EXHIBIT 4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of
May 11, 2004 by and among Capital Trust, Inc., a Maryland corporation (the
"COMPANY"), and X. X. Xxxxxxx Corporation, a Delaware corporation ("BERKLEY").
Berkley and its designated controlled Affiliates identified on Schedule A
attached hereto are each referred to in this Agreement as an "INITIAL HOLDER"
and are collectively referred to in this Agreement as the "INITIAL HOLDERS"
(provided that only Berkley shall be a direct party hereto and responsible for
its obligations hereunder).
RECITALS
WHEREAS, pursuant to the terms of that certain securities purchase
agreement, dated as of the date hereof, among the Company, the Initial Holders
and the stockholders named therein (the "SECURITIES PURCHASE AGREEMENT"), the
Company has agreed to sell to the Initial Holders and the Initial Holders have
agreed to purchase (1) at the Initial Closing 1,310,000 shares (the "TRANCHE 1
SHARES") of class A common stock, par value $.01 per share, of the Company (the
"COMMON STOCK") and a warrant (the "WARRANT") initially exercisable for 365,000
shares (the "WARRANT SHARES") and (2) at the Subsequent Closing 325,000 shares
of Common Stock (the "TRANCHE 2 SHARES") and together with the Tranche 1 Shares
and the Warrant Shares, the "SHARES"); and
WHEREAS, pursuant to the Securities Purchase Agreement, the Company
has agreed to grant to the Holders (as defined below) the registration rights
set forth in this Agreement.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby 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:
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or is under common control
with such Person. For the purposes of this definition, "control", when used with
respect to any Person, means possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of the such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms of "affiliated", "controlling" and "controlled" have meanings
correlative to the foregoing.
"AGENT" means the principal placement agent on an agented placement
of Registrable Securities.
"BUSINESS DAY" means 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" means the Securities and Exchange Commission.
"COMMON STOCK" has the meaning set forth in the Recitals.
"COMPANY" has the meaning set forth in the Preamble and also
includes the Company's successors.
"CONTINUOUSLY EFFECTIVE" means, with respect to a specified
registration statement, that it shall not cease to be effective and current and
compliant with respect to applicable disclosure requirements and available for
Transfers of Registrable Securities thereunder, and shall not be subject to any
stop order or similar order issued by the Commission, for longer than either (i)
any ten (10) consecutive Business Days, or (ii) an aggregate of fifteen (15)
Business Days during the period specified in the relevant provision of this
Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"DEMAND REGISTRATION" shall have the meaning set forth in Section
2(a).
"DEMANDING HOLDERS" shall have the meaning set forth in Section
2(a).
"HOLDER" or "HOLDERS" means the Initial Holder(s) or each Person to
whom a Holder Transfers Registrable Securities in accordance with Section 7(c)
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.
"INITIAL HOLDER" or "INITIAL HOLDERS" has the meaning set forth in
the Preamble
"MAJORITY SELLING HOLDERS" means those Selling Holders whose
Registrable Securities included in such registration represent a majority of the
Registrable Securities of all Selling Holders included therein.
"NASD" means the National Association of Securities Dealers, Inc.
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"PERSON" means an individual, partnership, corporation, limited
liability company, trust, estate, or unincorporated organization, or other
entity, or a government or agency or political subdivision thereof.
"REGISTER," "REGISTERED" and "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act, and the declaration or ordering by the
Commission of effectiveness of such registration statement or document.
"REGISTRABLE SECURITIES" means (i) the Tranche 1 Shares and Tranche
2 Shares purchased pursuant to the Securities Purchase Agreement; (ii) the
Warrant Shares issuable upon the exercise of the Warrant purchased pursuant to
the Securities Purchase Agreement; (iii) any shares of Common Stock 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, the Shares; and (iv) any securities
issued in exchange for such shares of Common Stock in any merger, combination or
reorganization of the Company; provided, however, that Registrable Securities
shall not include any securities which have theretofore been registered pursuant
to this Agreement and sold by a Holder pursuant to the Securities Act or which
have been sold by a Holder to the public pursuant to Rule 144 or any similar
rules promulgated by the Commission pursuant to the Securities Act, and,
provided further, that the Company shall have no obligation under Section 2 to
register any Registrable Securities of any Holder if the Company shall deliver
to the Holders requesting such registration an opinion of counsel reasonably
satisfactory to such Holders and their counsel to the effect that such
Registrable Securities may be resold pursuant to Rule 144(k) under the
Securities Act (or any successor provision) or, at the time of calculation, one
hundred percent (100%) of such Holder's Registrable Securities may be resold in
a single ninety (90) day period under Rule 144 of the Securities Act. 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, purchase or otherwise),
whether or not such acquisition has actually been effected.
