process, and
(B) that service of process may also be made on such party by delivery of notice
pursuant to Section 11(b) with a proof of mailing receipt validated by the
Shared States Postal Service constituting evidence of valid service, and that
service made pursuant to (ii)(A) or (B) above shall have the same legal force
and effect as if served upon such party personally within the State of Delaware.
For purposes of implementing the parties' agreement to appoint and maintain an
agent for service of process in the State of Delaware, each such party that has
not as of the date hereof already duly appointed such an agent does hereby
appoint RL&F Service Corp., One Rodney Square, 10th Floor, Wilmington, Delaware,
19801, as such agent.
(c) Entire Agreement; No Third Party Beneficiaries.
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(i) This Agreement constitutes the entire agreement among
the parties pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations, and undertakings of the parties.
(ii) Nothing in this Agreement shall be deemed to grant to
or vest in any person other than the parties hereto and their permitted assigns
any rights or privileges or status as an intended beneficiary hereof.
(d) Amendments and Waivers. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated orally or in writing,
except that, subject to the final sentence of this Section 11(d), any term of
this Agreement may be amended in any respect whatsoever and the observance of
any such term may be waived (either generally or in a particular instance and
either retroactively or prospectively) with the written consent of (i) the
Partnership and (ii) Holders owning a majority in interest of the Registrable
Securities; provided, however, that no such amendment or waiver shall alter the
rights or priorities of the Agent which may be granted pursuant to Section 10.
(e) Specific Performance. The parties hereto acknowledge and
agree that they would not have adequate remedies at law and would be irreparably
harmed if any of the provisions of this Agreement were not performed by the
parties hereto in accordance with the specific terms hereof or were otherwise
breached, and that, in such case, it would be impossible to measure in money the
damages to such parties. It is accordingly agreed that the parties hereto shall
be jointly and severally entitled to injunctive relief or the enforcement of
other equitable remedies, without bond or other security, to compel performance
and to prevent breaches of this Agreement by any party hereto and specifically
to enforce the terms and provisions hereof, in addition to any other remedy to
which they may be entitled, at law or in equity.
(f) Severability. Any provision of this Agreement that is
invalid, illegal, or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality, or
unenforceability, without affecting in any way the remaining provisions hereof
in such jurisdiction or rendering that or any other provision of this Agreement
invalid, illegal, or unenforceable in any other jurisdiction.
(g) Legal and Other Fees and Expenses. Each of the parties shall
pay its own expenses incurred in connection with the negotiation and preparation
of this Agreement and, except as otherwise specifically set forth herein, the
transactions contemplated hereby, including, without limitation, all fees and
disbursements of their respective legal counsel, advisors, and accountants. If
any legal action or any arbitration or other proceeding or appeal therefrom is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in connection with any of the provisions
of this Agreement, the successful or prevailing party or parties shall be
entitled to recover from the non-prevailing party or parties
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reasonable attorneys' fees and other costs incurred in that action or
proceeding, whether or not such action or proceeding is prosecuted to judgment
or, in addition to any other relief to which it or they may be entitled.
(h) Binding Effect. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, executors,
administrators, successors, and assigns.
(i) Headings; References. Headings used in this Agreement are
for convenience of reference only, do not constitute a part of this Agreement,
and shall not affect the construction or interpretation hereof. References in
this Agreement to sections are, unless otherwise noted, references, to the
specified section of this Agreement.
(j) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Registration
Rights Agreement to be executed as of the date first written above.
PIMCO Advisors L.P.,
a Delaware limited partnership
By /s/ KENNETH M. POOVEY
------------------------
Name: Kenneth M. Poovey
Title: Executive Vice President
HOLDERS
----------------------------
Name:_______________________
[Signature blocks of individual Holders
may be on separate pages]
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