SECURITIES PURCHASE AGREEMENT DATED AS OF JANUARY 25, 2008 between CENTERLINE HOLDING COMPANY and RELATED SPECIAL ASSETS LLC
Exhibit
10.1
DATED
AS OF JANUARY 25, 2008
between
and
RELATED
SPECIAL ASSETS LLC
|
ARTICLE
I
|
Sale
of the Convertible Preferred Shares
|
1
|
|
|
Section
1.1
|
Authorization
of Issuance and Sale and Delivery of the Convertible Preferred
Shares
|
1
|
|
|
Section
1.2
|
The
Closing of the Sale of the Convertible Preferred
Shares
|
1
|
|
ARTICLE
II
|
The
Closing
|
2
|
|
|
Section
2.1
|
Deliveries
at the Closing.
|
2
|
|
|
Section
2.2
|
Restrictive
Legend
|
3
|
|
ARTICLE
III
|
[Intentionally
omitted]
|
4
|
|
ARTICLE
IV
|
[Intentionally
omitted]
|
4
|
|
ARTICLE
V
|
Representations
and Warranties of the Company
|
5
|
|
|
Section
5.1
|
Due
Creation, Good Standing and Due Qualification.
|
5
|
|
|
Section
5.2
|
Subsidiary
Due Organization, Good Standing and Due
Qualification
|
5
|
|
|
Section
5.3
|
Authorization;
Enforceability; Corporate and Other Proceedings.
|
5
|
|
|
Section
5.4
|
Non
Contravention.
|
6
|
|
|
Section
5.5
|
Absence
of Defaults
|
6
|
|
|
Section
5.6
|
Capitalization
of the Company.
|
7
|
|
|
Section
5.7
|
Offering
Exemption.
|
7
|
|
|
Section
5.8
|
SEC
Reports.
|
7
|
|
|
Section
5.9
|
Financial
Statements.
|
8
|
|
|
Section
5.10
|
No
Material Adverse Change
|
8
|
|
|
Section
5.11
|
No
Consent or Approval Required.
|
8
|
|
|
Section
5.12
|
Absence
of Proceedings.
|
9
|
|
|
Section
5.13
|
Possession
of Licenses and Permits
|
9
|
|
|
Section
5.14
|
Title
to Property
|
9
|
|
|
Section
5.15
|
Investment
Company Act
|
9
|
|
|
Section
5.16
|
Authorization
of the Trust Agreement
|
10
|
|
|
Section
5.17
|
Limitation
of Personal Liability
|
10
|
|
|
Section
5.18
|
Similar
Offerings
|
10
|
|
|
Section
5.19
|
No
General Solicitation
|
10
|
-i-
|
|
Section
5.20
|
Partnership
Status
|
10
|
|
|
Section
5.21
|
Maintenance
of Controls and Procedures
|
11
|
|
|
Section
5.22
|
Registration
Statement
|
11
|
|
|
Section
5.23
|
Brokers
or Finders.
|
11
|
|
ARTICLE
VI
|
Representations
and Warranties of the Purchaser
|
11
|
|
|
Section
6.1
|
Experience.
|
11
|
|
|
Section
6.2
|
Investment.
|
12
|
|
|
Section
6.3
|
Transfer
Restrictions.
|
12
|
|
|
Section
6.4
|
Brokers
or Finders.
|
12
|
|
|
Section
6.5
|
Organization;
Good Standing; Qualification and Power.
|
12
|
|
|
Section
6.6
|
Authorization;
Enforceability; Corporate and Other Proceedings.
|
13
|
|
|
Section
6.7
|
Non
Contravention.
|
13
|
|
|
Section
6.8
|
No
Consent or Approval Required.
|
13
|
|
|
Section
6.9
|
Similar
Offerings
|
14
|
|
|
Section
6.10
|
No
General Solicitation
|
14
|
|
ARTICLE
VII
|
Covenants
|
14
|
|
|
Section
7.1
|
Board
Designation Right
|
14
|
|
|
Section
7.2
|
Consummation
of the Rights Offering
|
15
|
|
|
Section
7.3
|
NYSE
Listing
|
16
|
|
|
Section
7.4
|
Distributions
Upon Redemption
|
17
|
|
|
Section
7.5
|
Tax
Allocations
|
17
|
|
ARTICLE
VIII
|
Indemnification
|
17
|
|
|
Section
8.1
|
Indemnification
Generally.
|
17
|
|
|
Section
8.2
|
Indemnification
Procedures For Third-Party Claims.
|
18
|
|
|
Section
8.3
|
Survival
of Representations, Warranties and Covenants
|
19
|
|
ARTICLE
IX
|
Miscellaneous
|
19
|
|
|
Section
9.1
|
Expenses
and Taxes.
|
19
|
|
|
Section
9.2
|
Further
Assurances.
|
19
|
|
|
Section
9.3
|
Securities
Law Disclosure; Public Announcement.20
|
|
|
Section
9.4
|
No
Third-Party Beneficiaries.
|
20
|
|
|
Section
9.5
|
Entire
Agreement.
|
20
|
|
|
Section
9.6
|
Successors
and Assigns.
|
20
|
-ii-
|
|
Section
9.7
|
Counterparts.
|
21
|
|
|
Section
9.8
|
Notices.
|
21
|
|
|
Section
9.9
|
Governing
Law.
|
22
|
|
|
Section
9.10
|
Submission
to Jurisdiction
|
22
|
|
|
Section
9.11
|
Specific
Performance
|
22
|
|
|
Section
9.12
|
Amendments
and Waivers.
|
23
|
|
|
Section
9.13
|
Incorporation
of Schedules and Exhibits.
|
23
|
|
|
Section
9.14
|
Construction.
|
23
|
|
|
Section
9.15
|
Interpretation.
|
23
|
|
|
Section
9.16
|
Severability.
|
23
|
|
|
Section
9.17
|
Waiver
of Jury Trial.
|
24
|
Annexes
| Annex I | – Certain Definitions |
Schedules
Schedule
5.4
Schedule 5.10
Schedule 5.10
Schedule
5.11
Schedule
5.12
Schedule
5.23
Exhibits
| Exhibit A | – Form of Certificate of Designation |
| Exhibit B | – Form of Registration Rights Agreement |
| Exhibit C | – Form of Legal Opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A. |
| Exhibit D | – Form of Legal Opinion of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP |
| Exhibit E | – Form of Instrument of Accession |
-iii-
SECURITIES
PURCHASE AGREEMENT
(this “Agreement”), dated
as
of January 25, 2008, between Centerline Holding Company, a
statutory trust created under the laws of the state of Delaware (the “Company”), and Related
Special AssetsLLC, a Delaware
limited
liability company (the “Purchaser”).
RECITALS
WHEREAS,
the Company desires
to sell to the Purchaser, and the Purchaser desires to purchase from the
Company, 11,216,628 11.0% Cumulative Convertible Preferred Shares, Series A-1
of
the Company (the “Convertible Preferred
Shares”) containing the terms set forth in the Certificate of Designation
attached as Exhibit
A hereto (the “Certificate
of
Designation”) and the Second Amended and Restated Trust Agreement of the
Company, dated as of November 17, 2003, as amended by Amendment No. 1
thereto, dated as of September 20, 2005, as further amended by Amendment No.
2
thereto, dated as of November 30, 2005, as further amended by Amendment No.
3
thereto, dated as of June 13, 2006, and as further amended by Amendment No.
4
thereto, dated as of April 2, 2007 (the “Trust
Agreement”);
NOW,
THEREFORE, in
consideration of the mutual promises herein made, and in consideration of the
representations, warranties, and covenants herein contained, the Company and
the
Purchaser agree as follows:
All
capitalized terms used and not otherwise defined in this Agreement shall have
the definitions set forth on Annex I hereto or,
if
not set forth on Annex
I, in the Trust Agreement.
ARTICLE
I
Sale
of the Convertible Preferred Shares
Section
1.1 Authorization
of Issuance
and Sale and Delivery of the Convertible Preferred Shares.
Subject
to the terms and conditions hereof, the Purchaser agrees to purchase at the
Closing (as defined below), and the Company agrees to sell and issue to the
Purchaser at the Closing, the Convertible Preferred Shares at an aggregate
purchase price of $131,234,548 (the “Aggregate Purchase
Price”), representing a price per Convertible Preferred Share of
$11.70.
Section
1.2 The
Closing of the Sale of
the Convertible Preferred Shares.
The
closing (the “Closing”) shall take
place at the offices of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00 a.m., New York time, on
the
date hereof, or such other time and date as the parties may agree upon (the
date
that the Closing occurs, the “Closing
Date”). At the Closing, on the terms and subject to the
conditions contained herein, the Company shall issue and deliver the Convertible
Preferred Shares against receipt by the Company of the Aggregate Purchase Price
by wire transfer of immediately available funds to an account, which the Company
shall designate to the Purchaser prior to the Closing in writing. The
Convertible Preferred Shares shall be evidenced by certificates.
ARTICLE
II
The
Closing
Section
2. Deliveries
at the
Closing.
(1)
At the Closing, the Company shall deliver to the Purchaser:
(a)
a duly executed share certificate registered in the name of the Purchaser,
representing the Convertible Preferred Shares being purchased by the Purchaser
pursuant to this Agreement;
(b)
a counterpart signature page to the Registration Rights Agreement, in the form
attached as Exhibit
B hereto (the “Registration
Rights
Agreement”), duly executed by the Company;
(c)
the opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A. Delaware counsel to the
Company, dated as of the Closing Date, in the form attached as Exhibit C
hereto;
(d)
the opinion of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, New York counsel to
the Company, dated as of the Closing Date, in the form attached as Exhibit D
hereto;
(e)
an executed copy of the Supplemental Listing Application to the New York Stock
Exchange, Inc. (the “NYSE”) in respect
of
the common shares of beneficial interest, no par value, of the Company (the
“Common
Shares”) issuable upon the conversion of Convertible Preferred
Shares;
(f)
a Secretary’s Certificate, duly executed by the Secretary of the Company,
appending certified copies of the Company’s Fundamental Documents and
minutes/resolutions of the Board of Trustees of the Company (the “Board”) (and, if
applicable, any committee) approving the Documents and the transactions
contemplated thereby (including, without limitation, the Certificate of
Designation and the Rights Offering (as defined herein));
(g)
an Incumbency Certificate, duly executed by an authorized officer of the
Company, certifying with respect to the incumbency of the officers listed
thereon and the genuineness of such officers’ respective
signatures;
(h)
a duly executed counterpart signature page to a cross-receipt (the “Cross-Receipt”) with
respect to the Company’s receipt of the Aggregate Purchase Price and the
Purchaser’s receipt of the Convertible Preferred Shares;
(i)
a Certificate of good standing of the Company from the Secretary of State of
the
States of Delaware, New York, Virginia and Texas, each dated as of a recent
date; and
2
(j)
an executed copy of the Waiver to Revolving Credit and Term Loan Agreement,
dated as of January 24, 2008, by and among the Company and Centerline Capital
Group Inc., those Persons listed as Guarantors on Schedule 1 thereto
and those Lenders constituting the Required Lenders (as defined therein), each
as set forth on a counterpart signature page thereto; and
(2)
At the Closing, the Purchaser shall deliver to the Company:
(a)
the Aggregate Purchase Price for the Convertible Preferred Shares being
purchased by the Purchaser pursuant to this Agreement; and
(b)
a counterpart signature page to the Registration Rights Agreement, duly executed
by the Purchaser; and
(c)
a duly executed counterpart signature page to the Cross-Receipt.
Section
2.2 Restrictive
Legend.
The
certificate representing the Convertible Preferred Shares shall be stamped
or
otherwise imprinted with a legend substantially in the following form (in
addition to any legend required by applicable state securities Laws), upon
issuance thereof, and until such time as the same is no longer required under
the applicable requirements of the Securities Act:
THE
11.0% CUMULATIVE CONVERTIBLE PREFERRED SHARES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS, AND
CENTERLINE HOLDING COMPANY (THE “ISSUER”) HAS NOT BEEN REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY
ACT”). NEITHER SUCH 11.0% CUMULATIVE CONVERTIBLE PREFERRED SHARES NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, RESOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION
IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE
HOLDER, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, RESELL OR OTHERWISE TRANSFER
THE 11.0% CUMULATIVE CONVERTIBLE PREFERRED SHARES REPRESENTED HEREBY, UNLESS
SUCH 11.0% CUMULATIVE CONVERTIBLE PREFERRED SHARES NO LONGER CONSTITUTE
“RESTRICTED SECURITIES” WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT,
ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO ONE OR MORE PERSONS, EACH
OF
WHICH IS AN “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501 UNDER THE SECURITIES
ACT) THAT IS ACQUIRING SUCH 11.0% CUMULATIVE CONVERTIBLE PREFERRED SHARES FOR
ITS OWN ACCOUNT FOR INVESTMENT AND NOT
3
WITH
A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR OTHER APPLICABLE SECURITIES LAWS OR (D)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF
THE SECURITIES ACT, IN EACH CASE SUBJECT TO ANY REQUIREMENT OF LAW THAT THE
DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH ACCREDITED INVESTOR BE
AT
ALL TIMES WITHIN ITS OR THEIR CONTROL.
TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY TRANSFER IN VIOLATION OF THE FOREGOING
WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE
TO
TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTION TO THE
CONTRARY TO THE ISSUER, THE TRANSFER AGENT OR ANY INTERMEDIARY.
Furthermore,
the Convertible Preferred Share certificate will contain a legend substantially
to the following effect:
THE
ISSUER WILL FURNISH TO ANY SHAREHOLDER ON REQUEST AND WITHOUT CHARGE A FULL
STATEMENT OF (1) ANY RESTRICTIONS, LIMITATIONS, PREFERENCES OR REDEMPTION
PROVISIONS CONCERNING THE 11.0% CUMULATIVE CONVERTIBLE PREFERRED SHARES AND
(2)
THE DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND OTHER RIGHTS, VOTING
POWERS, RESTRICTIONS, LIMITATIONS AS TO DISTRIBUTIONS, AND OTHER QUALIFICATIONS
AND TERMS AND CONDITIONS OF REDEMPTION OF THE 11.0% CUMULATIVE CONVERTIBLE
PREFERRED SHARES, THE DIFFERENCES IN THE RELATIVE RIGHTS AND PREFERENCES BETWEEN
THE SHARES OF EACH SERIES OF SUCH CLASS TO THE EXTENT THEY HAVE BEEN SET, AND
THE AUTHORITY OF THE BOARD OF TRUSTEES OF THE ISSUER TO SET THE RELATIVE RIGHTS
AND PREFERENCES OF SUBSEQUENT SERIES OF 11.0% CUMULATIVE CONVERTIBLE PREFERRED
SHARES. 11.0% CUMULATIVE CONVERTIBLE PREFERRED SHARES WILL BE ISSUED
AND MAY BE TRANSFERRED ONLY IN WHOLE SHARES.
ARTICLE
III
[Intentionally
omitted]
ARTICLE
IV
[Intentionally
omitted]
4
ARTICLE
V
Representations
and Warranties of the Company
As a material inducement to the Purchaser to enter into and perform its
obligations under this Agreement, the Company hereby represents and warrants
to
the Purchaser as follows:
Section
5.1 Due
Creation, Good Standing
and Due Qualification.
The
Company has been duly created and is validly existing as a statutory trust
in
good standing under the laws of the state of Delaware, and under the Trust
Agreement, resolutions of the Board (or a duly authorized committee thereof)
and
the Delaware Statutory Trust Act, has full trust power and authority to own,
lease and operate its properties and conduct its business as presently being
conducted and to enter into and perform its obligations under, or as
contemplated under, this Agreement; and the Company is duly qualified as a
statutory trust to transact business as a foreign entity and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except
where
the failure so to qualify or to be in good standing would not result in a
material adverse change in the business, Assets, liabilities, operations,
condition (financial or otherwise) or operating results of the Company and
its
Subsidiaries (as defined herein), taken as a whole (a “Material Adverse
Effect”).
Section
5.2 Subsidiary
Due Organization,
Good Standing and Due Qualification.
Each
of the Company’s Subsidiaries
has
been duly created and is validly
existing and is in good standing under the laws of the state of its
creation, and under its respective Fundamental Documents and relevant state
law,
has full power and authority to own, lease and operate its properties and to
conduct its business as presently being conducted; each such Subsidiary is
duly
qualified to transact business as a foreign entity and is in good standing
in
each jurisdiction in which such qualification is required, whether by reason
of
the ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the SEC Reports,
all
of the issued and outstanding equity interests of each Subsidiary have been
duly
and validly authorized and issued and are fully paid and non-assessable
interests in such Subsidiary that are owned by the Company, directly or through
other Subsidiaries, free and clear of any Lien; and none of the outstanding equity interests
of
the Subsidiaries were
issued in violation of any preemptive right, resale right, right of first
refusal or other similar right.
Section
5.3 Authorization;
Enforceability; Corporate and Other Proceedings.
(1)
The Company has all requisite power and authority to execute and deliver each
Document to which it is a party and to perform its obligations under each such
Document. Each Document to which the Company is a party has been duly authorized
by all necessary action on the part of the Company, and each Document to which
the Company is a party has been duly executed and delivered by the Company,
and,
assuming the due authorization, execution and
5
delivery
by the other parties thereto, constitutes the valid and legally binding
obligation of the Company, enforceable in accordance with its terms and
conditions, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect relating to
creditors’ rights generally and (ii) general principles of equity (whether
applied by a court of law or equity) and the discretion of the court before
which any proceeding therefor may be brought.
(2)
The authorization, issuance, sale and delivery of the Convertible Preferred
Shares have been duly authorized by all requisite action of the Board.
Notwithstanding anything contained on the schedules attached hereto, the
Convertible Preferred Shares being issued as of the Closing Date, if and when
issued, will be duly and validly issued and
outstanding, fully paid and nonassessable interests in the
Company, with no personal liability attaching to the
ownership thereof, free and clear of any Liens, and will not be subject
to
any preemptive right, resale right, right of first refusal or other similar
rights of any security holder of the Company, provided that the Rights Offering
(as defined herein) shall be made to holders of Trust Securities (as defined
herein), other than the Purchaser Group (as defined herein).
The underlying Common
Shares issuable upon conversion of the Convertible Preferred Shares have been
duly authorized by all requisite action of the Board and, when issued upon
such conversion and delivered against surrender of the Convertible Preferred
Shares, will be duly and validly issued, fully
paid and nonassessable interests in the Company
and will not be subject to any preemptive right, resale right, right of first
refusal or other similar rights of any security holder of the Company, provided
that the Rights Offering (as defined herein) shall be made to holders of Trust
Securities (as defined herein), other than the Purchaser Group.
Section
5.4 Non
Contravention.
Notwithstanding
anything contained on the
schedules attached hereto,
the execution, delivery and performance by the Company of the Documents,
the
consummation
of the
transactions contemplated hereby and thereby and compliance
with the provisions hereof and thereof, including
the
issuance, sale and delivery of the Convertible Preferred Shares have not, do
not
and shall not (whether with or without
the giving of notice or passage of time or both), (a) violate any Law
to which
the Company or any of its Subsidiaries is subject, (b) violate any provision
of
the Fundamental Documents of the Company or the Fundamental Documents of the
Company’s Subsidiaries, (c) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right
to
accelerate, require the repurchase, redemption or repayment of, terminate,
modify or cancel, or require any
notice under any material
contract to which the Company or any of its Subsidiaries is
a party, or (d) result
in the imposition of any
Lien upon any of the
Assets of
the
Company or any of its
Subsidiaries.
Section
5.5 Absence
of
Defaults. The Company is not in violation of its Trust
Agreement, none of the Company’s Subsidiaries are in violation of their
respective Fundamental Documents and neither the Company nor any of its
Subsidiaries are in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement or
6
instrument
to which the Company or any of its Subsidiaries is a party or by which any
of
them may be bound or to which any of the property or assets of the Company
or
any of its Subsidiaries is subject, except for such violations or defaults
that
would not result in a Material Adverse Effect.
Section
5.6 Capitalization
of the
Company.
(1)
All of the issued and outstanding beneficial interests in the Company have
been
duly and validly authorized and issued and are fully paid and nonassessable
interests in the Company, have been issued in compliance with all federal and
state securities laws and were not issued in violation of any preemptive
right,
resale right, right of first refusal or other similar right.
(2)
Except as contemplated by the Documents, the Certificate of Designation,
including the Rights Offering (as defined therein) or the Trust Agreement,
or as
otherwise disclosed in the SEC Reports, there are, and immediately after
consummation of the Closing there will be, no (i) outstanding warrants,
options, agreements, convertible securities or other commitments or instruments
pursuant to which the Company is or may become obligated to issue or
sell any shares of the Company’s capital stock or other securities (or securities
convertible into securities of the Company), (ii) preemptive rights,
resale rights, rights of first refusal or similar rights
to
purchase or otherwise acquire shares of the capital stock or other securities
of
the Company pursuant to any provision of Law, the Company’s Fundamental
Documents or any contract, “shareholders’ rights plan”, “poison pill” or similar
plan, arrangement or scheme to which the Company is a party or (iii) right,
contractual or otherwise, to cause the Company to register pursuant to the
Securities Act, any beneficial interests in the Company upon the issue and
sale
of the Convertible Preferred Shares, in each case, other than those
rights that
have been expressly waived, fully and unconditionally, prior to the date
hereof; immediately
following the Closing hereunder, the Convertible Preferred
Shares will represent 14% of the
Company’s
Common
Shares on a fully diluted basis,
assuming vesting
of all
outstanding restricted
Common Shares
and conversion
or exchange of all outstanding vested options
exercisable for Common Shares, Common
Shares, Special Common Units,
Special
Common Interests, 4.40% Cumulative Perpetual Convertible Community Reinvestment
Act Preferred Shares, Series A-1 and Convertible Community Reinvestment Act
Preferred Shares.
Section
5.7 Offering
Exemption.
Based
upon and assuming the accuracy of the representations of the Purchaser in
Article VI, the offering, sale and issuance of the Convertible Preferred Shares
do not require registration under the Securities Act or applicable state
securities and “blue sky” Laws. The Company has made all requisite
filings and has taken or will take all action necessary to be taken to comply
with such state securities or “blue sky” Laws.
Section
5.8 SEC
Reports.
(i)
The
Company’s Annual Report on Form 10-K most recently filed with the SEC (the
“Annual
Report”) and (ii) each subsequent report filed with the SEC pursuant to
the Exchange
7
Act
(together with the Annual Report, the “SEC Reports”), as of
their respective dates, did not include any untrue statement of a material
fact
or omit to state a material fact necessary to make the statements therein,
in
the light of the circumstances under which they were made, not
misleading. Such documents, when they were filed with the SEC,
conformed in all material respects to the requirements of the Exchange Act
and
the rules and regulations of the SEC thereunder (including Regulation
S-X). Since the date of the filing of the Annual Report with the SEC,
the Company has made all filings with the SEC required to be made by the Company
under the Exchange Act.
Section
5.9 Financial
Statements.
