Exhibit 2.9
FORM OF
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of __________, ____ by and among (i) Pennsylvania Real Estate
Investment Trust, a Pennsylvania business trust (the "Trust"), and (ii) each of
the persons identified on Schedule A attached hereto (each, a "Beneficial Owner"
and, collectively, the "Beneficial Owners").
WHEREAS, the Trust, PREIT Associates, L.P., a Delaware limited
partnership ("PREIT Partnership"), Crown American Realty Trust, a Maryland real
estate investment trust ("Crown"), and Crown American Properties, L.P., a
Delaware limited partnership ("Crown Partnership"), entered into an Agreement
and Plan of Merger, dated as of May 13, 2003 (the "Merger Agreement"), pursuant
to which (i) Crown will be merged with and into the Trust (the "Merger"), with
the Trust as the survivor of the Merger, and (ii) PREIT Partnership and Crown
Partnership will consummate certain transactions contemplated in connection with
the Merger, including the issuance by PREIT Partnership of __________ class B
units of limited partner interest in PREIT Partnership (such units, the "PREIT
OP Units") to the Beneficial Owners as set forth opposite their names on
Schedule A attached hereto;
WHEREAS, pursuant to Section 9.5 and the other related provisions of
the First Amended and Restated Agreement of Limited Partnership of PREIT
Partnership, dated as of September 30, 1997 and as amended through __________
__, ____ (as the same may be amended, restated or supplemented from time to
time, the "Partnership Agreement"), subject to the various limitations contained
in the Partnership Agreement and other instruments being delivered in connection
with the Merger, the Beneficial Owners are entitled to redeem their PREIT OP
Units for cash or, at the Trust's election, common shares of beneficial
interest, par value $1.00 per share, of the Trust ("Shares" and, such redemption
right, the "Redemption Right"); and
WHEREAS, the Trust has agreed to grant to the Beneficial Owners the
registration rights described herein with respect to Shares issued in connection
with the Merger and the Shares, if any, issuable in respect of the PREIT OP
Units.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements hereinafter set forth, and for other good
and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, hereby agree, intending to be legally bound hereby, as follows:
1. Certain Definitions
In addition to the other terms defined in this Agreement, the following
terms shall have the following meanings:
"Commission" means the United States Securities and Exchange
Commission, or such other federal agency at the time having the principal
responsibility for administering the Securities Act.
"Effective Time" means the time that the Merger becomes effective
pursuant to the terms of the Merger Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the relevant time.
"NASD" means National Association of Securities Dealers, Inc.
"Oak Ridge Net Proceeds of Sale" shall mean an amount equal to the
aggregate value of all consideration received (except, in the case of any
promissory note or other deferred consideration received, only the aggregate
value of all cash consideration received or to be received during the Initial
Period) by the Beneficial Owners in connection with the sale of the Oak Ridge
Mall (including a partial sale thereof) less (i) all direct costs and expenses
associated therewith, including, but not limited to, transfer taxes, brokerage
fees and transaction costs, (ii) any amounts paid by or on behalf of any of the
Beneficial Owners at the time of such sale in satisfaction of any debt secured
by such property and, (iii) in the case of a partial sale of the Oak Ridge Mall,
any portion of the consideration received by the Beneficial Owners in connection
with such sale which the Beneficial Owners reasonably expect to reinvest within
one year from the date of such sale in improvements or other expenditures
reasonably necessary to maintain and preserve the value of the remainder of the
Oak Ridge Mall as a result of such partial sale. For purposes of this
definition, any non-monetary consideration shall be valued at its fair market
value on the date received.
"Participation Threshold" means such number of Registrable Securities
having an aggregate proposed sales price of $16 million less the sum of (A) the
Oak Ridge Net Proceeds of Sale and (B) the aggregate sale price of all
Registrable Securities previously sold by the Beneficial Owners during the
Initial Period.
"Person" means an individual, a partnership (general or limited),
corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate, a quasi-governmental entity, a government or any
agency, authority, political subdivision or other instrumentality thereof, or
any other entity.
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"Registrable Securities" means (i) any Shares issued by the Trust to
the Beneficial Owners pursuant to the Merger, (ii) any Shares issued or issuable
by the Trust in order to redeem or acquire PREIT OP Units issued or issuable in
connection with the Merger and the transactions contemplated thereby, and (iii)
any additional Shares or other equity securities of the Trust issued by the
Trust in respect of Shares described in subclause (i) after the issuance of such
Shares, in connection with a stock dividend, stock split, combination, exchange,
reorganization, recapitalization or similar reclassification of the Trust's
securities; provided that, as to any particular Registrable Securities, such
securities shall cease to constitute Registrable Securities when: (w) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of thereunder; (x) such securities shall have been sold in satisfaction
of all applicable conditions to the resale provisions of Rule 144 under the
Securities Act (or any similar provision then in force); (y) such securities are
eligible to be publicly sold without limitation as to amount or manner of sale
pursuant to Rule 144(k) under the Securities Act (or any successor provision to
such Rule); or (z) such securities shall have ceased to be issued and
outstanding. The term Registrable Securities shall not include the PREIT OP
Units or any other securities of PREIT Partnership.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect from time to time.
