EXHIBIT 10.19
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of the ____ day of
____________, 1997, by and among WELLSFORD REAL PROPERTIES, INC., a
Maryland corporation (the "Company"), and ERP OPERATING LIMITED
PARTNERSHIP, an Illinois limited partnership, and its successors, assigns
and transferees (herein referred to collectively as the "Holders" and
individually as a "Holder").
W I T N E S S E T H:
WHEREAS, on the date hereof, Holder and the Company have entered into
that certain Common Stock and Preferred Stock Purchase Agreement (the
"Stock Purchase Agreement");
WHEREAS, pursuant to the terms of the Stock Purchase Agreement, Holder
is obligated to purchase shares of Class A common stock, par value $.01 per
share, of the Company ("Class A Common Stock") and Series A 8% Convertible
Redeemable Preferred Stock of the Company (the "Preferred Stock");
WHEREAS, pursuant to the Articles Supplementary classifying the
Preferred Stock attached as Exhibit A to the Stock Purchase Agreement
("Articles Supplementary"), the Holder shall have the right to convert all
or any of the outstanding shares of Preferred Stock into shares of common
stock, par value $.01 per share, of the Company (the "Common Stock");
WHEREAS, pursuant to the Articles of Incorporation of the Company, the
Holder shall have the right to convert all or any of the outstanding shares
of Class A Common Stock into shares of Common Stock; and
WHEREAS, the Company has agreed to provide the Holders with certain
registration rights as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and subject to and on the terms and conditions herein set
forth, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"Demand Notice" shall have the meaning set forth in Section 2 hereof.
"Effective Date" shall mean the date of this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended from time to time.
"Holder" or "Holders" shall have the meaning set forth in the
preamble.
"Person" shall mean an individual, partnership, corporation, trust, or
unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, and any such prospectus as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration Statement,
and by all other amendments and supplements to such prospectus, including
post-effective amendments, and in each case including all material
incorporated by reference therein.
"Public Sale" shall mean a public sale or distribution of Registrable
Securities, including a sale pursuant to Rule 144 (or any similar provision
then in effect) under the Securities Act.
"Registrable Securities" shall mean the Shares, excluding (i) Shares
for which a Registration Statement relating to the sale thereof by the
Holder shall have become effective under the Securities Act and which have
been disposed of by the Holder under such Registration Statement, and
(ii) Shares sold or otherwise distributed pursuant to Rule 144 under the
Securities Act.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance with this Agreement, including, without
limitation: (i) all SEC or National Association of Securities Dealers,
Inc. ("NASD") registration and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection
with blue sky qualification of any of the Registrable Securities and the
preparation of a Blue Sky Memorandum) and compliance with the rules of the
NASD, (iii) all expenses of any Persons engaged by the Company in preparing
or assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus, certificates and other documents
relating to the performance of and compliance with this Agreement, (iv) all
fees and expenses incurred in connection with the listing, if any, of any
of the Registrable Securities on any securities exchange or exchanges
pursuant to Section 4(a)(viii) hereof, (v) the fees and disbursements of
counsel for the Company and of the independent public accountants of the
Company, including the expenses of any special audits or "cold comfort"
letters, if any, required by or incident to such performance and
compliance, and (vi) the fees and disbursements of counsel representing a
selling Holder. Registration Expenses shall specifically exclude
underwriting discounts and commissions, and transfer taxes, if any,
relating to the sale or disposition of Registrable Securities by a selling
Holder, all of which shall be borne by such Holder in all cases.
"Registration Notice" shall have the meaning set forth in Section 3
hereof.
"Registration Statement" shall mean a registration statement of the
Company and any other entity required to be a registrant with respect to
such registration statement pursuant to the requirements of the Securities
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Act which covers the Registrable Securities requested by Holders to be
covered by such registration statement, and all amendments and supplements
to such registration statement, including post-effective amendments, in
each case including the Prospectus contained therein, all exhibits thereto
and all materials incorporated by reference therein.
"Requesting Holder" shall mean each Holder who requests to participate
in an underwritten public offering of Company Common Stock.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"Shares" shall mean Preferred Stock issuable or issued, Common Stock
issuable or issued upon conversion of all or any portion of the shares of
Preferred Stock or Class A Common Stock and Common Stock issuable or issued
upon the exercise of warrants issued pursuant to the Articles
Supplementary.