The
consolidated financial statements of the Company contained in the SEC
Reports (the “Financial
Statements”) complied as to form in all material respects with the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with GAAP applied on a consistent basis during the periods
involved and fairly present, in all material respects, in conformity with GAAP,
the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and their consolidated results
of operations and changes in financial position for the periods then ended
(except, in each case, as may be indicated in the notes thereto and subject,
in
each case, to normal year-end adjustments in the case of any unaudited interim
financial statements).
Section
5.10 No
Material Adverse
Change. Since September 30, 2007 (the date of the most recent
financial statements of the Company filed with the SEC), except as
otherwise stated therein or in the SEC Reports, or otherwise set forth on Schedule
5.10 hereto, there has not been (i) any change resulting in a Material
Adverse Effect, (ii) any transaction which is material to the
Company or its Subsidiaries, except transactions in the ordinary
course of business, (iii) any obligation, direct or contingent, which is
material to the Company and its Subsidiaries taken as a whole,
incurred by the Company or its Subsidiaries, except obligations
incurred in the, ordinary course of business, (iv) any change in the beneficial
interests in or outstanding indebtedness of the Company or its
Subsidiaries, except changes in the ordinary course of business or (v) except
for regular quarterly dividends on the beneficial interests in the
Company or its Subsidiaries, in amounts per share that are consistent
with past practice, there has been no dividend or distribution of any kind
declared, paid or made on the beneficial interests in the Company or
its Subsidiaries. Neither the Company nor its Subsidiaries
has any material contingent obligation which is not disclosed in this Agreement
or the SEC Reports.
Section
5.11 No
Consent or Approval
Required.
Except
as
set forth on Schedule
5.11 hereto, no consent, approval or authorization of, or declaration to
or filing with, any Person, including pursuant to the Credit Agreement or the
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, is required
by
the Company for the valid authorization, execution and delivery by the Company
of any Document or for its consummation of the transactions contemplated thereby
or for the valid authorization, issuance and delivery of the Convertible
Preferred Shares, other than those consents, approvals,
8
authorizations,
declarations or filings which have been obtained or made, as the case may be,
and such as may be required under state securities or “blue sky” laws in
connection with the purchase and resale of the Convertible Preferred
Shares.
Section
5.12 Absence
of Proceedings.
Except
as disclosed in the SEC
Reports or set forth on
Schedule
5.12 hereto,
there is no
Proceeding now
pending, or, to the knowledge of the Company, threatened, against or affecting
the Company or any of its Subsidiaries which, singly or in the aggregate, would
result in a Material Adverse Effect, or which might reasonably be expected
to
materially and adversely affect the consummation of the transactions
contemplated herein or the performance by the Company of its obligations
hereunder.
Section
5.13 Possession
of Licenses and
Permits. The Company and its Subsidiaries possess
such permits, licenses, approvals, consents and other authorizations
(collectively, “Governmental
Licenses”) issued by the appropriate federal, state, local or foreign,
regulatory agencies or bodies necessary to conduct the businesses now operated
by them; the Company and its Subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, result in a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and effect,
except where the invalidity of Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not, singly or in
the
aggregate, result in a Material Adverse Effect; and neither the
Company nor any of its Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any Governmental
Licenses which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse
Effect.
Section
5.14 Title
to
Property.
The
Company and its Subsidiaries do not own any real property nor do they have
any
leases or subleases with respect to any real property (except for seventeen
properties leased by the Company and its Subsidiaries); the Company and its
Subsidiaries have good and marketable title to the investments described in
the
SEC Reports, in each case, free and clear of all Liens of any kind except such
as (i) are described in the SEC Reports or (ii) do not, singly or in the
aggregate, materially affect the value of any such investments; and neither
the
Company nor any of its Subsidiaries has any notice of any material
claim of any sort that has been asserted by anyone adverse to the rights of
the
Company or any of its Subsidiaries under any of such investments, or
affecting or questioning the rights of the Company or any Subsidiary
thereof to the continued possession of the investments.
Section
5.15 Investment
Company Act.
The
Company is not, and upon the issuance and sale of the Convertible Preferred
Shares as herein contemplated and the application of the net proceeds therefrom
will not be, an
9
“investment
company” or an entity “controlled” by an “investment company”, as such terms are
defined in the Investment Company Act of 1940, as amended.
Section
5.16 Authorization
of the Trust
Agreement.
The
Trust
Agreement, has been duly authorized, executed and delivered by the Company
and
constitutes a valid, legal and binding agreement of the Company , enforceable
against the Company in accordance with its terms, except to the
extent enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors’ rights generally or by
general principles of equity.
Section
5.17 Limitation
of Personal
Liability.
The
holders
of the Convertible
Preferred Shares will be entitled
to the same limitation of personal liability as that extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware; provided, however, that pursuant
to
the terms of this Agreement, the Purchaser will indemnify the Company against
any liability resulting from any inaccuracy in or breach of any such investor’s
representations and warranties in accordance with the terms hereof; and
provided, further, however, it being understood that a holder of Convertible
Preferred Shares may be obligated
to make certain payments provided for in the Trust Agreement.
Section
5.18 Similar
Offerings.
None
of the Company, its
Affiliates, or any Person acting on its or any of their behalf (in each case
other than the Purchaser, as to which the Company makes no representation),
has,
directly or indirectly, solicited any offer to buy, sold or offered to sell
or
otherwise negotiated in respect of, or will solicit any offer to buy, sell
or
offer to sell or otherwise negotiate in respect of, in the United States or
to
any United States citizen or resident, any security which is or would be
integrated with the sale of the Convertible Preferred Shares in a manner that
would require the Convertible Preferred Shares to be registered under the
Securities Act.
Section
5.19 No
General
Solicitation.
None
of
the Company, its Affiliates or any person acting on its or any of their behalf
(in each case other than the Purchaser, as to whom the Company makes
no representation) has engaged or will engage, in connection with the offering
of the Convertible Preferred Shares, in any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the Securities
Act.
Section
5.20 Partnership
Status.
The
Company has been and is properly treated as a partnership, and not as a publicly
traded partnership taxable as a corporation or as an association taxable as
a
corporation for federal income tax purposes, and the holders of the Convertible
Preferred Shares will be treated as partners for U.S. federal income tax
purposes.
10
Section
5.21 Maintenance
of Controls and
Procedures.
The
Company has established and maintains “disclosure controls and
procedures” (as such term is defined in Rules 13a-15 and 15d-15 under the
Exchange Act) that (A) are designed to ensure that material information relating
to the Company , including its Subsidiaries, is made known to the Company ’s
Chief Executive Officer and its Chief Financial Officer by others within those
entities, particularly during the periods in which the filings made by the
Company with the SEC which it may make under Section 13(a), 13(c), 14
or 15(d) of the Exchange Act are being prepared and (B) have been evaluated
for
effectiveness as of the end of the Company ’s most recent quarterly report on
Form 10-Q filed with the SEC. The Company’s accountants and the audit
committee of the Board have been advised of (x) any significant deficiencies
in
the design or operation of internal controls that could adversely affect the
Company’s ability to record, process, summarize, and report financial data and
(y) any fraud, whether or not material, that involves management or other
employees who have a role in the Company’s internal controls.
Section
5.22 Registration
Statement
As
of the
date hereof, the Company meets the requirements for use of
Form S-3 under the Securities Act and a registration statement has
been filed with the SEC for registration under the Securities Act of
the offering and sale of debt and equity securities of the
Company and has been declared effective under the Securities Act and
no stop order suspending the effectiveness of the registration statement has
been issued and no Proceedings for that purpose have been instituted, or to
the
knowledge of the Company, are contemplated by the SEC.
Section
5.23 Brokers
or
Finders.
Except
as
set forth on Schedule
5.23, the Company has not retained any investment banker, broker or
finder in connection with this Agreement or the transactions contemplated hereby
(including the sale of the Convertible Preferred Shares) or incurred any
liability for any brokerage or finders’ fees, agent commissions or any similar
charges in connection wit this Agreement or the transactions contemplated
hereby.
ARTICLE
VI
Representations
and Warranties of the Purchaser
As
a
material inducement to the Company to enter into and perform its obligations
under this Agreement, the Purchaser represents, warrants and covenants to
the
Company as follows:
Section
6.1 Experience.
The
Purchaser is an “accredited investor” within the meaning of Regulation D
promulgated under the Securities Act and, by virtue of its experience in
evaluating and investing
11
in
private placement transactions of securities in companies similar to the
Company, the Purchaser is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own
interests. The Purchaser has had access to the Company’s senior
management and has had the opportunity to conduct such due diligence review
as
it has deemed appropriate.
Section
6.2 Investment.
The
Purchaser has not been formed solely for the purpose of making this investment
and is not making this investment with the view to, or for resale in connection
with, any distribution of any part thereof in violation of, or in a manner
that
would require registration of the Convertible Preferred Shares being purchased
hereby under, the Securities Act. The Purchaser understands that the
Convertible Preferred Shares have not been registered under the Securities
Act
or applicable state securities or “blue sky” Laws by reason of a specific
exemption from the registration provisions of the Securities Act and applicable
state securities or “blue sky” Laws, the availability of which depends upon,
among other things, the bona fide nature of the investment intent and the
accuracy of the Purchaser’s representations as expressed herein and the
Purchaser will not take any actions that would have caused the Convertible
Preferred Shares being purchased hereby to be registered under the Securities
Act. Notwithstanding the foregoing, the consummation of the Rights
Offering and the use of the proceeds thereof shall not be deemed to be a
violation of this representation, warranty and covenant.
Section
6.3 Transfer
Restrictions.
The
Purchaser acknowledges and understands that it must bear the economic risk
of
this investment for an indefinite period of time because the Convertible
Preferred Shares must be held indefinitely unless subsequently registered under
the Securities Act and applicable state securities or “blue sky” Laws or unless
an exemption from such registration is available. The Purchaser
understands that any transfer agent of the Company will be issued
stop transfer instructions with respect to the Convertible Preferred Shares
unless any transfer thereof is subsequently registered under the Securities
Act
and applicable state securities or “blue sky” Laws or unless an exemption from
such registration is available.
Section
6.4 Brokers
or
Finders.
The
Purchaser has not retained any investment banker, broker or finder in connection
with this Agreement or the transactions contemplated hereby (including the
sale
of the Convertible
Preferred Shares) or incurred any liability for any brokerage or finders’ fees,
agent commissions or any similar charges in connection wit this Agreement or
the
transactions contemplated hereby.
Section
6.5 Organization;
Good Standing;
Qualification and Power.
The
Purchaser is duly organized, validly existing and in good standing under
the
Laws of its jurisdiction of formation, has all requisite power to carry on
its
business as presently being
12
conducted
and is qualified to do business and in good standing in every jurisdiction
in
which the failure so to qualify or be in good standing could reasonably be
expected to have a material adverse effect on the business, Assets, liabilities,
operations, condition (financial or otherwise) or operating results of the
Purchaser and its subsidiaries, taken as a whole (a “Purchaser Material
Adverse
Effect”).
Section
6.6 Authorization;
Enforceability; Corporate and Other Proceedings.
The
Purchaser has all requisite power and authority to execute and deliver each
Document to which it is a party and to perform its obligations under each such
Document. Each Document to which the Purchaser is a party has been
duly authorized by all necessary action on the part of the Purchaser, and each
Document to which the Purchaser is a party has been duly executed and delivered
by the Purchaser, and assuming the due authorization, execution and delivery
by
the other parties thereto constitutes the valid and legally binding obligation
of the Purchaser, enforceable in accordance with its terms and conditions,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance
or
other similar laws now or hereafter in effect relating to creditors’ rights
generally and (ii) general principles of equity (whether applied by a court
of
law or equity) and the discretion of the court before which any proceeding
therefor may be brought.
Section
6.7 Non
Contravention.
The
execution, delivery and performance by the Purchaser of the Documents, the
consummation of the transactions contemplated thereby and compliance with the
provisions thereof, including the purchase of the Convertible Preferred Shares
have not, do not and shall not, (a) violate any Law to which the Purchaser
or
any of its subsidiaries is subject, (b) violate any provision of the Fundamental
Documents of the Purchaser or any of its subsidiaries, (c) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, require the repurchase of,
terminate, modify or cancel, or require any notice under any material contract
to which the Purchaser or any of its subsidiaries is a party or (d) result
in
the imposition of any Lien upon any of the Assets of the Purchaser or any of
its
subsidiaries, except in the case of (a), (c) and (d), as would not have a
Purchaser Material Adverse Effect.
Section
6.8 No
Consent or Approval
Required.
No
consent, approval or authorization of, or declaration to or filing with,
any
Person is required by the Purchaser for the valid authorization, execution
and
delivery by the Purchaser of any Document or for its consummation of the
transactions contemplated thereby or for the purchase of the Convertible
Preferred Shares, other than those consents, approvals, authorizations,
declarations or filings which have been obtained or made, as the case may
be,
and such as may be required under state securities or “blue sky” laws in
connection with the purchase and resale of the Convertible Preferred
Shares.
13
Section
6.9 Similar
Offerings.
None
of
the Purchaser, its Affiliates or any Person acting on its or any of their behalf
(in each case other than the Company , as to which the Purchaser makes no
representation), has, directly or indirectly, solicited any offer to buy, sold
or offered to sell or otherwise negotiated in respect of, or will solicit any
offer to buy, sell or offer to sell or otherwise negotiate in respect of, in
the
United States or to any United States citizen or resident, any security which
is
or would be integrated with the sale of the Convertible Preferred Shares in
a
manner that would require the Convertible Preferred Shares to be registered
under the Securities Act.
Section
6.10 No
General
Solicitation.
None
of
the Purchaser, its Affiliates or any person acting on its or any of their behalf
(in each case other than the Company, as to whom the Purchaser makes no
representation) has engaged or will engage, in connection with the offering
of
the Convertible Preferred Shares, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities
Act.
ARTICLE
VII
Covenants
Section
7.1 Board
Designation
Right.
(1)
If the Purchaser, together with its Affiliates and successors in interest,
retain at least 50% of the Convertible Preferred Shares purchased upon
consummation of the purchase and sale pursuant to Section 1.1 hereof immediately
following completion of the Rights Offering and the associated redemption of
Convertible Preferred Shares then held by Purchaser and its Affiliates and
successors in interest (the Convertible Preferred Shares so retained, the "Retained Shares"),
then from and after the date of completion of the Rights Offering for so long
as
the Purchaser, together with its Affiliates and successors in interest,
collectively owns at least 50% of the Retained Shares, the Company shall,
subject to and in accordance with the provisions of the Trust Agreement,
Delaware law and the rules of the NYSE and any other national or regional
securities exchange or system of automated dissemination of quotation of
securities prices on which the Common Shares are then traded or quoted, acting
through the Board, consistent with and subject to their duties under Delaware
law and the Trust Agreement, take all actions necessary to cause the nomination
by the Board of one (1) representative, designated by the Purchaser (the "Designee"), for
election by the holders of Common Shares and any other shares entitled to vote
with the Common Shares of the Company in the election of trustees to the Board;
provided, that, such Designee qualifies as "Independent" in accordance with
applicable listing standards of the NYSE or any other national or regional
securities exchange or system of automated dissemination of quotation of
securities prices in the United States on which the Common Shares are then
traded or quoted, each as amended from time to time, and that in addition the
Board has affirmatively determined that such Designee had no material
relationship
14
with
the
Company or its Affiliates or any member of the senior management of the Company
or his or her Affiliates.
(2)
The Purchaser shall provide written notice (the “Designation Notice”)
to the Board identifying its Designee. Upon receiving a Designation
Notice, the trustees of the Board shall take such actions as may reasonably
be
within their power, consistent with and subject to their duties under Delaware
law and the Trust Agreement, to cause the Board to nominate for appointment
to
the Board, the Designee, to include the Designee in the Company’s next election
for trustees to its Board and to recommend that the shareholders of the Company
vote for the Designee for election to the Board.
(3)
To the extent that the Designee is unable to stand for election for any reason,
the Purchaser shall promptly provide to the Board a written notice of the name
of the person to be designated by them in substitution of such prior
Designee.
(4)
In the event that the Designee ceases to serve as a trustee of the Company
due
to death, resignation or removal of said trustee, the Purchaser may submit
written notice to the Board designating an individual to replace said Designee.
The trustees shall, consistent with and subject to their duties under Delaware
law and the Trust Agreement, promptly recommend that the Board appoint such
replacement designee as a trustee of the Company to fill any vacancy resulting
from the death, resignation or removal of the Designee and to include the
Designee in the Company’s next election for trustees to its Board and recommend
that the shareholders of the Company vote for the Designee for election to
the
Board. If any such Designee is elected at an Annual Meeting of
Shareholders of the Company, the Designee will be nominated to the Board as
a
member of the class of trustees whose office have expired in that
year.
Section
7.2 Consummation
of the Rights
Offering.
(1)
The Company shall use its commercially reasonable efforts to consummate a rights
offering (the “Rights
Offering”) to holders of (i) the Company’s Common Shares (including any
restricted Common Shares), vested options exercisable for Common Shares,
Convertible Community Reinvestment Act Preferred Shares, Series A Convertible
Community Reinvestment Act Preferred Shares, 4.40% Cumulative Perpetual
Convertible Community Reinvestment Act Preferred Shares, Series A-1 and/or
Special Preferred Voting Shares, and/or (ii) Special Common Units and/or Special
Common Interests issued, respectively, by Centerline Capital Company LLC and
Centerline Investors I LLC, Affiliates of the Company (collectively, the “Trust
Securities”),
in each case other than the Purchaser, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, Related
General II L.P. or any Affiliates of the foregoing (collectively, the “Purchaser
Group”),
to subscribe
for their pro rata share (assuming for this purpose that the Trust Securities
held by the Purchaser Group are not outstanding) of 11.0% Cumulative Convertible
Preferred Shares, Series A-1 of the Company, having the same terms as the
Convertible Preferred Shares other than the issue date, as promptly as practical
following the Closing Date. The Rights Offering shall be conducted in
compliance with all applicable Laws, and the proceeds therefrom shall be used
to
redeem, pursuant to Section 3 a.ii. of the
Certificate of Designation, the Convertible Preferred Shares held by the
Purchaser, together with its Affiliates and successors in interest (and any
permitted transferee pursuant to Section 7.2 (2)). Under the terms of
the Rights
15
Offering,
the holders of the Trust Securities shall have no oversubscription
rights. The prospectus
supplement delivered to the holders of the Trust Securities in connection with the
Rights
Offering, together with the base
prospectus and the registration statement in which they are
included, will
not contain any untrue statement
of a
material fact, or omit to state a material fact necessary to make the statements
contained therein (in the
case of the prospectuses,
in light of the circumstances under which they were made),
not misleading.
For
purposes of this Section 7.2 only, “Affiliates” shall not include officers,
directors, trustees or employees of the Company or its Subsidiaries, other
than
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇.
(2)
The Purchaser agrees that
neither it, nor any of its Affiliates or successors in interest, will, directly
or indirectly, sell, assign, offer to sell, pledge or otherwise transfer, or
convert into Common Shares, any of the Convertible Preferred Shares purchased
by
the Purchaser hereunder, except to its Affiliates or unless otherwise not
prohibited by the NYSE, and in any such case in compliance with the Securities
Act, until the earlier of (i) such time as the Company completes the Rights
Offering, (ii) the receipt of any shareholder approval that may be required
by
the rules of the NYSE for the issuance of the Common Shares issuable upon the
conversion of the Convertible Preferred Shares and (iii) September 22,
2008.
(3)
The Purchaser agrees that in exercising their rights under Section 5.b. of
the
Certificate of Designation, the Purchaser and its Affiliates and successors
in
interest shall comply with all requirements as to the composition of the Board
set forth in the Trust Agreement, including any certificates of designation,
and
the bylaws of the Company. The Company agrees that it shall not be governed
by a
Board with a composition that would prevent the holders of the Convertible
Preferred Shares from exercising their rights under Section 5.b. of the
Certificate of Designation as if such rights were then exercisable.
Section
7.3 NYSE
Listing.
(1)
The Company shall use its commercially reasonable efforts
to have the Convertible Preferred Shares approved for listing on the NYSE as
promptly as practical following the Closing Date and, if necessary, the Common
Shares that may be issued in connection with accrued and unpaid dividends or
make-whole premiums.
(2)
In the event the Company does not (i) consummate the Rights Offering or (ii)
obtain the approval of any shareholders that may be required by the rules of
the
NYSE for the issuance of the Common Shares issuable upon the conversion of
the
Convertible Preferred Shares, then upon the transfer of the Convertible
Preferred Shares by the Purchaser to an unaffiliated third party, the Company
will use its commercially reasonable efforts to obtain the listing of the Common
Shares issuable upon the conversion of the Convertible Preferred Shares on
the
NYSE, to the extent permitted by the rules thereunder, or seek the approval
of
the shareholders that may be required by the rules of the NYSE for the issuance
of the Common Shares issuable upon the conversion of the Convertible Preferred
Shares.
16
Section
7.4 Distributions
Upon
Redemption. Upon redemption of the Purchaser’s Convertible
Preferred Shares pursuant to the Rights Offering, the Company hereby confirms
that the Purchaser is entitled to accrued and unpaid distributions at an annual
rate of 11.0% (computed on the basis of a 360-day year consisting of twelve
30-day months as provided in the Certificate of Designation) from the issue
date
thereof to, but excluding, the redemption date, whether or not declared by
the
Board, as set forth in the Certificate of Designation.
Section
7.5 Tax
Allocations. The Company shall allocate Net Income or Net Loss
(i) in accordance with the Trust Agreement and (ii) in the same manner to the
holders of both the Convertible Preferred Shares and the 4.40% Cumulative
Perpetual Convertible Community Reinvestment Act Preferred Shares, Series
A-1.
ARTICLE
VIII
Indemnification
Section
8.1 Indemnification
Generally.
(1)
The Company shall indemnify the Purchaser and its Affiliates, and their
respective directors, officers, shareholders and other equity holders, partners,
members, attorneys, accountants, agents, advisors, representatives and employees
and, as applicable, their respective heirs, successors and permitted assigns
(each of the foregoing, in such capacity (as applicable), a “Purchaser Indemnified
Party”) from and against any and all losses, damages, liabilities, fines,
costs, claims, charges, actions, proceedings, demands, judgments, settlement
costs and expenses of any nature whatsoever (including, without limitation,
reasonable attorneys’ fees and out-of-pocket expenses), whether joint or several
(any of the foregoing, a “Loss”) resulting
from
any breach of a representation, warranty or covenant by the Company. The
Purchaser shall indemnify the Company and its Affiliates, and their respective
directors, trustees, officers, shareholders and other equity holders, partners,
members, attorneys, accountants, agents, advisors, representatives and employees
and, as applicable, their respective heirs, successors and permitted assigns
(each of the foregoing, in such capacity (as applicable), a “Company Indemnified
Party”; each Company Indemnified Party and Purchaser Indemnified Party,
an “Indemnified
Party”) from and against any and all Losses resulting from any breach of
a representation, warranty or covenant by the Purchaser.
