1
Exhibit (10)(r)
-------------------------------
Registration Rights Agreement
Dated as of November 1, 1999
between
First Union Real Estate Equity and Mortgage Investments
and
The Parties Signatory Hereto
-------------------------------
2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of the 1st day of November, 1999, between First Union Real
Estate Equity and Mortgage Investments, an Ohio business trust (the "Company"),
and Gotham Partners, L.P., Gotham Partners III, L.P. and Gotham Partners
International, Ltd. (each, a "Purchaser" and collectively, the "Purchasers").
WHEREAS, the Company and the Purchasers have entered into those
certain Standby Purchase Agreements, each dated as of August 11, 1998, and a
Letter Agreement, dated as of April 19, 1999 (collectively, the "Standby
Agreement"), which provides for the sale by the Company and the purchase by the
Purchasers of the Company's shares of beneficial interest, $1.00 par value per
share (the "Common Shares"), in connection with the Offerings (as defined in the
Standby Agreement) contemplated thereby; and
WHEREAS, in connection with the Standby Agreement, the Company
has agreed to provide to the Purchasers, their respective successors, assigns
and direct and indirect transferees the registration rights set forth in this
Agreement.
ACCORDINGLY, the parties hereto agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended
from time to time.
"1934 ACT" shall mean the Securities Exchange Act of l934, as
amended from time to time.
"ADDITIONAL PIGGYBACK RIGHTS" shall have the meaning set forth
in Section 2.3(c) hereof.
"COMPANY" shall have the meaning set forth in the preamble and
shall also include the Company's successors.
"DEMAND EXERCISE NOTICE" shall have the meaning set forth in
Section 2.3(a)(i) hereof.
"DEMAND REGISTRATION REQUESTS" shall have the meaning set forth
in Section 2.3(a)(i) hereof.
3
"DEMAND REGISTRATIONS" shall have the meaning set forth in
Section 2.3(a)(i) hereof.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in
Section 2.1(a)(ii) hereof.
"ENTERPRISE SHARES" shall mean the "Warrant Shares" entitling
Enterprise Asset Management, Inc. to purchase 500,000 Common Shares as referred
to in the Agreement, dated as of November 2, 1998, between Enterprise Asset
Management, Inc. and the Company.
"FILING DATE" shall have the meaning set forth in Section
2.1(a)(i).
"HOLDERS" shall mean the Purchasers and their respective
affiliates, for so long as they own any Registrable Securities, and their
respective successors, assigns and direct and indirect transferees who become
registered owners of Registrable Securities.
"MATERIAL TRANSACTION" shall have the meaning set forth in
Section 2.1(a)(ii) hereof.
"MATERIAL TRANSACTION TOLLING PERIOD" shall have the meaning set
forth in Section 2.1(a)(ii) hereof.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"OFFERING" shall mean the rights offering conducted by the
Company pursuant to the Prospectus, dated April 13, 1999, as supplemented by the
Prospectus Supplement, dated April 21, 1999, and consummated on May 14, 1999.
"OTHER DEMAND RIGHTS" shall have the meaning set forth in
Section 2.2(b)(ii) hereof.
"PERSON" shall mean an individual, partnership (general or
limited), corporation, limited liability company, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
"PIGGYBACK REGISTRATION" shall mean a registration effected
pursuant to Section 2.2 hereof.
"PIGGYBACK REGISTRATION STATEMENT" shall have the meaning
assigned thereto in Section 2.2 hereof.
"PIGGYBACK RIGHTS" shall have the meaning assigned thereto in
Section 2.2(a) hereof.
"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, including
any such prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration Statement, and
by all other amendments and supplements to a prospectus,
-2-
4
including post-effective amendments, and in each case including all material
incorporated by reference therein.
"PURCHASER" shall have the meaning set forth in the preamble.
"REGISTERED REGISTRABLE SECURITIES" shall have the meaning set
forth in Section 2.4 hereof.
"REGISTRABLE SECURITIES" shall mean the Securities; provided,
however, that Securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to such Securities shall have been declared
effective under the 1933 Act and such Securities shall have been disposed of
pursuant to such Registration Statement, (ii) such Securities have been sold to
the public pursuant to Rule l44 (or any similar provision then in force) under
the 1933 Act, or (iii) such Securities shall have ceased to be outstanding.
"REGISTRATION EXPENSES" shall mean any and all expenses incurred
by the Company or any Holder in connection with any registration, filing or
qualification of Registrable Securities, including without limitation: (i) all
SEC, securities exchange or NASD registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws and compliance with the rules of the NASD (including reasonable fees
and disbursements of counsel for any underwriters or Holders in connection with
blue sky qualification of any of the Registrable Securities and any filings with
the NASD), (iii) all expenses incurred in connection with the preparation, word
processing, printing and distribution of any Registration Statement, any
Prospectus, any amendments or supplements thereto, any underwriting agreements
and securities sales agreements, (iv) all fees and expenses incurred in
connection with the listing, if any, of any of the Registrable Securities on any
securities exchange or exchanges, (v) the fees and disbursements of counsel for
the Company and of the independent public accountants of the Company, including
the expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, (vi) the fees, disbursements and
expenses of any "qualified independent underwriter" engaged pursuant to Section
3(p) hereof, (vii) the reasonable fees and disbursements of one counsel
representing the Holders and (viii) any fees and disbursements of the
underwriters customarily required to be paid by issuers of securities and the
fees and expenses of any special experts retained by the Company in connection
with any Registration Statement, but excluding underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by the Holders.