2. Shelf Registration.
(a) At any time after the closing of the Merger, the Beneficial Owners
owning Registrable Securities then outstanding may unanimously request in
writing that the Trust effect a shelf registration under the Securities Act
registering for resale by the Beneficial Owners of all of the Registrable
Securities eligible for registration pursuant to a shelf registration statement
on Form S-3 (or any similar short-form registration statement that is a
successor to Form S-3) or, in the Trust's sole discretion, any other appropriate
form. The Trust shall use its commercially reasonable efforts to prepare and
file a shelf registration statement under the Securities Act within forty-five
(45) days of the receipt by the Trust of such request from the Beneficial
Owners. The Trust shall use commercially reasonable efforts to cause such shelf
registration statement to be declared effective as promptly as shall be
reasonably practicable after it has been filed. The Trust shall not be required
to effect more than one shelf registration pursuant to this Section 2. Subject
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to Sections 2(c), 2(e) and 3(e) of this Agreement, the Trust shall use its
commercially reasonable efforts to keep such shelf registration statement
effective until all securities included in such registration statement have
ceased to constitute Registrable Securities and to undertake to file a second
registration statement, which may include a combined prospectus (as permitted
under Rule 429 of the Securities Act) covering the Registrable Securities
included in the earlier registration statement together with any Shares issued
or issuable by the Trust in connection with the contribution of any Reserved
PREIT OP Units (as defined in the Merger Agreement) pursuant to the put and call
provisions of the Crown Partnership Contribution Agreement (as defined in the
Merger Agreement) that are issued after the date of the initial registration
request pursuant to this Section 2.
(b) Notwithstanding Section 2(a) above, the Trust may defer the filing
of or effectiveness of any shelf registration statements required by this
Section 2 for a reasonable period of time not to exceed 105 days after a request
by the Beneficial Owners to effect such registration if (i) the Trust is, at
such time, in the process of pursuing an underwritten public offering of equity
securities and is advised by its managing underwriter(s) that such offering
would in its or their opinion be adversely affected by such filing or (ii) the
Trust in good faith determines that any such filing or the offering of any
Registrable Securities would materially impede, delay or interfere with any
proposed financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction involving the Trust which began
prior to the date on which a request for registration was made by the Beneficial
Owners hereunder.
(c) At any time when a shelf registration statement effected pursuant
to this Section 2 is effective, upon written notice from the Trust to each
Beneficial Owner that the Trust has determined in good faith that sale of
Registrable Securities pursuant to such shelf registration statement would
require disclosure of non-public material information not otherwise required to
be disclosed under applicable law having a material adverse effect on the Trust
(an "Information Blackout"), each Beneficial Owner shall suspend sales of
Registrable Securities pursuant to such shelf registration statement until the
earlier of:
(i) forty-five (45) days after the Trust notifies the
Beneficial Owners of such good faith determination, or
(ii) such time as the Trust notifies the Beneficial Owners
that such material information has been disclosed to the public or has
ceased to be material or that sales pursuant to such shelf registration
statement may otherwise be resumed (the number of days from such
suspension of sales by the Beneficial Owners until the day when such
sale may be resumed hereunder is hereinafter called a "Sales Blackout
Period").
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(d) Notwithstanding the provisions of Section 2(c), there shall be no
more than two (2) Information Blackouts during any fiscal year of the Trust and
no Sales Blackout Period shall continue for more than forty-five (45)
consecutive days.
(e) Notwithstanding any other provisions contained herein to the
contrary, the Trust shall not be required to effect any shelf registration or to
keep any shelf registration statement effective pursuant to this Section 2
following the Demand Registration Rights Effective Date (as defined below) if
the Beneficial Owners (i) exercise their right to request a demand registration
pursuant to Section 3 below or (ii) notify the Trust in writing of their
election to preserve their future right to request a demand registration
pursuant to Section 3 below, as described in Section 3(e) below.
(f) The Trust shall bear all Registration Expenses in connection with
any shelf registration pursuant to this Section 2, whether or not such shelf
registration becomes effective; provided, however, that if the Beneficial Owners
request a shelf registration and subsequently withdraw their request, then such
Beneficial Owners shall either pay all Registration Expenses incurred in
connection with such shelf registration or forfeit the right to request another
shelf registration unless the withdrawal of such request is the result of facts
or circumstances relating to the Trust that arise after the date on which such
request was made and would have a material adverse effect on the offering of the
Registrable Securities.
3. Demand Registration.
(a) If on the date that is five years and nine months after the closing
of the Merger (the "Demand Registration Rights Effective Date"), the Registrable
Securities owned by the Beneficial Owners constitute at least 5% of the Trust's
then outstanding shares (after giving effect to the redemption of any PREIT
Class B Units held by the Beneficial Owners and the issuance of the Trust's
shares therefor), then, subject to Section 3(e) below, at any time beginning on
the Demand Registration Rights Effective Date the Beneficial Owners owning
Registrable Securities then outstanding may unanimously request in writing that
the Trust effect the registration under the Securities Act of the Registrable
Securities then outstanding pursuant to a registration statement on Form S-3 (or
any similar short-form registration statement that is a successor to Form S-3),
or in the Trust's sole discretion, any other appropriate form. The Trust shall
use commercially reasonable efforts to prepare and file a registration statement
under the Securities Act within sixty (60) days of the receipt by the Trust of
such request from the Beneficial Owners. The Trust shall use commercially
reasonable efforts to cause such registration statement to be declared effective
by the Commission as promptly as shall be reasonably practicable after it has
been filed, and the Trust shall use its commercially reasonable efforts to keep
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such registration statement effective until the earlier of (i) such time as all
Registrable Securities included in such registration statement have been
disposed of pursuant to the distribution thereunder or (ii) the 30th day
following the effectiveness of such registration statement. The Trust shall be
obligated to effect only one such Demand Registration for the Beneficial Owners.
