REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") dated as of
November 23, 1994, is by and among Town & Country Corporation, a Massachusetts
corporation (the "Company"), and the persons who have executed signature pages
attached hereto (individually a "Holder" and collectively the "Holders").
WHEREAS, the Company has duly authorized the issuance of, and
contemporaneously herewith is issuing, up to 2,533,255 shares (the "Initial
Shares") of the Company's convertible redeemable preferred stock, $1.00 par
value per share (the "Convertible Preferred"), without registration under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a letter
agreement dated November 4, 1994 by and between the Company and each of the
Holders (the "Letter Agreements");
WHEREAS, the Company from time to time after the date hereof may issue
additional shares (the "Dividend Shares" and, together with the Initial Shares,
the "Shares") of Convertible Preferred as payment in lieu of cash dividends
payable on the Convertible Preferred pursuant to the Certificate of Vote of
Directors Establishing a Series of a Class of Stock with respect to the
Convertible Preferred (the "Certificate of Designation"); and
WHEREAS, the execution of this Agreement is a condition to the Holders'
agreement to consummate the transactions pursuant to which they will receive the
Shares.
NOW, THEREFORE, in consideration of the mutual benefits to be derived
from this Agreement, the parties hereto hereby agree as follows:
1. Registration; Obligations of the Company. Within 60 days following
the date that the Shares are issued to the Holders by the Company, the Company
(at its own expense) shall file a registration statement (the "Registration
Statement") on Form S-2 (or such other form which the Company is then entitled
to use) under the Securities Act covering (i) the Shares, (ii) the shares of the
Company's Class A common stock, $.01 par value per share (the "Class A Common"),
into which the Shares are convertible, and (iii) such number of additional
shares of Convertible Preferred and Class A Common as may be issued from time to
time in lieu of dividend payments on the Convertible Preferred (the "Dividend
Securities") (the Shares, the Class A Common into which such Shares are
convertible, and the Dividend Securities are hereinafter collectively referred
to as the "Securities"). The Company will use its best efforts to cause the
Registration Statement to be declared effective by the Securities and Exchange
Commission ("SEC") within 120 days after the date on which the Registration
Statement is filed with the SEC and to keep the Registration Statement
effective, including filing as promptly as practicable any post-effective
amendments, as required, for the period (the "Effective Period") commencing on
the earliest date on which any of the Securities are issued and ending on the
earlier of (a) the date on which each of the Holders has notified the Company
that such Holder may dispose of all of the Securities owned by it pursuant to
Rule 144(k) under the Securities Act and (b) the date on which the Holders and
all Affiliates (as defined below) of the Holders no longer own any Securities.
In addition, the Company shall:
(a) Prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement, and use its best efforts to cause each such
amendment to become effective, as may be necessary to comply with the provisions
of the Securities Act; and
(b) Furnish to each Holder such reasonable number of copies of
a prospectus, in conformity with the requirements of the Securities Act, as it
may reasonably request in order to facilitate the disposition of Securities
owned by it.
2. State Securities Laws. Subject to the conditions set forth
in this Agreement, the Company shall, upon filing of the Registration Statement,
file such documents as may be necessary to either register or qualify or satisfy
an exemption from registration or qualification of the Securities under the
securities or "Blue Sky" laws of the States of California and New York and the
Commonwealth of Massachusetts and such other states as the Holders may
reasonably request, and the Company shall use its best efforts to cause such
filings to become effective; provided, however, that the Company shall not be
obligated to qualify as a foreign corporation to do business under the laws of
any such state in which it is not then qualified or to file any general consent
to service of process in any such state. Once effective, the Company shall use
its best efforts to keep such filings effective until the earlier of (a) the
expiration of the Effective Period pursuant to Section 1 hereof or (b) in the
case of a particular state, each Holder that requested registration in such
state has notified the Company that it no longer requires an effective filing in
such state in accordance with its original request for filing. The Company shall
promptly notify the Holders of, and confirm in writing, the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Securities for sale under the securities or "Blue Sky" laws of any
jurisdiction or the initiation or threat of any proceeding for such purpose.