"REGISTRATION STATEMENT" shall mean any registration statement
of the Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
-3-
5
"SEC" shall mean the United States Securities and Exchange
Commission or any successor agency or government body performing the functions
currently performed by the United States Securities and Exchange Commission.
"SECTION 2.2 SALE NUMBER" shall have the meaning set forth in
Section 2.2(b) hereof.
"SECTION 2.3 SALE NUMBER" shall have the meaning set forth in
Section 2.3(d) hereof.
"SECURITIES" shall mean (i) the Common Shares acquired by each
Purchaser and its affiliates in connection with the Offering; and (ii) any
equity securities of the Company issued or issuable with respect to any of such
Common Shares in connection with a reclassification, recapitalization, merger,
consolidation or other reorganization, stock dividend or stock split.
"SHELF REGISTRATION" shall mean a registration effected pursuant
to Section 2.1 hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2.1 of this
Agreement which (i) covers all of the Registrable Securities and all of the
Enterprise Shares (including any equity securities of the Company issued or
issuable with respect to any of such Enterprise Shares in connection with a
reclassification, recapitalization, merger, consolidation or other
reorganization, stock dividend or stock split) and (ii) covers no other
securities of the Company that have been or will be issued and which shelf
registration statement is on a Form S-3 or a successor form pursuant to Rule 415
under the 1933 Act, or any similar rule that may be adopted by the SEC, and all
amendments to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"STANDBY AGREEMENT" shall have the meaning set forth in the
preamble.
"UNDERWRITERS' REPRESENTATIVE" shall mean the managing
underwriter, or, in the case of a co-managed underwriting, the managing
underwriter designated as the Underwriters' Representative by the co-managers.
"VALID BUSINESS REASON" shall have the meaning set forth in
Section 2.1(a)(ii) hereof.
2. REGISTRATION UNDER THE 1933 ACT.
2.1 SHELF REGISTRATION. (a) The Company shall:
(i) not later than the date that is 45 days after the Purchasers
deliver a written request to the Company (the date such request is delivered to
be determined in accordance with Section 5.3 hereto) with respect to the filing
of the Shelf Registration Statement hereinafter
-4-
6
referred to (the "Filing Date"), file with the SEC, and thereafter shall use its
best efforts to cause to be declared effective as promptly as practicable, but
not later than 120 days after the Filing Date, a Shelf Registration Statement
relating to the offer and sale of the Registrable Securities by the Holders from
time to time in accordance with the methods of distribution (including an
underwritten offering) elected from time to time by the Holders participating in
the Shelf Registration and set forth in such Shelf Registration Statement;
(ii) use its best efforts to keep the Shelf Registration
Statement continuously effective until the earliest to occur of:
(A) the date when all Registrable Securities
covered by the Shelf Registration Statement
have been sold pursuant to any Registration
Statement under this Agreement or cease to be
outstanding or otherwise to be Registrable
Securities;
(B) the date on which all of the following
conditions have been satisfied: (1) the
Registrable Securities represent less than five
percent (5%) of the outstanding Common Shares
of the Company; (2) none of the Holders have
designees on the Company's Board of Trustees
and (3) the Company delivers to the Holders an
opinion of counsel reasonably acceptable to the
Holders to the effect that (x) the Holders are
not and have not been "affiliates" (within the
definition of Rule 144 under the ▇▇▇▇ ▇▇▇) of
the Company for the preceding three consecutive
months and (y) the Registrable Securities may
be freely disposed of pursuant to Rule 144
under the 1933 Act or otherwise; and
(C) the date which is seven years from the date
hereof
(the "Effectiveness Period"), PROVIDED, HOWEVER, that if the Company determines
by a resolution of the Board of Trustees of the Company or authorized committee
thereof that in its good faith judgment (a "Valid Business Reason") the
continued availability of the Shelf Registration Statement would materially
interfere with any material financing, acquisition, corporate reorganization or
merger or other transaction (including any significant regulatory event)
involving the Company (a "Material Transaction"), the continued availability of
the Shelf Registration Statement may be suspended for a reasonable period of
time; PROVIDED, HOWEVER, that (1) in the case of a Material Transaction that
requires the Company to seek the approval of the Company's shareholders or would
require the Company to prepare and file with the SEC a registration statement
under the 1933 Act or the 1934 Act, such suspension shall in no event exceed 120
days or (2) in the case of any other Material Transaction, such suspension shall
in no event exceed 90 days; PROVIDED, FURTHER that such suspensions shall not
occur more than two times and in no event for more than 180 days in the
aggregate in any consecutive twelve-month period during the Effectiveness Period
(such period during which the Effectiveness Period may be suspended, the
"Material Transaction Tolling Period"); and
-5-
7
(iii) notwithstanding any other provisions hereof, use its
best efforts to ensure that (A) the Shelf Registration Statement and any
amendment thereto and any Prospectus forming a part thereof complies in all
material respects with the 1933 Act and the rules and regulations thereunder,
(B) the Shelf Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (C) the Prospectus forming a part of the
Shelf Registration Statement does not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements,
in light of the circumstances under which they were made, not misleading.
(b) Each Holder of Registrable Securities agrees that, upon
receipt of any notice from the Company that the Company has determined to
suspend the availability of the Shelf Registration Statement for use by the
Holders pursuant to Section 2.1(a)(ii) above, such Holder will discontinue its
disposition of Registrable Securities pursuant to the Shelf Registration
Statement and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such Holder's possession of the Prospectus covering such Registrable Securities
that was in effect at the time of receipt of such notice.