(b) Notwithstanding Section 3(a) above, the Trust may defer the filing
of or effectiveness of the registration statement required by this Section 3 for
a reasonable period of time not to exceed 180 days after a request by the
Beneficial Owners to effect such registration if (i) the Trust is, at such time,
in the process of pursuing an underwritten public offering of equity securities
and is advised by the managing underwriter(s) that such offering would in its or
their opinion be adversely affected by such filing or (ii) the Trust in good
faith determines that any such filing or the offering of any Registrable
Securities would materially impede, delay or interfere with any proposed
financing, offer or sale of securities, acquisition, corporate reorganization or
other significant transaction involving the Trust which began prior to the date
on which a request for registration was made by the Beneficial Owners hereunder.
(c) If the Beneficial Owners intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Trust as part of their request made pursuant to Section 3(a) above.
In such event, the right of any Beneficial Owner to include its Registrable
Securities in such registration shall be conditioned upon such Beneficial
Owner's participation in such underwriting and the inclusion of such Beneficial
Owner's Registrable Securities in the underwriting to the extent provided
herein. All Beneficial Owners proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by the
Trust. Notwithstanding any other provision of this Section 3 to the contrary,
if, in the case of a registration requested pursuant to Section 3(a) above, the
managing underwriter for the offering advises the Beneficial Owners and the
Trust that marketing factors require a limitation of the number of shares to be
underwritten, then the Trust shall so advise all Beneficial Owners of
Registrable Securities that would otherwise be underwritten pursuant hereto, and
the number of Registrable Securities that may be included in the underwriting
shall be allocated pro rata among all Beneficial Owners thereof desiring to
participate in such underwriting (according to the number of Registrable
Securities requested to be sold by each Beneficial Owner). No Registrable
Securities requested by a Beneficial Owner to be included in a registration
pursuant to Section 3(a) shall be excluded from the underwriting unless all
securities other than Registrable Securities are first excluded.
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(d) The Trust shall bear all Registration Expenses (as defined in
Section 7 below) in connection with any demand registration pursuant to this
Section 3, whether or not such registration statement becomes effective;
provided, however, that if the Beneficial Owners request a demand registration
and subsequently withdraw their request, then such Beneficial Owners shall
either pay all Registration Expenses incurred in connection with such demand
registration or forfeit the right to request another demand registration unless
the withdrawal of such request is the result of facts or circumstances relating
to the Trust that arise after the date on which such request was made and would
have a material adverse effect on the offering of the Registrable Securities.
(e) Notwithstanding any other provision contained herein to the
contrary, the Trust shall not be required to effect any demand registration
pursuant to this Section 3 unless prior to the expiration of the thirty (30) day
period commencing on the Demand Registration Rights Effective Date the
Beneficial Owners (which Beneficial Owners, as required by Section 3(a) above,
on the Demand Registration Rights Effective Date owned Registrable Securities
which constituted at least 5% of the Trust's then outstanding shares after
giving effect to the redemption of any PREIT Class B Units held by the
Beneficial Owners and the issuance of the Trust's shares therefor) unanimously
either (i) request in writing that the Trust immediately effect the registration
under the Securities Act of the Registrable Securities then outstanding in
accordance with Section 3(a) above or (ii) notify the Trust in writing of their
election to preserve the future right of the Beneficial Owners to request a
registration under the Securities Act of the Registrable Securities pursuant to
this Section 3 above; it being understood and agreed that, in the event the
Beneficial Owners elect to preserve the future right to request a demand
registration under the Securities Act of the Registrable Shares pursuant to this
Section 3 during such thirty (30) day period, the Trust's obligation to effect
any shelf registration or to keep any shelf registration statement effective
pursuant to Section 2 of this Agreement shall terminate immediately regardless
of whether or not the Beneficial Owners thereafter exercise their right to
request a demand registration pursuant to this Section 3.
4. Incidental or "Piggy-Back" Registration.
(a) If, at any time during the nine (9) month period beginning on the
Effective Time of the Merger (the "Initial Period"), the Trust proposes to file
a Registration Statement under the Securities Act covering an underwritten
offering by the Trust for its own account (other than a Registration Statement
on Form S-4 or S-8 or any successor thereto), then the Trust shall promptly give
written notice of such proposed filing to each of the Beneficial Owners. Upon
the written request of any Beneficial Owner received by the Trust within 10 days
after the delivery of such notice by the Trust (but in any event prior to 10
days following the expiration of the Initial Period), the Trust shall use
commercially reasonable efforts to cause a registration statement covering those
Registrable Securities that each such Beneficial Owner has requested to be
registered up to, in the aggregate, the Participation Threshold, to become
effective under the Securities Act.
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(b) The Trust shall not be required under this Section 4 to include any
of the Beneficial Owners' securities in an underwriting unless they accept the
terms of the underwriting as agreed upon between the Trust and the underwriters
selected by the Trust; provided, that the Beneficial Owners in no event shall be
subject to a lock-up period in excess of that provided for in Section 5(a)
below. If the managing underwriter for the offering shall advise the Trust that
marketing factors require a limitation of the number of shares to be
underwritten, then the Trust shall so advise all Beneficial Owners of
Registrable Securities which would otherwise be underwritten pursuant to this
Section 4 and the number of shares of Registrable Securities that may be
included in the underwriting shall be allocated in accordance with Section 4(c)
below.
