1
EXHIBIT 10.56
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") made and
entered into as of this __ day of __________ ___, 1996 by and among BRANDYWINE
REALTY TRUST, a Maryland real estate investment trust (the "Company"), and
XXXXXX XXXXXXX INSTITUTIONAL FUND, INC.-U.S. REAL ESTATE PORTFOLIO, a Maryland
corporation and XXXXXX XXXXXXX SICAV SUBSIDIARY SA, a Luxembourg corporation
(each a Purchaser and together the "Purchasers").
BACKGROUND
Pursuant to a Securities Purchase Agreement dated as of
November 6, 1996 by and between the Company and the Purchasers (the "Securities
Purchase Agreement"), the Company has agreed to issue to the Purchasers an
aggregate of 709,091 shares of the Company's common shares of beneficial
interest par value $.01 per share (the "Shares").
To induce each Purchaser to enter into the foregoing
transaction, the Company has agreed to provide them with the registration rights
set forth in this Agreement.
1. CERTAIN DEFINITIONS.
In addition to the other terms defined in this Agreement, the
following terms shall be defined as follows:
"Additional Holders" means those Persons who have registration
rights with respect to securities of the Company pursuant to either of the
Additional Registration Rights Agreements.
"Additional Registration Rights Agreements" means that certain
Registration Rights Agreement of the Company and Safeguard Scientifics
(Delaware) Inc., the Xxxxxxx Company and the Turkey Venture Fund XIII, Ltd. and
that certain Registration Rights Agreement of the Company and RAI Real Estate
Advisers, Inc., as the voting trustee of a voting trust executed by the
Commonwealth of Pennsylvania State Employes' Retirement System.
"Additional Securities" means those securities of the Company
which are or become subject to the registration provisions of either of the
Additional Registration Rights Agreements.
"Brokers Transactions" has the meaning ascribed to such term
pursuant to Rule 144 under the Securities Act.
2
"Business Day" means any day on which the American Stock
Exchange is open for trading.
"Closing Date" means the date of closing under the Securities
Purchase Agreement.
"Common Stock" means common shares of beneficial interest of
the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder, all as the same
shall be in effect at the relevant time.
"Holder(s)" means each Purchaser for so long as (and to the
extent that) it owns any Registrable Securities, and its successors, assigns,
and direct and indirect transferees who become registered owners of Registrable
Securities or securities exercisable, exchangeable or convertible into
Registrable Securities.
"Outstanding" means with respect to any securities as of any
date, all such securities theretofore issued, except any such securities
theretofore converted, exercised or canceled or held by the issuer or any
successor thereto (whether in its treasury or not) or any affiliate of the
issuer or any successor thereto.
"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 of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
"Registrable Security(ies)" means (I) all or any portion of
the Shares, (ii) any additional common shares of beneficial interest or other
equity securities of the Company issued or issuable after the Closing Date in
respect of any such securities (or other equity securities issued in respect
thereof) by way of a stock dividend or stock split, in connection with a
combination, exchange, reorganization, recapitalization or reclassification of
Company securities, or pursuant to a merger, division, consolidation or other
similar business transaction or combination involving the Company, and (iii) any
other common shares of beneficial interest obtained in open market transactions
or otherwise; provided that in the case of equity securities other than Common
Stock such securities are registered under Section 12(b) or Section 12(g) of the
Exchange Act; and further provided that: as to any particular Registrable
Securities, such securities shall cease to constitute Registrable Securities (I)
when 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; or (ii) when such securities shall have ceased to
be issued and outstanding.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with the registration requirements set
forth in this Agreement including, without
-2-
3
limitation, the following: (I) the fees, disbursements and expenses of the
Company's counsel(s), accountants, and experts in connection with the
registration under the Securities Act of Registrable Securities; (ii) all
expenses in connection with the preparation, printing and filing of the
registration statement, any preliminary prospectus or final prospectus, any
other offering document and amendments and supplements thereto, and the mailing
and delivering of copies thereof to the underwriters and dealers, if any; (iii)
the cost of printing or producing any agreement(s) among underwriters,
underwriting agreement(s) and blue sky or legal investment memoranda, any
selling agreements, and any other documents in connection with the offering,
sale or delivery of Registrable Securities to be disposed of; (iv) any other
expenses in connection with the qualification of Registrable Securities for
offer and sale under state securities laws, including the fees and disbursements
of counsel for the underwriters in connection with such qualification and in
connection with any blue sky and legal investment surveys; (v) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of Registrable Securities to
be disposed of and any blue sky registration or filing fees, and (vi) the fees
and expenses incurred in connection with the listing of Registrable Securities
on each securities exchange (or The NASDAQ Stock Market) on which Company
securities of the same class are then listed; provided, however, that
Registration Expenses with respect to any registration pursuant to this
Agreement shall not include (x) expenses incurred by any Holder in connection
with any offering, including the fees and expenses of counsel, accountants, and
experts retained by such Holder (other than the fees and expenses of one counsel
for the Holders as and to the extent provided in Section 10), (y) any
underwriting discounts or commissions attributable to Registrable Securities, or
(z) any transfer taxes applicable to Registrable Securities.