(2)
The Company shall indemnify the Purchaser Indemnified Parties from and against
any and all Losses to which any such Indemnified Party may become subject,
arising out of or in connection with the transactions contemplated by this
Agreement, or any Proceeding, including, without limitation, any shareholder
derivative claim or any claim by a holder of Common Shares resulting from the
allocation of "phantom income" to such holder as a result of the provisions
of
Section 7.5 of this Agreement, relating to any of the foregoing, regardless
of
whether any such Indemnified Party is a party thereto, only to the extent such
matter is initiated by a third party or results from a matter initiated by
a
third party, and to reimburse each such Indemnified Party upon demand for any
reasonable legal or other expenses incurred in connection with investigating
or
defending any of the foregoing, provided that the foregoing
17
indemnity
will not, as to any Indemnified Party, apply to Losses to the extent they are
found in a final, non-appealable judgment of a court of competent jurisdiction
to have resulted primarily from the willful misconduct or gross negligence
of
such Indemnified Party (provided that breaches of fiduciary duty themselves
will
be deemed not to constitute willful misconduct or gross negligence per se for
purposes of this Section 8.1(2) unless there is an express finding by such
court
that said breach of fiduciary duty was the result of willful misconduct or
gross
negligence). Notwithstanding any other provision of this Agreement, no
Indemnifying Party shall be liable for any indirect, special, punitive or
consequential damages in connection with this Agreement, the Convertible
Preferred Shares or Common Shares issuable upon conversion thereof or any
related transaction or any Proceeding relating to any of the foregoing. The
Company shall not be liable for any settlement of any Proceeding effected
without the Company’s prior written consent (which consent shall not be
unreasonably withheld or delayed or conditioned), but if settled with the
Company’s prior written consent, or if there is a final judgment against an
Indemnified Party in any such Proceeding, the Company agrees to
indemnify and hold harmless each Indemnified Party in the manner set forth
above.
Section
8.2 Indemnification
Procedures
For Third-Party Claims.
If
a
claim by a third party
(including claims for
breaches of fiduciary duties) is made against an Indemnified Party
and
such Indemnified Party intends to seek indemnity with
respect thereto from the Company (in the case of a Purchaser Indemnified Party
seeking such indemnity) or the Purchaser (in the case of a Company Indemnified
Party seeking indemnity) (each of the Company or the Purchaser, as the case
may
be, in such capacity, an “Indemnifying
Party”), such
Indemnified Party shall give notice in writing as promptly as reasonably
practicable to such Indemnifying Party of any Proceeding commenced against
or by
it in respect of which indemnity may be sought hereunder, but failure to so
notify such Indemnifying Party shall not relieve such Indemnifying Party from
any liability that it may have on account of this Article VIII, so long as
such
failure shall not have materially prejudiced the position of such Indemnifying
Party. Upon such notification, the Indemnifying Party shall assume
the defense of such Proceeding brought by a third party, and, after such assumption,
the Indemnified Party shall
not be entitled to reimbursement of any expenses thereafter incurred by it in
connection with such Proceeding, except as described
below. In any such Proceeding, any Indemnified Party shall have the
right to retain its own counsel (including local counsel), but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party shall have failed to promptly assume and
thereafter conduct such defense, (ii) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the contrary, (iii) in the
reasonable determination of counsel for the Indemnified Party, representation
of
such Indemnified Party by counsel obtained by the Indemnifying Party would
be
inappropriate due to actual or potential conflicting interests between such
Indemnified Party and any other party represented by such counsel in such
proceeding. No Indemnifying Party, in the defense of a third-party claim,
shall, except with the
consent of the Indemnified Party, consent to entry of any judgment or enter
into
any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim. The Indemnifying Party shall not
be liable for any settlement of any Proceeding effected without its written
consent (which shall not be unreasonably withheld, delayed or conditioned
by such
18
Indemnifying
Party), but if settled with such consent or if there be final judgment for
the
plaintiff, the Indemnifying Party shall indemnify the Indemnified Party from
and
against any Loss by reason of such settlement or judgment. The Indemnifying
Party will advance expenses to an Indemnified Party as reasonably incurred
so
long as such indemnified party shall have provided the indemnifying party with
a
written undertaking to reimburse the indemnifying party for all amounts so
advanced if it is ultimately determined that the indemnified party is not
entitled to indemnification hereunder (which shall include breaches of fiduciary
duty if permitted above).
Section 8.3 Survival
of Representations,
Warranties and Covenants.
All representations and warranties
and covenants contained in this Agreement or made in writing by
or on behalf of
the Company or the
Purchaser in
connection
with the transactions contemplated by this Agreement shall survive, for
the duration of any statutes of limitation applicable thereto, the execution
and
delivery of this Agreement, any investigation at any time made by the Company,
the Purchaser or on such party’s behalf, the purchase of the Convertible
Preferred Shares by the Purchaser under this Agreement and any disposition
of or
payment on the Convertible Preferred Shares. All statements contained in
any certificate or other instrument delivered to the Purchaser or the Company by
or on behalf of the Company or
the Purchaser pursuant to this
Agreement shall
be deemed
representations and warranties of the Company or the Purchaser,
respectively, under this
Agreement.
ARTICLE
IX
Miscellaneous
Section
9.1 Expenses
and
Taxes.
(1)
Each party to this Agreement shall bear its own respective costs and expenses
incurred in connection with the preparation, execution and delivery of this
Agreement and the agreements and transactions contemplated hereby, except that
the Company shall reimburse the Purchaser for its reasonable legal fees and
disbursements incurred in connection with the negotiation and documentation
of
the purchase of the Convertible Preferred Shares.
(2)
All transfer, stamp (including documentary stamp taxes, if any), and other
similar taxes (including, in each case, any penalties, interest or additions
thereto) with
respect to the initial purchase and sale of the Convertible Preferred Shares,
shall be borne by the Company.
Section 9.2 Further
Assurances.
Each
Purchaser and the Company
shall
duly execute and deliver, or
cause to be duly executed and delivered, at its own cost and expense, such
further instruments and documents and to take all such action, in each case
as
may be necessary or proper in the reasonable judgment of each Company or
the Purchaser,
respectively, upon the reasonable advice of counsel, to carry out the provisions
and purposes of this Agreement and the other Documents.
19
Section
9.3 Securities
Law Disclosure;
Public Announcement.
The
Company shall issue a current report on Form 8-K within the time periods
required thereby disclosing the material terms of the transactions contemplated
hereby and attaching this Agreement and the Registration Rights Agreement as
exhibits thereto. Except as set forth below, no public release or announcement
concerning the transactions contemplated hereby shall be issued by the
Company or any of its Subsidiaries without the prior consent of the
Purchasers (which consents shall not be unreasonably withheld), except as such
release or announcement may be required by law or the applicable rules or
regulations of any securities exchange or securities market, in which case
the
Company shall allow the Purchaser to the extent reasonably
practicable under the circumstances, reasonable time to comment on such release
or announcement in advance of such issuance.
Section
9.4 No
Third-Party
Beneficiaries.
Except
as
expressly provided herein, this Agreement shall not confer any rights or
remedies upon any Person other than the parties hereto and their respective
successors and permitted assigns.
Section
9.5 Entire
Agreement.
This
Agreement and the other Documents constitute the entire agreement among the
parties hereto and supersede any prior understandings, agreements or
representations by or among such parties, written or oral, that may have related
in any way to the subject matter of any Document.
Section
9.6 Successors
and
Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. The Company
may not assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the Purchaser.
This
Agreement and the rights (excluding those rights provided under Sections 7.1,
9.1 and 9.3) and obligations (excluding those obligations provided under Section
2.1 ) of the Purchaser hereunder shall be binding upon and inure to the benefit
of any and all Persons to whom the Purchaser transfers any Convertible Preferred
Shares on or prior to 60 days after consummation of the Rights Offering, in
each
case with the same force and effect as if the foregoing Persons were named
herein as Purchaser parties hereto; provided, that any such transferee of the
Convertible Preferred Shares has executed and delivered to the Company an
Instrument of Accession in the form of Exhibit E. References
herein to Convertible Preferred Shares sold by the Company and purchased by
the
Purchaser shall be deemed to include Convertible Preferred Shares held or owned
by any transferees of the Purchaser, and references to the Purchaser herein
(including, without limitation, such references contained in Article VIII)
shall
be deemed to include such transferees. Notwithstanding the foregoing,
the Purchaser may not transfer or assign any of its rights or obligations
hereunder or the Convertible Preferred Shares in violation of the provisions
of
the Trust Agreement and Certificate of Designation (including the restrictive
legends contained therein) or in violation of the Securities Act or any
20
other
manner that would have resulted in a requirement to register the Convertible
Preferred Shares purchased on the date hereof.
Section
9.7 Counterparts.
This
Agreement may be executed in one or more counterparts (including via facsimile
or similar instantaneous electronic transmission devices pursuant to which
the
signature of or on behalf of such party can be seen), each of which shall
be
deemed an original but all of which together shall constitute one and the same
instrument.
Section
9.8 Notices.
All
notices, requests, demands, claims and other communications hereunder shall
be
in writing and shall be deemed to have been duly given if delivered personally,
telecopied, sent by internationally-recognized overnight courier or mailed
by
registered or certified mail (return receipt requested), postage prepaid, to
the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
If
to the
Company, to:
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: General
Counsel
with
a
copy to:
Paul,
Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Esq.
If
to the
Purchaser, to:
Related
Special Assets LLC
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: ▇▇▇▇
▇. ▇▇▇▇
21
with
a
copy to:
▇▇▇▇
▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, Esq.
All
such
notices and other communications shall be deemed to have been given and received
(i) in the case of personal delivery, on the date of such delivery, (ii) in
the
case of delivery by telecopy, on the date of such delivery, (iii) in the case
of
delivery by internationally-recognized overnight courier, on the third Business
Day following dispatch and (iv) in the case of mailing, on the seventh Business
Day following such mailing.
Section
9.9 Governing
Law.
This
agreement shall be governed by and construed in accordance with the internal
laws of the state of New York, without regard to the principles of conflicts
of
laws thereof.
Section
9.10 Submission
to
Jurisdiction.
Except
as
otherwise set forth
in this Section 9.10, no claim under this Agreement by a party against the
other
party may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York located in the City
and
County of New York,
which courts shall have exclusive jurisdiction over
the
adjudication of such matters, and the parties hereto consent to personal
jurisdiction, service and venue in any court in which any claim arising out
of
or in any way relating to this Agreement is brought by any third party against
the Company or any Indemnified Party. The parties hereto agree that a
final judgment in any such action, proceeding or counterclaim brought in any
such court shall be conclusive and binding upon the parties and may be enforced
in any other courts in the jurisdiction of which the parties is or may be
subject, by suit upon such
judgment.
Section
9.11 Specific
Performance.
The
parties
hereto
acknowledge
that there would be no
adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition
to any other remedy to which it may be entitled at law or in equity, shall
be
entitled to compel
specific performance of the obligations of any other party under this Agreement
in accordance with the terms and conditions of this Agreement and immediate injunctive
relief, without the necessity of proving the inadequacy of money damages as
a
remedy, in any court of the United States or any State thereof having
jurisdiction.
22
Section
9.12 Amendments
and
Waivers.
No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by both parties hereto. No
waiver by any party of any default, misrepresentation, or breach of representation,
warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior
or
subsequent default, misrepresentation, or breach of representation, warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence. No such waiver
shall be effective unless signed by the party against which the waiver is to
be
effective.
Section
9.13 Incorporation
of Schedules
and Exhibits.
The
Annex, Schedules
and Exhibits identified in this Agreement are incorporated herein by reference
and made a part hereof.
Section
9.14 Construction.
Where
specific language is used to clarify by example a general statement contained
herein, such specific language shall not be deemed to modify, limit or restrict
in any manner the construction of the general statement to which it
relates. The use in this Agreement of the term “including” means
“including,
without
limitation.” The language used in this Agreement shall be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction shall be applied against any
party.
Section
9.15 Interpretation.
Unless
otherwise indicated, references
to
“$”
are
references to the U.S.
dollar. Accounting
terms used but not otherwise defined herein shall have the meanings
given to them
under GAAP. As used in this Agreement (including all Annexes, Schedules,
Exhibits and
amendments hereto), the masculine, feminine and neuter gender and the singular
or plural number shall be deemed to include the others whenever the context
so
requires. References to Articles and Sections refer to articles and
sections of this Agreement. Similarly, references to Annexes, Schedules and Exhibits
refer to schedules and exhibits, respectively, attached to this
Agreement. Unless the
content requires otherwise, words such as “hereby,”
“herein,”
“hereinafter,”
“hereof,”
“hereto,”
“hereunder”
and
words of like import refer to this
Agreement. The
article and section headings contained in this Agreement are inserted for convenience
only and
shall not affect in any way the meaning or interpretation of this
Agreement.
Section
9.16 Severability.
It
is
the desire and intent of the parties
that the provisions of this Agreement be enforced to the fullest
extent
permissible under the Laws and public policies applied
in each
jurisdiction in which
enforcement is
sought. Accordingly, if any particular provision of this
Agreement shall be
adjudicated by a court of competent jurisdiction to be invalid, prohibited
or
unenforceable for any reason, such provision, as to such jurisdiction, shall
be
ineffective, without invalidating the remaining provisions of this
Agreement or affecting the
validity or enforceability of this Agreement or affecting the validity
or
enforceability of such provision in any other
jurisdiction.
23
Notwithstanding the foregoing, if such provision could
be more
narrowly written so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be deemed to be so narrowly
written, to the minimum extent necessary to prevent the rendering of such
provision from being invalid or unenforceable, without invalidating
the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section
9.17 Waiver
of Jury
Trial.
EACH
OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER DOCUMENT.
24
IN
WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first above
written.
| CENTERLINE HOLDING COMPANY | ||||
|
|
By:
|
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | ||
|
Name:
|
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |||
|
Title:
|
President and Chief Executive Officer | |||
| RELATED SPECIAL ASSETS LLC | |||||
| By: | The Related Realty Group, Inc., its manager | ||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇ | ||||
|
Name:
▇▇▇▇ ▇. ▇▇▇▇
|
|||||
|
Title:
President
|
|||||
Annex
I
CERTAIN
DEFINITIONS
“Assets”
means,
with respect to any
Person, all of the assets,
rights, interests and other properties, real, personal and mixed, tangible
and
intangible, owned by such Person.
“Business
Day” means any day that is
not a
Saturday,
Sunday,
legal holiday or
other day on which banks are required to be closed in New York, New York.
“Credit
Agreement” means the Revolving Credit
and
Term Loan Agreement, dated as of December 27, 2007, by and among the Company
and
Centerline Capital Group Inc., as Borrowers named therein, and certain entities
named therein as Guarantors, Bank of America, N.A. and other entities party
thereto from time to time as lenders, and Bank of America, N.A., as Swingline
Lender and as Administrative Agent on behalf of the Lenders, as the same may
be
amended from time to time.
“Documents”
means
this Agreement, the
Registration Rights Agreement and the Certificate
of
Designation, collectively.
“Exchange
Act” means the Securities Exchange
Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
“Fundamental
Documents” means, with
respect to a corporation, the charter and bylaws (each as amended) or, with
respect to any other Person, the documents by which
such
Person (other than an
individual) establishes its legal existence or which govern its internal
affairs.
“GAAP”
means,
at any time, generally accepted
accounting principles in the jurisdiction in which the Person to which such principles
are applied is
organized at such time.
“Governmental
Entity” means any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, federal, state or
local.
“Law”
means
any constitution, law, statute,
treaty, rule, directive, requirement or regulation or Order, domestic or foreign,
of any
Governmental Entity or any
rules or regulations of any self-regulatory organization.
“Lien”
means
any security interest, pledge,
bailment (in the nature of a pledge or for purposes of security), mortgage,
deed
of trust, the grant of a power to confess judgment, conditional sale,
trust receipt or other title retention agreement (including any lease in the
nature thereof), lien, charge, encumbrance, claim, equity, easement,
reservation, restriction, cloud, right of first refusal or first offer, option,
equity or adverse claim or other
similar arrangement or interest in real or personal
property.
“Order”
means
any order, writ, judgment,
injunction, decree, determination or award issued by a Governmental
Entity.
“Person”
means
any individual, corporation,
partnership, limited liability company, trust, estate, or unincorporated
organization, or other entity or Governmental Entity or other juridical
entity.
“Proceeding”
means
any
action, suit, claim, inquiry, investigation or proceeding by or before any
Governmental Entity.
“Securities
Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Subsidiary”
means
any
entity in which the Company directly or indirectly, through one or
more intermediaries, (a) holds beneficially or of record securities that
would entitle the Company to exercise 50% or more of the votes that
could be cast in the election of members to the board of directors, board of
managers or other governing body of such entity, or (b) possesses, directly
or indirectly, power (whether through the ownership of voting securities or,
through membership on the board of directors, managers or other governing body,
by contract (including, without limitation, a limited partnership agreement
or
general partnership agreement) or otherwise) to direct or cause the direction
of
the management and policies of such entity.
2
SCHEDULE
5.10
On
January 18, 2008, ▇▇▇▇▇ ▇. Off, on behalf of herself and all others similarly
situated, and derivatively on behalf of Centerline Holding Company filed with
the Court of Chancery of the state of Delaware a civil action against ▇▇▇▇▇▇▇
▇.
▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and the Related Companies, LP and Centerline
Holding Company. The litigation is pending as of the date
hereof.
On
January 18, 2008, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, on behalf of himself and all others
similarly situated, filed with the U.S. District Court for the Southern District
of New York a civil action against Centerline Holding Company, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇. ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇. The litigation
is
pending as of the date hereof.
On
January 18, 2008, ▇▇▇▇▇▇ ▇▇▇▇▇▇ filed a civil action in the Supreme Court of
the
State of New York naming Centerline Holding Company as a nominal defendant.
The
litigation is pending as of the date hereof.
SCHEDULE
5.11
The
issuance
of the Common Shares
underlying the Convertible Preferred Shares will be subject to the consummation
of the Rights Offering and, if the Rights Offering is not consummated, a vote
of
the Company’s common shareholders.
The
transaction
contemplated by this
Agreement requires the
listing of the Convertible Preferred Shares on the NYSE and
the Common Shares issuable upon the conversion
of the
Convertible Preferred Shares; provided that NYSE approval
has been obtained subject to
consummation of the Rights Offering.
The
Company is required to file a
registration statement to register the Convertible Preferred Shares and a prospectus supplement
for the
Convertible Preferred Shares to be issued in the Rights
Offering.
SCHEDULE
5.12
On
January 18, 2008, ▇▇▇▇▇ ▇. Off, on behalf of herself and all others similarly
situated, and derivatively on behalf of Centerline Holding Company filed with
the Court of Chancery of the state of Delaware a civil action against ▇▇▇▇▇▇▇
▇.
▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and the Related Companies, LP and Centerline
Holding Company. The litigation is pending as of the date
hereof.
On
January 18, 2008, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, on behalf of himself and all others
similarly situated, filed with the U.S. District Court for the Southern District
of New York a civil action against Centerline Holding Company, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇. ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇. The litigation
is
pending as of the date hereof.
On
January 18, 2008, ▇▇▇▇▇▇ ▇▇▇▇▇▇ filed a civil action in the Supreme Court of
the
State of New York naming Centerline Holding Company as a nominal defendant.
The
litigation is pending as of the date hereof.
SCHEDULE
5.23
Bear
▇▇▇▇▇▇▇ was retained in connection with Project Spinnaker and is advising the
Company in connection with the issuance of the Convertible Preferred Shares
and
the Rights Offering.
EXHIBIT
A
CERTIFICATE
OF DESIGNATION
of
11.0%
CUMULATIVE CONVERTIBLE PREFERRED SHARES, SERIES A-1
of
CENTERLINE
HOLDING COMPANY
Pursuant
to the Second Amended and Restated Trust Agreement of
Centerline
Holding Company, dated as of November 17, 2003, as amended by Amendment
No. 1 thereto, dated as of September 20, 2005, as further amended by
Amendment No. 2 thereto, dated as of November 30, 2005, as further amended
by
Amendment No. 3 thereto, dated as of June 13, 2006, and as further amended
by
Amendment No. 4 thereto, dated as of April 2, 2007 (the “Trust
Agreement”).
CENTERLINE
HOLDING COMPANY is a Delaware statutory trust created and existing under
the
Delaware Statutory Trust Act (the “Company”),
and
DOES
HEREBY CERTIFY:
That
pursuant to the authority expressly vested in the board of trustees of the
Company (the “Board”) by the
Trust
Agreement, the Board duly adopted on January 17, 2008, resolutions providing
for
the creation of a class of Preferred Shares of the Company, with substantially
(i) the designations, powers, preferences, (ii) the relative, participating,
optional or other special rights, and (iii) the qualifications, limitations
or
restrictions set forth below (in addition to those set forth in the Trust
Agreement). Capitalized terms used herein, but not otherwise defined
herein, shall have the respective meanings ascribed to them in the Trust
Agreement. The Board formed a Rights Offering Committee of the Board
(the “Rights Offering
Committee”) and delegated to the Rights Offering Committee the authority
to make changes to such form of Certificate of Designation. The
Rights Offering Committee, pursuant to resolutions duly adopted on January
25,
2008, approved certain changes to the form of Certificate of Designation
and
approved the adoption of this Certificate of Designation with the terms set
forth below and directed that this Certificate of Designation be attached
as an
appendix to the Trust Agreement.
1.
DESIGNATION AND
AMOUNT. The shares of such class of Preferred Shares shall be
designated “11.0% Cumulative Convertible Preferred Shares, Series A-1” (the
“11.0% Cumulative
Convertible Preferred Shares,” which shall include the Original 11.0%
Cumulative Convertible Preferred Shares (as defined below) and the Additional
11.0% Cumulative Convertible Preferred Shares (as defined below)) and, subject
to the Trust Agreement, the number of shares constituting such class shall
be as
determined from time to time by the Board. The Company may, from time
to time, issue additional 11.0% Cumulative Convertible Preferred Shares and
has
issued, and may from time to time issue, other securities that are on parity
with the 11.0% Cumulative Convertible Preferred Shares with respect to the
payment of distributions and rights upon the Company’s liquidation, dissolution
or winding up, which includes, but is not limited to, additional already
issued
and currently outstanding 4.40% Cumulative Perpetual Convertible Community
Reinvestment Act Preferred Shares, Series A-1 (the “Cumulative Perpetual
Convertible CRA Shares”).
A-1
The
Company may issue additional 11.0% Cumulative Convertible Preferred Shares
(“Additional 11.0%
Cumulative Convertible Preferred Shares”) under this Certificate of
Designation from time to time after the original issuance (the “Original Issuance
Date”) of shares of 11.0% Cumulative Convertible Preferred Shares (such
shares issued on the Original Issuance Date, the “Original 11.0%
Cumulative
Convertible Preferred Shares”), including in connection with the Rights
Offering (as defined below). The Additional 11.0% Cumulative
Convertible Preferred Shares and the Original 11.0% Cumulative Convertible
Preferred Shares will be treated as a single class and series for all purposes
of this Certificate of Designation, including, without limitation, for purposes
of voting, waivers, amendments, redemptions and offers to purchase.