(c) If the Trust shall, pursuant to Section 4(b), reduce the amount of
securities to be included in an offering, such reduction shall be made as
follows: (i) first, all securities other than those to be included by the Trust
for its own account and other than those which the Beneficial Owners seek to
include in the offering (but in any event not to exceed the Participation
Threshold) shall be excluded from the offering to the extent such limitation on
the number of shares included in the underwriting is required; and (ii) second,
if further limitation on the number of shares to be included in the underwriting
is required, the number of shares to be included by the Beneficial Owners shall
be reduced to 15% of the total number of shares to be included in such
incidental registration and the number of shares to be included by the Trust
shall be reduced to 85% of the total number of shares to be included in such
incidental registration; it being understood that any reduction in the number of
shares to be included in the incidental registration by the Beneficial Owners
shall be made pro rata among the Beneficial Owners in accordance with the number
of shares of Registrable Securities requested to be sold by each such Beneficial
Owner.
(d) The Trust shall bear all Registration Expenses in connection with
any incidental registration pursuant to this Section 4, whether or not such
incidental registration statement becomes effective.
(e) Notwithstanding anything in Section 5(a) below to the contrary, in
the event that (i) the Beneficial Owners participate in any incidental
registration pursuant to this Section 4 and (ii) the sum of the aggregate net
proceeds reasonably expected to be received by the Beneficial Owners in
connection with such incidental registration and the aggregate net proceeds
previously received by such Beneficial Owners from the sale of Registrable
Shares by such Beneficial Owners from and after the Effective Time shall be
equal to an amount less than $10 million in the aggregate, the duration of the
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restriction on public sales or distributions of Registrable Securities by the
Beneficial Owners in connection with such incidental registration pursuant to
this Section 4 shall be reduced to apply only to the period commencing on the
tenth (10th) day prior to the date such underwritten offering commences and
ending no later than sixty (60) days following the closing of the underwritten
offering (or such shorter period as the managing underwriter or underwriters for
such underwritten offering may request); provided, however, that if the managing
underwriter or underwriters for such underwritten offering reasonably determine
that a longer period (but in any event not to exceed the period otherwise
required by Section 5(a) below) is necessary or appropriate in connection with
such offering, then the Beneficial Owners shall have the option to either (i)
comply with such longer requirement or (ii) forfeit their rights in connection
with such incidental registration pursuant to this Section 4; it being
understood and agreed that, in the event that the Beneficial Owners elect to
forfeit their rights in connection with an incidental registration pursuant to
clause (ii) above, (x) such Beneficial Owners shall not be subject to the
restrictions on sale contained in Section 5(a) below or this Section 4(e) in
connection with such offering, and (y) in the event such offering is not
consummated by the Trust, such Beneficial Owners would again be entitled to
request "piggy-back" registration of their Registrable Securities in accordance
with Section 4(a) above in connection with a subsequent offering.
5. Restrictions on Public Sale.
The Beneficial Owners shall:
(a) in the event the Trust is issuing equity securities to the public
in an underwritten offering, and, if requested by the managing underwriter or
underwriters for such underwritten offering, subject to Section 4(e) above, not
effect any public sale or distribution of Registrable Securities or any
securities convertible into or exchangeable or exercisable for such Registrable
Securities, including a sale pursuant to Rule 144 (or any similar provision then
in force) under the Securities Act, for a period commencing on the tenth (10th)
day prior to the date such underwritten offering commences (such offering being
deemed to commence for this purpose on the later of the effective date for the
registration statement for such offering or, if applicable, the date of the
prospectus supplement for such offering) and ending 90 days after the closing of
such underwritten offering;
(b) not, during any period in which any of their Registrable Securities
are included in any effective registration statement: (i) effect any
stabilization transactions or engage in any stabilization activity in connection
with the Shares or other equity securities of the Trust in contravention of Rule
104 of Regulation M under the Exchange Act; or (ii) permit any Affiliated
Purchaser (as that term is defined in Rule 101 of Regulation M under the
Exchange Act) to bid for or purchase for any account in which any Beneficial
Owner has a beneficial interest, or attempt to induce any other person to
purchase, any Shares in contravention of Rule 102 of Regulation M under the
Exchange Act; and
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(c) furnish each broker through whom the Beneficial Owners offer
Registrable Securities such number of copies of the prospectus as such broker
may require and otherwise comply with the prospectus delivery requirements under
the Securities Act.