2. Registration Under the Securities Act.
(a) Filing of Registration Statement. After one (1) year from
the Effective Date hereof, as promptly as practicable after written notice
(a "Demand Notice") from the Holder requesting that the Company effect the
registration under the Securities Act of Registrable Securities having an
aggregate fair market value of $5,000,000 during the period three (3) years
from the Effective Date hereof ("Initial Period") or $7,500,000 at any time
after the Initial Period, the Company shall cause to be filed promptly a
Registration Statement or an amendment to a Registration Statement as
determined by the Company providing for the resale by the Holder of
Registrable Securities in accordance with the terms hereof and will use its
best efforts to cause any such Registration Statement to be declared
effective by the SEC as soon as reasonably practicable. Notwithstanding the
foregoing, Holder shall only have the right to deliver one Demand Notice
during any calendar year; provided, however, that during the period five
(5) years from the Effective Date hereof Holder shall not deliver more than
four (4) Demand Notices in the aggregate. Any such registration request by
Holder shall include all Shares which may be included in such Registration
Statement at such time. The Company agrees to use its best efforts to keep
any such Registration Statement continuously effective under the Securities
Act until such Shares covered thereby are no longer Registrable Securities
and further agrees to supplement or amend the Registration Statement, if
and as required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Registration Statement or by
the Securities Act or by any other rules and regulations thereunder for
such Registration Statement. The Company may elect to register all Shares
at any time.
(b) Expenses. The Company shall pay all Registration Expenses
in connection with any Registration Statement filed pursuant to this
Section 2.
(c) Inclusion in Registration Statement. The Company may
require each Holder of Registrable Securities to furnish to the Company in
writing such information regarding the proposed offer or sale by such
Holder of such Registrable Securities as the Company may from time to time
reasonably request in writing. Any Holder who does not provide the
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information reasonably requested by the Company in connection with the
Registration Statement as promptly as practicable after receipt of such
request, but in no event later than ten (10) days thereafter, shall not be
entitled to have its Registrable Securities included in the Registration
Statement.
3. Incidental Registration.
If the Company proposes to register any shares of Common Stock for
Public Sale pursuant to an underwritten offering under the Securities Act
(whether proposed to be offered for sale by the Company or by any other
Person) it will give prompt written notice (a "Registration Notice") to the
Holders of its intention to do so. Upon the written request of any Holder
(a "Requesting Holder") delivered to the Company within fifteen (15)
Business Days after the receipt of a Registration Notice, which request
shall specify the number of Registrable Securities intended to be disposed
of by such Requesting Holder, the Company shall include the Shares
specified in the request of such Requesting Holder in the registration
statement; provided, however, the Registrable Securities requested by such
Requesting Holder to be included in the Registration Statement shall have
an aggregate fair market value of $5,000,000 during the Initial Period or
$7,500,000 thereafter. The Company will not be required to effect any
registration pursuant to this Section 3 if the Company shall have been
advised in writing (with a copy to each Requesting Holder) by a nationally
recognized independent investment banking firm selected by the Company to
act as lead underwriter in connection with the public offering of
securities that, in such firm's opinion, a registration at that time of
additional securities would materially and adversely affect the offering,
in which case in the discretion of the Company, either:
(i) the Registrable Securities of the Requesting Holders shall
nevertheless be included in such Registration Statement subject to the
condition that the Requesting Holders may not offer or sell their
Registrable Securities included therein for a period of at least 90
days after the initial effective date of such Registration Statement,
or
(ii) if the Company should reasonably determine that the
inclusion of such Registrable Securities, notwithstanding the
provisions of the preceding clause (i), would materially adversely
affect the offering contemplated in such Registration Statement, and
based on such determination recommends inclusion in such Registration
Statement of fewer or none of the Registrable Securities of the
Requesting Holders, then (x) the number of Registrable Securities of
the Requesting Holders included in such Registration Statement shall
be reduced, if the Company recommends the inclusion of fewer
Registrable Securities, or (y) none of the Registrable Securities of
the Requesting Holders shall be included in such Registration
Statement, if the Company recommends the inclusion of none of such
Registrable Securities; provided, however, that if Registrable
Securities are being offered for the account of other persons or
entities as well as the Company, such reduction shall not represent a
greater fraction of the number of securities intended to be offered by
the Requesting Holders than the fraction of similar reductions imposed
on such other persons or entities (other than the Company).