(c) (i) If any Holder of Registrable Securities requests that
some or all of its Registrable Securities covered by the Shelf Registration
Statement be sold in an underwritten offering, the Company shall, as promptly as
practicable, but no later than ten days after receipt of such request, give
written notice of such request to all Holders of Registrable Securities. Any
Holder of Registrable Securities who wishes to participate in the underwritten
offering may, within ten days of receipt of such notice, elect to have all or
any of its Registrable Securities included in such underwritten offering;
PROVIDED, HOWEVER, that if the number of Registrable Securities requested to be
included in such registration, in the opinion of the Underwriters'
Representative, exceeds the largest number that can be sold in an orderly manner
in such offering within a price range acceptable to the Holders of a majority of
the Registrable Securities proposed to be registered, then the number of such
Registrable Securities to be included in such underwritten registration shall be
allocated pro rata among all Holders requesting that their Registrable
Securities be included in such registration, based on the number of Registrable
Securities proposed to be sold by each Holder. Notwithstanding the foregoing,
the Company shall have no obligations under Section 3(l) in respect of an
underwritten offering of Registrable Securities unless and until the Company
shall have received written notification from the Holders of Registrable
Securities that the intended method of distribution is an underwritten offering
of Registrable Securities with a reasonably anticipated aggregate offering price
to the public of at least ten million ($10,000,000) dollars.
(ii) If any of the Registrable Securities covered by the Shelf
Registration Statement are to be sold in an underwritten offering, the
Underwriters' Representative will be selected by the Holders of a majority of
the Registrable Securities to be included in such offering and shall be
reasonably acceptable to the Company. No Holder may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Holders of a
-6-
8
majority of the Registrable Securities to be included in the offering and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements. In connection with any underwritten offering under
this Section 2.1, each of the participating Holders and the Company shall be a
party to the underwriting agreement with the underwriters and may be required to
make certain customary representations and warranties (in the case of the
participating Holders as to the Registrable Securities being sold by the
participating Holder in such underwritten offering and the plan of distribution
thereof) and provide certain customary indemnification for the benefit of the
underwriters.
2.2 PIGGYBACK REGISTRATION. (a) If at any time the Company
proposes to register (including for this purpose a registration effected by the
Company for the account of the Company or shareholders of the Company other than
the Holders of the Registrable Securities for offer and sale Common Shares under
the 1933 Act (other than pursuant to registrations on Form S-4 or Form S-8 or
similar forms solely for registration of securities in connection with an
employee benefit plan or dividend reinvestment plan, merger or consolidation or
exchange offer), as soon as practicable (but in no event less than ten business
days prior to the date of filing any related Registration Statement), the
Company shall give the Holders of the Registrable Securities written notice of
such registration. Upon the written request of any Holder given within ten days
following the date such notice is delivered (as determined in accordance with
Section 5.3 hereof), the Company shall use all reasonable efforts to cause to be
included in such Registration Statement (a "Piggyback Registration Statement"),
and use all reasonable efforts to cause to be registered under the 1933 Act, all
the Registrable Securities that such Holder shall have requested to be
registered (such right of Holders to request that their Registrable Shares be
included in a Piggyback Registration Statement, "Piggyback Rights").
Notwithstanding anything to the contrary in this Section 2.2(a), the Company
shall not be required to include any Registrable Securities in such Piggyback
Registration Statement if (i) the Piggyback Registration Statement is a "shelf"
registration statement on Form S-3 or other appropriate form pursuant to Rule
415 under the 1933 Act and (ii) the Shelf Registration Statement is effective
and available for sales of Registrable Securities. The Company shall have the
absolute right to withdraw or cease to prepare or file any Piggyback
Registration Statement for any offering referred to in this Section 2.2 without
any obligation or liability to the Holders; PROVIDED, that the Company shall
promptly notify the Holders in writing of any such action and shall, subject to
the provisions of Section 2.5, reimburse Holders of Registrable Securities
requested to be included in such Piggyback Registration Statement for all
reasonable out-of-pocket expenses incurred by such Holders in connection with
such Piggyback Registration Statement prior to such withdrawal by the Company.
(b) If any Piggyback Registration Statement relates to an
underwritten offering of Common Shares and such Common Shares and the number of
Registrable Securities requested to be included in such registration, in the
opinion of the Underwriters' Representative, exceeds the largest number (the
"Section 2.2 Sale Number") that can be sold in an orderly manner in such
offering, then the Company shall include in such registration:
(i) all Common Shares that the Company proposes to
register for its own account (the "Company Securities");
-7-
9
(ii) if the number of Company Securities is zero, all
securities being included in such registration pursuant to the terms of any
contractual demand registration rights granted to any Person other than a Holder
("Other Demand Rights"); and
(iii) (x) to the extent that the number of Company
Securities is more than zero but less than the Section 2.2 Sale Number, all
securities being included in such registration pursuant to the terms of any
Other Demand Rights and all Registrable Securities requested to be included in
such registration by Holders of Registrable Securities; provided, however, that,
if the number of such Registrable Securities, securities being included pursuant
to Other Demand Rights and Company Securities exceeds the Section 2.2 Sale
Number, the aggregate number of such Registrable Securities and securities being
included pursuant to Other Demand Rights (not to exceed the Section 2.2 Sale
Number) to be included in such registration shall be allocated on a pro rata
basis among all Holders requesting that Registrable Securities be included in
such registration and all Persons exercising Other Demand Rights based on the
number of Registrable Securities then owned by each such Holder requesting
inclusion or the number of securities to be included pursuant to Other Demand
Rights then owned by each such Person, as applicable, in relation to the
aggregate number of Registrable Securities then owned by all such Holders
requesting inclusion and all Persons exercising Other Demand Rights; and
(y) to the extent that the number of Company
Securities is zero, and the number of securities being included pursuant to
Other Demand Rights is less than the Section 2.2 Sale Number, all Registrable
Securities requested to be included in such registration by Holders of
Registrable Securities, PROVIDED, HOWEVER, that, if the number of such
Registrable Securities and securities being included pursuant to Other Demand
Rights exceeds the Section 2.2 Sale Number, the aggregate number of such
Registrable Securities (not to exceed the Section 2.2 Sale Number) to be
included in such registration shall be allocated on a pro rata basis among all
Holders requesting that Registrable Securities be included in such registration
based on the number of Registrable Securities then owned by each such Holder
requesting inclusion in relation to the aggregate number of Registrable
Securities then owned by all such Holders requesting inclusion.