3. Obligations of the Holders.
(a) The Company shall have no obligation to register Securities
on behalf of any Holder if such Holder has not furnished in writing to the
Company such information regarding itself, the Securities (and any other shares
of Convertible Preferred or Class A Common) held by it, and the intended method
of disposition of the Securities as shall be required to effect the registration
of its Securities.
(b) To the extent required by the Securities Act and the rules
and regulations promulgated thereunder, each of the Holders agrees to deliver or
cause delivery of the prospectus contained in the Registration Statement and any
amendment or supplement thereto to any purchaser of the Securities from the
Holders.
4. Expenses. The Company shall bear all expenses incurred in connection
with the registration of the Securities pursuant to this Agreement. Such
expenses shall include, without limitation, all printing, legal and accounting
expenses incurred by the Company and all registration and filing fees imposed by
the SEC, any state securities commission or the American Stock Exchange. Each of
the Holders shall be responsible for any brokerage or underwriting commissions
and taxes of any kind (including, without limitation, transfer taxes) with
respect to any disposition, sale or transfer of the Securities held by it and
for any legal, accounting and other expenses incurred by it.
5. Suspension of Registration Statement. After the Registration
Statement initially has been declared effective, if at any time during the
Effective Period either (i) the effectiveness of the Registration Statement has
been suspended or has otherwise lapsed for any reason or (ii) the Company
instructs the Holders in writing not to sell any Securities covered by the
Registration Statement, which instruction shall be deemed for purposes of this
Agreement to be a suspension of the effectiveness of the Registration Statement,
the Company will (a) within five days notify the Holders in writing of such
cessation and (b) in the case of a suspension or lapse pursuant to clause (i)
above, promptly (at its own expense) use its best efforts to cause the
Registration Statement to be declared effective or to file such supplement or
post-effective amendment as may be required to rectify such lapse or (c) in the
case of a suspension pursuant to clause (ii) above, promptly inform the Holders
when they may recommence effecting sales of the Securities pursuant to the
Registration Statement.
6. Illiquidity Payment. If at the end of any calendar month (a
"Determination Date") the Registration Statement was not continuously effective
for at least 120 days during the preceding six calendar month period, the
Company shall within 15 days after the end of each such month pay to each Holder
in cash an illiquidity payment (the "Illiquidity Payment") which initially shall
be equal to the Initial Illiquidity Payment (as defined below) and shall be
increased as provided in Section 7 below, if applicable; provided, however, that
the Company will not be required to make an Illiquidity Payment under this
Section 6 with respect to any Determination Date if an Illiquidity Payment was
made by the Company with respect to either of the two Determination Dates
immediately preceding such Determination Date. The Initial Illiquidity Payment
shall be equal to the product of .00125 times the aggregate liquidation value of
all Convertible Preferred owned by such Holder as of the Determination Date,
which Convertible Preferred was acquired by such Holder on the date hereof, or,
in the event that such Convertible Preferred has been converted into shares of
Class A Common, the aggregate Fair Market Value of such shares of Class A Common
owned by such Holder as of the Determination Date.
For purposes of this Agreement, "Fair Market Value" of a share of Class
A Common shall mean the average of the closing sale price (or, if no closing
sale price is reported, the average of the bid and ask price or, if more than
one in either case, the average of the average bid and average ask prices on
such day) of a share of Class A Common on the American Stock Exchange Inc.
("AMEX") for the 15 Trading Days (as defined below) immediately preceding the
date on which Fair Market Value is determined or, in the event that the Class A
Common is not traded on AMEX, such other national securities or regional
securities exchange upon which the Class A Common is listed and principally
traded or, if no such price is available, the per share market value of the
Class A Common as determined by a recognized financial advisor retained by the
Company (at the Company's expense) for the purpose of such valuation. For
purposes of this Agreement, "Trading Day" shall mean each day on which AMEX or
such other securities exchange or automated quotations system on which shares of
Class A Common are traded is open for the transaction of business or, if the
Class A Common is not listed or admitted for trading on AMEX or any securities
exchange or automated quotations system, any day other than a Saturday, a Sunday
or a day on which banking institutions in the City of Boston or The Commonwealth
of Massachusetts are authorized or obligated by law or executive order to close.