"SEC" 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.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC thereunder, all as the same shall be in
effect at the relevant time.
"Shelf Registration Statement" means a Shelf Registration
Statement of the Company pursuant to the provisions of Section 2(b) of this
Agreement which covers Common Stock on an appropriate form then permitted by the
SEC to be used for such registration and the sales contemplated to be made
thereby, under Rule 415 under the Securities Act, or any similar rule that may
be adopted by the SEC, and all amendments and supplements to such Registration
Statement, including pre and post-effective amendments thereto, in each case
including the prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Shelf Registration" means a registration of Common Stock
effected pursuant to Section 2(b) hereof.
"Trading Day" means a day on which the principal securities
exchange or stock market on which the applicable security is traded is open for
the transaction of business.
-3-
4
2. DEMAND REGISTRATION; SHELF REGISTRATION.
(a) (I) A Holder may request at any time (by written notice
delivered to the Company) that the Company register under the Securities Act all
or any portion of the Registrable Securities held by (or then issuable to) such
Holder (the "Requesting Holder"), representing in the aggregate not less than
twenty percent of the Registrable Securities held by such Requesting Holder, for
sale in the manner specified in such notice (including, but not limited to, an
underwritten public offering); provided however, that no such request shall be
made prior to one hundred twenty (120) days after the date that the Company's
Registration Statement on Form S-11 (File No. 333-13969)(the "1996 Registration
Statement") has been declared effective by the SEC. In each such case, such
notice shall specify the number of Registrable Securities for which registration
is requested, the proposed manner of disposition of such securities, and the
minimum price per share at which the Requesting Holder would be willing to sell
such securities in an underwritten offering. The Company shall, within five (5)
Business Days after its receipt of any Requesting Holder's notice under this
Section 2(a)(I), give written notice of such request to all other Holders and
all Additional Holders and afford them the opportunity of including in the
requested registration statement such of their Registrable Securities or
Additional Securities, as the case may be, as they shall specify in a written
notice given to the Company within twenty (20) days after their receipt of the
Company's notice. Within ten (10) Business Days after the expiration of such
twenty (20) day period, the Company shall notify all Holders and Additional
Holders requesting registration of (A) the aggregate number of Registrable
Securities or Additional Securities, as the case may be, proposed to be
registered by all Holders and Additional Holders, (B) the proposed filing date
of the registration statement, and (C) such other information concerning the
offering as any Holder or Additional Holder may have reasonably requested. If
the Requesting Holder of the Registrable Securities to be included in such
offering shall have requested that such offering be underwritten, the managing
underwriter for such offering shall be chosen by such Holder with the consent of
the Company, which consent shall not be unreasonably withheld, not less than
thirty (30) days prior to the proposed filing date stated in the Company's
notice, and the Company shall thereupon promptly notify such Holders and any
Additional Holders to be included in such offering as to the identity of the
managing underwriter, if any, for the offering. On or before the 30th day prior
to such anticipated filing date, any Holder or Additional Holder may give
written notice to the Company and the managing underwriter specifying either
that (A) Registrable Securities or Additional Securities, as the case may be, of
such Holder or Additional Holder are to be included in the underwriting, on the
same terms and conditions as the securities otherwise being sold through the
underwriters under such registration or (B) such Registrable Securities or
Additional Securities, as the case may be, are to be registered pursuant to such
registration statement and sold in the open market without any underwriting, on
terms and conditions comparable to those normally applicable to offerings in
reasonably similar circumstances, regardless of the method of disposition
originally specified in such Holder's or Additional Holder's request for
registration. To the extent that any or all of the Registrable Securities to be
included in any registration pursuant to this Section 2(a)(I) or any other
provision of this Agreement are to be issued upon conversion, exercise or
exchange of other securities, there shall be no obligation for any Holder to
effect any such conversion, exercise or exchange until immediately prior to the
closing of the sale of such Registrable Securities.