2.
DISTRIBUTIONS,
EARNINGS AND TAX ALLOCATIONS.
a.
Distributions. Except
as set forth in Section 2.b. and subject to the provisions of 2.g, the Company
shall pay, when, as and if, declared, out of funds legally available therefor,
cumulative preferential cash distributions on each Cumulative Convertible
Preferred Share at the annual rate of 11.0% (equivalent initially to $1.287
per
share per year), as may be adjusted pursuant to Section 2.h, computed on
the
basis of a 360-day year consisting of twelve 30-day months (such annual rate,
the “Dividend
Rate”), based on the initial liquidation amount of $11.70 per share (such
per share amount, as adjusted, the “Liquidation
Preference”). The initial distribution and any distribution
payable on 11.0% Cumulative Convertible Preferred Shares for any other partial
distribution period will be prorated for the period of time the 11.0% Cumulative
Convertible Preferred Shares are outstanding during the applicable
period. Distributions on the 11.0% Cumulative Convertible Preferred
Shares shall be cumulative from the date of issuance (the “Issue Date”), shall
be payable for each calendar quarter in arrears on the following dates of
each
year: January 31, April 30, July 31 and October 31 and any accumulated and
unpaid distribution will be added to the Liquidation Preference on each
Distribution Payment Date if not declared and paid in cash on such Distribution
Payment Date, such that such accumulated and unpaid distributions will
effectively compound each quarter; provided, however, that if any such date
is
not a business day, the applicable distribution will be made on the next
succeeding business day in respect of the immediately preceding calendar
quarter
ending December 31, March 31, June 30, and September 30, respectively (each
such
date, a “Distribution
Payment Date”).
b.
Initial
Distribution. Pursuant to the terms of Section 2.a., the
initial quarterly distribution payable on the 11.0% Cumulative Convertible
Preferred Shares shall be equal to the quarterly distribution otherwise payable
on such shares, prorated for the period from the date of issuance of the
11.0%
Cumulative Convertible Preferred Shares to the end of the calendar quarter
in
which the 11.0% Cumulative Convertible Preferred Shares were
issued.
c.
Record
Date. Distributions will be payable to holders of record of
the 11.0% Cumulative Convertible Preferred Shares as they appear in the
Company’s transfer records at the close of business on the applicable record
date, which shall be the last day of the calendar quarter (whether or not
a
business day) prior to the applicable Distribution Payment Date or such other
date designated by the Board for the payment of distributions that is not
more
than 31 nor less than 10 days prior to such Distribution Payment Date (each,
a
“Distribution Record
Date”).
A-2
d.
Distribution
Priorities.
i.
If any 11.0% Cumulative Convertible Preferred Shares are outstanding, except
as
permitted in the next sentence, no full distributions shall be declared,
paid or
set apart for payment on any of the Company’s shares ranking, as to the payment
of distributions or rights upon the Company’s liquidation, dissolution or
winding up on a parity with or junior to the 11.0% Cumulative Convertible
Preferred Shares for any period unless full cumulative distributions have
been
or contemporaneously are declared and paid, or declared and a sum sufficient
for
the payment thereof irrevocably set apart for such payment, on the 11.0%
Cumulative Convertible Preferred Shares for all past distribution periods
and
the then current distribution period. When distributions are not paid
in full (or a sum sufficient for such full payment is not so irrevocably
set
apart) upon the 11.0% Cumulative Convertible Preferred Shares and any other
Preferred Shares ranking, as to distributions, on a parity with the 11.0%
Cumulative Convertible Preferred Shares, including, without limitation, the
Cumulative Perpetual Convertible CRA Shares, all distributions declared upon
the
11.0% Cumulative Convertible Preferred Shares and such other Preferred Shares,
including, without limitation, the Cumulative Perpetual Convertible CRA Shares,
shall be declared pro
rata so that the amount of distributions declared for each 11.0%
Cumulative Convertible Preferred Share and each such other Preferred Shares,
including, without limitation,
the
Cumulative Perpetual Convertible CRA Shares, shall in all
cases bear to each
other the same ratio that accumulated and unpaid distributions for each 11.0%
Cumulative Convertible Preferred Share and such other Preferred Shares (which
shall not include any accumulation in respect of unpaid distributions for
prior
distribution periods if such other Preferred Shares are not entitled to a
cumulative distribution) bear to each other.
ii.
Except as provided herein, including the payment of distributions on Preferred
Shares ranking, as to distributions, on a parity with the 11.0% Cumulative
Convertible Preferred Shares as provided in the second sentence of Section
2.d.i., unless full cumulative distributions on the 11.0% Cumulative Convertible
Preferred Shares have been or contemporaneously are declared and paid, or
declared and a sum sufficient for the payment thereof irrevocably set apart
for
payment for all past distribution periods and the then current distribution
period, no distributions (other than in any of the Company’s shares ranking, as
to distributions and rights upon the Company’s liquidation, dissolution and
winding up, junior to the 11.0% Cumulative Convertible Preferred Shares)
shall
be declared or paid or set apart for payment, nor shall any other distribution
be made, upon any of the Company’s shares ranking, as to distributions or rights
upon the Company’s liquidation, dissolution and winding up, on a parity with or
junior to the 11.0% Cumulative Convertible Preferred Shares, nor shall any
of
the Company’s shares ranking, as to the payment of distributions or rights upon
the Company’s liquidation, dissolution or winding up, on a parity with or junior
to the 11.0% Cumulative Convertible Preferred Shares be redeemed, purchased
or
otherwise acquired for any consideration (nor shall any moneys be paid to
or
made available for a sinking fund for the redemption of any such shares)
by the
Company or any of the Company’s Affiliates (except by conversion into or
exchange for other of the Company’s Shares ranking, as to the payment of
distributions and rights upon the Company’s liquidation, dissolution or winding
up junior to the 11.0% Cumulative Convertible Preferred Shares).
A-3
e. Accumulated
Distributions. Distributions on the 11.0% Cumulative
Convertible Preferred Shares will accumulate, whether or not there are funds
legally available for the payment thereof and whether or not they are declared,
and accumulated but unpaid distributions will accumulate as of the Distribution
Payment Date on which they first become payable. Any distribution
payment made on the 11.0% Cumulative Convertible Preferred Shares shall first
be
credited against the earliest accumulated but unpaid distribution due with
respect to such Shares that remains payable at the time of such distribution
payment.
f.
Compliance with
Law. No distributions on the Convertible Preferred Shares will
be authorized by the Board or paid or set apart for payment if such
authorization, payment or setting apart for payment would violate any of
the
Company’s agreements or instruments, including, without limitation, the Credit
Agreement (as defined below), as the same may from time to time be amended,
or
is restricted or prohibited by law.
g.
Increase in Dividend
Rate. If the Company fails to consummate the Rights Offering
(as defined below) or obtain any shareholder approval that may be required
by
the rules of the NYSE for the issuance of the Common Shares issuable upon
the
conversion of the 11.0% Cumulative Convertible Preferred Shares by September
22,
2008 and as a result such Common Shares may not be issued pursuant to the
rules
of the NYSE, then the Dividend Rate shall be increased to 15.0% notwithstanding
a transfer of such 11.0% Cumulative Convertible Preferred Shares after the
Issue
Date, retroactive to the Issue Date, but only for so long as such Common
Shares
are not permitted to be issued pursuant to the rules of the NYSE and shall
return to 11.0% upon the date such Common Shares may be issued, including,
without limitation, upon a transfer of such 11.0% Cumulative Convertible
Preferred Shares to a new shareholder under circumstances that permit the
conversion of such 11.0% Cumulative Convertible Preferred Shares or upon
the
receipt of any such shareholder approval or Rights Offering or otherwise.
If the
Company fails to pay the redemption price on any Redemption Date (as defined
below), then the Dividend Rate shall increase commencing on such Redemption
Date
on the 11.0% Cumulative Convertible Preferred Shares by 4.00% until such
date
that the redemption price is paid or funds sufficient for the payment of
such
redemption price are irrevocably deposited in trust by the Company pursuant
to
Section 3 below.
3.
REDEMPTION.
a.
Call
Redemption. Except as provided in Sections 3.a.i. and 3.a.ii.
below, the 11.0% Cumulative Convertible Preferred Shares are not redeemable
by
the Company at any time prior to the Final Redemption Date (as defined
below). Unless previously redeemed or converted as herein provided,
the Company will redeem all 11.0% Cumulative Convertible Preferred Shares
then
outstanding at a per share amount equal to 100% of the Liquidation Preference
plus an amount equal to any accumulated and unpaid distributions not included
in
the Liquidation Preference to, but excluding, the Final Redemption Date,
on
January, 25, 2018 (the “Final Redemption
Date”).
i.
The Company may redeem the Convertible Preferred Shares, in whole or in part,
at
a price per share equal to 100% of the Liquidation Preference plus an amount
equal to any accumulated and unpaid distributions not included in the
Liquidation Preference to the Redemption Date at any time on or after January
31, 2013; provided that (A)
A-4
the
Closing Sale Price of the Common Shares multiplied by the Conversion Rate
then
in effect equals or exceeds 130% of the Liquidation Preference plus an amount
equal to any accumulated and unpaid distributions not included in the
Liquidation Preference for 20 Trading Days during any 30 consecutive Trading
Day
period ending after January 31, 2013 and (B) the Company has paid all
accumulated and unpaid distributions on the Distribution Payment Date
immediately preceding such Redemption Date.
“Closing
Sale Price”
means for all purposes of this Certificate of Designation, with respect
to the
Common Shares, on any date, the last reported per share sale price (or, if
no
last sale price is reported, the average of the last bid and ask prices or,
if
more than one in either case, the average of the average bid and the average
ask
prices) on such date as reported in composite transactions for the principal
United States securities exchange on which the Common Shares are then listed,
or
if the Common Shares are not then listed on a United States national or regional
exchange, as reported on the principal over-the-counter market on which the
Common Shares are then traded or quoted.
“Trading
Day” means
for all purposes of this Certificate of Designation, (i) if the Common Shares
are listed or admitted for trading on any national or regional securities
exchange, days on which such national or regional securities exchange is
open
for business, (ii) if the Common Shares are quoted on any system of automated
dissemination of quotations of securities prices, days on which trades may
be
effected through such system, or (iii) if the Common Shares are not listed
on a
national or regional securities exchange or quoted on any system of automated
dissemination of quotation of securities prices, days on which the Common
Shares
are traded regular way in the over-the-counter market and for which a closing
bid and a closing asked price for the Common Shares are available.
ii.
The Company shall redeem the Original 11.0% Cumulative Convertible Preferred
Shares issued on the Original Issuance Date at a per share price equal to
100%
of the Liquidation Preference plus an amount equal to any accumulated and
unpaid
distributions not included in the Liquidation Preference to, but excluding,
the
Redemption Date with the net proceeds received by the Company from a single rights offering
(the
“Rights
Offering”) to holders of (i) the Company’s Common Shares (including any
restricted Common Shares), vested options exercisable for Common Shares,
Convertible Community Reinvestment Act Preferred Shares, Series A Convertible
Community Reinvestment Act Preferred Shares, 4.40% Cumulative Perpetual
Convertible Community Reinvestment Act Preferred Shares, Series A-1 and/or
Special Preferred Voting Shares, and/or (ii) Special Common Units and/or
Special
Common Interests issued, respectively, by Centerline Capital Company LLC
and
Centerline Investors I LLC, Affiliates of the Company (collectively, the
“Trust Securities”),
in each case other than the Original Purchaser, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
Related General II L.P. or any Affiliates of the foregoing (collectively,
the
“Purchaser
Group”), to subscribe for their pro rata share (assuming for this purpose
that the Trust Securities held by the Purchaser Group are not outstanding)
of
11.0% Cumulative Convertible Preferred Shares; provided, that, for each 11.0%
Cumulative Convertible Preferred Share, Series A-1 purchased in the Rights
Offering, the Company shall redeem one Original 11.0% Cumulative Convertible
Preferred Share initially purchased by Related Special Assets, LLC (the “Original Purchaser”)
as promptly as practicable following the closing of the Rights Offering without
regard to the notice provisions contained in Section 3(c) below.
A-5
For
purposes of this Section 3.a.ii. only, “Affiliates” shall not include officers,
directors, trustees or employees of the Company or its Subsidiaries, other
than
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇.
For
purposes of this Section 3.a.ii. only, “Subsidiaries” shall mean any entities in
which the Company directly or indirectly, through one or more
intermediaries, (a) holds beneficially or of record securities that would
entitle the Company to exercise 50% or more of the votes that could
be cast in the election of members to the board of directors, board of managers
or other governing body of such entity, or (b) possesses, directly or
indirectly, power (whether through the ownership of voting securities or,
through membership on the board of directors, managers or other governing
body,
by contract (including, without limitation, a limited partnership agreement
or
general partnership agreement) or otherwise) to direct or cause the direction
of
the management and policies of such entities.
b.
Source of
Financing. Except as provided in Section 3.a.ii., redemptions
of the 11.0% Cumulative Convertible Preferred Shares may be financed using
funds
from any source.
c.
Notice of
Redemption. Except as provided in Section 3(a)(ii) above,
notice of redemption will be mailed not less than 20 nor more than 60 days
prior
to the date of redemption (the “Redemption Date”), to
each holder of 11.0% Cumulative Convertible Preferred Shares to be redeemed,
notifying such holder of the Company’s election to redeem such shares, stating
(i) the Redemption Date, (ii) the redemption price, (iii) the number
of 11.0% Cumulative Convertible Preferred Shares to be redeemed (and,
if fewer than all the 11.0% Cumulative Convertible Preferred Shares are to
be
redeemed, the number of shares to be redeemed from such holder), (iv) the
place(s) where the 11.0% Cumulative Convertible Preferred Shares are to be
surrendered for payment, (v) that distributions on the 11.0% Cumulative
Convertible Preferred Shares to be redeemed will cease to accumulate on such
Redemption Date and (vi) the date upon which the holder’s conversion rights, if
any, as to such 11.0% Cumulative Convertible Preferred Shares shall
terminate. If fewer than all of the 11.0% Cumulative Convertible
Preferred Shares outstanding are to be redeemed, the 11.0% Cumulative
Convertible Preferred Shares to be redeemed will be determined pro rata or by lot or in
such
other manner as prescribed by the Board. Holders of Convertible
Preferred Shares may continue to convert their 11.0% Cumulative Convertible
Preferred Shares into Common Shares after receiving notice of redemption
through
the close of business on the Redemption Date in accordance with the provisions
of Section 6 hereof.
d.
Mechanics of
Redemption. On or after a Redemption Date, each applicable
holder of 11.0% Cumulative Convertible Preferred Shares to be redeemed must
present and surrender the certificate representing such 11.0% Cumulative
Convertible Preferred Shares to the Company at the place designated in the
applicable notice, duly endorsed, and thereupon the Company shall pay or
cause
to be paid the redemption price of such shares to or on the order of the
person
whose name appears on such certificate as the owner
thereof, and
each certificate so surrendered will thereafter be canceled. If fewer
than all the shares represented by any such certificate are to be redeemed,
the
Company shall issue a new certificate representing the unredeemed
shares. A holder may notify the Company that its certificate or
certificates have been lost, stolen or destroyed, and, upon execution of
an
agreement satisfactory to the Companyto indemnify the
Company for any loss incurred by it in connection with such lost certificate
or
A-6
certificates
or an indemnity bond (in the Company’s sole discretion), and assuming such
holder’s compliance with the other provisions of this Section 3.d, such holder
shall be entitled to receive the amounts contemplated by this Section
3.d. From and after such Redemption Date (unless the Company defaults
in payment of the redemption price), all distributions on 11.0% Cumulative
Convertible Preferred Shares called for redemption will cease to accumulate
and
all rights of the holders thereof, except the right to receive the redemption
price thereof (including all accumulated and unpaid distributions to, but
excluding, the Redemption Date), will cease and terminate and such shares
may
not thereafter be transferred (except with the Company’s consent) in the
Company’s transfer records, and such shares shall not be deemed to be
outstanding for any purpose whatsoever.
e.
Deposit of Redemption
Price. At the Company’s election, the Company may, prior to
the Redemption Date, irrevocably deposit the redemption price (including
accumulated and unpaid distributions not included in the Liquidation Preference)
of the 11.0% Cumulative Convertible Preferred Shares so called for redemption
in
trust for the holders thereof with a bank or trust company, in which case
the
Redemption Notice to holders of the 11.0% Cumulative Convertible Preferred
Shares to be redeemed will (i) state the date of such deposit, (ii) specify
the
office of such bank or trust company as the place of payment of the redemption
price and (iii) require such holders to surrender the certificates representing
such shares at such place on or about, but not later than, the Redemption
Date
against payment of the redemption price (including all accumulated and unpaid
distributions to such Redemption Date). Any moneys so deposited which
remain unclaimed by the holders of the Convertible Preferred Shares at the
end
of two years after the Redemption Date will be returned by such bank or trust
company to the Company.
f.
Voting Rights
Upon
Redemption/Conversion. The voting rights granted to the
holders of the 11.0% Cumulative Convertible Preferred Shares (see Section
5
hereof) will not apply if, at or prior to the time when the act with respect
to
which such vote would otherwise be required is effected, all outstanding
11.0%
Cumulative Convertible Preferred Shares have been converted, redeemed or
called
for redemption and sufficient funds shall have been irrevocably deposited
in
trust to effect such redemption.
g.
Payment of Cumulative
Distributions Prior to Redemption. Except for a redemption
pursuant to Section 3(a)(ii) above, notwithstanding anything in this Section
3
to the contrary, unless full cumulative distributions on the 11.0% Cumulative
Convertible Preferred Shares have been or contemporaneously are declared
and
paid, or declared and sum sufficient for the payment thereof irrevocably
set
apart for payment for all past distribution periods and the then current
distribution period, no Convertible Preferred Shares will be redeemed unless
all
outstanding 11.0% Cumulative Convertible Preferred Shares are simultaneously
redeemed, provided, however, that the foregoing will not prevent the purchase
or
acquisition by the Company of 11.0% Cumulative Convertible Preferred Shares
pursuant to a purchase or exchange offer made on the same terms to holders
of
all outstanding 11.0% Cumulative Convertible Preferred Shares. In
addition, except for a redemption pursuant to Section 3(a)(ii) above, unless
full cumulative distributions on all outstanding 11.0% Cumulative Convertible
Preferred Shares have been or contemporaneously are declared and paid, or
declared and a sum sufficient for the payment thereof irrevocably set apart
for
payment for all past distributions periods and the then current distribution
period, the Company may not purchase or otherwise acquire directly
or
A-7
indirectly
any 11.0% Cumulative Convertible Preferred Shares or any of the Company’s shares
ranking, as to the payment of distributions or rights upon the Company’s
liquidation, dissolution or winding up on a parity with or junior to the
11.0%
Cumulative Convertible Preferred Shares (except by conversion into or exchange
for other of the Company’s Shares ranking, as to distributions and rights upon
the Company’s liquidation, dissolution or winding up, junior to the 11.0%
Cumulative Convertible Preferred Shares) provided, however, that the foregoing
will not prevent the purchase or acquisition by the Company of 11.0% Cumulative
Convertible Preferred Shares pursuant to a purchase or exchange offer made
on
the same terms to holders of all outstanding 11.0% Cumulative Convertible
Preferred Shares.
h.
Repurchase at
Option
of Holder Upon a Fundamental Change.
i.
If a Fundamental Change (as defined below) occurs at any time prior to the
Final
Redemption Date, then each holder of 11.0% Cumulative Convertible Preferred
Shares shall have the right, at such holder’s option, to require the Company to
repurchase all of such holder’s 11.0% Cumulative Convertible Preferred Shares,
or any portion thereof, for cash on a date designated by the Company (the
“Fundamental Change
Repurchase Date”) that is not less than twenty (20) nor more than thirty
(30) days after the date of the Fundamental Change Notice (as defined below)
in
respect of such Fundamental Change at a repurchase price per share equal
to 100%
of the Liquidation Preference of the 11.0% Cumulative Convertible Preferred
Shares to be repurchased, plus an amount equal to any accumulated and unpaid
distributions not included in the Liquidation Preference up to, but excluding,
the Fundamental Change Repurchase Date. Notwithstanding the
foregoing, if a Fundamental Change Repurchase Date is after a Distribution
Record Date but on or prior to the corresponding Distribution Payment Date,
the
Company will pay the full amount of accumulated and unpaid distributions
on such
Distribution Payment Date to the holder of record at the close of business
on
the corresponding Distribution Record Date. Notwithstanding the
foregoing, no 11.0% Cumulative Convertible Preferred Shares may be surrendered
for repurchase pursuant to this Section 3.h in connection with a merger,
consolidation, conversion or other transaction effected solely for the purpose
of changing the Company’s jurisdiction of organization to any other state within
the United States.
ii.
Before the fifteenth (15th) day after the occurrence of a Fundamental Change,
the Company shall mail or cause to be mailed to all holders of record on
the
date of the Fundamental Change a notice (the “Fundamental Change
Notice”) of the occurrence of such Fundamental Change, of the repurchase
right at the option of the holders arising as a result thereof and the
Fundamental Change Conversion Date (as defined below).
Each
Fundamental Change Notice shall specify
(A) the circumstances constituting the Fundamental Change, (B) the
Fundamental Change Repurchase Date, (C) that; if the holder desires to
exercise its repurchase right pursuant to this Section 3.h, the holder must
do
so on or prior to the close of business on the Fundamental Change Repurchase
Date (the “Fundamental
Change Expiration Time”), (D) that the holder shall have the right
to withdraw any 11.0% Cumulative Convertible Preferred Shares surrendered
prior
to the Fundamental Change Expiration Time, (E) if the 11.0% Cumulative
Convertible Preferred Shares are then convertible, that 11.0% Cumulative
Convertible Preferred Shares as to which an Option of Holder to
ElectRepurchase (as hereinafter defined) has been given
may
be converted only if the Option of
A-8
Holder
to
Elect Repurchase is withdrawn in accordance with the terms of the Trust
Agreement, (F) a description of the procedure that a holder must follow to
exercise such repurchase right and to withdraw any surrendered 11.0% Cumulative
Convertible Preferred Shares, (G) the place or places where the holder is
to surrender such holder’s 11.0% Cumulative Convertible Preferred Shares,
(H) the amount of accumulated and unpaid distributions in respect of such
holder’s 11.0% Cumulative Convertible Preferred Shares to the Fundamental Change
Repurchase Date and (I) the CUSIP number or numbers of the 11.0% Cumulative
Convertible Preferred Shares (if then generally in use).
No
failure of the Company to give the foregoing notices and no defect therein
shall
limit the holders’ repurchase rights or affect the validity of the proceedings
for the repurchase of the 11.0% Cumulative Convertible Preferred Shares pursuant
to this Section 3.h.
iii.