"RULE 144" and "RULE 145" mean Rule 144 and Rule 145 promulgated
under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.
"SELLING HOLDERS" means, with respect to a specified registration
pursuant to this Agreement, the Holders whose Registrable Securities are
proposed to be included in such registration.
"SECURITIES PURCHASE AGREEMENT" has the meaning set forth in the
Recitals.
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"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.
Section 2. Demand Registration.
(a) Request for Demand Registration.
(i) Subject to Sections 2(b), 2(d) and 2(e) below, at any time, if
one or more Holders shall make a written request to the Company (the
"DEMANDING HOLDERS"), the Company shall cause there to be filed with the
Commission a registration statement meeting the requirements of the
Securities Act (a "DEMAND REGISTRATION"), and each Demanding Holder shall
be entitled to have included therein (subject to Section 3 hereof) all or
such number of such Demanding Holder's Registrable Securities as the
Demanding Holder shall request in writing. Any request made pursuant to
this Section 2(a) shall be addressed to the attention of the Secretary of
the Company, and shall specify the number of Registrable Securities to be
registered, the intended methods of disposition thereof and that the
request is for a Demand Registration pursuant to this Section 2(a).
(ii) Whenever the Company shall have received a demand pursuant to
Section 2(a) to effect the Demand Registration of any Registrable
Securities, the Company shall promptly give written notice of such
proposed registration to all Holders of Registrable Securities, if any.
Any such Holder may, within twenty (20) days after receipt of such notice,
request in writing that all of such Holder's Registrable Securities, or
any portion thereof designated by such Holder, be included in the
registration and such request shall not be considered one of the Demand
Registrations under Section 2(a) to which Holders are entitled under
Section 2(b)(i).
(b) Limitations on Demand Registrations.
(i) The Company shall be obligated to effect no more than four
Demand Registrations in total and no more than two such registrations in
any twelve-month period. For purposes of the preceding sentence,
registration shall not be deemed to have been effected (A) unless a
registration statement with respect thereto has become effective, (B) if
after such registration statement has
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become effective, such registration or the related offer, sale or
distribution of Registrable Securities thereunder is interfered with by
any stop order, injunction or other order or requirement of the Commission
or other governmental agency or court for any reason not attributable to
the Selling Holders and such interference is not thereafter eliminated, or
(C) if the conditions to closing specified in the underwriting agreement,
if any, entered into in connection with such registration are not
satisfied or waived by reason of a failure on the part of the Company,
unless caused by a Selling Holder. If the Company shall have complied with
its obligations under this Section 2, a right to demand a registration
pursuant to Section 2(a) shall be deemed to have been satisfied upon the
earlier of (X) the date as of which all of the Registrable Securities
included therein shall have been disposed of pursuant to a registration
statement, (Y) the date when all of the Registrable Securities covered by
the Registration Statement cease to be Registrable Securities and (Z) the
date as of which such Demand Registration shall have been Continuously
Effective for a period of not less than one hundred eighty (180) days
("MINIMUM EFFECTIVE PERIOD").