7. Additional Illiquidity Payment. In the event the Company would have
been obligated to make an Illiquidity Payment pursuant to Section 6 above
(without regard to the proviso contained in the first sentence of Section 6) for
three consecutive calendar months and on the fourth consecutive calendar month
(the "Fourth Month") the Registration Statement was not continuously effective
for at least 120 days during the preceding six calendar month period, the
Illiquidity Payment on the Fourth Month shall be increased by 100% of the
Initial Illiquidity Payment for such Fourth Month and for each consecutive
calendar month thereafter (without regard to the proviso contained in the first
sentence of Section 6) on which the Company is obligated pursuant to this
Agreement to make an Illiquidity Payment.
8. Representations of the Company. The Company represents and warrants
to the Holders that the execution and delivery of this Agreement have been duly
authorized by all necessary corporate action on the part of the Company and will
not conflict with, result in any breach which would constitute a default under,
or result in the creation or imposition of any lien upon any of the assets of
the Company or its subsidiaries pursuant to the terms of, any agreement,
indenture or instrument, to which the Company or any of its subsidiaries is a
party or by which any of the property or assets of the Company or any of its
subsidiaries is subject, or result in a violation of the corporate charter or
by-laws of the Company or any of its subsidiaries (the effect of which conflict,
lien, default or violation would result in a material adverse effect on the
Company or would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement), nor will the performance by the
Company of its obligations under this Agreement violate any law, rule,
administrative regulation or decree of any court or governmental agency having
jurisdiction over the Company or any of its subsidiaries or any of their
properties. The Company further represents and warrants to the Holders that the
Shares and the Class A Common into which such Shares are convertible have been
duly authorized and, when issued pursuant to the Certificate of Designation,
will be validly issued, fully-paid and non-assessable. Assuming the accuracy of
the representations made by each Holder in its respective Letter Agreement, the
Company represents and warrants to the Holders that the issuance of the Shares
to the Holders does not require registration of the Shares under the Securities
Act or the securities or "Blue Sky" laws of any state.
9. No Conflicting Agreements. The Company agrees that it will
not enter into any agreement, indenture or instrument the terms of which would
conflict with the terms of this Agreement.
10. Accrual of Payments. In the event that the Company is not permitted
by law, governmental rule or regulation to make any payment required to be made
hereunder, such payment shall accrue as an obligation of the Company and shall
be paid as soon as the restriction on the making of such payment is removed.
11. Benefit of Obligations. The obligations of the Company
hereunder are for the benefit of each Holder and each Affiliate (as defined
below) of such Holder to which such Holder transfers any of the Securities.
For purposes of this Agreement, "Affiliate" means, with respect to any person,
any other person directly or indirectly controlling or controlled by or under
direct or indirect common control with such person. In addition, "Affiliate"