6. Registration Procedures.
(a) In connection with any registration contemplated by Sections 2, 3
or 4, the Trust shall:
(i) prepare and file with the Commission, within the
applicable time period, a registration statement, which registration
statement shall (x) be available for the sale of the Registrable
Securities in accordance with the intended method or methods of
distribution by the Beneficial Owners, and (y) comply as to form in all
material respects with the requirements of the applicable form and
include all financial statements required by the Commission to be filed
therewith; provided that, before filing a registration statement, the
Trust shall upon request furnish to the Beneficial Owners copies of
such registration statement as proposed to be filed and thereafter such
number of copies of such registration statement (including all exhibits
thereto), and any documents incorporated by reference after the initial
filing of any registration statement as the Beneficial Owners may
reasonably request on a case by case basis after each such filing in
order to facilitate the disposition of the Registrable Securities owned
by the Beneficial Owners, and shall revise the registration statement
as it specifically relates to the Beneficial Owners based on
information received by the Beneficial Owners as determined by the
Trust;
(ii) prepare and file with the Commission such amendments,
post-effective amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for such period
of time as is necessary to allow the distribution of the Registrable
Securities contemplated therein and to comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement during the period during which
any such registration statement is required to be effective; provided
that, before filing any amendments or supplements to such registration
statement or the prospectus, the Trust shall upon request furnish to
the Beneficial Owners copies of such amendments and supplements (in
each case including all exhibits thereto) and the prospectus (including
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each preliminary prospectus) as proposed to be filed and thereafter
such number of copies of such amendments, supplements, prospectuses and
any documents incorporated by reference after the initial filing of any
registration statement as the Beneficial Owners may reasonably request
on a case by case basis after each such filing in order to facilitate
the disposition of the Registrable Securities owned by the Beneficial
Owners, and revise such documents as they specifically relate to the
Beneficial Owners based on information received by the Beneficial
Owners as determined by the Trust;
(iii) use its commercially reasonable efforts to register or
qualify the Registrable Securities covered by such registration
statement under the securities or "blue sky" laws of such jurisdictions
as the Beneficial Owners shall reasonably request, and do any and all
other acts and things which may be necessary or desirable to enable the
Beneficial Owners to consummate the offering and disposition of
Registrable Securities in such jurisdictions; provided, however, that
the Trust shall not be required to qualify generally to do business as
a foreign business trust, subject itself to taxation, or consent to
general service of process, in any jurisdiction wherein it would not,
but for the requirements of this Section 6, be obligated to be
qualified;
(iv) use its commercially reasonable efforts to cause the
Registrable Securities covered by such registration statement to be
registered with, or approved by, such other public, governmental or
regulatory authorities as may be necessary to facilitate the
disposition of such Registrable Securities in accordance with the
methods of disposition intended herein;
(v) notify each Beneficial Owner promptly and, if requested by
any Beneficial Owner, confirm such notification in writing, (A) when a
prospectus or any prospectus supplement has been filed with the
Commission, and, with respect to such registration statement or any
post-effective amendment thereto, when the same has been declared
effective by the Commission, (B) of any request by the Commission for
amendments or supplements to such registration statement or related
prospectus, or for additional information, (C) of the issuance by the
Commission of any stop order or the initiation of any proceedings for
such or a similar purpose (and the Trust shall use its commercially
reasonable efforts to obtain the withdrawal of any such order at the
earliest practicable moment), (D) of the receipt by the Trust of any
notification with respect to the suspension of the qualification of any
of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose (and the
Trust shall use its commercially reasonable efforts to obtain the
withdrawal of any such suspension at the earliest practicable moment),
(E) of the occurrence of any event that requires the making of any
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changes to such registration statement or related prospectus so that
such documents will not contain any untrue statement of a material fact
or omit 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, not misleading (and the Trust shall,
subject to Section 7, promptly prepare and furnish to the Beneficial
Owners a reasonable number of copies of a supplemented or amended
prospectus such that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include 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, in
light of the circumstances under which they are made, not misleading),
and (F) of the Trust's determination that the filing of a
post-effective amendment to such registration statement shall be
necessary or appropriate. Each Beneficial Owner shall be deemed to have
agreed by acquisition of Registrable Securities that, upon the receipt
of any notice from the Trust of the occurrence of any event of the kind
described in clause (E) of this Section 6(a)(v), each Beneficial Owner
shall forthwith discontinue his or its offer and disposition of
Registrable Securities pursuant to the registration statement covering
such Registrable Securities until he or it shall have received copies
of a supplemented or amended prospectus which is no longer defective as
contemplated by clause (E) of this Section 6(a)(v) and, if so directed
by the Trust, shall deliver to the Trust, at the Trust's expense, all
copies (other than permanent file copies) of the defective prospectus
covering such Registrable Securities which are then in its possession;
(vi) otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission, as
the same may hereafter be amended; and
(vii) cooperate with the Beneficial Owners to facilitate the
timely preparation and delivery of certificates representing
Registrable Securities to be sold; and use commercially reasonable
efforts to cause the Registrar and Transfer Agent for the Trust to
issue, upon request of the Beneficial Owners, certificates for such
numbers of Registrable Securities registered in such names as the
Beneficial Owners may reasonably request at least two business days
prior to any sale of Registrable Securities.
(b) In connection with any registration contemplated by Sections 3 or 4
only, the Trust shall:
(i) make available for inspection by the Beneficial Owners and
any attorney, accountant or other agent retained by the Beneficial
Owners (collectively, the "Inspectors"), all financial and other
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records, pertinent corporate documents and properties of the Trust and
its subsidiaries as shall be necessary to enable them to conduct their
due diligence review, and cause the officers, trustees and employees of
the Trust and its subsidiaries to supply all information reasonably
requested by any such Inspector in connection with such review. In
addition, the Trust shall use its commercially reasonable efforts to
make available, to discuss the Trust's business with the Inspectors,
the independent public accountants who have certified its most recent
annual financial statements, and shall provide such opportunities as
are necessary for the Inspectors to discuss the Trust's business with
the Trust's trustees and officers; and
(ii) obtain an opinion from counsel to the Trust and a "cold
comfort" letter from an independent certified public accounting firm of
national recognition and standing who have certified the Trust's
financial statements included in the registration statement or any
amendment thereto, in customary form addressed to the managing
underwriter or underwriters, the Board of Trustees and to the selling
Beneficial Owners of Registrable Securities included in a registration
statement filed by the Trust.