Repurchases of 11.0% Cumulative Convertible Preferred Shares under this Section
3.h shall be made, at the option of the holder thereof, upon delivery to
the
Company, prior to the Fundamental Change Expiration Time, at the address
specified in the applicable Fundamental Change Notice by a holder of a duly
completed and executed notice (the “Option of Holder
to Elect
Repurchase”) in the form set forth on the reverse of the 11.0% Cumulative
Convertible Preferred Share.
The
Company shall not be required to purchase from any holder, fractions of a
11.0%
Cumulative Convertible Preferred Share.
Notwithstanding
anything herein to the contrary, any holder delivering to the Company the
Option
of Holder to Elect Repurchase contemplated by this Section 3.h shall have
the
right to withdraw such Option of Holder to Elect Repurchase at any time prior
to
the Fundamental Change Expiration Time by delivery of a written notice of
withdrawal to the Company in accordance with Section 3.h.iv below. 11.0%
Cumulative Convertible Preferred Shares in respect of which an Option of
Holder
to Elect Repurchase has been given by the holder thereof may not be converted
pursuant to Section 6 hereof on or after the date of the delivery of such
Option of Holder to Elect Repurchase unless such Option of Holder to Elect
Repurchase has first been validly withdrawn.
For
a
11.0% Cumulative Convertible Preferred Share to be so repurchased at the
option
of the holder, the Company must receive at the address specified in the
Fundamental Change Notice a share certificate, if any, in respect of such
11.0%
Cumulative Convertible Preferred Share duly endorsed for transfer in favor
of
the Company (or an affidavit of lost share certificate in respect thereof
together with either, at the option of the Company in its sole discretion,
an
indemnity agreement or indemnity bond), together with the form entitled “Option
of Holder to Elect Repurchase” on the reverse thereof duly completed and such
11.0% Cumulative Convertible Preferred Share duly endorsed for transfer,
on or
before the Fundamental Change Expiration Time. All questions as to
the validity, eligibility (including time of receipt) and acceptance of any
11.0% Cumulative Convertible Preferred Share for repurchase shall be determined
by the Company, the determination of which shall be final and binding absent
manifest error.
A-9
iv. An Option
of Holder to Elect Repurchase may be withdrawn by means of a written notice
of
withdrawal delivered to the address specified in the Fundamental Change Notice
in accordance with the Option of Holder to Elect Repurchase at any time prior
to
the Fundamental Change Expiration Time, specifying:
| A. | the 11.0% Cumulative Convertible Preferred Shares with respect to which such notice of withdrawal is being submitted; |
| B. | the certificate number, if any, of the 11.0% Cumulative Convertible Preferred Shares in respect of which such notice of withdrawal is being submitted; and |
| C. | the amount of 11.0% Cumulative Convertible Preferred Shares, if any, that remain subject to the original Option of Holder to Elect Repurchase. |
v.
At the Company’s election, the Company may, prior to the Fundamental Change
Repurchase Date, irrevocably deposit an amount of money sufficient to repurchase
all the 11.0% Cumulative Convertible Preferred Shares to be repurchased on
the
Fundamental Change Repurchase Date in trust for the holders thereof with
a bank
or trust company, in which case the Fundamental Change Notice will (i) state
the
date of such deposit, (ii) specify the office of such bank or trust company
as
the place of payment of the offer to purchase and (iii) require such holders
to
surrender the certificates representing such shares at such place on or about,
but not later than, the Fundamental Change Repurchase Date against payment
of
the purchase price therefor (including all accumulated and unpaid distributions
to such Fundamental Change Repurchase Date). Any moneys so deposited
which remain unclaimed by the holders of the 11.0% Cumulative Convertible
Preferred Shares at the end of two years after the Fundamental Change Repurchase
Date will be returned by such bank or trust company to the Company.
If
on the
business day immediately following the Fundamental Change Repurchase Date,
the
Company or such other bank or trust company, holds money sufficient to
repurchase all of the 11.0% Cumulative Convertible Preferred Shares that
are to
be purchased as of the Fundamental Change Repurchase Date, then, on and after
such date, (i) such 11.0% Cumulative Convertible Preferred Shares will cease
to
be outstanding, (ii) distribution on such 11.0% Cumulative Convertible Preferred
Shares will cease to accumulate, and (iii) all other rights of the holders
of
such 11.0% Cumulative Convertible Preferred Shares will terminate, other
than
the right to receive the repurchase price upon delivery of the 11.0% Cumulative
Convertible Preferred Shares in accordance with this Section 3.h.
vi.
The Company will comply with the requirements of Rule 13e-4, Rule 14e-1 and
any
other tender offer rules under the United States Securities Exchange Act
of
1934, as amended (the “Exchange Act”), to
the extent applicable, and file a Schedule TO or any other required schedule
or
form under the Exchange Act to the extent then applicable in connection with
the
repurchase rights of the holders of 11.0% Cumulative Convertible Preferred
Shares pursuant to this Section 3.h in the event of a Fundamental
Change. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Certificate
of
A-10
Designation
governing an offer to purchase upon a Fundamental Change, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under the provisions of this Certificate
of Designation by virtue of such compliance.
vii.
A “Fundamental
Change” means the occurrence of any of the following: (A) the sale, lease
or transfer, in one or a series of related transactions, of all or substantially
all of the Company’s assets (determined on a consolidated basis) to any person
or group (as such term is used in Section 13(d)(3) of the Exchange Act),
(B) the
adoption of a plan the consummation of which would result in the Company’s
liquidation or dissolution, (C) the acquisition, directly or indirectly,
by any
person or group (as such term is used in Section 13(d)(3) of the Exchange
Act),
of beneficial ownership (as defined in Rule 13d-3 under the Exchange Act)
of
more than 50% of the aggregate voting power of the Company’s voting shares, (D)
during any period of two consecutive years, individuals who at the beginning
of
such period comprised the Board (together with any new trustees whose election
by such Board or whose nomination for election by the Company’s shareholders was
approved by a vote of 66 2⁄3% of the Company’s trustees then still in office who
were either trustees at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason
to
constitute a majority of the Board then in office, or (E) the Common Shares
cease to be listed on a national securities exchange or quoted on an
over-the-counter market in the United States.
viii.
Notwithstanding the foregoing, in the event any Fundamental Change would
constitute the payment of a distribution or a liquidation, dissolution or
winding up of the Company, then the payment by the Company to any holder
of
11.0% Cumulative Convertible Preferred Shares upon a Fundamental Change shall
be
subject to the rights of all holders of all other of the Company’s Shares
ranking on parity with the 11.0% Cumulative Convertible Preferred Shares
as to
the payment of distributions or rights upon the Company’s liquidation,
dissolution or winding up, to receive payment on parity with the 11.0%
Cumulative Convertible Preferred Shares.
i.
Compliance with
Law. Notwithstanding anything to the contrary contained
herein, no redemption or repurchase pursuant to this Section 3 will be made
by
the Company if such redemption or repurchase is restricted or prohibited
by law
or, except for a redemption pursuant to Section 3(a)(ii) hereof, would violate
any of the Company’s agreements or instruments, including, without limitation,
the Credit Agreement (as defined below), as the same may from time to time
be
amended.
4.
LIQUIDATION,
DISSOLUTION OR WINDING UP.
a.
Payment of
Distributions and Rights. Subject to the rights of any equity
securities ranking on parity with, or senior to, the 11.0% Cumulative
Convertible Preferred Shares, including, without limitation, the Cumulative
Perpetual Convertible CRA Shares, and the then existing and future liabilities,
upon liquidation, dissolution or winding up of the Company, the holders of
the
11.0% Cumulative Convertible Preferred Shares shall be entitled to the
Liquidation Preference per such share plus any accrued and unpaid distributions
on such shares not otherwise included in the Liquidation
Preference. With respect to the
A-11
payment
of distributions and rights upon the Company’s liquidation, dissolution or
winding up, the 11.0% Cumulative Convertible Preferred Shares shall rank:
(i)
senior to (A) the Common Shares; (B) the Convertible Community Reinvestment
Act Preferred Shares of the Company and Series A Convertible Community
Reinvestment Act Preferred Shares of the Company; and (C) all other equity
securities issued by the Company the terms of which acknowledge such ranking;
(ii) on a parity with (A) the Cumulative Perpetual Convertible CRA Shares;
and (B) all other equity securities the terms of which acknowledge such ranking;
and (iii) junior to (A) all equity securities issued by the Company whose
terms
specifically provide that they rank senior to the 11.0% Cumulative Convertible
Preferred Shares; and (B) the payment of the Company’s then existing and future
liabilities (including the Company’s indebtedness).
The
11.0%
Cumulative Convertible Preferred Shares shall not be entitled to CRA
Credits. “CRA Credits”
are an
allocation of the value of any assets owned directly or indirectly by the
Company which a Cumulative Perpetual Convertible CRA Shareholder or holder
of a
parity security may be able to report under the “investment test” promulgated
under the Community Reinvestment Act of 1977, as amended from time to time
and
as affected by the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, enacted on November 12, 1999 (the
“CRA”).
b.
Additional
Issuances. The Company may issue, without consent of the
holders of 11.0% Cumulative Convertible Preferred Shares (“Cumulative Convertible
Preferred Shareholders”): (i) additional Common Shares; (ii) securities
that rank on parity with or junior to the 11.0% Cumulative Convertible Preferred
Shares with respect to payment of distributions and rights upon the Company’s
liquidation, dissolution or winding up, including, without limitation, 11.0%
Cumulative Convertible Preferred Shares and Cumulative Perpetual Convertible
CRA
Shares; and (iii) additional securities which rank senior to the 11.0%
Cumulative Convertible Preferred Shares solely with respect to CRA Credit
allocations and not with respect to payment of distributions and rights upon
the
Company’s liquidation, dissolution or winding up; and (iv) subject to
Section 5.c.ii, additional indebtedness.
5.
VOTING
RIGHTS.
a.
General. To
the extent not prohibited by the rules of the NYSE and any other national
or
regional securities exchange or system of automated dissemination of quotation
of securities prices in the United States on which the Common Shares are
then
traded or quoted, the 11.0% Cumulative Convertible Preferred Shares shall
be
entitled to vote together with the holders of Common Shares as a single class
(together with any other securities issued by the Company that are entitled
to
vote together with the Common Shares with respect to the matter to be voted
upon) on all
matters that holders of Common Shares are entitled to vote upon, with each
11.0%
Cumulative Convertible Preferred Share entitled to such number of votes as
are
equal to the number of whole Common Shares such 11.0% Cumulative Convertible
Preferred Share would be convertible into as of the record date for any such
vote of Common Shares regardless of whether the 11.0% Cumulative Convertible
Preferred Shares are then so convertible.
b.
Outstanding
Distributions/Redemption Payment. Whenever (i) distributions
on any 11.0% Cumulative Convertible Preferred Shares are in arrears for six
or
more quarterly periods or (ii) the Company fails to pay the redemption price
on
any Redemption
A-12
Date,
in
each case, subject to the provisions of and in accordance with the Trust
Agreement, theholders of a majority in interest of the 11.0% Cumulative
Convertible Preferred Shares and the holders of any other parity preferred
shares upon which like voting rights have been conferred and are exercisable,
including, but not limited to, the Cumulative Perpetual Convertible CRA Shares,
if applicable (voting together as a single class with all holders of other
parity preferred shares upon which like voting rights have been conferred
and
are exercisable) will be entitled to nominate and elect two trustees to the
Board for a one-year term. In exercising their rights to nominate and
elect such trustees under this Section 5.b., the holders of the 11.0% Cumulative
Convertible Preferred Shares shall comply with all requirements as to the
composition of the Board set forth in the Trust Agreement, including any
certificates of designation, and the Company Bylaws. During the
period of any such arrearage, the Board shall increase the size of the Board
by
two members to accommodate the two additional trustees. Upon the cure
of such arrearage, the two additional trustees shall immediately cease to
be
trustees and the size of the Board shall be reduced by two
members. Such election shall be held at a special meeting of such
shareholders and at each subsequent annual meeting until all arrearages and
the
distributions on the 11.0% Cumulative Convertible Preferred Shares and such
other preferred shares have been fully paid or a sum sufficient for the full
payment thereof has been irrevocably set apart. Vacancies for
trustees elected by holders of 11.0% Cumulative Convertible Preferred Shares
and
such other preferred shares shall be filled by the remaining trustee so elected
then in office or, if there is no such remaining trustee, by the holders
of a
majority of the outstanding 11.0% Cumulative Convertible Preferred Shares
and
such other preferred shares voting together as a single class. A
trustee elected by the holders of 11.0% Cumulative Convertible Preferred
Shares
and such other preferred shares may be removed with or without cause only
by the
holders of a majority of the outstanding 11.0% Cumulative Convertible Preferred
Shares and such other preferred shares voting together as a single
class. Trustees elected by the holders of the 11.0% Cumulative
Convertible Preferred Shares shall not be divided into the classes of the
Board
and the term of office of all trustees elected by the holders of 11.0%
Cumulative Convertible Preferred Shares will terminate immediately upon the
termination of the rights of the holders of 11.0% Cumulative Convertible
Preferred Shares to vote for trustees and upon such termination the total
number
of trustees constituting the entire Board will automatically be reduced by
two. In accordance with the provisions of this Section 5.b, holders
of 11.0% Cumulative Convertible Preferred Shares shall be entitled to one
vote
per share, provided that if one or more additional classes of parity preferred
shares is entitled to vote along together with the holders of the 11.0%
Cumulative Convertible Preferred Shares, including, without limitation, the
Cumulative Perpetual Convertible CRA Shares, if applicable, then the holders
of
each class of shares will have voting rights proportional to the relative
amounts of liquidation preference and accumulated and unpaid distributions
outstanding in respect of each class.
c.
Required
Consent. So long as any 11.0% Cumulative Convertible Preferred
Shares remain outstanding, the Company may not,
i.
without the affirmative vote or consent of the holders of at least a majority
of
11.0% Cumulative Convertible Preferred Shares outstanding at the time, given
in
person or by proxy, either in writing or at a meeting, (i) authorize or create,
or increase the authorized or issued amount of, any class or series of the
Company’s shares ranking, with respect to the payment of distributions or rights
upon the Company’s liquidation, dissolution or winding up, senior to 11.0%
Cumulative Convertible Preferred Shares, or reclassify any authorized
shares
A-13
into
such
shares, or create, authorize or issue any obligation or security convertible
or
exchangeable into, or evidencing the right to purchase any, such shares or
(ii)
amend, alter or repeal the provisions of the Trust Agreement or the 11.0%
Cumulative Convertible Preferred Shares, whether by merger, conversion or
consolidation (an “Event”) or otherwise,
so as to materially and adversely affect any right, preference, privilege
or
voting power of the 11.0% Cumulative Convertible Preferred Shares or the
holders
thereof; provided, however, with respect to the occurrence of any of the
Events
set forth in (ii) above, so long as 11.0% Cumulative Convertible Preferred
Shares remain outstanding with the terms thereof materially unchanged, taking
into account that, upon the occurrence of an Event, the Company may not be
the
surviving entity, the occurrence of any such Event will not be deemed to
materially adversely affect the rights, preferences, privileges or voting
powers
of the 11.0% Cumulative Convertible Preferred Shares or the holders thereof;
and
provided, further, that (x) any increase in the amount of the authorized
Preferred Shares or the creation or issuance of any other Preferred Shares,
or
(y) any increase in the amount of authorized 11.0% Cumulative Convertible
Preferred Shares or Cumulative Perpetual Convertible CRA Shares, in each
case
ranking, as to payment of distributions or rights upon the Company’s
liquidation, dissolution or winding up, on a parity with or junior to the
11.0%
Cumulative Convertible Preferred Shares, will not be deemed to materially
adversely affect such rights, preferences, privileges or voting powers;
and
ii.
without the affirmative vote or consent of the holders of at least a majority
of
11.0% Cumulative Convertible Preferred Shares outstanding at the time, given
in
person or by proxy, either in writing or at a meeting, incur any indebtedness
or
issue any capital stock, the incurrence or issuance of which would cause
a
default in the “Consolidated EBITDA
to Fixed
Charges Ratio” covenant contained in Section 10.15 of the Revolving
Credit and Term Loan Agreement, dated as of December 27, 2007, by and among
the
Company and Centerline Capital Group Inc., as Borrowers named therein, and
certain entities named therein as Guarantors, Bank of America, N.A. and other
entities party thereto from time to time as lenders, and Bank of America,
N.A.,
as Swingline Lender and as Administrative Agent on behalf of the Lenders,
as the
same may be amended from time to time (the “Credit Agreement”),
assuming for purposes of this section 5.c.ii that the ratio of Consolidated
EBITDA (as defined in the Credit Agreement) to Fixed Charges (as defined
in the
Credit Agreement) required to be maintained is measured for the period of
the
last 12 months then ending and is required to be equal to or greater than
1.5 to
1.0.
6.
CONVERSION.
a.
Optional Right
to
Convert; Conversion Formula; Automatic Conversion. To the
extent permitted by the rules of the NYSE and any other national or regional
securities exchange or system of automated dissemination of quotation of
securities prices in the United States on which the Common Shares are then
traded or quoted and upon compliance with the provisions of this Section
6,
11.0% Cumulative Convertible Preferred Shares may be converted into Common
Shares at the Cumulative Convertible Preferred Shareholder’s option in whole or
in part at any time after the date hereof initially at a conversion rate
per
$11.70 Liquidation Preference equal to 1.0884 (representing the quotient
of
1.0884 obtained by dividing $11.70 by $10.75) (the “Conversion Rate”),
which is equivalent to an initial conversion price of $10.75 per Common Share
(subject to adjustment in accordance with the provisions of this Section
6).
A-14
b.
Mechanics of
Conversion; Fractional Shares.
i.
Each Cumulative Convertible Preferred Shareholder who desires to convert
its
11.0% Cumulative Convertible Preferred Shares into Common Shares shall provide
notice to the Company’s offices in the form of the Notice of Conversion attached
to this Certificate of Designation (a “Conversion Notice”) via telecopy, hand
delivery or other mail or messenger service. The original Conversion
Notice and the certificate or certificates representing the 11.0% Cumulative
Convertible Preferred Shares for which conversion is elected, shall be delivered
to the Company by nationally recognized courier, duly endorsed. The
date upon which a Conversion Notice is initially received by the Company
shall
be a “Notice Date.”
Each
conversion will be deemed to have been effected immediately prior to the
close
of business on the date on which the certificate representing 11.0% Cumulative
Convertible Preferred Shares shall have been surrendered and notice shall
have
been received by the Company or in the case of a conversion pursuant to Section
6.a.ii., on the 20th Trading Day upon which the condition contained therein
is
met, and the conversion shall be at the Conversion Rate in effect at such
time
and on such date.
The
Company shall use all reasonable efforts to issue and deliver within three
(3)
business days after the Notice Date, to such Cumulative Convertible Preferred
Shareholder at the address of the holder on the books of the Company, a
certificate or certificates for the number of Common Shares to which the
holder
shall be entitled as set forth herein; provided that the original certificates
representing the 11.0% Cumulative Convertible Preferred Shares to be converted
are received by the transfer agent or the Company within three (3) business
days
after the Notice Date and the Person or Persons entitled to receive the Common
Shares issuable upon such conversion shall be treated for all purposes as
the
record holder or holders of such Common Shares on such date such original
certificates are received.
ii.
If the Conversion Rate results in a Cumulative Convertible Preferred Shareholder
being entitled to receive a fractional Common Share with respect to the
aggregate 11.0% Cumulative Convertible Preferred Shares being converted pursuant
to a Conversion Notice, in lieu of the issuance of such fractional Common
Share,
the Company shall pay to the Cumulative Convertible Preferred Shareholder
cash
in an amount equal to the closing price of a Common Share at the close of
business on the trading day prior to the conversion date multiplied by the
fraction representing the fractional share.
c.
Anti-Dilution
Adjustments to Conversion Rate.
i.
If, prior to the conversion of all 11.0% Cumulative Convertible Preferred
Shares, the number of issued and outstanding Common Shares is increased by
a
payment of distributions in Common Shares on any class or series of the
Company’s shares or other similar event, then the Conversion Rate in effect
immediately prior to the close of business on the Record Date shall be increased
by multiplying such Conversion Rate by a fraction:
A-15
(a)
the numerator of which shall be the sum of the total number of Common Shares
outstanding at the close of business on such Record Date and the total number
of
Common Shares with respect to such distribution; and
(b)
the denominator of which shall be the number of Common Shares outstanding
at the
close of business on such Record Date.
Such
increase shall become effective immediately prior to the opening of business
on
the day following the Record Date fixed for such
determination. If any distribution of the type described in this
Section 6.c.i is declared but not so paid or made, the Conversion Rate shall
again be adjusted to the Conversion Rate which would then be in effect if
such
distribution had not been declared.
ii.
If, prior to the conversion of all 11.0% Cumulative Convertible Preferred
Shares, the Company subdivides, combines, reclassifies or splits its outstanding
Common Shares into a greater number of Common Shares, the Conversion Rate
in
effect immediately prior to the opening of business on the day following
the day
upon which such subdivision, reclassification or split becomes effective
shall
be proportionately increased, and, conversely, in case the Company shall,
while
any of the 11.0% Cumulative Convertible Preferred Shares are outstanding,
combine or reclassify its outstanding Common Shares into a smaller number
of
Common Shares, the Conversion Rate in effect immediately prior to the opening
of
business on the day following the day upon which such combination or
reclassification becomes effective shall be proportionately reduced, such
increase or reduction, as the case may be, to become effective immediately
prior
to the opening of business on the day following the day upon which such
subdivision, reclassification, split or combination becomes effective, so
that
any 11.0% Cumulative Convertible Preferred Shares thereafter surrendered
for
conversion shall be entitled to receive that number of Common Shares which
it
would have received had such 11.0% Cumulative Convertible Preferred Shares
been
converted immediately prior to the happening of such event adjusted as a
result
of such event;
iii.
Except for the Rights Offering, if, prior to the conversion of all 11.0%
Cumulative Convertible Preferred Shares, the Company issues rights or warrants
to all or substantially all holders of our outstanding Common Shares entitling
them to subscribe for or purchase Common Shares (or securities convertible
into
or exchangeable or exercisable for Common Shares), at a price per share (or
having a conversion, exchange or exercise price per share) less than the
average
of the closing sales prices (the “Closing Sales
Price”)
of a Common Share on the NYSE or any other national or regional securities
exchange or other over-the-counter market in the United States on which the
Common Shares are then traded or quoted on the ten trading days immediately
preceding the date of the announcement by public notice of such issuance
or
distribution (treating the conversion, exchange or exercise price per Common
Share of the securities convertible, exchangeable or exercisable for Common
Shares as equal to (x) the sum of (i) the price for a unit of the security
convertible into or exchangeable or exercisable for Common Shares and (ii)
any
additional consideration initially payable upon the conversion of or exchange
or
exercise for such security into Common Shares divided by (y) the number of
Common Shares initially underlying such convertible, exchangeable or exercisable
A-16
security),
then the Conversion Rate shall be increased by multiplying the
Conversion Rate in effect at the opening of business on the date after such
date
of announcement by a fraction:
(a)
the numerator of which shall be the number of Common Shares outstanding at
the
close of business on the date of announcement, plus the total number of
additional Common Shares so offered for subscription or purchase (or into
which
the convertible, exchangeable or exercisable securities so offered are
convertible, exchangeable or exercisable); and
(b) the
denominator of which shall be the number of Common Shares outstanding on
the
close of business on the date of announcement, plus the number of Common
Shares
(or convertible, exchangeable or exercisable securities) which the aggregate
offering price of the total number of Common Shares (or convertible,
exchangeable or exercisable securities) so offered for subscription or purchase
(or the aggregate conversion, exchange or exercise price of the convertible,
exchangeable or exercisable securities so offered) would purchase at such
Closing Sale Price of the Common Shares.