(ii) Notwithstanding the foregoing, the Demand Registration rights
granted to the Holders in Section 2(a) are subject to the following
limitations: (A) each registration in respect of a Demand Registration
must include Registrable Securities having an aggregate market value of at
least $5,000,000, which market value shall be determined by multiplying
the number of Registrable Securities to be included in the Demand
Registration by the proposed per share offering price (provided that (x)
the limitation set forth in this clause (A) shall not be in effect at any
time the Holders' Registrable Securities are not able to be sold under
Rule 144 because of the Company's failure to comply with the information
requirements thereunder, unless at such time, the Company's counsel
delivers a written opinion of counsel, which shall be in a form reasonably
satisfactory to such Holder's counsel, to such Holders to the effect that
such Holder's Registrable Securities may be publicly offered and sold
without registration under the Act and (y) if the Underwriters'
Representative or Agent advises the Company in writing that, in its
opinion, the amount of securities requested to be included in such
offering exceeds the amount which can be sold in such offering without
adversely affecting the marketability of the offering, the minimum
aggregate market value of Registrable Securities to be included in such
Demand Registration may be reduced to the extent required, but in no event
may the aggregate market value of the Registrable Securities included
therein be lower than $2,000,000); (B) the Company shall not be required
to cause a registration pursuant to Section 2(a) to be declared effective
within a period of one hundred twenty (120) days of the effective date of
any registration statement of the Company effected in connection with a
Demand Registration, provided the Company has not breached its obligations
under Section 2(a); (C) the Demand Registration rights contained herein
shall be subject to the terms and conditions of the registration rights
and other terms and conditions contained in Section 7.3 of
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the Preferred Share Purchase Agreement, dated as of June 16, 1997, as
amended, between the Company, formerly known as California Real Estate
Investment Trust, and Veqtor Finance Company, LLC, and Section 6 of the
Registration Rights Agreement, dated as of July 28, 1998, among the
Company, Vornado Realty L.P., EOP Operating Limited Partnership, Mellon
Bank N.A., as trustee for General Motors Hourly-Rate Employees Pension
Trust and Mellon Bank N.A., as trustee for General Motors Salaried
Employees Pension Trust (the "EXISTING REGISTRATION RIGHTS") and the
Company shall not be required to cause a registration pursuant to Section
2(a) to be declared effective or to include any Registrable Securities in
a Demand Registration hereunder to the extent not permitted by the
Existing Registration Rights; (D) the Company shall not be required to
file a registration statement at any time prior to October 11, 2004 nor
have any registration statement declared effective prior to November 11,
2004 if filed prior thereto unless Purchaser is permitted to sell,
transfer or otherwise dispose of Registrable Securities prior to such time
pursuant to Section 2.7 of the Securities Purchase Agreement; (E) the
Company shall not be required to file a registration statement or to keep
a registration statement effective and current and compliant with respect
to applicable disclosure requirements and the Company 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 Holders in writing 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 the filing of a registration or documents
necessary to keep an existing registration statement effective and current
and compliant nor suspend the use thereof for such reason for more than
ninety (90) days in the aggregate in any calendar year; and (F) the
Company shall not be required to file a registration statement or to keep
a registration statement effective and current and compliant and the
Company shall be permitted to suspend the use of any then effective
registration statement during the period starting with the date fifteen
(15) days prior to the Company's good faith estimate, as certified in
writing by an executive officer of the Company to the Holders, of the date
of the proposed pricing of an underwritten public offering of equity
securities of the Company for the account of the Company whether covered
by a prospectus under primary registration statement filed specifically
for the proposed offering or a prospectus supplement under an effective
primary shelf registration statement on file pursuant to Rule 415 under
the Securities Act, and ending on the date ninety (90) days following the
consummation of such underwritten public offering; provided, however, in
the case of foregoing clauses
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(E) and (F), the Minimum Effective Period shall be extended by the
aggregate number of days of such period of restriction.
(c) Effective Demand Registration. Following receipt of a request
for a Demand Registration, the Company shall:
(i) file the registration statement with the Commission as
promptly as practicable, and shall use the Company's commercially
reasonable efforts to have the registration declared effective under the
Securities Act as soon as reasonably practicable, in each instance giving
due regard to the need to prepare current financial statements, conduct
due diligence and complete other actions that are reasonably necessary to
effect a registered public offering; and
(ii) use the Company's commercially reasonable efforts to keep the
relevant registration statement Continuously Effective for no less than
the Minimum Effective Period or until such earlier date as of which all
the Registrable Securities under the registration statement filed pursuant
to the Demand Registration shall have been disposed of in the manner
described in the registration statement. Notwithstanding the foregoing, if
for any reason the effectiveness of a registration pursuant to this
Section 2 is suspended or such registration statement shall not be current
and compliant with respect to applicable disclosure requirements, the
Minimum Effective Period shall be extended by the aggregate number of days
of such suspension or period of non-compliance.
(d) Form of Registration Statement. A registration pursuant to
this Section 2 shall be on such appropriate registration form of the Commission
as shall (i) be selected by the Company and be reasonably acceptable to the
Majority Selling Holders and (ii) permit the disposition of the Registrable
Securities in accordance with the intended method or methods of disposition
specified in the request pursuant to Section 2(a).