Notwithstanding the foregoing, Holder shall only have the right to deliver
one Registration Notice during any calendar year; provided, however, that
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during the period five (5) years from the Effective Date hereof Holder
shall not deliver more than four (4) Registration Notices in the aggregate.
With respect to any proposed sale by the Holder of Registrable
Securities pursuant to this Section 3 the Company shall pay all
Registration Expenses.
No registration of Registrable Securities effected under this Section
3 shall relieve the Company of its obligation to effect registrations of
Registrable Securities pursuant to Section 2.
The rights of the Holder under this Section 3 are solely incidental in
nature, and nothing in this Section 3 shall prevent the Company from
reversing a decision to file a Registration Statement pursuant to this
Section 3 or from withdrawing any such Registration Statement before it has
become effective.
The incidental registration rights granted pursuant to this Section 3
shall not apply to (a) a registration relating to employee or director
stock option, purchase or other employee benefit plans, (b) a registration
related to a dividend reinvestment or share purchase plan or (c) a
registration on Form S-4 or Form S-8.
4. Registration Procedures.
(a) Obligations of the Company. In connection with any
Registration Statement pursuant to Sections 2 or 3 hereof, the Company
shall:
(i) cause the Registration Statement to be available for
the sale of the Registrable Securities by Holders in
one or more transactions, in negotiated transactions,
through the writing of options on the Registrable
Securities, or a combination of such methods of sale,
and to comply as to form in all material respects with
the requirements of the applicable form and include all
financial statements required by the SEC to be
filed therewith, and in the event the Company is listed
on the Nasdaq National Market System ("NMS"), in one or
more transactions on NMS or otherwise in special
offerings, exchange distributions or secondary
distribution pursuant to and in accordance with the
rules of the NMS, in the over-the-counter market;
(ii) (A) prepare and file with the SEC such amendments and
post-effective amendments to any Registration Statement
as may be necessary to keep each such Registration
Statement effective for the applicable period;
(B) cause the Prospectus included in each such
Registration Statement to be supplemented by any
required prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 or any similar rule
that may be adopted under the Securities Act;
(C) respond promptly to any comments received from the
SEC with respect to each Registration Statement, or any
amendment, post-effective amendment or supplement
relating thereto; and (D) comply with the provisions of
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the Securities Act applicable to issuers registering
securities under the circumstances provided herein with
respect to the disposition of securities covered by
each Registration Statement, except as otherwise
provided in Section 3 hereof;
(iii) furnish to each Holder of Registrable Securities,
without charge, as many copies of each Prospectus,
and any amendment or supplement thereto and such
other documents as they may reasonably request, in
order to facilitate the public sale or other
disposition of the Registrable Securities; the
Company consents to the use of the Prospectus, by
each such Holder of Registrable Securities, in
connection with the offering and sale of the
Registrable Securities covered by the Prospectus;
(iv) notify promptly each Holder of Registrable Securities
and confirm such advice in writing (A) of the issuance
by the SEC or any state securities authority of any
stop order suspending the effectiveness of a
Registration Statement or the initiation of any
proceedings for that purpose, (B) if the Company
receives any notification with respect to the
suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, and
(C) of the happening of any event during the period a
Registration Statement is effective 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 the Prospectus), not
misleading;
(v) use its best effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration
Statement at the earliest possible moment;
(vi) use its best efforts to register or qualify the
Registrable Securities by the time the applicable
Registration Statement is declared effective by the SEC
under all applicable state securities or "blue sky"
laws of such jurisdictions as any Holder of Registrable
Securities covered by a Registration Statement shall
reasonably request in writing, keep each such
registration or qualification effective during the
period such Registration Statement is required to be
kept effective and do any and all other acts and things
which may be reasonably necessary or advisable to
enable such Holder to consummate the disposition in
each such jurisdiction of such Registrable Securities
owned by such Holder; provided, however, that the
Company shall not be required to (A) qualify generally
to do business in any jurisdiction or to register as a
broker or dealer in such jurisdiction where it would
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not otherwise be required to qualify but for this
Section 4(a)(vi), (B) subject itself to taxation in any
such jurisdiction, or (C) submit to the general service
of process in any such jurisdiction;
(vii) upon the occurrence of any event contemplated by
Section 4(a)(iv)(C) hereof, use its best efforts
promptly to prepare and file a supplement or
prepare, file and obtain effectiveness of a post-
effective amendment to a Registration Statement or
the related Prospectus or any document
incorporated therein by reference or file any
other required document so that, as thereafter
delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any
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 the light of the circumstances under
which they were made, not misleading;
(viii) use its best efforts to cause all Registrable
Securities to be listed on any securities exchange
on which similar securities issued by the Company
are then listed;
(ix) provide a CUSIP number for all Registrable Securities,
not later than the effective date of the Registration
Statement or amendment thereto relating to such
Registrable Securities;
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and make
available to its security holders, as soon as
reasonably practicable, an earning statement covering
at least twelve (12) months which shall satisfy the
provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder; and
(xi) use its best efforts to cause the Registrable
Securities covered by a Registration Statement to be
registered with or approved by such other governmental
agencies or authorities as may be necessary by virtue
of the business and operations of the Company to enable
Holders to consummate the disposition of such
Registrable Securities.