Such
increase shall become effective immediately prior to the opening of business
on
the day following the Record Date for such determination. To the
extent that Common Shares (or securities convertible, exchangeable or
exercisable into Common Shares) are not delivered pursuant to such rights
or
warrants, upon the expiration or termination of such rights or warrants,
the
Conversion Rate shall be readjusted to the Conversion Rate which would then
be
in effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of the delivery of only the number of Common Shares
(or
securities convertible, exchangeable or exercisable into Common Shares) actually
delivered. In the event that such rights or warrants are not so
issued, the Conversion Rate shall again be adjusted to be the Conversion
Rate
which would then be in effect if the Record Date fixed for the determination
of
shareholders entitled to receive such rights or warrants had not been
fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase Common Shares at less than such Closing
Sale Price, and in determining the aggregate offering price of such Common
Shares, there shall be taken into account any consideration received for
such
rights or warrants, the value of such consideration if other than cash, to
be
determined by the Board.
iv.
(A) Except for the Rights Offering, if, prior to the conversion of all 11.0%
Cumulative Convertible Preferred Shares, the Company, by distribution or
otherwise, distributes to all or substantially all holders of its outstanding
Common Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing Company and
the
Common Shares are not changed or exchanged), capital stock, evidences of
its
indebtedness or other assets, including securities, (including capital stock
of
any subsidiary of the Company) but excluding (a) dividends or distributions
of
Common Shares referred to in Section 6.c.i; (b) any rights or warrants referred
to in Section 6.c.iii; (c) dividends and distributions paid exclusively in
cash
and (d) dividends and distributions of securities or other property or assets
(including cash) in connection with a merger, consolidation, statutory share
exchange, tender offer for all or substantially all of our Common Shares
or sale
of
A-17
all
or
substantially all of the Company’s assets to which Section 6.c.v applies (such
securities, evidence of its indebtedness or other assets being distributed
hereinafter in this Section 6.c.iv called the “Distributed Assets”),
then, in each such case, subject to paragraphs (D) and (E) of this Section
6.c.iv., the Conversion Rate shall be increased by multiplying the Conversion
Rate in effect immediately prior to the close of
business on the Record Date with respect to such distribution by a
fraction:
(a)
the numerator of which shall be the Current Market Price; and
(b)
the denominator of which shall be such Current Market Price, less the Fair
Market Value on such date of the portion of the Distributed Assets so
distributed applicable to one Common Share (determined on the basis of the
number of Common Shares outstanding on such Record Date) on such
date.
Such
increase shall become effective immediately prior to the opening of business
on
the day following the Record Date for such distribution. In the event
that such dividend or distribution is not so paid or made, the Conversion
Rate
shall again be adjusted to be the Conversion Rate which would then be in
effect
if such dividend or distribution had not been declared.
(B)
If
the Board determines the Fair Market Value of any distribution for purposes
of
this Section 6.c.iv by reference to the actual or when issued trading market
for
any Distributed Assets comprising all or part of such distribution, it must
in
doing so consider the prices in such market over the same period (the “Reference Period”)
used in computing the Current Market Price pursuant to this Section 6.c.iv
to
the extent possible, unless the Board determines in good faith that determining
the Fair Market Value during the Reference Period would not be in the best
interest of the holders of the 11.0% Cumulative Convertible Preferred
Shares.
(C)
In
the event any such distribution consists of capital stock or Common Shares
of,
or similar equity interests in, one or more of the Company’s subsidiaries (a
“Spin Off”),
the Fair Market Value of the securities to be distributed shall equal the
average of the Closing Sale Prices of such securities for the five consecutive
trading days commencing on and including the sixth trading day of those
securities after the effectiveness of the Spin Off, and the Current Market
Price
shall be measured for the same period. In the event, however, that an
underwritten initial public offering of the securities in the Spin Off occurs
simultaneously with the Spin Off, the Fair Market Value of the securities
distributed in the Spin Off shall mean the initial public offering price
of such
securities and the Current Market Price shall mean the Closing Sale Price
for
the Common Shares on the same trading day.
(D) Rights
or warrants distributed by the Company to all holders of the outstanding
Common
Shares entitling them to subscribe for or purchase equity securities of the
Company (either initially or under certain circumstances), which rights or
warrants, until the occurrence of a specified event or events (“Trigger Event”), (x)
are deemed to be transferred with such Common Shares, (y) are not exercisable
and (z) are also issued in respect of future issuances of Common Shares,
shall
be deemed not to have been distributed for purposes of this
A-18
Section
6.c.iv (and no adjustment to the Conversion Rate under this Section shall
be
required) until the occurrence of the earliest Trigger Event. If such
right or warrant is subject to subsequent events, upon the occurrence of
which
such right or warrant shall become exercisable to purchase different Distributed
Assets, or entitle the holder to purchase a different number or amount of
the foregoing Distributed Assets or to purchase any of the foregoing Distributed
Assets at a different purchase price, then the occurrence of each such event
shall be deemed to be the date of issuance and Record Date with respect to
a new
right or warrant (and a termination or expiration of the existing right or
warrant without exercise by the holder thereof). In addition, in the
event of any distribution (or deemed distribution) of rights or warrants,
or any
Trigger Event or other event (of the type described in the preceding sentence)
with respect thereto, that resulted in an adjustment to the Conversion Rate
under this Section 6.c.iv:
(a)
in the case of any such rights or warrants which shall all have been repurchased
without exercise by any holders thereof, the Conversion Rate shall be readjusted
upon such final repurchase to give effect to such distribution or Trigger
Event,
as the case may be, as though it were a cash distribution, equal to the per
share repurchase price received by a holder of Common Shares with respect
to
such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of Common Shares as of the date of such
repurchase; and
(b)
in the case of such rights or warrants which shall have expired or been
terminated without exercise, the Conversion Rate shall be readjusted as if
such
rights and warrants had never been issued.
(E)
For purposes of this Section 6.c.iv and Section 6.c.i, Section 6.c.ii and
Section 6.c.iii, any dividend or distribution to which this Section 6.c.iv
is
applicable that also includes (x) Common Shares to which Section 6.c.i applies,
(y) a subdivision, split or combination of shares of Common Shares to which
Section 6.c.ii applies or (z) rights or warrants to subscribe for or purchase
Common Shares to which Section 6.c.iii applies (or any combination thereof),
shall be deemed instead to be:
(a) a
dividend or distribution of the evidences of indebtedness, assets, shares
of
capital stock, rights or warrants, other than such Common Shares, such
subdivision, split or combination or such rights or warrants to which Section
6.c.i, Section 6.c.ii and Section 6.c.iii apply, respectively (and
any Conversion Rate adjustment required by this Section 6.c.iv with respect
to
such dividend or distribution shall then be made), immediately followed
by
(b) a
dividend or distribution of such Common Shares, such subdivision, split or
combination or such rights or warrants (and any further Conversion Rate increase
required by Section 6.c.i, Section 6.c.ii and Section 6.c.iii with respect
to
such dividend or distribution shall then be made), except:
A-19
the
Record Date of such dividend or distribution shall be substituted as (x)
“the
date fixed for the determination of shareholders entitled to receive such
distribution” and “Record Date” within the meaning of Section 6.c.i, (y) “the
day upon which such subdivision, reclassification or split becomes effective” or
“the day upon which such combination or reclassification becomes
effective” (as applicable) within the meaning of Section 6.c.ii, and (z) as “the Record Date fixed for the determination of
shareholders entitled to receive such rights or warrants” and such “Record Date”
within the meaning of Section 6.c.iii; and (ii) any reduction or increase
in the
number of Common Shares resulting from such subdivision, split or combination
(as applicable) shall be disregarded in connection with such dividend
or distribution.
v.
If, prior to the conversion of all 11.0% Cumulative Convertible Preferred
Shares, the Company shall be a party to any transaction (including, without
limitation, a merger, consolidation, statutory share exchange, tender offer
for
all or substantially all of our Common Shares or sale of all or substantially
all of the Company’s assets), as a result of which Common Shares shall be
converted into the right to receive securities or other property (including
cash
or any combination thereof), each 11.0% Cumulative Convertible Preferred
Share,
if any share thereof remains outstanding and is convertible after the
consummation of the transaction, shall thereafter be convertible into the
kind
and amount of shares and other securities and property (including cash or
any
combination thereof) receivable upon the consummation of such transaction
by a
holder of that number of Common Shares or fraction thereof into which one
11.0%
Cumulative Convertible Preferred Share was convertible immediately prior
to such
transaction, assuming such 11.0% Cumulative Convertible Preferred Shareholder
failed to exercise any rights of election to convert (provided that if the
kind
and amount of stock or beneficial interest, securities and other property
so
receivable is not the same for each non-electing share, the kind and amount
so
receivable by each non-electing share shall be deemed to be the kind and
amount
received per share by a plurality of non-election shares). The
Company may not become a party to any such transaction unless the terms thereof
are consistent with the foregoing.
vi.
If, prior to the conversion of all 11.0% Cumulative Convertible Preferred
Shares, the Company makes cash distributions (other than distributions in
connection with the Company’s liquidation, dissolution or winding up,
distributions on the Cumulative Perpetual Convertible CRA Shares or other
Preferred Shares, ordinary course distributions or quarterly distributions
consisting exclusively of cash to all holders of Common Shares equal to or
less
than $0.15 per share, subject to adjustment for subdivisions, combinations,
reclassifications or splits of the Company’s Common Shares), the Conversion Rate
shall be adjusted so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the close
of
business on the date fixed for determination of the shareholders entitled
to
receive such distribution by a fraction:
(a)
the numerator of which shall be equal to the Current Market Price per Common
Share on the date fixed for such determination; and
(b)
the denominator of which shall be equal to the Current Market Price per Common
Share on such date fixed for determination less the amount per Common Share
of
such distribution,
A-20
such
adjustment to become effective immediately after the record date
fixed for the determination of shareholders entitled to receive such
distribution.
Notwithstanding
the foregoing, in cases where (A) the per share amount of such distribution
equals or exceeds the Current Market Price of the Common Shares, or (B) the
Current Market Price of the Common Shares exceeds the per share amount of
such
distribution by less than $1.00, in lieu of the adjustment set forth in this
Section ▇.▇.▇▇., holders will have the right to receive upon conversion,
in
addition to Common Shares, if any, such distribution such holders would have
received upon conversion of such holders’ 11.0% Cumulative Convertible Preferred
Shares if they had been converted immediately prior to the record
date.
vii.
No adjustment of the Conversion Rate is required to be made in any case until
cumulative adjustments amount to 1% or more of the Conversion Rate. Any
adjustments not so required to be made will be carried forward and taken
into
account in subsequent adjustments.
viii. In
addition to the foregoing adjustments, the Company is permitted to make such
reductions in the conversion price as the Company considers to be advisable
in
order that any event treated for federal income tax purposes as a dividend
of
stock or stock rights will not be taxable to the holders of Common
Shares.
ix.
For purposes of this Section 6.c, the following terms shall have the meanings
indicated:
(a) “Current
Market Price”
on any date means the average of the daily Closing Sale Prices per
Common Share
for the ten consecutive trading days immediately prior to such date; provided,
however, that if: (1) the “ex” date (as hereinafter defined) for any
event (other than the issuance or distribution requiring such computation
of
Current Market Price) that requires an adjustment to the Conversion Rate
pursuant to Section 6.c.i, Section 6.c.ii, Section 6.c.iii, or Section
6.c.iv
occurs during such ten consecutive trading days, the Closing Sale Price
for each
trading day prior to the “ex” date for such other event shall be adjusted by
multiplying such Closing Sale Price by the same fraction by which the Conversion
Rate is so required to be adjusted as a result of such other event; (2)
the “ex”
date for any event (other than the issuance or distribution requiring such
computation of Current Market Price) that requires an adjustment to the
Conversion Rate pursuant to Section 6.c.i, Section 6.c.ii, Section 6.c.iii,
or
Section 6.c.iv occurs on or after the “ex” date for the issuance or distribution
requiring such computation and prior to
A-21
the
day in question, the Closing Sale Price for each
trading day on and after the “ex” date for such other event shall be adjusted by
multiplying such Closing Sale Price by the reciprocal of the fraction by
which
the Conversion Rate is so required to be adjusted as a result of such other
event; and (3) the “ex” date for the issuance or distribution requiring such
computation is prior to the day in question, after taking into account any
adjustment required pursuant to clause (i) or (ii) of this proviso, the Closing
Sale Price for each trading day on or after such “ex” date shall be adjusted by
adding thereto the amount of any cash and the Fair Market Value (as determined
by the Board in a manner consistent with any determination of such value
for
purposes of Section 6.c.iv) of the evidences of indebtedness, shares of capital
stock or assets being distributed applicable to one Common Share as of the
close
of business on the day before such “ex” date. For purposes hereof,
the “ex” date is the date on or after which a Common Share is traded without a
previously declared issuance or distribution pursuant to the rules of a
securities exchange upon which the Common Shares are then listed and
traded.
Notwithstanding
the foregoing, whenever successive adjustments to the Conversion Rate are
called
for pursuant to this Section 6.c, such adjustments shall be made to the Current
Market Price as may be necessary or appropriate to effectuate the intent
of this
Section 6.c and to avoid unjust or inequitable results as determined in good
faith by the Board.
(b)
“Fair
Market
Value” means the amount which a willing buyer would pay a willing seller
in an arm’s length transaction (as determined by the Board, whose determination
shall be made in good faith and, absent manifest error, shall be final
and
binding on holders of the 11.0% Cumulative Convertible Preferred
Shares).
(c)
“Record
Date” means, with respect to any dividend, distribution or other
transaction or event in which the holders of Common Shares have the right to
receive any cash, securities or other property or in which the Common Shares
(or
other applicable security) is exchanged for or converted into any combination
of
cash, securities or other property, the date fixed for determination of
shareholders entitled to receive such cash, securities or other property
(whether such date is fixed by the Board or by statute, contract or
otherwise).
d.
Adjustment to
Conversion Rate Upon a Fundamental Change.
A-22
i. If and only to the extent a holder of 11.0% Cumulative Convertible Preferred Shares elects to convert its 11.0% Cumulative Convertible Preferred Shares pursuant to Section 6(a) in connection with a Fundamental Change, the Company shall increase the Conversion Rate applicable to the shares of 11.0% Cumulative Convertible Preferred Shares surrendered for conversion by a number of additional Common Shares (the “Additional Shares”), if any, as set forth in this Section 6(d). A conversion shall be deemed for the purposes of this Section 6 to be “in connection with” a Fundamental Change if the applicable Conversion Notice is received by the Company from and including the Effective Date of such Fundamental Change up to and including the Fundamental Change Conversion Date for that Fundamental Change. If a holder elects to convert 11.0% Cumulative Convertible Preferred Shares in connection with a Fundamental Change, but such Fundamental Change is not consummated, then such holder shall not be entitled to the increased Conversion Rate referred to above in connection with the conversion.
ii.
The number of Additional Shares, if any, shall be determined by reference
to the
table below, based on the Effective Date of such Fundamental Change and the
Share Price for such Fundamental Change. If an event occurs that requires
an
adjustment to the Conversion Rate as described in Section 6, each
applicable Share Price set forth in the first row of the table below shall
be
adjusted, concurrently with such adjustment in the Conversion Rate, multiplying
the Share Price in effect immediately before the adjustment by a fraction,
the
numerator of which is the Conversion Rate in effect immediately before the
adjustment, and the denominator of which is the adjusted Conversion Rate.
In
addition, but without duplication of the adjustment pursuant to the preceding
sentence, if an event occurs that requires an adjustment to the Conversion
Rate
as described in Section 6, each applicable number of Additional Shares set
forth in the table below shall be adjusted concurrently and in the same manner
in which the Conversion Rate is adjusted as described in
Section 6.
Number
of Additional
Shares
(per
$11.70 liquidation preference of 11.0% Cumulative Convertible Preferred
Shares)
Share
Price
|
Effective
Date
|
$10.27
|
$10.75
|
$12.50
|
$15.00
|
$17.50
|
$20.00
|
$25.00
|
|
1/25/2008
|
0.0509
|
0.0932
|
0.0639
|
0.0379
|
0.0217
|
0.0111
|
0.0000
|
|
1/23/2009
|
0.0509
|
0.0849
|
0.0563
|
0.0318
|
0.0173
|
0.0079
|
0.0000
|
|
1/23/2010
|
0.0509
|
0.0737
|
0.0459
|
0.0234
|
0.0109
|
0.0032
|
0.0000
|
|
1/23/2011
|
0.0509
|
0.0621
|
0.0340
|
0.0133
|
0.0031
|
0.0000
|
0.0000
|
|
1/23/2012
|
0.0509
|
0.0497
|
0.0192
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
|
1/23/2013
|
0.0509
|
0.0402
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
|
1/23/2014
|
0.0509
|
0.0404
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
|
1/23/2015
|
0.0509
|
0.0403
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
|
1/23/2016
|
0.0509
|
0.0391
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
|
1/23/2017
|
0.0509
|
0.0319
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
|
1/23/2018
|
0.0509
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
iii.
The exact applicable Share Price and the Effective Date of such Fundamental
Change may not be set forth in the table above, in which case:
A.
if the actual applicable Share Price is between two applicable Share Prices
listed in the table above, and/or the actual Effective Date of such Fundamental
Change is between two dates listed in the table above, the Company
shall
A-23
determine the number of additional
shares by linear interpolation between the numbers of additional shares set
forth for the two applicable prices, or for the two dates based on a 365-day
year, as applicable;
B.
if the actual applicable Share Price is greater than $25.00 per share (subject
to adjustment as provided below, the “Cap Price”), no
Additional Shares shall be issuable and the Conversion Rate shall not increase
in connection with a Fundamental Change; and
C.
if the actual applicable Share Price is less than $10.27 per share (subject
to
adjustment as provided below, the “Floor Price”), no
Additional Shares shall be issuable and the Conversion Rate shall not increase
in connection with a Fundamental Change.
iv.
In no event shall Additional Shares be issuable if, after giving effect thereto,
the Conversion Rate would exceed 1.1392 (the “Cap Conversion
Rate”). If an event occurs that requires an adjustment to the Conversion
Rate as described in Section 6, each of the Cap Price, the Floor Price and
the Cap Conversion Rate shall be adjusted concurrently and in the same manner
in
which the Conversion Rate is adjusted as described in
Section 6.
v.
The Company shall mail to holders of 11.0% Cumulative Convertible Preferred
Shares notice of, or publicly announce (with subsequent prompt notice by
mail),
the anticipated effective date of any proposed Fundamental Change at least
15 days before the anticipated Effective Date of such Fundamental Change.
In addition, no later than the third Business Day after the completion of
such
Fundamental Change, the Company shall publicly announce such
completion.
vi.
For purposes of this Section 6(d), the following terms shall have the following
meanings:
|
|
(a)
|
“Effective
Date of such
Fundamental Change” means, with respect to a Fundamental Change,
the date on which such Fundamental Change occurs or becomes effective.
|
|
|
(b)
|
“Fundamental
Change
Conversion Date” means, with respect to a Fundamental Change, the
date specified as such by the Company in the Fundamental Change
Notice
delivered pursuant to Section 3(h)(ii), which date shall be a Business
Day
and shall not be less than 20 days nor more than 35 days after
the date on
which the Company gives such notice.
|
|
|
(c)
|
“Share
Price”
means, with respect to a Fundamental Change, an amount determined
as
follows: (1) if the Fundamental Change is a transaction or series
of
related transactions and the consideration (excluding cash payments
for
fractional shares or pursuant to statutory
|
A-24
|
|
appraisal
rights) for Common Shares in the Fundamental Change consists solely
of
cash, then the Share Price will be the cash amount paid per Common
Share
in the transaction; (2) if the Fundamental Change is a sale,
transfer, lease, conveyance or other disposition of property and
assets
and the consideration paid for the Company’s property and assets (or for
the property and assets of the Company and its subsidiaries on
a
consolidated basis) consists solely of cash, then the Share Price
will be
the cash amount paid for the Company’s property and assets, expressed as
an amount per Common Share outstanding on the Effective Date of
such
Fundamental Change; and (3) in all other cases, the Share Price
will be
the average of the Closing Sale Price per Common Share for the
five
consecutive Trading Days immediately preceding the Effective Date.
|
e.
Conversion into
Common
Shares. Upon conversion of the 11.0% Cumulative Convertible
Preferred Shares in accordance with this Certificate of Designation and the
issuance of a certificate or certificates for the number of Common Shares
to
which the 11.0% Cumulative Convertible Preferred Shareholder shall be entitled
as set forth herein, such 11.0% Cumulative Convertible Preferred Shares shall
be
deemed automatically canceled and shall cease to be issued or
outstanding. The conversion of 11.0% Cumulative Convertible Preferred
Shares into Common Shares is hereby authorized and the Common Shares issued
upon
conversion shall be fully paid and nonassessable undivided beneficial interests
in the assets of the Company. The Company shall at all times reserve
and keep available out of its authorized but unissued Common Shares, solely
for
the purpose of effecting the conversion of the 11.0% Cumulative Convertible
Preferred Shares, such number of its Common Shares as shall from time to
time be
sufficient to effect the conversion of all then outstanding 11.0% Cumulative
Convertible Preferred Shares; and if at any time the number of authorized
but
unissued Common Shares shall not be sufficient to effect the conversion of
all
then outstanding 11.0% Cumulative Convertible Preferred Shares, the Company
and
the Board shall take such action as may be necessary to increase its authorized
but unissued Common Shares to such number of Common Shares as shall be
sufficient for such purposes.
7.
TRANSFER
RESTRICTIONS.
a.
Legend.
Any
11.0%
Cumulative Convertible Preferred Shares offered in a private offering pursuant
to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), may
be offered and sold only to “accredited investors” within the meaning of Rule
501 under the Securities Act (“Accredited
Investors”). Those shares shall be subject to restrictions on
transfer as set forth in the Trust Agreement (including this Certificate
of
Designation) and each such 11.0% Cumulative Convertible Preferred Share
certificate must contain a legend substantially to the following
effect:
A-25
THE 11.0% CUMULATIVE CONVERTIBLE PREFERRED SHARES REPRESENTED HEREBY
HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”),
OR ANY
STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS, AND
CENTERLINE HOLDING COMPANY (THE “ISSUER”)
HAS NOT BEEN
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
“INVESTMENT
COMPANY
ACT”). NEITHER SUCH 11.0% CUMULATIVE CONVERTIBLE PREFERRED
SHARES NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, RESOLD
OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION.