(e) Selection of Underwriters. If any registration pursuant to
Section 2(a) involves an underwritten offering (whether on a "firm," "best
efforts" or "all reasonable efforts" basis or otherwise), or an agented
offering, the Majority Selling Holders shall have the right to select the
underwriter or underwriters and manager or managers to administer such
underwritten offering or the placement agent or agents for such agented
offering; provided, however, that each Person so selected shall be reasonably
acceptable to the Company.
Section 3. Registration Procedures.
(a) Obligations of the Company. Whenever required under Section 2
to effect a Demand Registration of any Registrable Securities, the Company shall
use its commercially reasonable efforts to:
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(i) Prepare and file with the Commission a registration statement
with respect to such Registrable Securities (which registration statement
shall be available for the Selling Holders' intended method of
distribution and 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 cause such registration statement to
become effective.
(ii) Notify each Selling Holder when the registration statement and
any post-effective amendments thereto are declared effective.
(iii) Notify each Selling Holder of the receipt of any comments from
the Commission with respect to the registration statement and, subject to
Section 2(b)(ii), 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 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 use its
commercially reasonable efforts 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
pre-effective or post-effective 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 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 securities covered by such
registration statement under such other securities or blue sky laws of
such states or jurisdictions as shall be reasonably requested by the
Underwriters' Representative or Agent (as applicable, or if inapplicable,
the Majority Selling Holders) 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,
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that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business, subject itself to taxation in
any such jurisdiction, or 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 Selling Holders and 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 and from
the holders of more than 5% of the Company's equity securities, if
requested by the underwriters. The Company shall also 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 issued or
threatened to be issued by the Commission in connection therewith and take
all 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 which is of a type specified in Section 2(b)(ii)(C) or as a
result of which such 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 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 each 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 and Underwriter (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 the
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opportunity 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 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) Obtain a so-called "comfort letter" from the Company's
independent public accountants, and legal opinions of counsel to the
Company addressed to the Selling Holders, 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 Majority Selling Holders.
The Company shall furnish to each Selling Holder a signed counterpart of
any such comfort letter or legal opinion. Delivery of any such opinion or
comfort letter shall be subject to the recipient furnishing such written
representations or acknowledgements as are customarily provided by selling
shareholders who receive such comfort letters or opinions.
(xii) 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.
(xiii) Cause the Registrable Securities to continue to be listed on
the New York Stock Exchange, Inc.
(xiv) Provide a CUSIP number for the Registrable Securities prior to
the effective date of the first registration statement including
Registrable Securities.
(xv) Take such other actions as are reasonably required in order to
expedite or facilitate the disposition of Registrable Securities included
in each such registration.
(b) Holders' Obligations. In connection with any registration
pursuant to Section 2, each Selling Holder agrees, as applicable:
(i) to execute the underwriting agreement, if any, agreed to by
the Majority Selling Holders or the Company, as the case may be;
(ii) that it will not offer or sell its Registrable Securities
under the registration statement until it has received copies of the
supplemented or amended
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prospectus contemplated by Section 3(a)(iii) and receives notice that any
post-effective amendment (if required) has become effective;
(iii) 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 2(b)(ii)(C), 2(b)(ii)(D), 3(a)(iii), 3(a)(vii) or
3(a)(viii), such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to any registration statement at issue
until such Holder's receipt of copies of a supplemented or amended
prospectus contemplated by Section 3(a)(iii) 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, such Holder will deliver to the Company (at the Company's
expense) all copies in such Holder's possession, other than permanent file
copies then in such Holder's possession, of the registration statement and
prospectus covering such Registrable Securities current at the time of
receipt of such notice; and
(iv) that the Company may require each Selling Holder as to which
any registration is being effected to furnish to it 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 may be required to effect the registration of such Selling
Holder's Registrable Securities, and to cooperate with the Company in
preparing such registration, the Company may exclude from such
registration the Registrable Securities of any Selling Holder who fails to
furnish such information within 5 Business Days after receiving such
request and to provide such cooperation, and the Company shall have no
obligation to register under the Securities Act the Registrable Securities
of a proposed Selling Holder who so fails to furnish such information or
provide such cooperation.