(c) No Holder may participate in any underwritten registration
pursuant to this Section 2.2 unless such Holder (a) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
entered into by the Company and the underwriters and (b) completes and executes
all customary questionnaires, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.
(d) The holders of the Registrable Securities shall be
entitled to have their Registrable Securities included in an unlimited number of
Piggyback Registrations pursuant to this Section 2.2.
2.3 DEMAND REGISTRATION.
(a) (i) If the Shelf Registration Statement is not available
for use by the Holders for a period exceeding ten consecutive business days
because the Company has failed to satisfy the eligibility requirements for the
use of a registration statement on Form S-3, each Holder shall have the right,
subject to the next sentence and to Section 2.3(b) and Section 2.3(d) below, to
require the Company to file a Registration Statement under the 1933 Act (which
-8-
10
Registration Statement shall only include such securities as shall be permitted
to be included in the Shelf Registration Statement) covering all or any part of
its respective Registrable Securities, by delivering a written request therefor
to the Company specifying the number of Registrable Securities to be included in
such registration by such Holder and the intended method of distribution
thereof. If the Company again becomes eligible to use a registration statement
on Form S-3 before a Holder exercises the right described in the immediately
preceding sentence, such Holder will no longer be permitted to exercise that
right with respect to that particular instance of the Company's failure to meet
those eligibility requirements. All such requests by any Holder pursuant to this
Section 2.3(a)(i) are referred to herein as "Demand Registration Requests," and
the registrations so requested are referred to herein as "Demand Registrations"
(with respect to any Demand Registration, the Holder(s) making such demand for
registration being referred to as the "Initiating Holder"). As promptly as
practicable, but no later than five business days after receipt of a Demand
Registration Request, the Company shall give written notice (the "Demand
Exercise Notice") of such Demand Registration Request to all Holders of record
of Registrable Securities.
(ii) The Company, subject to Section 2.3(d) and
Section 2.3(e), shall include in a Demand Registration (x) the Registrable
Securities of the Initiating Holder and (y) the Registrable Securities of any
other Holder which shall have made a written request to the Company for
inclusion in such registration (which request shall specify the maximum number
of Registrable Securities intended to be disposed of by such Holder) within ten
days following the date of the Demand Exercise Notice.
(iii) The Company shall use its best efforts to
promptly effect such registration under the 1933 Act of the Registrable
Securities which the Company has been so requested to register, for distribution
in accordance with such intended method of distribution.
(b) The Demand Registration rights granted in Section 2.3(a)
to the Holders are subject to the following limitations: (i) each registration
in respect of a Demand Registration Request must include, in the aggregate
(based on the Common Shares included in such registration by the Company, all
Holders and all holders of Piggyback Rights and Additional Piggyback Rights
(each as defined below) participating in such registration), Common Shares
having an aggregate market value of at least $5 million; (ii) the Company shall
not be required to cause a registration pursuant to Section 2.3(a)(i) to be
declared effective within a period of 90 days after the effective date of a
registration statement filed by the Company covering a firm commitment public
offering; (iii) if the Company is involved in a Material Transaction for which
the Board of Trustees of the Company or an authorized committee thereof has
concluded that any registration of Registrable Securities should not be made or
continued because a Valid Business Reason exists, (x) the Company may postpone
filing a Registration Statement relating to a Demand Registration Request until
such Valid Business Reason no longer exists, but in no event for a period longer
than the Material Transaction Tolling Period, and (y) in case a Registration
Statement has been filed or is effective, in each case, relating to a Demand
Registration Request, the Company may cause such Registration Statement to be
withdrawn and/or its availability for use by the Holders suspended or may
postpone amending or supplementing such Registration Statement until such Valid
Business Reason no longer exists, but in no event for a period longer than the
Material Transaction Tolling Period; and the Company shall give written notice
of its
-9-
11
determination to postpone, withdraw or suspend the availability for use by the
Holders of a Registration Statement and of the fact that the Valid Business
Reason for such postponement, withdrawal or suspension no longer exists, in each
case, promptly after the occurrence thereof; and (iv) the Company's obligations
under this Section 2.3 shall terminate at such time as the Company's obligation
to keep the Shelf Registration Statement effective pursuant to Section
2.1(a)(ii) shall terminate.
Each Holder of Registrable Securities agrees that, upon
receipt of any notice from the Company that the Company has determined to
withdraw or suspend the availability for use by the Holders of any Registration
Statement pursuant to clause (iii) above, such Holder will discontinue its
disposition of Registrable Securities pursuant to such Registration Statement
and, if so directed by the Company, will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in such
Holder's possession of the Prospectus covering such Registrable Securities that
was in effect at the time of receipt of such notice. If the Company shall have
withdrawn or prematurely terminated a Registration Statement filed under Section
2.3(a)(i) (whether pursuant to clause (iii) above or as a result of any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court), the Company shall not be considered to have
effected an effective registration for the purposes of this Agreement until the
Company shall have filed a new Registration Statement covering the Registrable
Securities covered by the withdrawn Registration Statement and such Registration
Statement shall have been declared effective and shall not have been withdrawn.