(c) In connection with any registration contemplated by Sections 2, 3
or 4, each Beneficial Owner shall:
(i) cooperate with the Trust in connection with the
preparation of the registration statement to be filed by the Trust
pursuant to this Agreement, and for so long as the Trust is obligated
to keep such registration statement effective, shall (a) respond within
five (5) business days to any request by the Trust to provide or verify
information regarding such Beneficial Owner or such Beneficial Owner's
Registrable Securities (including the proposed manner of sale) that may
be required to be included in such registration statement pursuant to
the rules and regulations of the Commission, and (b) provide in a
timely manner information regarding the proposed distribution by such
Beneficial Owner of the Registrable Securities and such other
information as may reasonably be requested by the Trust from time to
time in connection with the preparation of and for inclusion in a shelf
registration statement pursuant to Section 2 and any related
prospectus; and
(ii) if requested by the Trust, before using any registration
statement or any prospectus contained therein or any amendment or
supplement thereto, deliver to the Trust a certification that he or it
has reviewed the information contained therein and representing and
warranting to the Trust that the information relating to such
Beneficial Owner and his or its plan of distribution is as set forth in
13
the related prospectus, that the prospectus does not, as of the time of
such sale, contain any untrue statement of a material fact relating to
or provided by such Beneficial Owner or his or its plan of distribution
and that the prospectus does not, as of the time of such sale, omit to
state any material fact relating to such Beneficial Owner or his or its
plan of distribution required to be stated in the prospectus or
necessary to make the statements in such prospectus, in the light of
the circumstances under which they were made, not misleading.
7. Registration Expenses.
Whether or not any registration statement prepared and filed pursuant
to Sections 2, 3 or 4 of this Agreement is declared effective by the Commission,
the Trust shall pay all of the following expenses ("Registration Expenses")
arising in connection with the registration pursuant to this Agreement (except
as specified in the following sentence): (a) all Commission and any NASD
registration and filing fees and expenses; (b) any and all expenses incident to
the Trust's performance of, or compliance with, this Agreement, including,
without limitation, any allocation of salaries and expenses of Trust personnel
or other general overhead expenses of the Trust, or other expenses for the
preparation of historical and pro forma financial statements or other data
prepared by the Trust; (c) all listing, transfer and/or exchange agent and
registrar fees; (d) fees and expenses in connection with the qualification of
the Registrable Securities under securities or "blue sky" laws; (e) printing and
delivery expenses; and (f) fees and out-of-pocket expenses of counsel for the
Trust and its independent certified public accountants and other persons,
including special experts, retained by the Trust. Notwithstanding the foregoing,
the Trust shall not be required to pay fees and out-of-pocket expenses of
counsel retained by the Beneficial Owners, or any discounts, commissions or fees
of selling brokers, dealers and underwriters relating to the distribution of the
Registrable Securities.
8. Indemnification; Contribution.
(a) The Trust hereby indemnifies and holds harmless, to the fullest
extent permitted by law, each Beneficial Owner, directors, officers, partners,
employees, agents of the Beneficial Owners, as applicable, and each Person, if
any, who controls any Beneficial Owner within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act, against all losses, claims,
damages, liabilities (or proceedings in respect thereof) and expenses (under the
Securities Act, common law and otherwise), joint or several, which arise out of
or are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the registration statement contemplated hereby or in
any prospectus, preliminary prospectus, any amendment or supplement thereto or
any document incorporated by reference relating thereto or in any filing made in
14
connection with the registration or qualification of the offering under "blue
sky" or other securities laws of jurisdictions in which the Registrable
Securities are offered, 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, not
misleading, and the Trust shall reimburse such Beneficial Owners for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or proceeding, (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, if used prior to the effective date of such registration
statement (unless such statement is corrected in the final prospectus, and the
Trust has previously furnished copies thereof to the Beneficial Owners seeking
such indemnification), or contained in the final prospectus (as amended or
supplemented if the Trust shall have filed with the Commission any amendment
thereof or supplement thereto) if used within the period during which the Trust
is required to keep the registration statement to which such prospectus relates
current, or the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein in light of the circumstances
under which they were made, not misleading; provided, however, that such
indemnification shall not extend to any such losses, claims, damages,
liabilities (or proceedings in respect thereof) or expenses that are caused by
any untrue statement or alleged untrue statement contained in, or by any
omission or alleged omission from, information furnished in writing to the Trust
by such Beneficial Owner in such capacity specifically and expressly for use in
any such registration statement or prospectus.
(b) The Beneficial Owners hereby jointly and severally indemnify and
hold harmless, to the fullest extent permitted by law, the Trust, its trustees,
officers, employees, agents and each Person, if any, who controls the Trust
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act, against any losses, claims, damages, liabilities (or proceedings
in respect thereof) and expenses resulting from any untrue statement, or alleged
untrue statement of a material fact, or any omission or alleged omission of a
material fact required to be stated, or necessary to make the statements in the
registration statement or prospectus, or any amendment thereof or supplement
thereto, not misleading; provided, however, that each Beneficial Owner shall be
liable hereunder if and only to the extent that any such loss, claim, damage,
liability (or proceeding in respect thereof) or expense arises out of or is
based upon an untrue statement, or alleged untrue statement or omission or
alleged omission, made in reliance upon and in conformity with information
pertaining to such Beneficial Owner which is requested by the Trust and
furnished in writing to the Trust by such Beneficial Owner specifically and
expressly for use in any such registration statement or prospectus.