-4-
5
(ii) The Company shall use its commercially
reasonable best efforts to file with the SEC within eighty (80) days (thirty
(30) days if the Company may use a Registration Statement on Form S-3 to
register such Registrable Securities) after the Company's receipt of the initial
Requesting Holder's written notice pursuant to Section 2(a)(I), a registration
statement for the public offering and sale, in accordance with the method of
disposition specified by such Holder, of the number of Registrable Securities
specified in such notice, and thereafter use its commercially reasonable best
efforts to cause such registration statement to become effective within sixty
(60) days after its filing. Such registration statement may be on Form S-11 or
another appropriate form (including Form S-3) that the Company is eligible to
use and that is reasonably acceptable to the managing underwriter; provided,
however, that if any Form other than Form S-11 is used in an underwritten
offering, upon the request of the managing underwriter, or the selling
shareholders, the prospectus included in the registration statement shall be
amplified to include such additional information as such persons may reasonably
request regarding the Company, its business and management (including, without
limitation, the information called for by Items 101, 102, 103, 201, 202, 301 and
303 of Regulation S-K under the Securities Act).
(iii) With respect to any Holder, the Company shall
not have any obligation hereunder (A) to permit or participate in more than two
offerings pursuant to this Section 2(a), or (B) to register any Registrable
Securities under this Section 2(a) unless it shall have received requests from
the Requesting Holder to register at least 20% of the aggregate Registrable
Securities of such Requesting Holder issued at the date hereof.
(iv) If the Company is required to use commercially
reasonable best efforts to register Registrable Securities and Additional
Securities in a registration initiated upon the demand of any Holder pursuant to
Section 2(a) of this Agreement and the managing underwriters for such offering
advise that the inclusion of all securities sought to be registered by the
Holders and Additional Holders may interfere with an orderly sale and
distribution of or may materially adversely affect the price of such offering,
then, unless all such Holders and Additional Holders otherwise notify the
Company in writing, the aggregate number of Registrable Securities and
Additional Securities included by the Holders and Additional Holders in such
offering shall be reduced to a number which the managing underwriters advise
will not likely have such effect and the maximum number of Registrable
Securities and Additional Securities able to be included in such offering by
each Holder and Additional Holder shall be reduced giving first preference to
all Registrable Securities before any Additional Securities are included and
thereafter pro rata (in accordance with such Holder's or Additional Holder's, as
the case may be, proportionate share of all Registrable Securities and
Additional Securities duly requested to be included in such registration).
(b) At any time during the 60-day period following the end of
any fiscal year of the Company, other than the fiscal year in which a
registration statement is to be filed pursuant to Section 2(a) (except that the
registration pursuant to a Deemed Additional Share Request shall not be subject
to such limitation), any Holder or Holders may request in writing that the
Company register under the Securities Act all or any portion of the Registrable
Securities held by (or then issuable to) such Requesting Holders for sale
pursuant to a Shelf Registration Statement; provided that any distribution or
sale pursuant to any such Shelf Registration shall be limited to Brokers'
Transactions or other transactions that do not involve an underwritten public
offering. By closing
-5-
6
under the Securities Purchase Agreement, the Purchasers shall be deemed to have
made (as of the date of such closing) a request under Section 2(b) (the "Deemed
Additional Share Request") that the Company register for sale pursuant to a
Shelf Registration Statement all Shares. The Company shall, within five (5)
Business Days after its receipt of any Requesting Holder's notice under this
Section 2(b), give written notice of such request to all other Holders and
Additional Holders and afford them the opportunity of including in the requested
Shelf Registration Statement such of their Registrable Securities or Additional
Securities, as the case may be, as they shall specify in a written notice given
to the Company within twenty (20) days after their receipt of the Company's
notice. The Company shall thereupon use its commercially reasonable best efforts
to file the Shelf Registration Statement with the SEC within sixty (60) days
after its receipt of the initial Requesting Holder's notice and to cause such
registration statement to be declared effective within sixty (60) days after its
filing (or in the case of the Deemed Additional Share Request the earlier of 60
days after filing or March 31, 1997); provided, however, that the Company shall
not be required (A) to effect more than one registration pursuant to this
Section 2(b) in any fiscal year for a Holder, or (B) to effect any registration
for a Holder pursuant to this Section 2(b) during the fiscal year during which
Registrable Securities of such Holder are registered pursuant to Section 2(a) of
this Agreement, or (C) to register for a Holder any Registrable Securities under
this Section 2(b) (other than pursuant to the Deemed Additional Share Request)
unless it shall receive requests from such Holder to register at least 10% of
the aggregate Registrable Securities of such Holder issued at the date hereof.