If the Company shall give any notice of withdrawal, postponement or suspension
of a Registration Statement, the Company shall, at such time as the Valid
Business Reason that caused such withdrawal or postponement no longer exists
(but in no event later than such number of days after the date of the
postponement or withdrawal that equals the Material Transaction Tolling Period),
use its best efforts to effect the registration under the 1933 Act of the
Registrable Securities covered by the withdrawn or postponed Registration
Statement in accordance with this Section 2.3 (unless the Initiating Holder
shall have withdrawn such request, in which case the Company shall be considered
to have effected an effective registration for the purposes of this Agreement).
(c) The Company, subject to Section 2.3(d) and Section 2.3(e),
may elect to include in any Registration Statement and offering made pursuant to
Section 2.3(a)(i), (i) any authorized but unissued Common Shares and (ii) any
other Common Shares which are requested to be included in such registration
pursuant to the exercise of piggyback registration rights granted by the Company
after the date hereof ("Additional Piggyback Rights"); PROVIDED, HOWEVER, that
such inclusion shall be permitted only pursuant to and subject to the terms of
the underwriting agreement or arrangements, if any, entered into by the
Initiating Holder.
-10-
12
(d) If any requested registration pursuant to Section 2.3(a)
involves an underwritten offering and the number of securities to be included in
such registration (at the request of the Holders or any other Persons (including
any Common Shares requested by the Company, by Holders exercising Piggyback
Rights or by holders exercising Additional Piggyback Rights)) in the opinion of
the Underwriters' Representative exceeds the largest number (the "Section 2.3
Sale Number") that can be sold in an orderly manner in such offering within a
price range acceptable to the Initiating Holder, the Company shall include in
such registration:
(i) all Registrable Securities requested to be
included in such registration by Holders of Registrable Securities; PROVIDED,
HOWEVER, that, if the number of such Registrable Securities exceeds the Section
2.3 Sale Number, the number of such Registrable Securities (not to exceed the
Section 2.3 Sale Number) to be included in such registration shall be allocated
on a pro rata basis among all Holders requesting that Registrable Securities be
included in such registration based on the number of Registrable Securities then
owned by each such Holder requesting inclusion in relation to the aggregate
number of Registrable Securities then owned by all such Holders requesting
inclusion;
(ii) to the extent that the number of Registrable
Securities to be included by all Holders is less than the Section 2.3 Sale
Number, Common Shares that the Company proposes to register; and
(iii) to the extent that the number of Registrable
Securities to be included by all Holders and the number of Common Shares to be
included by the Company is less than the Section 2.3 Sale Number, any other
Common Shares that the holders thereof propose to register pursuant to the
exercise of Additional Piggyback Rights.
If, as a result of the proration provisions of this Section
2.3(d), any Holder shall not be entitled to include all Registrable Securities
in a registration that such Holder has requested be included, such Holder may
elect to withdraw his request to include Registrable Securities in such
registration or may reduce the number requested to be included; PROVIDED,
HOWEVER, that (x) such request must be made in writing prior to the execution of
the underwriting agreement and (y) such withdrawal shall be irrevocable.
(e) In connection with any Demand Registration, the Initiating
Holder shall have the right to designate the Underwriters' Representative for
such registration, PROVIDED that such Underwriters' Representative is reasonably
satisfactory to the Company. No Holder may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Initiating Holder and (b) completes and executes all
questionnaires, underwriting agreements and other documents required under the
terms of such underwriting arrangements.
2.4 REDUCTION OF AVAILABILITY ON SHELF REGISTRATION STATEMENT.
If any Registrable Securities are registered for sale and sold in connection
with any registration pursuant to Section 2.2 or Section 2.3 (the "Registered
Registrable Securities"), the extent to which the Shelf Registration Statement
is available for the sale of Registrable Securities by Holders shall be reduced
by a number of Securities equal to the number of Registered Registrable
Securities.
-11-
13
2.5 EXPENSES. The Company shall pay all Registration Expenses
in connection with any registration pursuant to Section 2.1 and Section 2.3 and,
except as hereinafter provided, Section 2.2. The Company shall pay the
Registration Expenses associated with the first two Piggyback Registrations, and
the Holders shall be responsible for any Registration Expenses associated with
any subsequent registration pursuant to Section 2.2. Each Holder shall pay all
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to any
Registration Statement.