(b) Obligations of Holders. In connection with and as a
condition to the Company's obligations with respect to a Registration
Statement pursuant to Sections 2 and 3 hereof and this Section 4, each
Holder agrees that (i) it will not offer or sell its Registrable Securities
under the Registration Statement until it has received copies of the
supplemental or amended Prospectus contemplated by Section 4(a)(ii) hereof
and receives notice that any post-effective amendment has become effective;
and (ii) upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 4(a)(iv)(C) hereof, such Holder
will forthwith discontinue disposition of Registrable Securities pursuant
to a Registration Statement until such Holder receives copies of the
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supplemented or amended Prospectus contemplated by Section 4(a)(vii) hereof
and receives notice that any post-effective amendment has become effective,
and, if so directed by the Company, such Holder will deliver to the Company
(at the expense of the Company) all copies in its possession, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
Each Holder will furnish to the Company all information relating
to the Holder required by the Securities Act to be included in the
Registration Statement.
The Company may require, as a condition to fulfilling its
obligations to register the Registrable Securities under Sections 2 or 3
hereof, that the Holders execute reasonable and customary indemnification
agreements for the benefit of the underwriters of the registration;
provided, however, that the Holders may not be required to indemnify the
Company's underwriters except with respect to information relating to the
Holders furnished by the Holders for use in such Registration Statement.
(c) Lockup. In the event the Company proposes to effect the
distribution of its securities through an underwritten public offering,
each Holder who then beneficially owns in excess of 100,000 shares agrees
for a period of time, beginning seven (7) days prior to the pricing of such
offering and ending thirty (30) days after such pricing that such Holder
will forthwith cease any sale or other disposition of any of the
Registrable Securities during such period of time, if requested in writing
by the Company or representatives of the underwriters for any such
underwritten public offering; provided, however, that Holders shall not be
subject to more than one Lockup Period during any twelve (12) month period.
(d) Postponement. The Company shall be entitled to postpone for
a reasonable period of time (but not in excess of 60 days) the filing of
any Registration Statement otherwise required to be prepared and filed by
it pursuant to Section 2 hereof, if the Board of Directors of the Company
determines, in its reasonable judgment, that such registration and offering
would materially interfere with any proposed financing, acquisition,
corporate reorganization or other material transaction involving the
Company, and the Company gives the Holders written notice of such
determination within fourteen (14) days of its receipt of a Demand Notice.
5. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder, each officer and director of such
Holder, and each Person, if any, who controls any Holder within the meaning
of Section 15 of the Securities Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement
(or any amendment thereto) pursuant to which
Registrable Securities were registered under the
Securities Act, including all documents incorporated
therein by reference, or the omission or alleged
omission therefrom of a material fact necessary in
order to make the statements therein, in the light of
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the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation,
or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the
written consent of the Company; and
(iii) against any and all expense whatsoever, as
incurred (including reasonable fees and
disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any
litigation, or investigation or proceeding by any
governmental agency or body, commenced or
threatened, in each case whether or not a party,
or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue
statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii)
above;
provided, however, that the indemnity provided pursuant to this
Section 5(a) does not apply to any Holder with respect to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by such Holder expressly for use in a Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement
thereto).