THE
HOLDER, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, RESELL OR OTHERWISE TRANSFER
THE 11.0% CUMULATIVE CONVERTIBLE PREFERRED SHARES REPRESENTED HEREBY, UNLESS
SUCH 11.0% CUMULATIVE CONVERTIBLE PREFERRED SHARES NO LONGER CONSTITUTE
“RESTRICTED SECURITIES” WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT,
ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS
BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO ONE OR MORE PERSONS,
EACH OF
WHICH IS AN “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501 UNDER THE SECURITIES
ACT) THAT IS ACQUIRING SUCH 11.0% CUMULATIVE CONVERTIBLE PREFERRED SHARES
FOR
ITS OWN ACCOUNT FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR OTHER
APPLICABLE SECURITIES LAWS OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE SUBJECT
TO ANY
REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF
SUCH
ACCREDITED INVESTOR BE AT ALL TIMES WITHIN ITS OR THEIR CONTROL.
TO
THE
FULLEST EXTENT PERMITTED BY LAW, ANY TRANSFER IN VIOLATION OF THE FOREGOING
WILL
BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO
TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTION TO
THE
CONTRARY TO THE ISSUER, THE TRANSFER AGENT OR ANY INTERMEDIARY.
Furthermore,
each 11.0% Cumulative Convertible Preferred Share certificate will contain
a
legend substantially to the following effect:
THE
ISSUER WILL FURNISH TO ANY SHAREHOLDER ON REQUEST AND WITHOUT CHARGE A FULL
STATEMENT OF (1) ANY RESTRICTIONS, LIMITATIONS, PREFERENCES OR REDEMPTION
PROVISIONS CONCERNING THE 11.0% CUMULATIVE CONVERTIBLE PREFERRED SHARES AND
(2)
THE DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND OTHER RIGHTS, VOTING
POWERS, RESTRICTIONS, LIMITATIONS AS TO DISTRIBUTIONS, AND OTHER QUALIFICATIONS
AND TERMS AND CONDITIONS OF REDEMPTION OF THE 11.0% CUMULATIVE CONVERTIBLE
PREFERRED SHARES, THE DIFFERENCES IN
A-26
THE RELATIVE RIGHTS AND PREFERENCES BETWEEN THE SHARES
OF EACH
SERIES OF SUCH CLASS TO THE EXTENT THEY HAVE BEEN SET, AND THE AUTHORITY
OF THE
BOARD OF TRUSTEES OF THE ISSUER TO SET THE RELATIVE RIGHTS AND PREFERENCES
OF
SUBSEQUENT SERIES OF 11.0% CUMULATIVE CONVERTIBLE
PREFERRED SHARES. 11.0% CUMULATIVE CONVERTIBLE PREFERRED SHARES WILL
BE ISSUED AND MAY BE TRANSFERRED ONLY IN WHOLE SHARES.
8.
CAPITALIZED
TERMS. Capitalized terms used herein and not otherwise defined
are used as defined in the Trust Agreement.
9.
SECTION
REFERENCES. Unless otherwise stated herein, references to
sections shall be deemed to be references to sections of this Certificate
of
Designation.
10.
GOVERNING
LAW. This Certificate of Designation shall be interpreted in
accordance with the terms of the State of Delaware (without regard to conflict
of laws principles), all rights and remedies being governed by such
laws.
11.
CERTIFICATES. Certificates
representing 11.0% Cumulative Convertible Preferred Shares shall include
a
statement that requires the Company to furnish to any Cumulative Convertible
Preferred Shareholder, upon request and without charge, a full statement
of (i)
any restrictions, limitations, preferences or redemption provisions concerning
the 11.0% Cumulative Convertible Preferred Shares and (ii) the designations
and
any preferences, conversion and other rights, voting powers, restrictions,
limitations as to distributions, and other qualifications and terms and
conditions of redemption of such 11.0% Cumulative Convertible Preferred Shares
and the authority of the Board to set the relative rights and preferences
of
subsequent series of 11.0% Cumulative Convertible Preferred
Shares. Notwithstanding any other provision of the Trust Agreement or
the Fifth Amended and Restated Bylaws of the Company (as amended, the “Company Bylaws”) to
the contrary, a certificate representing 11.0% Cumulative Convertible Preferred
Shares shall be validly issued upon the manual signature of any one or more
Managing Trustee. Such a certificate need not be countersigned and
registered by the Company’s transfer agent and/or registrar. The
Managing Trustees, acting individually or collectively, shall execute and
deliver certificates representing the 11.0% Cumulative Convertible Preferred
Shares substantially in the form attached hereto as Exhibit A and incorporated
herein by reference, together with such modifications thereto as such Managing
Trustee or Managing Trustees shall approve (notwithstanding any other provision
of the Trust Agreement or Company Bylaws but subject to the requirements
set
forth in this Certificate of Designation), such approval to be conclusively,
but
not exclusively, evidenced by the execution and delivery thereof by such
Managing Trustee or Managing Trustees. To the extent that this
Section 11 is inconsistent with the Company Bylaws, in accordance with Article
XIV of the Company Bylaws, the Company Bylaws, including Article VII of the
Company Bylaws, shall be deemed amended for the limited purposes set forth
in
this Section 11.
12.
SEVERABILITY
OF PROVISIONS. Each provision of this
Certificate of Designation shall be considered
severable and if for
any reason any provision or provisions herein are determined to be invalid,
unenforceable or illegal under any existing or future
law,
A-27
such invalidity,
unenforceability or illegality shall not impair the operation of or affect
those
portions of this Certificate of Designation which are valid, enforceable
and
legal.
A-28
ANNEX
TO
CERTIFICATE
OF
DESIGNATION
NOTICE
OF
CONVERSION
To: Centerline
Holding Company
Reference
is made to that certain Certificate of Designation of 11.0% Cumulative
Convertible Preferred Shares, Series A-1 (the “11.0%
Designation”). Capitalized terms used but not defined herein
have the meanings set forth in the 11.0% Designation. Pursuant to the
11.0% Designation, the undersigned, being a holder of 11.0% Cumulative
Convertible Preferred Shares (an “Exercising Holder”),
hereby elects to exercise its conversion rights as to a portion or portions
of
its 11.0% Cumulative Convertible Preferred Shares, all as specified opposite
its
signature below:
Dated:
|
EXERCISING
HOLDER
|
NUMBER
OF 11.0%
CUMULATIVE CONVERTIBLE PREFERRED SHARES, SERIES A-1 TO BE CONVERTED TO COMMON SHARES |
||||
|
Name
|
Signature
|
||||
|
|
A-29
EXHIBIT
B
REGISTRATION
RIGHTS
AGREEMENT
This
REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is entered into as of January 25, 2008, by and between Centerline Holding
Company, a statutory trust formed under the laws of the State of Delaware
(the
“Company”),
and Related Special Assets LLC, a Delaware limited liability company (the
“Holder”).
Recitals
WHEREAS,
pursuant to the terms of that certain securities purchase agreement, dated
as of
the date hereof, among the Company and the Holder (the “Securities
Purchase Agreement”), the Company has agreed to sell to the Holder and
the Holder has agreed to purchase from the Seller 11,216,628 11.0% Cumulative
Convertible Preferred Shares, Series A-1 of the Company (the “Convertible
Preferred Shares”); and
WHEREAS,
in order to induce the Holder to consummate the transactions contemplated
by the
Securities Purchase Agreement, the Company has agreed to grant to the Holder
the
registration rights set forth in this Agreement.
NOW,
THEREFORE, the parties hereto, in consideration of the foregoing, the mutual
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged,
hereby agree as follows:
Section
1. Definitions.
Capitalized
terms used, but not otherwise defined herein, shall have the meanings assigned
to such terms in the Securities Purchase Agreement. As used in this
Agreement, the following capitalized defined terms shall have the following
meanings:
“Agent”
means the principal placement agent on an agented placement of Registrable
Securities.
“Agreement”
has the meaning set forth in the Preamble.
“Business
Day” shall
mean
a day other than a Saturday, Sunday or other day on which banking institutions
in New York, New York are permitted or required by any applicable law to
close.
“Commission”
shall mean the Securities and Exchange Commission.
“Common
Shares” shall mean the common shares of beneficial interest of the
Company.
“Company”
shall have the meaning set forth in the Preamble and also shall include
the
Company’s successors.
B-1
“Conversion
Shares” shall mean the Common Shares issued or issuable, as applicable,
upon conversion of the Convertible Preferred Shares.
“Convertible
Preferred Shares” shall have the meaning set forth in the
Recitals.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended from
time
to time.
“Existing
Registration Rights” shall mean the registration rights contained in the
Registration Rights Agreement, dated as of November 17, 2003, by and among
CharterMac, APH Associates L.P., DLK Associates L.P, Marc Associates, L.P.,
Related General II, L.P., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, SJB Associates L.P., J. ▇▇▇▇▇▇▇
▇▇▇▇▇
and Fried Family 2001 Trust and the Registration Rights Agreement, dated
as of
August 15, 2006, by and among CharterMac, CM ARCap Investors LLC, ▇▇▇▇▇▇▇
▇.
▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
“Holdback
Period”
shall have the meaning set forth in Section 4(d).
“Holder”
shall have the meaning set forth in the Preamble, and shall include the
transferee of any such Person’s Registrable Securities acquiring rights in
accordance with Section 8(i) hereof whenever such Person owns of record
Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more Persons with respect
to the
same Registrable Securities, the Company may act upon the basis of the
instructions, notice or election received from the registered owner of
such
Registrable Securities.
“Independent
Trustees” shall have the same meaning as in the Second Amended and
Restated Trust Agreement of the Company dated as of November 17, 2003,
as
amended.
“Majority
Selling
Holders” means those Selling Holders whose Registrable Securities
included in such Registration Statement represent a majority of the Registrable
Securities of all Selling Holders included therein.
“NASD”
shall mean the National Association of Securities Dealers, Inc.
“Person”
shall mean an individual, partnership, corporation, limited liability company,
trust, estate, or unincorporated organization, or other entity, or a government
or agency or political subdivision thereof.
“Prospectus”
shall mean the prospectus included in a Registration Statement, including
any
preliminary prospectus, and any such prospectus as amended or supplemented
by
any prospectus supplement or free-writing prospectus with respect to the
terms
of the offering of any portion of the Registrable Securities covered by
a
Shelf
B-2
Registration
Statement, and by all other amendments and supplements to such prospectus,
including post-effective amendments, and in each case including all material
incorporated by reference therein.
“Registrable
Securities” shall mean (i) the Convertible Preferred Shares and
Conversion Shares; (ii) any Common Shares or other securities issued as (or
issuable upon the conversion or exercise of any warrant, right or other
security
which is issued as) a dividend or other distribution with respect to, or
in
exchange by the Company generally for, or in replacement by the Company
generally of, any Convertible Preferred Shares or Conversion Shares;
(iii) any securities issued pursuant to a stock split or a reclassification
of, or in substitution for, any Convertible Preferred Shares or Conversion
Shares; and (iv) any securities issued in exchange for the Convertible
Preferred Shares or Conversion Shares in any merger, combination or
reorganization of the Company; provided, however,
that
Registrable Securities shall not include any securities which have theretofore
been registered and sold pursuant to the Securities Act or which have been
sold
to the public pursuant to Rule 144 or any similar rules promulgated by
the
Commission pursuant to the Securities Act or are eligible for sale pursuant
to
Rule 144(k). For purposes of this Agreement, a Person will be deemed
to be a Holder of Registrable Securities whenever such Person has the
then-existing right to acquire such Registrable Securities (by conversion,
exchange, purchase or otherwise), whether or not such acquisition has actually
been effected and whether or not the Company or any other Person has the
right
to redeem the securities exchangeable for the Registrable Securities in
lieu of
issuing the Registrable Securities.
“Registration
Statement” or “Shelf
Registration Statement” shall mean a "shelf" registration statement of
the Company pursuant to the requirements of the Securities Act which covers
the
issuance or resale of the Registrable Securities on Form S-3 or such other form as the
Company is
eligible to use under Rule 415 promulgated under the Securities Act, or
any similar rule that may be adopted by the Commission, and all amendments
and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus, all exhibits thereto and all materials
incorporated by reference therein, and including any information deemed
to be a
part thereof as of the time of effectiveness pursuant to Rule 430A, 430B
or
430C.
“Rule
144”
and “Rule
145” shall mean Rule 144 and Rule 145 promulgated under the Securities
Act, and any successor rule or regulation under the Securities Act.
“Securities
Act” shall mean the Securities Act of 1933, as amended from time to time,
and any successor act.
“Securities
Purchase Agreement” shall have the meaning set forth in the
Recitals.
B-3
“Selling
Holders” means, with respect to a specified Registration Statement
pursuant to this Agreement, the Holders whose Registrable Securities are
included in such Registration Statement.
“Transfer”
means and includes the act of selling, giving, transferring, creating a
trust
(voting or otherwise), assigning or otherwise disposing of (other than
pledging,
hypothecating or otherwise transferring as security or any transfer upon
any
merger or consolidation) (and correlative words shall have correlative
meanings); provided, however,
that any
transfer or other disposition upon foreclosure or other exercise of remedies
of
a secured creditor after an event of default under or with respect to a
pledge,
hypothecation or other transfer as security shall constitute a
Transfer.
“Underwriters’Representative”
means the managing underwriter, or, in the case of a co-managed underwriting,
the managing underwriter designated as the Underwriters’ Representative by the
co-managers; provided, that the managing underwriter shall be subject to
the
approval of not less than a majority of the Independent Trustees.
“Underwritten
Offering” shall have the meaning set forth in Section 4(d).
Section
2.
(a)
Shelf
Registration Under the
Securities Act. Not later than ninety (90) days after the date
of this Agreement, the Company shall file a Shelf Registration Statement
providing for the sale by the Holders of the Registrable Securities. If
the
Company is (i) a "well-known seasoned issuer", the Shelf Registration Statement
shall be immediately effective pursuant to Rule 462 or (ii) not a "well-known
seasoned issuer," the Company will use its commercially reasonable efforts
to
cause such Shelf Registration Statement to be declared effective by the
Commission as soon as practicable. The Company agrees to use its
commercially reasonable efforts to keep the Shelf Registration Statement
continuously effective with respect to such Registrable Securities for
a period
expiring on the date on which all of the Registrable Securities covered
by the
Shelf Registration Statement have been sold pursuant to the Shelf Registration
Statement or the Holders of such Registrable Securities are eligible to
sell
such Registrable Securities pursuant to Rule 144(k) promulgated under the
Securities Act and further agrees during such period to supplement or amend
the
Shelf Registration Statement, if and as required by the rules, regulations
or
instructions applicable to the registration form used by the Company for
such
Shelf Registration Statement or by the Securities Act or by any other rules
and
regulations thereunder for a shelf registration to the extent necessary
to
ensure that it is available for resales by the Holders of the Registrable
Securities. Notwithstanding the foregoing, (i) the Company shall not be
required
to file a Registration Statement at any time prior to the earlier of (A)
the
completion of the Rights Offering and (B) 270 days from the date hereof;
and
(ii) the Company shall not be required to file a Registration Statement
or to
keep a Registration Statement effective and shall be permitted to suspend
the
use of any then effective Registration Statement if the Chief Executive
Officer
or the Chief Financial Officer of the Company certifies to the
B-4
Holders
in writing of the existence of circumstances relating to a material pending
development, including, but not limited to a pending or contemplated material
acquisition or merger or other material transaction or event, which would
require additional disclosure by the Company in the Registration Statement
of
previously non-public material information which the Company in its good
faith
judgment has a bona fide business purpose for keeping confidential and
the
nondisclosure of which in the Registration Statement might cause the
Registration Statement to fail to comply with applicable disclosure
requirements; provided, however,
that the
Company may not delay, suspend or withdraw a Registration Statement for
such
reason for more than sixty (60) days or more often than twice during any
period
of twelve (12) consecutive months. The Company is not required to file
a
separate Registration Statement, but may file one Registration Statement
covering the Registrable Securities held by more than one Holder.
(b)
Incidental
Registration. If the Company proposes to file a registration
statement under the Securities Act (other than a registration statement
on a
Form S-4 or S-8 or filed in connection with an exchange offer or an offering
of
securities solely to the Company’s existing shareholders or pursuant to Rule 415
under the Securities Act (or any substitute form or rule, respectively,
that may
be adopted by the Commission)) in an underwritten offering on any form
that
would also permit the registration of the Registrable Securities, and such
filing is to be solely on behalf of selling holders of its securities
for the general registration of Common Shares to be sold for cash, subject
to
the Existing Registration Rights, the Company shall promptly give each
Holder
written notice of such registration setting forth the date on which the
Company
proposes to file such registration statement and advising each Holder of
its
right to have Registrable Securities included in such
registration. Upon the written request of any Holder received by the
Company within ten (10) Business Days following the date of the Company’s
notice, the Company shall use its commercially reasonable efforts to cause
to be
registered under the Securities Act all of the Registrable Securities that
each
such Holder has requested to be registered. The Company shall have
the absolute right to withdraw or cease to prepare or file any registration
statement for any offering referred to in this Section 2(b) without any
obligation or liability to any Holder. The Company shall not be
required to include any Holder’s Registrable Securities in any underwriting
pursuant to this Section 2(b) unless such holder accepts the terms of the
underwriting agreement as agreed to between the Company and the
underwriters. If, in the opinion of the Underwriters’ Representative,
the amount of Registrable Securities requested to be included in such
registration would materially adversely affect such offering, or the timing
or
distribution thereof, then the Company will include in such registration,
to the
extent the number of Registrable Securities requested to be included in
such
registration can be sold without having the adverse effect referred to
above (in
the opinion of the Underwriters’ Representative), the number of Registrable
Securities requested to be included in such registration by the Holders
pursuant
to this Section 2 and all securities offered for the account of other
Persons, such amount to be allocated pro rata among all requesting
Holders and other Persons on the basis of the relative number
B-5
of
Registrable Securities and securities requested to be registered by each
such
Holder and other Person.
Section
3.
Registration
Procedures.
(a)
Obligations
of the
Company. In connection with the obligations of the Company with respect
to the Registration Statement required to be filed pursuant to Section
2 hereof,
the Company shall, to the extent applicable, use its commercially reasonable
efforts to:
(i) Prepare
and file with the Commission within the time period for such filing set
forth in
Section 2 hereof, a Shelf Registration Statement with respect to such
Registrable Securities (which Registration Statement shall be available
for the
Selling Holders' intended method or methods of distribution and shall comply
in
all material respects with the requirements of the applicable form and
include
all financial statements required by the Commission to be filed therewith)
and,
if not effective on filing, use commercially reasonable efforts to cause
such
Registration Statement to become effective.
(ii) Notify
each Selling Holder when the Registration Statement and any post-effective
amendments and supplements thereto are declared effective.
(iii) Notify
each Selling Holder of the receipt of any comments from the Commission
with
respect to the Shelf Registration Statement and, subject to Section 2,
respond
to such comments and prepare and file with the Commission, if necessary,
such
amendments and supplements to such Registration Statement and the Prospectus
used in connection with such Registration Statement or any document incorporated
therein by reference or file any other required document as may be necessary
to
comply with the provisions of the Securities Act and rules thereunder,
including
the filing of a supplemental Prospectus pursuant to Securities Act Rule
424 or
any free-writing prospectus pursuant to Rule 433, with respect to the
disposition of all securities covered by such Registration Statement and
the
instructions applicable to the registration form used by the Company. In
the
event that any Registrable Securities included in a Registration Statement
subject to, or required by, this Agreement remain unsold at the end of
the
period during which the Company is obligated to maintain the effectiveness
of
such Registration Statement, the Company may file a post-effective amendment
to
the Registration Statement for the purpose of removing such securities
from
registered status.
(iv) Furnish
to each Selling Holder of Registrable Securities, without charge, such
numbers
of copies of the Registration Statement, any amendment thereto, the Prospectus,
including each preliminary Prospectus and any amendments or supplements
thereto,
in each case in conformity with the requirements of the Securities Act
and the
rules thereunder, and such other related
B-6
documents
as any such Selling Holder may reasonably request in order to facilitate
the
disposition of Registrable Securities owned by such Selling Holder.
(v) Register
and qualify the Registrable Securities covered by such Registration Statement
under such other securities or blue sky laws of such states or jurisdictions
in
the United States as shall be reasonably requested by any Selling Holder
and to
keep such qualification effective during the period such Registration Statement
is effective and obtain the withdrawal of any order suspending the effectiveness
of a Registration Statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of the offer and transfer
of any
of the Registrable Securities in any jurisdiction, at the earliest possible
moment; provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (i) qualify to do business or register
as
a broker or dealer in any such jurisdiction where it would not otherwise
be
required to qualify or register but for this Section 3(a)(v), (ii) subject
itself to taxation in any such jurisdiction, or (iii) to file a general
consent
to service of process in any such states or jurisdictions.
(vi) In
the
event of any underwritten or agented offering, enter into and perform the
Company’s obligations under an underwriting or agency agreement (including
indemnification and contribution obligations of underwriters or agents
and
representations and warranties by the Company to the underwriters), in
usual and
customary form, with the managing underwriter or underwriters of or agents
for
such offering and use its commercially reasonable efforts to obtain executed
lock-up agreements from the officers and directors of the Company, if requested
by the underwriters. The Company shall also reasonably cooperate with the
Majority Selling Holders and the Underwriters’ Representative or Agent for such
offering in the marketing of the Registrable Shares, including making available
the Company’s officers, accountants, counsel, premises, books and records for
such purpose, but the Company shall not be required to incur any material
out-of-pocket expense pursuant to this sentence and shall not be required
to
conduct a road-show in connection therewith.
(vii) Notify
each Selling Holder of any stop order suspending the effectiveness of a
Registration Statement issued or for the issuance of which proceedings
have been
instituted, or, to the extent the Company has actual knowledge thereof,
threatened to be issued by the Commission in connection therewith and take
all
commercially reasonable actions required to prevent the entry of such stop
order
or to remove it if entered.
(viii) Notify
each Selling Holder of the happening of any transaction or event during
the
period a Registration Statement is effective as a result of which the
Registration Statement or the related Prospectus contains any untrue
statement of
a
material fact or omits to state any material fact required to be stated
therein
or
B-7
necessary
to make the statements therein, in light of the circumstances under which
they
were made (in the case of any Prospectus), not misleading.
(ix) Make
generally available to the Company's security holders copies of an earnings
statement satisfying the provisions of Section 11(a) of the Securities
Act no
later than ninety (90) days following the end of the 12-month period beginning
with the first month of the Company's first fiscal quarter commencing after
the
effective date of the Registration Statement filed pursuant to this
Agreement.