The Company shall use its commercially reasonable best efforts to keep such
Shelf Registration Statement (or, if required hereunder, a successor Shelf
Registration Statement filed pursuant to Section 2(d) below) continuously
effective in order to permit the prospectus forming a part thereof to be usable
by Holders and Additional Holders until all securities included in such Shelf
Registration Statement have ceased to be Registrable Securities or Additional
Securities, as the case may be. (the "Lapse Date").
(c) Notwithstanding any other provision of this Agreement, the
Company shall have the right to defer the filing or effectiveness of a
registration statement relating to any registration requested under Section 2(a)
for a reasonable period of time not to exceed 180 days if (x) the Company is, at
such time, working on an underwritten, primary public offering of its securities
and is advised by its managing underwriter(s) that such offering would in its or
their opinion be materially adversely affected by such filing; or (y) a prior
registration statement of the Company for an underwritten, primary public
offering by the Company of its securities was declared effective by the SEC less
than 120 days prior to the anticipated effective date of the requested
registration.
(d) If the Company is precluded by Rule 415 or any other
applicable rule under the Securities Act from including all Registrable
Securities and Additional Securities in any Shelf Registration or from keeping
any Shelf Registration Statement continuously effective from the filing date
thereof through the Lapse Date, the Company shall file such additional or
further Shelf Registration Statements, as may be required, so that, subject to
the other provisions of this Agreement, all Registrable Securities and
Additional Securities requested to be included are included on a continuously
effective Shelf Registration Statement for substantially all of the period from
the filing date of the first Shelf Registration Statement through the Lapse
Date.
(e) Neither the Company nor any Person other than a Holder or
an Additional Holder shall be entitled to include any securities held by it or
him in any underwritten offering pursuant to Section 2(a) of this Agreement.
-6-
7
(f) No registration of Registrable Securities under this
Article 2 shall relieve the Company of its obligation (if any) to effect
registrations of Registrable Securities pursuant to Article 3.
3. INCIDENTAL REGISTRATION.
(a) Until all securities subject to this Agreement have ceased
to be Registrable Securities, if the Company proposes, other than pursuant to
Article 2 hereof and other than pursuant to the 1996 Registration Statement, to
register any of its Common Stock or other securities issued by it having terms
substantially similar to Registrable Securities or any successor securities
(collectively, "Other Securities") for public sale under the Securities Act
(whether proposed to be offered for sale by the Company or by any other Person)
on a form and in a manner which would permit registration of Registrable
Securities for sale to the public under the Securities Act, it will give prompt
written notice (which notice shall specify the intended method or methods of
disposition) to the Holders and the Additional Holders of its intention to do
so, and upon the written request of any Holder or Additional Holder delivered to
the Company within fifteen (15) Business Days after the giving of any such
notice (which request shall specify the number of Registrable Securities or
Additional Securities, as the case may be, intended to be disposed of by such
Holder or Additional Holder) the Company will use its commercially reasonable
best efforts to effect, in connection with the registration of the Other
Securities, the registration under the Securities Act of all Registrable
Securities and Additional Securities which the Company has been so requested to
register by Holders and Additional Holders; provided, however, that:
(i) if, at any time after giving such written notice
of its intention to register Other Securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such Other Securities,
the Company may, at its election, given written notice of such determination to
the Holders and Additional Holders requesting registration and thereupon the
Company shall be relieved of its obligation to register such Registrable
Securities and Additional Securities in connection with the Registration of such
Other Securities (but not from its obligation to pay Registration Expenses to
the extent incurred in connection therewith as provided in Article 11), without
prejudice, however, to the rights (if any) of the Holders to request that such
registration be effected as a registration under Article 2; and
(ii) the Company will not be required to effect any
registration of Registrable Securities or Additional Securities pursuant to this
Article 3 in connection with a primary offering of securities by it if the
Company shall have been advised in writing (with a copy to the Holders
requesting registration) by a nationally recognized investment banking firm