3. REGISTRATION PROCEDURES. In connection with the obligations
of the Company with respect to Registration Statements pursuant to Section 2.1,
Section 2.2 or Section 2.3 hereof, the Company shall:
(a) prepare and file with the SEC the Registration Statement,
within the relevant time period specified in Section 2.1, Section 2.2 or Section
2.3 hereof, as applicable, on the appropriate form under the 1933 Act reflecting
the methods of distribution (including an underwritten offering) of the
Registrable Securities elected from time to time by the Holders, which form (i)
shall be selected by the Company, (ii) shall be available for the sale of the
Registrable Securities by the selling Holders thereof and (iii) shall comply as
to form in all material respects with the requirements of the applicable form
and include or incorporate by reference all financial statements required by the
SEC to be filed therewith or incorporated by reference therein, and use its best
efforts to cause such Registration Statement to become effective and remain
current (which obligation may be satisfied by filing reports with the SEC
pursuant to the Company's reporting obligations under the ▇▇▇▇ ▇▇▇) and in
compliance with the provisions of the 1933 Act for the period specified in
Section 2.1, Section 2.2 or Section 2.3, as applicable;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary
under applicable law to keep such Registration Statement current (which
obligation may be satisfied by filing reports with the SEC pursuant to the
Company's reporting obligations under the ▇▇▇▇ ▇▇▇) and in compliance with the
provisions of the 1933 Act for the period specified in Section 2.1, Section 2.2
or Section 2.3, as applicable, and to facilitate the disposition of all
securities covered by each Registration Statement during the applicable period
in accordance with the intended method or methods of distribution (including an
underwritten offering) by the selling Holders thereof and cause each Prospectus
to be filed pursuant to Rule 424 (or any similar provision then in force) under
the 1933 Act and comply with the provisions of the 1933 Act, the 1934 Act and
the rules and regulations thereunder applicable to them with respect to the
disposition of all securities covered by each Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution (including an underwritten offering) by the selling Holders
thereof;
(c) furnish to each Holder and to each underwriter of an
underwritten offering of Registrable Securities, if any, without charge, as many
copies of each Prospectus, including each preliminary Prospectus, as such Holder
or underwriter may reasonably request, including
-12-
14
financial statements and schedules and, if the Holder so requests, all exhibits
in order to facilitate the public sale or other disposition of the Registrable
Securities;
(d) register or qualify the Registrable Securities under all
applicable state securities or "blue sky" laws of such jurisdictions as any
Holder covered by a Registration Statement and each underwriter of an
underwritten offering of Registrable Securities shall reasonably request by the
time the applicable Registration Statement is declared effective by the SEC, and
do any and all other acts and things which may be reasonably necessary or
advisable to enable each such Holder and underwriter to consummate the
disposition in each such jurisdiction of such Registrable Securities owned by
such Holder;
(e) notify promptly each Holder, their counsel and the
Underwriters' Representative, if any, and promptly confirm such advice in
writing (i) when a Registration Statement has become effective and when any
post-effective amendments thereto become effective, (ii) of any request by the
SEC or any state securities authority for post-effective amendments to a
Registration Statement and Prospectus or for additional information after the
Registration Statement has become effective, (iii) of the issuance by the SEC or
any state securities authority of any stop order suspending the effectiveness of
a Registration Statement or the initiation of any proceedings for that purpose,
(iv) if, between the effective date of a Registration Statement and the closing
of any sale of Registrable Securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement, securities
sales agreement or other similar agreement, if any, relating to the offering
cease to be true and correct in all material respects, (v) of the happening of
any event or the discovery of any facts during the period a Registration
Statement is effective which makes any statement made in such Registration
Statement or the related Prospectus untrue in any material respect or which
requires the making of any changes in such Registration Statement or Prospectus
in order to make the statements therein not misleading or otherwise to comply in
all material respects with the provisions of the 1933 Act, (vi) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose and (vii) of the
reasonable determination by the Company that a post-effective amendment to such
Registration Statement would be appropriate;
(f) furnish counsel for the Holders and the Underwriters'
Representative, if any, copies of any comment letters received from the SEC or
any other request by the SEC or any state securities authority for amendments or
supplements to a Registration Statement and Prospectus or for additional
information;
(g) obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement at the earliest possible moment;
(h) furnish to each Holder, and each underwriter, if any,
without charge, at least one conformed copy of each Registration Statement and
any post-effective amendment thereto, including financial statements and
schedules (without documents incorporated therein by reference and all exhibits
thereto, unless requested);
-13-
15
(i) cooperate with the selling Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold and not bearing any restrictive legends; and enable such Registrable
Securities to be in such denominations and registered in such names as the
selling Holders or the underwriters, if any, may reasonably request at least two
business days prior to the closing of any sale of Registrable Securities;
(j) upon the occurrence of any event or the discovery of any
facts, each as contemplated by Section 3(e)(ii), Section 3(e)(iii), Section
3(e)(v), Section 3(e)(vi) and Section 3(e)(vii) hereof, as promptly as
practicable after the occurrence of such an event, prepare a supplement or
post-effective amendment to the Registration Statement or the related Prospectus
or any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain at the time of such delivery any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, and notify the Holders to suspend use of the
Prospectus as promptly as practicable after any such event or discovery, and
each Holder agrees to suspend use of the Prospectus until the Company has
amended or supplemented the Prospectus to correct such misstatement or omission,
PROVIDED, HOWEVER, that if the Company suspends the use of the Prospectus for
the circumstances described in Section 2.1(a)(ii) or Section 2.3(b) hereof, such
suspension shall be limited to a number of days equal to the Material
Transaction Tolling Period. At such time as such public disclosure is otherwise
made or the Company determines that such disclosure is not necessary, in each
case to correct any misstatement of a material fact or to include any omitted
material fact, the Company agrees promptly to notify each Holder of such
determination and to furnish each Holder such number of copies of the Prospectus
as amended or supplemented, as such Holder may reasonably request;
(k) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to any Prospectus or any document which is to be
incorporated by reference into a Registration Statement or any Prospectus after
the initial filing of a Registration Statement, provide copies of such document
to the Holders and make representatives of the Company as shall be reasonably
requested by the Holders, available for discussion of such document (it being
understood that , with respect to any such Registration Statement, Prospectus or
amendment or supplement thereto, the Holders shall have the opportunity to
comment on the disclosure relating to such Holders therein, and the Company
shall not file such Registration Statement, Prospectus or amendment or
supplement thereto without the consent of the Holders to such disclosure, which
consent shall not be unreasonably withheld);
(l) enter into agreements (including underwriting agreements)
and take all other reasonable, customary and appropriate actions in order to
expedite or facilitate the disposition of such Registrable Securities and in
such connection whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration:
-14-
16
(i) make such representations and warranties to the
Holders and the underwriters, if any, in form, substance and
scope as are customarily made by issuers to underwriters in
similar underwritten offerings as may be reasonably requested by
them;
(ii) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Underwriters'
Representative, if any, and the Holders of the Registrable
Securities being sold) addressed to each selling Holder and the
underwriters, if any, covering the matters customarily covered
in opinions requested in sales of securities or underwritten
offerings and such other matters as may be reasonably requested
by such Holders and Underwriters' Representative;
(iii) obtain "cold comfort" letters and updates thereof
from the Company's independent certified public accountants
(and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements are, or
are required to be, included in the Registration Statement)
addressed to the underwriters, if any, and use reasonable
efforts to have such letter addressed to the selling Holders (to
the extent consistent with Statement on Auditing Standards No.