with respect to Fidelity Management and Research Company or Fidelity Management
Trust Company includes the funds listed on Schedule A hereto and any other fund
managed by Fidelity Management and Research Company or Fidelity Management Trust
Company or any Affiliate of any such fund and/or Fidelity Management and
Research Company or Fidelity Management Trust Company. For the purposes of the
definition of Affiliate, "control" when used with respect to any person means
the power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
12. Indemnification.
(a) The Company will indemnify and hold harmless each Holder,
each of its Affiliates and each person, if any, who controls such Holder against
any losses, claims, damages or liabilities to which such Holder, such Affiliate
or such controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the prospectus contained in the Registration Statement
(the "Prospectus") or any amendment or supplement thereto, or (ii) the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse such Holder, each such Affiliate and each such controlling person for
any legal or other expense reasonably incurred by such Holder, its Affiliates or
such controlling person in connection with investigating or defending any such
loss, claim, damage, liability, action or proceeding; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission made in
the Registration Statement, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through such Holder specifically for use in the preparation
thereof. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Holder will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the Registration Statement
and each person, if any, who controls the Company within the meaning of the
Securities Act, against any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus or any amendment or
supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein 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; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however, that such
Holder will be liable in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission has been made in the Registration Statement, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through such Holder specifically for
use in the preparation thereof. This indemnity agreement will be in addition to
any liability which such Holder may otherwise have.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 11, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
11(a) or (b) shall be available to any party who shall fail to give notice as
provided in this Section 11(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
prejudiced by the failure to give such notice, but the failure to give such
notice shall not relieve the indemnifying party or parties from any liability
which it or they may have to the indemnified party for contribution or otherwise
than on account of the provisions of Section 11(a) or (b). In case any such
proceeding 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 satisfactory to such indemnified party
and shall pay as incurred the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred the fees and expenses of
the counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and both the indemnifying party and the indemnified party have reasonably
concluded that representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by the Holders in
the case of parties indemnified pursuant to Section 11(a) and by the Company in
the case of parties indemnified pursuant to Section 11(b). The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent but if settled with such consent or if there be a final
judgement for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 11 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 11(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Holders on the other from the issuance of the Convertible
Preferred. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under Section 11(c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the Holders on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Holders on the other
shall be deemed to be in the same proportion as the total net income from the
issuance of the Convertible Preferred (before deducting expenses) received by
the Company bear to the total net proceeds received by the Holders on the resale
of the Convertible Preferred. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the Holders on
the other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and
equitable if contributions pursuant to this Section 11(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 11(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to above in this Section 11(d) shall be deemed to include 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 subsection (d), (i) no Holder shall be required to contribute
any amount in excess of the total net proceeds received by such Holder on the
resale of the Securities, and (ii) 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.
(e) In any proceeding relating to the Registration Statement, the
Prospectus or any supplement or amendment thereto, each party against whom
contribution may be sought under this Section 11 hereby consents to the
jurisdiction of any court having jurisdiction over any other contributing party,
agrees that process issuing from such court may be served upon him or it by any
other contributing party and consents to the service of such process and agrees
that any other contributing party may join him or it as an additional defendant
in any such proceeding in which such other contributing party is a party.
13. Reports Under Securities Exchange Act of 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit the Holders to sell securities of the Company to the public without
registration, the Company agrees to:
(i) use its best efforts to file with the SEC in a timely
manner all reports and other documents required of the Company under
the Securities Act and the 1934 Act; and
(ii) furnish to the Holders, so long as the Holders own any
Securities, forthwith upon request (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule
144, the Securities Act and the 1934 Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other publicly
available information as may be reasonably requested in availing the
Holders of any rule or regulation of the SEC which permits the selling
of any such securities without registration or pursuant to such form.
14. No Other Obligation to Register. Except as provided in this
Agreement, the Company shall have no obligation to the Holders to register the
Securities under the Securities Act or any state "Blue Sky" or securities laws.
15. Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented without the prior written consent of
the Company and Holders of not less than a majority of the Securities then
subject to this Agreement.
16. Notices. Any notices hereunder shall be in writing and
delivered in person or mailed by first-class mail addressed as follows, unless
another address is specified to the other parties hereto:
If to the Company: Town & Country Corporation
25 Union Street
Chelsea, MA 02150
Attn: C. William Carey, President
With copies to: Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Attn: Richard E. Floor, P.C.
If to a Holder: At the address set forth on such
Holder's signature page attached hereto
17. Termination. This Agreement shall terminate and be of no
further force or effect upon expiration of the Effective Period.
18. Counterparts. The parties may sign any number of copies of
this Agreement. Each signed copy shall be an original, but all of them
together represent the same agreement. One complete signed copy is enough
to prove this Agreement.
19. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of The Commonwealth of Massachusetts
but without giving effect to applicable principles of conflicts of law to
the extent that the application of the laws of another jurisdiction would be
required thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
TOWN & COUNTRY CORPORATION
By: ____________________
Name:
Title:
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REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
No. of Shares: __________ Holder:
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Name:
Title:
Address for Notice:
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Name and Address of
Registered Holder (if
different):
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121883.c6
SCHEDULE A TO REGISTRATION RIGHTS AGREEMENT
FIDELITY FUNDS*
Fidelity Capital & Income Fund
Fidelity Asset Manager
Spartan High Income Fund
Fidelity Puritan Fund
Fidelity Advisor High Yield Portfolio
Certain Funds Managed by Fidelity Management
Trust Company
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* Certificate may be registered in the name of a nominee.
121883.c6