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(c) Any Person seeking indemnification under the provisions of this
Section 8 shall, promptly after receipt by such Person of notice of the
commencement of any action, suit, claim or proceeding, notify in writing each
party against whom indemnification is to be sought of the commencement thereof;
provided, however, that the failure so to notify an indemnifying party shall not
relieve the indemnifying party from any liability which it or he may have under
this Section 8 (except to the extent that it has been prejudiced in any material
respect by such failure) or from any liability which the indemnifying party may
otherwise have. In case any such action, suit, claim or proceeding is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent it or he may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party shall have the right to employ its own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such suit, action, claim or proceeding, (ii) the indemnifying party shall not
have employed counsel (reasonably satisfactory to the indemnified party) to take
charge of the defense of such action, suit, claim or proceeding within a
reasonable time after notice of commencement of the action, suit, claim or
proceeding, or (iii) such indemnified party shall have reasonably concluded,
based on the advice of counsel, that there may be defenses available to it which
are different from or additional to those available to the indemnifying party
which, if the indemnifying party and the indemnified party were to be
represented by the same counsel, could result in a conflict of interest for such
counsel or materially prejudice the prosecution of the defenses available to
such indemnified party. If any of the events specified in clauses (i), (ii) or
(iii) of the preceding sentence shall have occurred or shall otherwise be
applicable, then the fees and expenses of one counsel selected by a majority in
interest of the indemnified parties shall be borne by the indemnifying party.
If, in any case, the indemnified party employs separate counsel, the
indemnifying party shall not have the right to direct the defense of such
action, suit, claim or proceeding on behalf of the indemnified party. Anything
in this paragraph to the contrary notwithstanding, an indemnifying party shall
not be liable for the settlement of any action, suit, claim or proceeding
effected without its prior written consent (which consent in the case of an
action, suit, claim or proceeding exclusively seeking monetary relief shall not
be unreasonably withheld or delayed). Such indemnification shall remain in full
force and effect irrespective of any investigation made by or on behalf of an
indemnified party.
16
(d) If the indemnification from the indemnifying party as provided in
this Section 8 is unavailable or is otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then the indemnifying 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. The relative fault of such indemnifying party shall be
determined by reference to, among other things, whether any action in question,
including any untrue (or alleged untrue) statement of a material fact or
omission (or alleged omission) to state a material fact, has been made, or
relates to information supplied by such indemnifying party or such indemnified
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in Section 8(d) hereof, any legal or other fees or expenses reasonably
incurred by such party in connection with any such investigation or proceeding.
The parties hereto acknowledge that it would not be just and equitable
if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation other than as described above.
Notwithstanding the provisions of this Section 8(d), the Beneficial Owners shall
not be required to contribute any aggregate amount in excess of the amount by
which the total price at which the Registrable Securities of such Beneficial
Owners were offered to the public exceed the amount of any damages which such
Beneficial Owners have otherwise been required to pay or become liable to pay by
reason of such untrue statement or omission. 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.
If, however, indemnification is available under this Section 8, the
indemnifying parties shall indemnify each indemnified party to the fullest
extent provided in Sections 8(a) through 8(d) hereof without regard to the
relative fault of said indemnifying party or indemnified party or any other
equitable consideration.
9. Rule 144 Compliance.
So as to enable each Beneficial Owner to sell Registrable Securities
pursuant to Rule 144 under the Securities Act, the Trust covenants that it will
use commercially reasonable efforts to (a) make and keep public information
available as those terms are understood and defined in Rule 144 under the
Securities Act; (b) file with the Commission in a timely manner all reports and
other documents required to be filed by the Trust under the Securities Act and
17
the Exchange Act so long as the Trust remains subject to such requirements and
the filing of such reports and other documents is required for the applicable
provisions of Rule 144 under the Securities Act; and (c) furnish to each
Beneficial Owner so long as such Beneficial Owner owns Registrable Securities
promptly upon request a copy of the most recent annual or quarterly report of
the Trust and such other reports and documents so filed by the Trust under the
Exchange Act. In connection with any sale, transfer or other disposition by any
Beneficial Owner of any Registrable Securities pursuant to Rule 144 under the
Securities Act, the Trust shall cooperate with such Beneficial Owner to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold, and enable certificates for such Registrable
Securities to be for such number of shares and registered in such names as the
Beneficial Owner representative may reasonably request in writing at least four
(4) Business Days prior to any sale of Registrable Securities hereunder.
10. Miscellaneous
(a) Notices. Except as otherwise provided below, whenever it is
provided in this Agreement that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties hereto, or whenever any of the parties hereto, desires to provide
to or serve upon any person any other communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and either shall be delivered in person
or sent by telecopy, addressed as follows:
if to the Trust:
Pennsylvania Real Estate Investment Trust
The Bellevue
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Executive Vice President and
General Counsel
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx L.L.P.
Columbia Square
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: J. Xxxxxx Xxxxxxx, Xx., Esq.
Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
18
and
Drinker Xxxxxx & Xxxxx LLP
One Xxxxx Square
00xx & Xxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
if to any Beneficial Owner or the Beneficial Owner representative:
Xxxx X. Xxxxxxxxxxx
Xxxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxx Xxxxx LLP
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. XxXxxxx, Esq.
Facsimile: (000) 000-0000
and
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) Entire Agreement. This Agreement represents the entire agreement
and understanding among the parties hereto with respect to the subject matter
hereof and supersedes any and all prior oral and written agreements,
arrangements and understandings among the parties hereto with respect to such
subject matter. This Agreement can be amended, supplemented or changed, and any
provision hereof can be waived, only by a written instrument making specific
reference to this Agreement signed by the Trust on the one hand, and all of the
Beneficial Owners on the other hand.