72 of the American Institute of Certified Public Accounts), such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters to underwriters in
connection with similar underwritten offerings, and, in addition
to the dates set forth below, shall be dated the effective date
of any prospectus supplement to the Prospectus included in the
applicable Registration Statement;
(iv) enter into a securities sales agreement with the
Holders and an agent of the Holders providing for, among other
things, the appointment of such agent for the selling Holders
for the purpose of soliciting purchases of Registrable
Securities, which agreement shall be in form, substance and
scope customary for similar offerings;
(v) if an underwriting agreement is entered into, cause
the same to set forth indemnification provisions and procedures
substantially equivalent to the indemnification provisions and
procedures set forth in Section 4 hereof with respect to the
underwriters and all other parties to be indemnified pursuant to
said Section or, at the request of any underwriters, in the form
customarily provided to such underwriters in similar types of
transactions; and
(vi) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar
offerings to the holders of registrable securities being sold
and the managing underwriters, if any.
-15-
17
The above shall be done at each closing under any underwriting or similar
agreement as and to the extent required thereunder.
(m) make available for inspection by representatives of the
Holders, any underwriters participating in any disposition pursuant to a
Registration Statement, and any counsel or accountant retained by any of the
foregoing (but not more than one counsel for all Holders and one counsel for all
underwriters), all financial and other records, pertinent corporate documents
and properties of the Company reasonably requested by any such Persons, and
cause the respective officers, directors, employees, and any other agents of the
Company to supply all information reasonably requested by any such
representative, underwriter, special counsel or accountant in connection with
the Shelf Registration Statement, and make such representatives of the Company
available for discussion of such documents as shall be reasonably requested by
the Holders or any underwriters so that they may conduct a reasonable
investigation within the meaning of Section 11 of the 1933 Act;
(n) cause all Registrable Securities to be listed on a national
securities exchange;
(o) otherwise comply with all applicable rules and regulations
of the SEC and make available to its securityholders, as soon as reasonably
practicable, an earnings statement covering at least 12 months which shall
satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;
(p) in the event that any broker-dealer registered under the
1934 Act shall underwrite any Registrable Securities or participate as a member
of an underwriting syndicate or selling group or "assist in the distribution"
(within the meaning of the Rules of Fair Practice and the By-Laws of the NASD)
or any successor thereto, as amended from time to time) thereof, whether as a
Holder of such Registrable Securities, or as an underwriter, a placement or
sales agent or a broker or dealer in respect thereof, or otherwise, assist such
broker-dealer in complying with the requirements of such Rules and By-Laws,
including by (A) if such Rules or By-Laws shall so require, engaging a
"qualified independent underwriter" (as defined in Rule 2720 (or any successor
thereto)) to participate in the preparation of the Registration Statement
relating to such Registrable Securities and to exercise usual standards of due
diligence in respect thereto, (B) indemnifying any such qualified independent
underwriter to the extent of the indemnification of underwriters provided in
Section 4 hereof (or to such other customary extent as may be requested by such
underwriter), and (C) providing such information to such broker-dealer as may be
required in order for such broker-dealer to comply with the requirements of the
Rules of Fair Practice of the NASD; and
(q) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter and its counsel (including any qualified independent underwriter
that is required to be retained in accordance with the rules and regulations of
the NASD).
The Company may (as a condition to such Holder's participation
in any registration) require each Holder to furnish to the Company such
information regarding the Holder and the
-16-
18
proposed distribution by such Holder of its Registrable Securities as the
Company may from time to time reasonably request in writing.
In the event that Holders dispose of Registrable Securities
pursuant to an underwritten offering, the Company shall not effect any sale or
distribution of, or file any registration statement with respect to, any
securities (within the meaning of Section 2(1) of the ▇▇▇▇ ▇▇▇) of the Company
other than Registrable Securities for 90 days after completion of such
underwritten offering or such shorter period as the Underwriters' Representative
shall reasonably determine is necessary and the Holders of Registrable
Securities not covered by such underwritten offering shall not publicly sell any
Registrable Securities not so covered for 90 days after completion of such
underwritten offering or such shorter period as the Underwriters' Representative
shall reasonably determine is necessary. In the case of the registration of any
underwritten primary equity offering initiated by the Company (other than any
registration by the Company on (i) Form S-8, or a successor or substantially
similar form, of (A) an employee stock option, stock purchase or compensation
plan or of securities issued or issuable pursuant to any such plan or (B) a
dividend reinvestment plan or (ii) Form S-4) or the registration of any rights
offering by the Company, the Holders agree, if requested in writing by the
managing underwriter or underwriters administering such offering, in the case of
an underwritten offering, or if requested by the Company, in the case of a
rights offering, not to effect any offer, sale or distribution of Registrable
Securities (or any option or right to acquire Registrable Securities) during the
period commencing on the 10th day prior to the effective date of the
registration statement covering such underwritten primary equity offering and
ending on the 90th day after the completion of such underwritten offering or on
such earlier date as such managing underwriter shall reasonably determine is
necessary.