(b) Indemnification by the Holders. Each Holder severally
agrees to indemnify and hold harmless the Company and the other selling
Holders, and each of their respective directors and officers (including
each director and officer of the Company who signed the Registration
Statement), and each Person, if any, who controls the Company or any other
selling Holder within the meaning of Section 15 of the Securities Act, to
the same extent as the indemnity contained in Section 5(a) hereof (except
that any settlement described in Section 5(a)(ii) shall be effected only
with the written consent of such Holder), but only insofar as such loss,
liability, claim, damage or expense arises out of or is based upon (i) any
untrue statement or omission, or alleged untrue statements or omissions,
made in a Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such
selling Holder expressly for use in such Registration Statement (or any
amendment thereto) or such Prospectus (or any amendment or supplement
thereto), or (ii) such Holder's failure to deliver a Prospectus to any
purchaser of Registrable Securities where such a delivery obligation was
applicable to such Holder's sale of Registrable Securities and such Holder
had been provided with a reasonable number of copies of such Prospectus for
the relevant deliveries thereof. In no event shall the liability of any
Holder under this Section 5(b) be greater in amount than the dollar amount
of the proceeds received by such Holder upon the sale of the
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Registrable Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Each indemnified
party shall give reasonably prompt notice to each indemnifying party of any
action or proceeding commenced against it in respect of which indemnity may
be sought hereunder, but failure to so notify an indemnifying party
(i) shall not relieve it from any liability which it may have under the
indemnity agreement provided in Section 5(a) or (b) above, unless and to
the extent it did not otherwise learn of such action and the lack of notice
by the indemnified party results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) shall not, in any event,
relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided under Section 5(a)
or (b) above. If the indemnifying party so elects within a reasonable time
after receipt of such notice, the indemnifying party may assume the defense
of such action or proceeding at such indemnifying party's own expense with
counsel chosen by the indemnifying party and approved by the indemnified
parties defendant in such action or proceeding, which approval shall not be
unreasonably withheld; provided, however, that, if such indemnified party
or parties reasonably determine that a conflict of interest exists where it
is advisable for such indemnified party or parties to be represented by
separate counsel or that, upon advice of counsel, there may be legal
defenses available to them which are different from or in addition to those
available to the indemnifying party, then the indemnifying party shall not
be entitled to assume such defense and the indemnified party or parties
shall be entitled to one separate counsel at the indemnifying party's
expense. If an indemnifying party is not entitled to assume the defense of
such action or proceeding as a result of the proviso to the preceding
sentence, such indemnifying party's counsel shall be entitled to conduct
the defense of such indemnified party or parties, it being understood that
both such counsel will cooperate with each other to conduct the defense of
such action or proceeding as efficiently as possible. If an indemnifying
party is not so entitled to assume the defense of such action or does not
assume such defense, after having received the notice referred to in the
first sentence of this paragraph, the indemnifying party or parties will
pay the reasonable fees and expenses of counsel for the indemnified party
or parties. In such event, however, no indemnifying party will be liable
for any settlement effected without the written consent of such
indemnifying party. If an indemnifying party is entitled to assume, and
assumes, the defense of such action or proceeding in accordance with this
paragraph, such indemnifying party shall not be liable for any fees and
expenses of counsel for the indemnified parties incurred thereafter in
connection with such action or proceeding. The indemnification obligations
provided pursuant to Sections 5(a) and (b) hereof survive, with respect to
a Holder, the transfer of Registrable Securities by such Holder, and with
respect to a Holder or the Company, shall remain in full force and effect
regardless of any investigation made by or on behalf of any indemnified
party.
(d) Contribution.
(i) In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement
provided for in this Section 5 is for any reason held
to be unenforceable although applicable in accordance
with its terms, the Company and the selling Holders
shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated
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by such indemnity agreement incurred by the Company and
the selling Holders, in such proportion as is
appropriate to reflect the relative fault of and
benefits to the Company on the one hand and the selling
Holders on the other (in such proportions that the
selling Holders are severally, not jointly, responsible
for the balance), in connection with the statements or
omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative
benefits to the indemnifying party and indemnified
parties shall be determined by reference to, among
other things, the total proceeds received by the
indemnified party and indemnified parties in connection
with the offering to which such losses, claims,
damages, liabilities or expenses relate. The relative
fault of the indemnifying party and indemnified parties
shall be determined by reference to, among other
things, whether the 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 by, or relates to information
supplied by, such indemnifying party or the indemnified
parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or
prevent such action.
(ii) The Company and the Holders agree that it would not be
just or 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
account of the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding
the provisions of this Section 5(d), no selling Holder
shall be required to contribute any amount in excess of
the amount by which the total price at which the
Registrable Securities of such selling Holder were
offered to the public exceeds the amount of any damages
which such selling Holder would otherwise have been
required to pay by reason of such untrue statement or
omission.