(c) Lock-Up Agreement. If requested in writing by the Company,
each Holder agrees to execute a lock-up agreement pursuant to which such Holder
shall not effect any public or private sale or distribution, including sales
pursuant to Rule 144 of the Securities Act (but excluding Transfers, whether
public or private to an Affiliate of such Holder), of Common Stock, or any
securities convertible into or exchangeable or exercisable for such securities,
held by such Holder during the period starting with date fifteen (15) days prior
to the Company's good faith estimate, as certified in writing by an executive
officer of the Company to the Holders, of the date of the proposed pricing of an
underwritten public offering of equity securities of the Company for the account
of the Company whether covered by a prospectus under primary registration
statement filed specifically for the proposed offering or a prospectus
supplement under an effective primary shelf registration statement on file
pursuant to Rule 415 under the Securities Act, and ending on the date ninety
(90) days following the consummation of such
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underwritten public offering; provided, however, that each Holder shall be
required to execute a lock-up agreement in accordance with this Section 3(c)
only in the event that each other stockholder of the Company holding 5% or more
of the then outstanding Common Stock on a fully-diluted basis (including
securities convertible into or exchangeable for Common Stock) executes a lock-up
agreement on substantially the same terms as set forth herein.
Section 4. 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 a Demand Registration for each Selling
Holder, 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 Initial Holders
(selected by the Selling Holders who constitute Majority Selling Holders);
provided, however, that the Company shall not be required to pay for any
expenses of any registration proceeding begun pursuant to Section 2 if the
registration is subsequently withdrawn at the request of the Selling Holders (if
such request is not made as a result of any action or inaction of the Company)
(in which case all Selling Holders and any other Holders of Registrable
Securities to be included in the registration shall bear such expenses pro rata
according to their number of shares requested to be registered), unless all
Holders of Registrable Securities then outstanding agree that such withdrawn
registration shall constitute one of the Demand Registrations under Section 2(a)
hereof. 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 5. Indemnification; Contribution.
(a) Indemnification by the Company. If any Registrable Securities
are included in a registration statement under this Agreement:
(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, 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 pursuant to any actual or threatened action, suit,
proceeding or investigation, or to which any of the foregoing Persons may
become subject under the Securities Act, the Exchange Act or other federal
or state laws, insofar as such losses, claims,
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damages, liabilities and expenses arise out of or are based upon any of
the following statements, omissions or violations:
(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;
provided, however, that the indemnification required by this Section 5(a) shall
not apply to 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 an untrue statement
or alleged untrue statement or omission or alleged omission made in any such
Registration Statement 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; provided, further,
that the indemnity agreement contained in this Section 5(a) shall not apply to
any underwriter to the extent that any such loss is based on or arises out of an
untrue statement or alleged untrue statement of a material fact, or an omission
or alleged omission to state a material fact, contained in or omitted from any
preliminary prospectus if the final prospectus shall correct such untrue
statement or alleged untrue statement, or such omission or alleged omission, and
a copy of the final prospectus has not been sent or given to such Person at or
prior to the confirmation of sale to such Person. The Company shall also
indemnify underwriters participating in the distribution of the Registrable
Securities, their officers, directors, agents and employees and each Person 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.
(ii) 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 directors, each
of its officers who shall have signed the registration statement, each
Person, if any, who
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controls the Company within the meaning of Section 15 of the Securities
Act or Section 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 pursuant to any actual or threatened action, suit,
proceeding or investigation, or to which any of the foregoing Persons may
otherwise become subject under the Securities Act, the Exchange Act or
other federal or state laws, insofar as such losses, claims, damages,
liabilities and expenses arise out 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 in writing 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 5(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 5(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.
(b) Conduct of Indemnification Proceedings. Promptly after receipt
by an indemnified party under this Section 5 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 5, 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
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following the commencement of any such action, if it prejudices or results in
forfeiture of rights or defenses, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 5, to the extent of any
damage directly suffered by the indemnifying party as a result thereof. Any fees
and expenses incurred by the indemnified party (including any fees and expenses
incurred in connection with investigating or preparing 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. 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 promptly assume the
defense of such action, claim or proceeding 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.
(c) Contribution. If the indemnification required by this Section
5 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 5:
(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,
-15-
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, subject to the limitations set forth in Section 5(a)
and Section 5(b), any legal or other fees or expenses reasonably incurred
by such party in connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(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
5(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.
(d) Full Indemnification. If indemnification is available under
this Section 5, the indemnifying parties shall indemnify each indemnified party
to the full extent provided in this Section 5 without regard to the relative
fault of such indemnifying party or indemnified party or any other equitable
consideration referred to in Section 5(d)(i) hereof.