(x) Make
available for inspection by any Selling Holder, any underwriter participating
in
such offering and the representatives of such Selling Holder (but not more
than
one firm of counsel to such Selling Holders), all financial and other
information as shall be reasonably requested by them, and provide the Selling
Holders, any underwriter participating in such offering and the representatives
of such Selling Holders and Underwriters’ Representative the opportunity to
discuss the business affairs of the Company with its principal executives
and
independent public accountants who have certified the audited financial
statements included in such Registration Statement, in each case all as
reasonably necessary to enable them to exercise their due diligence
responsibility under the Securities Act; provided, however, that information
that the Company determines, in good faith, to be confidential and which
the
Company advises such Person in writing is confidential shall not be disclosed
unless such Person signs a confidentiality agreement reasonably satisfactory
to
the Company, or the related Selling Holder of Registrable Securities agrees
to
be responsible for such Person's breach of confidentiality on terms reasonably
satisfactory to the Company.
(xi) In
the
event of any underwritten or agented offering, obtain a so-called “comfort
letter” from the Company’s independent public accountants, and legal opinions of
counsel to the Company addressed to the underwriter participating in such
offering, in customary form and covering such matters of the type customarily
covered by such letters, and in a form that shall be reasonably satisfactory
to
the Underwriters’ Representative. Delivery of any such opinion or
comfort letter shall be subject to the recipient furnishing such written
representations or acknowledgements as are required or customarily provided
by
selling shareholders who receive such comfort letters or opinions.
(xii) Cause
the
Company’s officers, employees, accountants and counsel, as applicable, to
participate in, and to otherwise facilitate and cooperate with the preparation
of a Prospectus and to participate in drafting sessions and due diligence
sessions, as applicable.
(xiii) 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.
B-8
(xiv) Cause
the
Registrable Securities covered by such Registration Statement if similar
securities of the Company are then listed on a securities exchange or included
for quotation in a recognized trading market, to be so listed or included
for so
long as such similar securities of the Company are so listed or
included.
(xv) Provide
a
CUSIP number for the Registrable Securities if not the Company Common Shares
prior to the effective date of the first Registration Statement including
Registrable Securities.
(xvi) Promptly
as practicable file a new
Registration Statement and use commercially reasonable efforts to cause
such
Registration Statement to be declared effective if the Company’s previously
filed Registration Statement is no longer effective or the Company is ineligible
to use the filed Registration Statement (except solely due to the unavailability
of audited financial statements at the end of the Company’s fiscal year) to
permit the Holders to resell the Registrable Securities and the Company
is still
obligated to maintain the effectiveness of the Registration
Statement.
(xvii) Take
such
other actions as are reasonably required in order to expedite or facilitate
the
disposition of Registrable Securities included in each such Registration
Statement.
(b)
Holders’
Obligations. It
shall be a condition precedent to the obligations of the
Company to take any action pursuant to Sections 2 and 3 hereof with respect
to
the Registrable Securities of any Selling Holder of Registrable Securities
that
such Selling Holder shall furnish to the Company such information regarding
such
Selling Holder, the number of the Registrable Securities owned by it, and
the
intended method of disposition of such Registrable Securities as shall
be
required to effect the registration of such Selling Holder's Registrable
Securities, and to cooperate with the Company in preparing such Registration
Statement.
Section
4. Agreements
of Selling
Holder. In connection with any Registration Statement pursuant to Section
2 hereof, each Selling Holder agrees, as applicable:
(a)
to
execute the underwriting agreement, if any, agreed to by the Majority Selling
Holders or the Company, as the case may be;
(b)
that
it
will not offer or sell its Registrable Securities under the Registration
Statement until it has received copies of the supplemented or
amended Prospectus
contemplated by Section 3(a)(iii) hereof and receives notice that any
post-effective amendment (if required) has become effective;
(c)
that,
upon receipt of any notice from the Company of the happening of any transaction
or occurrence of any event of the kind specified in Sections
B-9
2,
3(a)(iii) or 3(a)(viii), such Holder will forthwith discontinue disposition
of
Registrable Securities pursuant to a Registration Statement until the Holder
receives copies of the supplemented or amended Prospectus contemplated
by
Section 3(a)(iii) hereof and receives notice that any post-effective amendment
(if required) has become effective or until it is advised in writing by
the
Company that the use of the applicable Prospectus and Registration Statement
may
be resumed, and, if so directed by the Company, the Holder will deliver
to the
Company (at the expense of the Company) all copies in its possession, other
than
permanent file copies then in such Holder's possession, of the Registration
Statement and Prospectus covering such Registrable Securities current
immediately preceding the time of receipt of such notice;
and
(d)
that
upon
the receipt of notice from the Company, as requested by the managing underwriter
or underwriters of a public offering of the Company’s Common Shares, or other
securities convertible into, or exercisable or exchangeable for, the Company’s
Common Shares, that is underwritten on a firm commitment basis for the
account
of the Company (an “Underwritten
Offering”), the Holders shall not effect any public or private sale or
distribution, including sales pursuant to Rule 144 of the Securities Act
of any
of the Company’s Common Shares, or any securities convertible into or
exchangeable or exercisable for such securities, including, but not limited
to,
the Convertible Preferred Shares, during the period (the “Holdback
Period”) beginning fourteen (14) days prior to, and ending ninety (90)
days after, the effective date of the Registration Statement relating to
such
Underwritten Offering; provided, however, that the aggregate number of
days
during which one or more Holdback Periods are in effect shall not exceed
one
hundred twenty (120) days during any period of twelve (12) consecutive
months.
Section
5.
Expenses of
Registration. The Company shall bear and pay all expenses incurred in
connection with any registration, filing, or qualification of Registrable
Securities with respect to the Registration Statement pursuant to Section
2,
including all registration, exchange listing, accounting, filing and NASD
fees,
all fees and expenses of complying with securities or blue sky laws, all
word
processing, duplicating and printing expenses, messenger and delivery expenses,
the reasonable fees and disbursements of counsel for the Company, and of
the
Company’s independent public accountants, including the expenses of “comfort
letters” required by or incident to such performance and compliance and
reasonable fees and disbursements of one firm of counsel for the Holders
(selected by the Selling Holders who constitute Majority Selling
Holders). The Holders shall be responsible for any underwriting
discounts and commissions and taxes of any kind (including, without limitation,
transfer taxes) relating to any disposition, sale or transfer of Registrable
Securities.
Section
6.
Indemnification;
Contribution.
(a) Indemnification
by the
Company. If any Registrable Securities are included in a Registration
Statement under this Agreement:
B-10
(i) To
the
extent permitted by applicable law, the Company shall indemnify and hold
harmless each Selling Holder, each Person, if any, who controls such Selling
Holder within the meaning of the Securities Act, and each officer, director,
trustee, partner, member, and employee of such Selling Holder and such
controlling Person, against any and all losses, claims, damages, liabilities
and
expenses (joint or several), including reasonable attorneys’ fees and
disbursements and expenses of investigation, incurred by such party arising
out
of or based upon any of the following statements, omissions or violations
(collectively, a “Violation”):
(A) Any
untrue statement or alleged untrue statement of a material fact contained
in
such Registration Statement, including any preliminary prospectus or final
prospectus contained therein, or any amendments or supplements thereto
or any
document incorporated by reference therein;
(B) Any
omission or alleged omission to state therein a material fact required
to be
stated therein, or necessary to make the statements therein (in light of
the
circumstances under which they were made in the case of any prospectus)
not
misleading; or
(C) Any
violation or alleged violation by the Company of the federal securities
laws,
any applicable state securities law or any rule or regulation promulgated
under
the Securities Act, the Exchange Act or any applicable state securities
law in connection with the Registrable Securities to this
Agreement;
provided,
however,
that the
indemnification required by this Section 6(a) shall not applyto
amounts paid in settlement of any such loss, claim, damage, liability or
expense
if such
settlement
is effected without the consent of the Company, which consent shall not
be
unreasonably withheld, nor shall the Company be liable in any such case
for any
such
loss,
claim, damage, liability or expense to the extent that it arises out of
or is
based upon a
Violation made in reliance upon and in conformity with written information
furnished to the Company by a Holder, underwriter or the indemnified party
expressly for use in connection with such registration. The Company shall
also
indemnify underwriters participating in the distribution of the Registrable
Securities, their officers, directors, agents and employees and each Person,
if
any, who controls such Persons (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) to the same extent as
provided
above with respect to the indemnification of the Selling Holders.
(b) Indemnification
by
Holder. If any of a Selling Holder’s Registrable Securities are included
in a Registration Statement under this Agreement, to the extent permitted
by
applicable law, such selling Holder shall indemnify and hold harmless the
Company, each of its trustees, officers, employees and agents, each Person,
if
any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section
B-11
20
of the
Exchange Act, any other Selling Holder, any controlling Person of any such
other
selling Holder and each officer, director, partner, and employee of such
other
Selling Holder and such controlling Person, against any and all losses,
claims,
damages, liabilities and expenses (joint and several), including reasonable
attorneys’ fees and disbursements and expenses of investigation, incurred by
such party arise out of or are based upon any untrue statement or alleged
untrue
statement of a material fact contained in the applicable Registration Statement,
including any preliminary prospectus or final prospectus contained therein,
or
any amendments or supplements thereto or any document incorporated by reference
therein or any omission or alleged omission to state therein a material
fact
required to be stated therein, or necessary to make the statements therein
(in
light of the circumstances under which they were made in the case of any
prospectus) not misleading or any violation or alleged violation by any
Holder
or underwriter of the federal securities laws, any applicable state securities
law or any rule or regulation promulgated under the Securities Act, the
Exchange
Act or any applicable state securities law, but only to the extent, that
such
untrue statement or omission had been contained in any information furnished
by
such Selling Holder to the Company expressly for use in connection with
such
registration; provided, however,
that (x) the
indemnification required by this Section 6(b) shall not apply to amounts
paid in
settlement of any such loss, claim, damage, liability or expense if settlement
is effected without the consent of the relevant Selling Holder of Registrable
Securities, which consent shall not be unreasonably withheld, and (y) in
no
event shall the amount of any indemnity under this Section 6(b) exceed
the gross
proceeds from the applicable offering received by such Selling Holder.
In no
event shall a Holder be jointly liable with any other Holder as a result
of its
indemnification obligations.
(c)
Conduct
of Indemnification
Proceedings. Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing for which such indemnified
party
may make a claim under this Section 6, such indemnified party shall deliver
to
the indemnifying party a written notice of the commencement thereof and
the
indemnifying party shall have the right to participate in, and, to the
extent
the indemnifying party so desires, jointly with any other indemnifying
party
similarly noticed, to assume the defense thereof with counsel retained
by the
indemnifying party (in which case the indemnifying party shall not thereafter
be
responsible for the fees and expenses of any separate counsel retained
by the
indemnified party or parties); provided, however,
that such
counsel shall be reasonably satisfactory to the indemnified party. The
failure
to deliver written notice to the indemnifying party within a reasonable
time following the commencement of any such action, if not otherwise
known by the indemnifying party, shall relieve such indemnifying party
of any
liability to the indemnified party under this Section 6, to the extent
of any
material prejudice or
forfeiture
of substantial rights or defenses resulting therefrom but shall not relieve
the
indemnifying party of any liability that it may have to any indemnified
party
otherwise than pursuant to this Section 6. Any fees and expenses incurred
by the
indemnified party (including any fees and expenses incurred in connection
with
investigating or preparing
B-12
to
defend
such action or proceeding) shall be paid to the indemnified party, as incurred,
within thirty (30) days of written notice thereof to the indemnifying party
so
long as such indemnified party shall have provided the indemnifying party
with a
written undertaking to reimburse the indemnifying party for all amounts
so
advanced if it is ultimately determined that the indemnified party is not
entitled to indemnification hereunder. Any such indemnified party shall
have the
right to employ separate counsel in any such action, claim or proceeding
and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be the expenses of such indemnified party unless (i) the indemnifying
party has agreed to pay such fees and expenses, (ii) the indemnifying party
shall have failed to assume the defense of such action, claim or proceeding
in a
timely manner or (iii) the named parties to any such action, claim or proceeding
(including any impleaded parties) include both such indemnified party and
the
indemnifying party, and such indemnified party shall have been advised
by
counsel that there may be one or more legal defenses available to it which
are
different from or in addition to those available to the indemnifying party
(in
which case, if such indemnified party notifies the indemnifying party in
writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense
of
such action, claim or proceeding on behalf of such indemnified party, it
being
understood, however, that the indemnifying party shall not, in connection
with
any one such action, claim or proceeding or separate but substantially
similar
or related actions, claims or proceedings in the same jurisdiction arising
out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one additional firm of attorneys (together
with
appropriate local counsel) at any time for all such indemnified parties).
No
indemnifying party shall be liable to an indemnified party for any settlement
of
any action, proceeding or claim without the written consent of the indemnifying
party, which consent shall not be unreasonably withheld.
(d)
Contribution.
If the
indemnification required by this Section 6 from the indemnifying party
is
unavailable to an indemnified party hereunder in respect of any losses,
claims,
damages, liabilities or expenses referred to in this Section 6:
(i)
The
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result
of such losses, claims, damages, liabilities or expenses in such proportion
as
is appropriate to reflect the relative fault of the indemnifying party
and
indemnified parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant
equitable considerations. The relative fault of such indemnifying party
and
indemnified parties shall be determined by reference to, among other things,
whether any action
has been committed by, or relates to information supplied by, such indemnifying
party or indemnified parties, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action.
The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include,
B-13
subject
to the limitations set forth in Section 6(a) and Section 6(b), any legal
or
other fees or expenses reasonably incurred by such party in connection
with any
investigation or proceeding.
(iii)
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) 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 Section 6(d)(i). 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)
Full
Indemnification. If indemnification is available under this Section 6,
the indemnifying parties shall indemnify each indemnified party to the
full
extent provided in this Section 6 without regard to the relative fault
of such
indemnifying party or indemnified party or any other equitable consideration
referred to in Section 6(d)(i) hereof.
(f)
Survival. The
obligations of the Company and the Selling Holders of Registrable Securities
under this Section 6 shall survive the completion of any offering of Registrable
Securities pursuant to a Registration Statement under this Agreement, and
otherwise.
Section
7.
Covenants of
the
Company. The Company hereby agrees and covenants that it shall
file as and when applicable, on a timely basis, all reports required to
be filed
by it under the Securities Act and the Exchange Act. If the Company
is not required to file reports pursuant to the Exchange Act, upon the
request
of any Holder of Registrable Securities, the Company shall make publicly
available the information specified in subparagraph (c)(2) of Rule
144. The Company shall take such further action as may be reasonably
required from time to time and as may be within the reasonable control
of the
Company, to enable the Holders to Transfer Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 or any similar rule or regulation hereafter adopted
by the
Commission.
In
connection with any sale, transfer or other disposition by a Holder of
any
Registrable Securities pursuant to Rule 144, the Company shall cooperate
with
such Holder to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any Securities
Act legend, and enable certificates for such transferred securities to
be for
such number of shares and registeredin
such
names as the Holder may reasonably request at least two Business Days prior
to
any sale of Registrable Securities.
Section
8. Miscellaneous.
B-14
(a)
Notices. All
notices and other communications given or made pursuant hereto shall be
in
writing and delivered by hand or sent by registered or certified mail (postage
prepaid, return receipt requested) or by nationally recognized overnight
air
courier service and shall be deemed to have been duly given or made as
of the
date delivered if delivered personally, or if mailed, on the third Business
Day
after mailing (on the first Business Day after mailing in the case of a
nationally recognized overnight air courier service) to the parties at
the
following addresses:
if
to the
Company, to:
Centerline
Holding Company
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Attention: General Counsel
with
a
copy to:
Paul,
Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Esq.
and
if to
the Holder, to:
Related
Special Assets,
LLC
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇
with
a copy to:
▇▇▇▇
▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Esq.
Any
party
may by notice given in accordance with this Section 8(a) to the other
parties designate another address or Person for receipt of notices
hereunder.
(b)
Amendments
and
Waivers. This Agreement may be modified, amended or supplemented only by
an instrument in writing signed by the Company and Holders holding a majority
of
the Registrable Securities; provided that consent to any modification,
amendment
or supplement by the Company shall require approval of not less than a
majority
of the Independent Trustees.
B-15
(c)
Waiver
of Compliance;
Consents. Except as otherwise provided in this Agreement, any
failure of any of the parties to comply with any obligation, covenant,
agreement
or condition herein may be waived by the party or parties entitled to the
benefits thereof only by a written instrument signed by the party granting
such
waiver (which, in the case of a waiver by the Company, shall require the
approval of not less than a majority of the Independent Trustees and in
the case
of the Holders, Holders holding a majority of the Registrable Securities),
but
such a waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto,
such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 8(c).
(d)
Governing
Law. This Agreement shall be governed by the laws of the State
of New York without regard to the conflict of laws principles
thereof.
(e)
Severability. The
invalidity or unenforceability of any provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability
of the
remainder of this Agreement in such jurisdiction or the validity, legality
or
enforceability of this Agreement, including any such provision, in any
other
jurisdiction, it being intended that all rights and obligations of the
parties
hereunder shall be enforceable to the fullest extent permitted by
law. Upon such determination that any provision is invalid, illegal
or incapable of being enforced, the parties hereto will negotiate in good
faith
to modify this Agreement so as to effect the original intent of the parties
as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby and thereby are fulfilled to the extent
possible.
(f) Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and
the same
instrument.
(g)
Section
Headings. The section headings contained in this Agreement are
solely for the purpose of reference, are not part of the agreement of the
parties and shall not in any way affect the meaning or interpretation of
this
Agreement. All references in this Agreement to Sections are to
sections of this Agreement, unless otherwise indicated.
(h)
Entire
Agreement. This Agreement, together with the Securities
Purchase Agreement and the Certificate of Designations for the Convertible
Preferred Shares,
embodies the entire agreement and understanding of the parties hereto in
respect
of the transactions contemplated by this Agreement. There are no
restrictions, promises, inducements, representations, warranties, covenants
or
undertakings, other than those expressly set forth or referred to herein
or
therein. This Agreement and the Securities Purchase Agreement and the
Certificate of Designations for the Convertible Preferred
B-16
Shares
supersede all prior written or oral agreements and understandings between
the
parties with respect to the transactions.
(i) Successors,
Assigns and
Transferees.
(i)
Except
as
expressly provided in this Section 8(i), the rights of the parties hereto
cannot
be assigned and any purported assignment or Transfer to the contrary shall
be
void ab initio. So long as the terms of this Section 8(i) are
followed, any Holder may assign any of its rights under this Agreement,
without
the consent of the Company, to any Person to whom such Holder Transfers
any
Registrable Securities or any rights to acquire Registrable Securities
so long
as such Transfer is not made pursuant to an effective Registration Statement
or
pursuant to Rule 144 or Rule 145 (or any successor provisions) under the
Securities Act or in any other manner or to any Person the effect or
consequences of which is to cause the Transferred securities to be freely
transferable without regard to the volume and manner of sale limitations
set
forth in Rule 144 (or any successor provision) in the hands of the transfer
of
the date of such Transfer.
(ii)
Notwithstanding
Section 8(i)(i), no Holder may assign any of its rights under this Agreement
to
any Person to whom such Holder Transfers any Registrable Securities if
the
Transfer of such Registrable Securities requires registration under the
Securities Act.
(iii)
No
Person
may be assigned any rights under this Agreement unless the Company is given
written notice by the assigning party stating the name and address of the
assignee, identifying the securities of the Company as to which the rights
in
question are being assigned, and providing a detailed description of the
nature
and extent of the rights that are being assigned; provided, however,
that no such
assignment shall be effective until (x) the Company receives the written
notice
pursuant to this Section 8(i)(iii) and (y) the assignee agrees in writing
to be
bound by and subject to the terms and conditions of this Agreement, including,
without limitation, the provisions of this Section 8(i).
(j)
Interpretation.
(i)
The
parties hereto have participated jointly in the negotiation and drafting
of this
Agreement. If any ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties
and no presumptions or burden of proof will arise favoring or disfavoring
any
party by virtue of authorship of any provisions of this Agreement.
(ii)
All
pronouns and any variations thereof refer to the masculine, feminine or
neuter,
singular or plural, as the context may require.
B-17
(iii)
The
words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.”
(k)
Further
Assurances. Each of the parties shall use reasonable efforts
to execute and deliver to any other party such additional documents and
take
such other action, as any other party may reasonably request to carry out
the
intent of this Agreement and the transactions contemplated hereby.
(l) Specific
Performance. The parties hereto acknowledge that there would
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition
to any
other remedy to which it may be entitled at law or in equity, shall be
entitled
to compel specific performance of the obligations of any other party under
this
Agreement in accordance with the terms and conditions of this Agreement
in any
court of the United States or any State thereof having
jurisdiction.
[SIGNATURE
PAGES FOLLOW]
B-18
IN
WITNESS WHEREOF, the parties have executed this Agreement, or caused this
Agreement to be duly executed on its behalf, as of the date first written
above.
|
CENTERLINE
HOLDING COMPANY
By:
________________________
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
President and Chief Executive
Officer
|
|
RELATED
SPECIAL ASSETS, LLC
By:
The Related Realty Group, Inc.,
its manager
By:
______________________
Name:
▇▇▇▇ ▇. ▇▇▇▇
Title: President |
B-19
EXHIBIT
C
Form
of
Legal Opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A.
C-1
EXHIBIT
D
Form
of
Legal Opinion of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
D-1
EXHIBIT
E
Instrument
of Accession
Reference
is made to the Securities
Purchase Agreement (the “Purchase Agreement”),
dated as of January 25, 2008, between Centerline Holding Company, a statutory
trust created under the laws of the state of Delaware, and Related Special
Assets LLC, a Delaware limited liability company. Capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed
to
them in the Purchase Agreement.
The
undersigned,_______________________, as a condition precedent to becoming the
owner or holder of record of _____________(_________) Convertible Preferred
Shares hereby agrees to become a Purchaser party to and to be bound by all
of
the obligations of the Purchaser under the Purchase Agreement (other than with
respect to Section 2.1 thereof), and shall be the recipient of all the rights
of
the Purchaser under the Purchase Agreement (other than with respect to Sections
7.1, 9.1 and 9.3 thereof). The undersigned hereby makes to the
Company (as of the date written below) the representations and warranties of
the
Purchaser contained in Article VI of the Purchase Agreement. The
Company hereby makes (as of the date of the Purchase Agreement) the
representations and warranties of the Company contained in Article V of the
Purchase Agreement, and the Company hereby agrees that the undersigned shall
have all of the rights of the Purchaser under the Purchase Agreement (other
than
any rights provided to the Purchaser under Sections 2.1, 7.1, 9.1 and 9.3
thereof). This Instrument of Accession shall take effect and shall
become an integral part of the Purchase Agreement immediately upon execution
and
delivery to the Company of this Instrument of Accession.
The
address for notification to the
undersigned for purposes of Section 9.8 of the Purchase Agreement is as
follows:
_______________
Telephone: _______________
Telecopy: _______________
Attention: _______________
IN
WITNESS WHEREOF, the undersigned has
caused this Instrument of Accession to be signed as of the date below
written.
____________________
By:__________________
Name:
Title:
Agreed
to
and Accepted
CENTERLINE
HOLDING COMPANY
E-1
By: ______________________________
Name:
Title:
E-2