(which may be the managing underwriter for the offering) selected by the
Company, that, in such firm's opinion, a registration of Registrable Securities
and Additional Securities at that time may interfere with an orderly sale and
distribution of the securities being sold by the Company in such offering or
materially and adversely affect the price of such securities; provided however,
that if an offering of some but not all of the Registrable Securities and
Additional Securities requested to be registered by the Holders and Additional
Holders would not adversely affect the distribution or price of the securities
to be sold by the Company in the offering in the opinion of such firm or are
included in such offering notwithstanding any such opinion, the Company shall
only include such lesser amount of Registerable
-7-
8
Securities and Additional Securities and the aggregate number of Registrable
Securities and Additional Securities to be included in such offering by each
Holder and Additional Holder shall be allocated pro rata among the Holders and
Additional Holders requesting such registration on the basis of the percentage
of the securities held by such Holders and Additional Holders which have
requested that such securities be included provided further, however, that a
registration under this Article 3 pursuant to demand registration rights of any
Additional Holders shall be treated as a primary offering for purposes of this
clause (ii) with the result that the applicable Additional Holders shall be
entitled to the same priority with respect to the Holders to which the Company
is entitled as provided above; and
(iii) The Company shall not be required to give
notice of, or effect any registration of Registrable Securities under this
Article 3 incidental to, the registration of any of its securities in connection
with mergers, consolidations, acquisitions, exchange offers, subscription
offers, dividend reinvestment plans or stock options or other employee benefit
or compensation plans.
(b) No registration of Registrable Securities effected under
this Article 3 shall relieve the Company of its obligations (if any) to effect
registrations of Registrable Securities pursuant to Article 2.
4. HOLDBACKS AND OTHER RESTRICTIONS.
(a) Each Holder hereby covenants and agrees with the Company
that:
(i) such Holder shall not, if requested by the
managing underwriters in an underwritten offering that includes such Holder's
Registrable Securities, effect any public sale or distribution of securities of
the Company of the same class as the securities included in such registration
statement (or convertible into such class), including a sale pursuant to Rule
144(k) under the Securities Act (except as part of such underwritten
registration: (A) during the ninety (90)-day period (or such longer period of
not more than one hundred eighty (180) days if such longer period is also
required by the managing underwriters of the Company and all other Persons
having securities included in such registration) beginning on the effective date
of such registration statement, to the extent timely notified in writing by the
Company or the managing underwriters; and (B) in the event of a primary offering
by the Company, to the extent such Holder does not elect to sell such securities
in connection with such offering, during the period of distribution of the
Company's securities in such offering and during the period in which the
underwriting syndicate, if any, participates in the aftermarket. In any such
case the Company shall require the underwriters to notify the Company and the
Company, in turn, shall notify all Holders of Registrable Securities included in
the offering promptly after such participation ceases;
(ii) such Holder shall not, during any period in
which any of his or its Registrable Securities are included in any effective
registration statement: (A) effect any stabilization transactions or engage in
any stabilization activity in connection with the Common Stock or other equity
securities of the Company in contravention of Rule 10b-7 under the Exchange Act;
(B) permit any Affiliated Purchaser (as that term is defined in Rule 10b-6 under
the Exchange Act) to bid for or purchase for any account in which such Holder
has a beneficial interest, or attempt to induce any other person to purchase,
any shares of Common Stock or Registrable Securities in contravention of
-8-
9
Rule 10b-6 under the Exchange Act; or (C) offer or agree to pay, directly or
indirectly, to anyone any compensation for soliciting another to purchase, or
for purchasing (other than for such Holder's own account), any securities of the
Company on a national securities exchange in contravention of Rule 10b-2 under
the Exchange Act; and
(iii) such Holder shall, in the case of a
registration including Registrable Securities to be offered by it for sale
through Brokers Transactions, furnish each broker through whom such Holder
offers Registrable Securities such number of copies of the prospectus as the
broker may require and otherwise comply with the prospectus delivery
requirements under the Securities Act.