(c) Assignment; Successors and Assigns. Except as set forth in the next
sentence, this Agreement and the rights granted hereunder may not be assigned by
any Beneficial Owner without the prior written consent of the Trust, which may
be granted or withheld by the Trust in its sole and absolute discretion. Each
19
Beneficial Owner will be permitted to assign its rights under this Agreement to
one or more entities controlled by it in connection with a concurrent transfer
of PREIT OP Units or Registrable Securities that is permitted by the terms of
the Partnership Agreement, so long as the Beneficial Owner provides to the Trust
at least five (5) business days' advance written notice of the transfer, and the
transferee executes and delivers to the Trust an instrument, in form and
substance acceptable to the Trust, agreeing to be bound by the terms of this
Agreement as if it were an original party hereto. This Agreement shall inure to
the benefit of and be binding upon all of the parties hereto and their
respective successors and permitted assigns.
(d) Headings. Section headings contained in this Agreement are inserted
for convenience of reference only, shall not be deemed to be a part of this
Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
(e) Applicable Law. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the internal laws of the State of New York.
(f) Severability. If fulfillment of any provision of this Agreement, at
the time such fulfillment shall be due, shall transcend the limit of validity
prescribed by law, then the obligation to be fulfilled shall be reduced to the
limit of such validity; and if any clause or provision contained in this
Agreement operates or would operate to invalidate this Agreement, in whole or in
part, then such clause or provision only shall be held ineffective, as though
not herein contained, and the remainder of this Agreement shall remain operative
and in full force and effect.
(g) Equitable Remedies. The parties hereto agree that irreparable harm
would occur in the event that any of the agreements and provisions of this
Agreement were not performed fully by the parties hereto in accordance with
their specific terms or conditions or were otherwise breached, and that money
damages are an inadequate remedy for breach of this Agreement because of the
difficulty of ascertaining and quantifying the amount of damage that will be
suffered by the parties hereto in the event that this Agreement is not performed
in accordance with its terms or conditions or is otherwise breached. It is
accordingly hereby agreed that the parties hereto shall be entitled to an
injunction or injunctions to restrain, enjoin and prevent breaches of this
Agreement by the other parties and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, such remedy being in addition to and not in lieu of, any other
rights and remedies to which the other parties are entitled to at law or in
equity.
20
(h) No Waiver. No waiver by a party hereto shall be effective unless
made in a written instrument duly executed by the party against whom such waiver
is sought to be enforced, and only to the extent set forth in such instrument.
Neither the waiver by any of the parties hereto of a breach or a default under
any of the provisions of this Agreement, nor the failure of any of the parties,
on one or more occasions, to enforce any of the provisions of this Agreement or
to exercise any right or privilege hereunder shall thereafter be construed as a
waiver of any subsequent breach or default of a similar nature, or as a waiver
of any such provisions, rights or privileges hereunder.
(i) Counterparts. To facilitate execution, this Agreement may be
executed in as many counterparts as may be required. It shall not be necessary
that the signature of or on behalf of each party appear on each counterpart, but
it shall be sufficient that the signature of or on behalf of each party appear
on one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in any proof of this
Agreement to produce or account for more than a number of counterparts
containing the respective signatures of or on behalf of all of the parties.
(j) Trust Assets. The Beneficial Owner acknowledges that no trustee,
officer or shareholder of the Trust is liable to such holder in respect of this
Agreement and that such holder shall look only to the income and assets of the
Trust in respect of any payments or claims related to this Agreement.
(k) Pronouns. All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural, as the identity
of the person or entity may require.
(l) Termination of CIT Registration Rights Agreement. By execution and
delivery hereof, Crown Investments Trust ("CIT") hereby agrees that that certain
Registration Rights Agreement, by and between Crown and CIT, dated August 17,
1993, is hereby terminated and shall be null and void and of no further force
and effect, and the Trust (as successor by merger to Crown) shall have no
liability or obligation with respect thereto.
(SIGNATURES APPEAR ON FOLLOWING PAGE)
21
IN WITNESS WHEREOF, each of the parties hereto has duly
executed and delivered this Registration Rights Agreement, or has caused this
Registration Rights Agreement to be duly executed and delivered in their names
and on their behalf, as of the date first written above.
Trust:
Pennsylvania Real Estate Investment
Trust
By:
------------------------------------
Name:
Title:
BENEFICIAL OWNERS:
------------------------------------------
Xxxx X. Xxxxxxxxxxx,
on his own behalf and as Beneficial Owner
Representative
Crown Investments Trust,
a Delaware statutory trust
By:
------------------------------------
Name:
Title:
Crown American Investment Company,
a Delaware corporation
By:
------------------------------------
Name:
Title:
Crown Delaware Holding Company,
a Delaware corporation
By:
------------------------------------
Name:
Title:
Crown American Properties, L.P.
By: Crown American Realty Trust, as
general partner
By:
------------------------------------
Name:
Title:
Schedule A
----------
[TO BE COMPLETED]
No. of Class B Units of
Limited Partner Interest in
Beneficial Owner PREIT Partnership
---------------- -----------------
Xxxx X. Xxxxxxxxxxx
Crown Investments Trust
Crown American Investment Company
Crown Delaware Holding Company
Crown American Properties, L.P.