4. INDEMNIFICATION; CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless the
Holders, each Person who participates as an underwriter (any such Person being
an "Underwriter") and each Person, if any, who controls any Holder or
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act, and the respective officers, directors, partners, employees,
representatives and agents of any of the foregoing, as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment or supplement thereto) pursuant
to which Registrable Securities were registered under the 1933 Act,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
-17-
19
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any government agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; PROVIDED
that (subject to Section 4(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel chosen by any
indemnified party), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any government agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Holder in its capacity as Holder or underwriter expressly for use in a
Registration Statement (or any amendment thereto) or any Prospectus.
(b) Each Holder severally, but not jointly, agrees to indemnify
and hold harmless the Company, each underwriter and the other selling Holders,
and each Person, if any, who controls the Company, any underwriter or any other
selling Holder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act, and the respective officers, directors, partners, employees,
representatives and agents of any of the foregoing, against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
Section 4(a) hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any Prospectus included therein in
reliance upon and in conformity with written information with respect to such
Holder furnished to the Company by such Holder in its capacity as Holder
expressly for use in the Registration Statement (or any amendment thereto) or
such Prospectus; PROVIDED, HOWEVER, that the aggregate amount which any such
Holder shall be required to pay pursuant to Section 4(b) and Section 4(e) shall
in no case be greater than the amount of net proceeds received by such Holder
from the sale of Registrable Securities pursuant to such Registration Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder, but
failure so to notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. If any
such action shall be brought against an indemnified party, and it shall notify
the indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel
-18-
20
satisfactory to the indemnified party. An indemnifying party may participate at
its own expense in the defense of such action; PROVIDED, HOWEVER, that counsel
to the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one counsel (in addition to any local counsel) separate from their own counsel
for all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 4 (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 4 is
for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and the
Holders on the other hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative fault of the Company on the one hand and the Holders on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Holders and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 4 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 4. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 4 shall be deemed to
include any legal
-19-
21
or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 4, no Holder shall be
required to contribute any amount in excess of the amount by which the net
proceeds received by such Holder for the Securities sold by it exceeds the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls a
Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as such Holder, and each
director of the Company, and each Person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company.
5. MISCELLANEOUS.
5.1 RULE 144. For so long as the Company is subject to the
reporting requirements of Section 13 or 15 of the 1934 Act, the Company
covenants that it will timely file the reports required to be filed by it under
the 1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder. If the Company ceases to be so
required to file such reports, the Company covenants that it will upon the
request of any Holder (a) make publicly available such information as is
necessary to permit sales pursuant to Rule 144 under the 1933 Act, and (b) take
such further action that is reasonable in the circumstances, in each case, to
the extent required from time to time to enable such Holder to sell its
Registrable Securities without registration under the 1933 Act within the
limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, or (ii) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder, the
Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
5.2 AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority of the outstanding Registrable Securities affected by
such amendment, modification, supplement, waiver or departure.
5.3 NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (a) if to a Holder, at the most current address given
-20-
22
by such Holder to the Company by means of a notice given in accordance with the
provisions of this Section 5.3, which address initially is the address set forth
in the Standby Agreement with respect to the Purchaser; and (b) if to the
Company, initially at the Company's address set forth in the Standby Agreement,
and thereafter at such other address of which notice is given in accordance with
the provisions of this Section 5.3.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; two business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
5.4 SUCCESSOR AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders. If any transferee of any Holder shall
acquire Registrable Securities, in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the terms
of this Agreement, and by taking and holding such Registrable Securities such
Person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement, and such Person shall be entitled to receive
the benefits hereof. Upon any such transfer of Registrable Securities, the
transferring Holder shall be relieved of and fully discharged from all
obligations hereunder, whether such obligations arose before or after such
transfer.
5.5 SPECIFIC ENFORCEMENT. The parties hereto acknowledge that
there would be no adequate remedy at law if the Company fails to perform any of
its obligations hereunder and that the Purchasers and the Holders from time to
time of the Registrable Securities may be irreparably harmed by any such
failure, and accordingly agree that the Purchasers and such Holders, in addition
to any other remedy to which they may be entitled at law or in equity, shall be
entitled to compel specific performance of the respective obligations of the
Company 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.
5.6 COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
5.7 HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
5.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
-21-
23
5.9 SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
5.10 NO PERSONAL LIABILITY. Notwithstanding anything contained
herein to the contrary, this Agreement is made and executed on behalf of the
Company, a business trust organized under the laws of the State of Ohio, by its
officer(s) on behalf of the Trustees thereof, and none of the Trustees or any
additional or successor Trustee hereafter appointed, or any beneficiary,
officer, employee or agent of the Company shall, except as otherwise may be
required by law, have any liability in such Trustee's, beneficiary's, officer's,
employee's or agent's personal or individual capacity, but instead, all parties
shall look solely to the property and assets of the Company for satisfaction of
claims of any nature arising under or in connection with this Agreement.
-22-
24
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
By: /s/ Authorized Signer
____________________________
Name:
Title:
Confirmed and accepted as
of the date first above
written:
GOTHAM PARTNERS, L.P.
By: Section H Partners, L.P.
By: Karenina Corp.
By: /s/ Authorized Signer
____________________________
Name:
Title:
GOTHAM PARTNERS III, L.P.
By: Section H Partners, L.P.
By: Karenina Corp.
By: /s/ Authorized Signer
____________________________
Name:
Title:
GOTHAM PARTNERS INTERNATIONAL, LTD.
By: /s/ Authorized Signer
____________________________
Name:
Title:
-23-