(b) The Company covenants and agrees with the Holders not to
effect any public or private sale or distribution (other than distributions
pursuant to employee benefit plans) of its securities, including a sale pursuant
to Regulation D under the Securities Act (or Section 4(2) thereof), during the
ten (10) day period prior to, and during the ninety (90) day period (or such
longer period of not more than one hundred eighty (180) days if such longer
period is also required by the managing underwriters of the Holders and all
other Persons having securities included in such registration) beginning with,
the effectiveness of a Registration Statement filed under Section 2(a) hereof,
to the extent timely requested in writing by the managing underwriters, if any,
or, if there be none, by the Holders of a majority in aggregate amount of the
Registrable Securities included on such registration statement for such
registration, except pursuant to registrations on Form X-0, Xxxx X-0 or any
successor form.
5. REGISTRATION PROCEDURES.
If and whenever the Company is required by the provisions of this
Agreement to use commercially reasonable best efforts to effect or cause a
registration as provided in this Agreement, the Company will:
(a) Use its commercially reasonable best efforts to prepare
and file with the SEC, a registration statement within the time periods
specified herein, and use its commercially reasonable best efforts to cause such
registration statement to become effective as promptly as practicable and to
remain effective under the Securities Act until (I) the Lapse Date with respect
to registrations pursuant to Section 2(b) and (ii) until the earlier of such
time as all securities covered thereby are no longer Registrable Securities or
one hundred and eighty (180) days after such registration statement becomes
effective with respect to registrations pursuant to Section 2(a), in every case
as any such period may be extended pursuant to Section 5(h).
(b) Prepare and file (and, if applicable, cause to become
effective) with the SEC, as promptly as practicable, 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 required by Section
5(a) above, as such period may be extended pursuant to Section 5(h).
-9-
10
(c) Comply in all material respects 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.
(d) Furnish to any Holder and any underwriter of Registrable
Securities, (I) such number of copies (including manually executed and conformed
copies) of such registration statement and of each amendment thereof and
supplement thereto (including all annexes, appendices, schedules and exhibits),
(ii) such number of copies of the prospectus used in connection with such
registration statement (including each preliminary prospectus, any summary
prospectus and the final prospectus), and (iii) such number of copies of other
documents, in each case as such Holder or such underwriter may reasonably
request.
(e) Use its commercially reasonable best efforts to register
or qualify all Registrable Securities covered by such registration statement
under the securities or "blue sky" laws of states of the United States as any
Holder or any underwriter shall reasonably request, and do any and all other
acts and things which may be reasonably requested by such Holder or such
underwriter to consummate the offering and disposition of Registrable Securities
in such jurisdictions; provided, however, that the Company shall not be required
to qualify generally to do business as a foreign corporation or as a dealer in
securities, subject itself to taxation, or consent to general service of process
in any jurisdiction wherein it is not then so qualified or subject.
(f) Use, as soon as practicable after the effectiveness of the
registration statement, commercially reasonable best efforts to cause the
Registrable Securities covered by such registration statement to be registered
with, or approved by, such other United States public, governmental or
regulatory authorities, if any, as may be required in connection with the
disposition of such Registrable Securities.
(g) Use its commercially reasonable best efforts to list the
Common Stock covered by such registration statement on any securities exchange
(or if applicable, The NASDAQ Stock Market) on which any securities of the
Company are then listed, if the listing of such Registrable Securities in then
permitted under the applicable rules of such exchange (or if applicable, The
NASDAQ Stock Market).
(h) Notify each Holder as promptly as practicable and, if
requested by any Holder, confirm such notification in writing, (I) when a
prospectus or any prospectus supplement has been filed with the SEC, and, with
respect to a registration statement or any post-effective amendment thereto,
when the same has been declared effective by the SEC, (ii) of the issuance by
the SEC of any stop order or the coming to the Company's attention of the
initiation of any proceedings for such or a similar purpose, (iii) of the
receipt by the Company 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, (iv) of the
occurrence of any event which requires the making of any changes to a
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 Company shall promptly prepare and furnish to each Holder a reasonable
number of copies of a supplemented or amended prospectus such that,
-10-
11
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 (v) of the Company's determination that the filing of a
post-effective amendment to the Registration Statement shall be necessary or
appropriate. Upon the receipt of any notice from the Company of the occurrence
of any event of the kind described in clause (iv) or (v) of this Section 5(h),
the Holders shall forthwith discontinue any offer and disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until all Holders shall have received copies of a supplemented or
amended prospectus which is no longer defective and, if so directed by the
Company, shall deliver to the Company, at the Company's expense, all copies
(other than permanent file copies) of the defective prospectus covering such
Registrable Securities which are then in the Holders' possession. If the Company
shall provide any notice of the type referred to in the preceding sentence, the
period during which the registration statements are required to be effective as
set forth under Section 5(a) shall be extended by the number of days from and
including the date such notice is provided, to and including the date when
Holders shall have received copies of the corrected prospectus.