(e) Survival. The obligations of the Company and the Selling
Holders of Registrable Securities under this Section 5 shall survive the
completion of any offering of Registrable Securities pursuant to a registration
statement under this agreement, and otherwise.
Section 6. Covenants of the Company. The Company hereby agrees and
covenants as follows:
(a) The Company shall use its commercially reasonable efforts to
file as and when applicable, on a timely basis, all reports required to be filed
by it under 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 use its commercially reasonable efforts to make
publicly available the information specified in subparagraph (c)(2) of Rule 144.
The Company shall use its commercially reasonable efforts to 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 other exemption from registration.
Upon the request of any Holder of Registrable Securities, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements and, if not, the specifics thereof.
(b) In connection with any sale, transfer or other disposition by
a Holder of any Registrable Securities pursuant to Rule 144, the Company shall
cooperate
-16-
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 Registrable Securities
to be for such number of shares and registered in such names as the Holder may
reasonably request at least two Business Days prior to any sale of Registrable
Securities.
Section 7. Miscellaneous .
(a) Amendments and Waivers.
(i) The provisions of this Agreement, including the provisions of
this Section 7(a), may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be
given without the written consent of the Company and the Holders of a
majority of the outstanding Registrable Securities. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon
each Holder, each future Holder of Registrable Securities, and the
Company.
(ii) Notice of any amendment, modification or supplement to this
Agreement adopted in accordance with this Section 7 shall be provided by
the Company to the Holders prior to the effective date of such amendment,
modification or supplement.
(b) Notices. All notices or other communications under this
Agreement shall be sufficient if in writing and delivered by hand or sent,
postage prepaid by registered, certified or express mail, or by recognized
overnight air courier service and shall be deemed given when so delivered by
hand, or if mailed or sent by overnight courier service, on the third Business
Day after mailing (one Business Day in the case of express mail or overnight
courier service) to the parties at the following addresses:
(i) if to the Initial Holders, to the addresses set forth under
their signatures on the signature page hereof and if to any other Holder
to the address contained in the records of the Company;
-17-
(ii) if to the Company, to:
Capital Trust, Inc.
000 Xxxx Xxxxxx,
00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Chief Executive Officer
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
or at such other address as the addressee may have furnished in writing to the
sender as provided herein.
(c) Assignment.
(i) Except as expressly provided in this Section 7(c), 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 7(c) 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 transferee as of the date of such
Transfer.
(ii) Notwithstanding Section 7(c)(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) The nature and extent of any rights assigned shall be as
agreed to between the assigning party and the assignee. No Person may be
assigned any rights under this Agreement unless (x) the Company is given
written notice by the assigning party at the time of such assignment
stating the name and address of the assignee, identifying the securities
of the Company as to which the rights in
-18-
question are being assigned, and providing a detailed description of the
nature and extent of the rights that are being assigned and (y) and 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 7(c).
(iv) Notwithstanding the foregoing, Berkley may assign its rights,
under this Agreement without the prior written consent of the Company to
one or more of its designated controlled Affiliates provided that Berkley
remains responsible for the obligations under this Agreement with respect
to such assignee.
(d) Successors and Assigns; No Third Party Beneficiaries. This
Agreement will be binding upon and inure to the benefit of the parties hereto
and their successors and permitted assigns. Except as set forth herein and by
operation of law, no party to this Agreement may assign or delegate all or any
portion of its rights, obligations, or liabilities under this Agreement without
the prior written consent of the Company in the case of a Holder or without the
written consent of Holders holding a majority of Registrable Securities in the
case of the Company. Notwithstanding the foregoing, Berkley may assign its
rights, obligations and liabilities under this Agreement without the prior
written consent of the Company to one or more of its designated controlled
Affiliates provided that Berkley remains responsible for the obligations under
this Agreement with respect to such assignee. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties hereto and their respective successors and permitted assigns to the
extent contemplated herein.
(e) 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.
(f) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
(h) Specific Performance; Costs and Expenses. 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.
-19-
(i) Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
-20-
IN WITNESS WHEREOF, the undersigned Company has executed this
Agreement as of the date first written above.
CAPITAL TRUST, INC.
By: /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
Title: Chief Executive Officer
IN WITNESS WHEREOF, the undersigned Berkley has executed this
Agreement as of the date first written above.
/s/ Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Address:
SCHEDULE A
Admiral Insurance Company
Berkley Insurance Company
Berkley Regional Insurance Company
Nautilus Insurance Company