(iii) Notwithstanding the foregoing, 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.
For purposes of this Section 5(d), each Person, if
any, who controls a Holder within the meaning of
Section 15 of the Securities Act and directors and
officers of a Holder shall have the same rights to
contribution as such Holder, and each director of
the Company, each officer of the Company who
signed the Registration Statement and each Person,
if any, who controls the Company within the
meaning of Section 15 of the Securities Act shall
have the same rights to contribution as the
Company.
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(iv) The contribution provided for in this Section 5(d)
shall survive, with respect to a Holder, the transfer
of Registrable Securities by such Holder, and with
respect to a Holder or the Company, shall remain in
full force and effect regardless of any investigation
made by or on behalf of any indemnified party.
6. Rule 144 Sales.
(a) Reports. The Company covenants that it will file the
reports required to be filed by the Company under the Securities Act and
the Securities Exchange Act of 1934, as amended, and will take such further
action as any Holder of Registrable Securities may reasonably request, all
to the extent required to enable such Holder to sell Registrable Securities
pursuant to Rule 144 under the Securities Act.
(b) Certificates. In connection with any sale, transfer or
other disposition by any Holder of any Registrable Securities pursuant to
Rule 144 under the Securities Act, the Company shall cooperate with such
Holder to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any
Securities Act legend, and enable certificates for such Registrable
Securities to be for such number of shares and registered in such names as
the selling Holders may reasonably request at least two (2) business days
prior to any sale of Registrable Securities.
(c) Opinion That Shares Not Required to be Registered. The
Company shall not be required to fulfill any registration obligations under
this Agreement if the Company provides the Holder who desires to sell
Registrable Securities with an opinion, satisfactory to Holder in its
reasonable discretion, of counsel, satisfactory to Holder in its reasonable
discretion, stating that (i) the Holder is free to sell the Registrable
Securities that they desired to register in the manner proposed by such
Holder (including but, not limited to, an underwritten offering), without
registering such Registrable Securities, or (ii) such Registrable
Securities can be sold under Rule 144 of the Securities Act or otherwise
without registration in the open market in compliance with the Securities
Act.
7. Miscellaneous.
(a) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given without the written consent of the Company and the
Holders of a majority in amount of the outstanding Registrable Securities;
provided, however, that no amendment, modification or supplement or waiver
or consent to the departure with respect to the provisions of Sections 2,
3, 4, 5, 6 or 7 hereof shall be effective as against any Holder of
Registrable Securities unless consented to in writing by such Holder of
Registrable Securities, as the case may be. Notice of any amendment,
modification or supplement to this Agreement adopted in accordance with
this Section 7(a) shall be provided by the Company to each Holder of
Registrable Securities at least fifteen (15) days prior to the effective
date of such amendment, modification or supplement.
(b) Notices. All notices and other communications provided for
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or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery, (i) if to a Holder, at the most current address given
by such Holder to the Company by means of a notice given in accordance with
the provisions of this Section 7(b), which address initially is, with
respect to each Holder, the address set forth next to such Holder's name on
the books and records of the Company, or (ii) if to the Company, at:
Wellsford Real Properties, Inc., 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: President, Fax No. (000) 000-0000.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; three
(3) business days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt is acknowledged, if
telecopied; or at the time delivered if delivered by an air courier
guaranteeing overnight delivery.
(c) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of
each of the Company and the Holder, including without limitation and
without the need for an express assignment, subsequent Holders. If any
successor, assignee or transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities, as the case may be, shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities such Person shall be entitled to receive the benefits hereof and
shall be conclusively deemed to have agreed to be bound by all of the terms
and provisions hereof.
(d) Headings. The headings in this Agreement are for the
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(e) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAW PROVISIONS THEREOF.
(f) Specific Performance. The Company and the Holders 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.
(g) Entire Agreement. This Agreement is intended by the Company
and the Holder as a final expression of their agreement and intended to be
a complete and exclusive statement of the agreement and understanding of
the Company and the Holder in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
of the Company and the Holder with respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
WELLSFORD REAL PROPERTIES, INC.
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By:________________________________
Name:______________________________
Title:_____________________________
ERP OPERATING LIMITED PARTNERSHIP
By:________________________________
Name:______________________________
Title:_____________________________
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