(i) Enter into such agreements and take such other appropriate
actions as are customary and reasonably necessary to expedite or facilitate the
disposition of such Registrable Securities, and in that regard, deliver to the
Holders such documents and certificates as may be reasonably requested by any
Holder of the Registrable Securities being sold or, as applicable, the managing
underwriters, to evidence the Company's compliance with this Agreement
including, without limitation, using commercially reasonable best efforts to
cause its independent accountants to deliver to the Company's Board of Trustees
(and to the Holders of Registrable Securities being sold in any registration) an
accountants' comfort letter substantially similar to that in scope delivered in
an underwritten public offering and covering audited and interim financial
statements included in the registration statement or, if such letter cannot be
obtained through the exercise of commercially reasonable best efforts, cause its
independent accountants to deliver to the Company's Board of Trustees (and to
the Holders of Registrable Securities being sold in any registration) a comfort
letter based on negotiated procedures providing comfort with respect to the
Company's financial statements included or incorporated by reference in the
registration statement at the highest level permitted to be given by such
accountants under the then applicable standards of the Association of
Independent Certified Accountants with respect to such registration statement.
In addition, the Company shall furnish to the Holders of Registrable Securities
being included in any registration hereunder an opinion of counsel substantially
identical in substance and scope to that customarily delivered to underwriters
in public offerings.
6. UNDERWRITING.
(a) If requested by the underwriters for any underwritten
offering of Registrable Securities pursuant to a registration hereunder, the
Company will enter into and perform its obligations under an underwriting
agreement with the underwriters for such offering, such agreement to contain
such representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, customary provisions
relating to indemnities and contribution and the provision of opinions of
counsel and accountants' letters.
-11-
12
(b) If any registration pursuant to Article 3 hereof shall
involve, in whole or in part, an underwritten offering, the Company may require
Registrable Securities requested to be registered pursuant to Article 3 to be
included in such underwriting on the same terms and conditions as shall be
applicable to the securities being sold through underwriters under such
registration. In such case, each Holder requesting registration shall be a party
to any such underwriting agreement. Such agreement shall contain such
representations and warranties by the Holders requesting registration and such
other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including, without
limitation, provisions relating to indemnities and contribution.
(c) In any offering of Registrable Securities pursuant to a
registration hereunder, each Holder requesting registration shall also enter
into such additional or other agreements as may be customary in such
transactions, which agreements may contain, among other provisions, such
representations and warranties as the Company or the underwriters of such
offering may reasonably request (including, without limitation, those concerning
such Holder, its Registrable Securities, such Holder's intended plan of
distribution and any other information supplied by it to the Company for use in
such registration statement), and customary provisions relating to indemnities
and contribution.
7. RULE 144.
The Company shall use commercially reasonable best efforts to
take all actions necessary to comply with the filing requirements described in
Rule 144(c)(1) or any successor thereto so as to enable the Holders to sell
Registrable Securities without registration under the Securities Act. Upon the
written request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with the filing requirements under Rule
144(c)(1) or any successor thereto.
8. PREPARATION; REASONABLE INVESTIGATION; INFORMATION.
In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act, (a) the Company will give the Holders and the underwriters, if any, and
their respective counsel and accountants, drafts of such registration statement
for their review and comment prior to filing and (during normal business hours
and subject to such reasonable limitations as the Company may impose to prevent
disruption of its business) such reasonable and customary access to its books
and records and such opportunities to discuss the business of the Company with
its officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the reasonable opinion of a
Holder of the Registrable Securities being registered and such underwriters or
their respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act and (b) as a condition precedent to including any
Registrable Securities of any Holder in any such registration, the Company may
require such Holder to furnish the Company such information regarding such
Holder and the distribution of such securities as the Company may from time to
time reasonably request in writing or as shall be required by law or the SEC in
connection with any registration; provided, however, that, upon the reasonable
request of the supplier of any such information, the recipient thereof shall
enter into a confidentiality agreement respecting such information in customary
form for an underwritten public offering.
-12-
13
9. INDEMNIFICATION AND CONTRIBUTION.
(a) In the case of each offering of Registrable Securities
made pursuant to this Agreement, the Company shall indemnify and hold harmless
each Holder, its officers, directors and trustees, each underwriter of
Registrable Securities so offered and each Person, if any, who controls any of
the foregoing Persons within the meaning of the Securities Act ("Holder
Indemnitees"), from and against any and all claims, liabilities, losses,
damages, expenses and judgments, joint or several, to which they or any of them
may become subject, under the Securities Act or otherwise, including any amount
paid in settlement of any litigation commenced or threatened, and shall promptly
reimburse them, as and when incurred, for any legal or other expenses incurred
by them in connection with investigating any claims and defending any actions,
insofar as such losses, claims, damages, liabilities or actions shall arise out
of, or shall be based upon, any violation or alleged violation by the Company of
the Securities Act, or relating to action taken or action or inaction required
of the Company in connection with such offering, or shall arise out of, or shall
be based upon, any untrue statement or alleged untrue statement of a material
fact contained in the registration statement (or in any preliminary or final
prospectus included therein) relating to the offering and sale of such
Registrable Securities, or any amendment thereof or supplement thereto, or in
any document incorporated by reference therein, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, that the
Company shall not be liable to any Holder Indemnitee in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement, or any
omission, if such statement or omission shall have been made in reliance upon
and in conformity with information furnished to the Company in writing by or on
behalf of such Holder specifically for use in the preparation of the
registration statement (or in any preliminary or final prospectus included
therein), or any amendment thereof or supplement thereto. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Holder and shall survive the transfer of such securities. The
foregoing indemnity agreement is in addition to any liability which the Company
may otherwise have to any Holder Indemnitee.
(b) In the case of each offering of Registrable Securities
made pursuant to this Agreement, each Holder, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and trustees, and each
Person, if any, who controls any of the foregoing within the meaning of the
Securities Act and (if requested by the underwriters) each underwriter who
participates in the offering and each Person, if any, who controls any such
underwriter within the meaning of the Securities Act (the "Company
Indemnitees"), from and against any and all claims, liabilities, losses,
damages, expenses and judgments, joint or several, to which they or any of them
may become subject, under the Securities Act or otherwise, including any amount
paid in settlement of any litigation commenced or threatened, and shall promptly
reimburse them, as and when incurred, for any legal or other expenses incurred
by them in connection with investigating any claims and defending any actions,
insofar as any such losses, claims, damages, liabilities or actions shall arise
out of, or shall be based upon, any violation or alleged violation by such
Holder of the Securities Act, any blue sky laws, securities laws or other
applicable laws of any state or country in which the Registrable Securities are
offered and relating to action taken or action or inaction required of such
Holder in connection with such offering, or shall arise out of, or shall be
based upon, any untrue statement or alleged untrue statement of a material fact
contained in the registration statement (or in any
-13-
14
preliminary or final prospectus included therein) relating to the offering and
sale of such Registrable Securities or any amendment thereof or supplement
thereto, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that such untrue statement is
contained in, or such fact is omitted from, information furnished in writing to
the Company by or on behalf of such Holder specifically for use in the
preparation of such registration statement (or in any preliminary or final
prospectus included therein). The liability of each Holder under such indemnity
provision (and under Section 9(d) below) shall be limited to an amount equal to
the total net proceeds received by such Holder from such offering. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company and shall survive the transfer of such
securities. The foregoing indemnity is in addition to any liability which each
Holder may otherwise have to any Company Indemnitee.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in respect of which
indemnity may be sought pursuant to this Article 9, such Person (the
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 9(a) or (b) shall be available to any
person who shall fail to give notice as provided in this Section 9(c) if the
indemnifying party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 9(a) or (b). In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel at its own expense. Notwithstanding the foregoing, the indemnifying
party shall pay as incurred the fees and expenses of the counsel retained by the
indemnified party in the event (I) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel, in the written opinion of such counsel, would be
inappropriate due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all such
indemnified parties. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgement for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Article 9 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 9(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
or if the indemnified party failed to give the notice required under Section
9(c) above, then each
-14-
15
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) in proportion as is appropriate to
reflect not only both the relative benefits received by such party (as compared
to the benefits received by all other parties) from the offering in respect of
which indemnity is sought, but also the relative fault of all parties in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by a party shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by it bear
to the total amounts (including, in the case of any underwriter, underwriting
commission and discounts) received by each other party. Relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this Section 9(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 above in this Section 9(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to above shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
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.
10. EXPENSES.
In connection with any registration under this Agreement, the
Company shall pay all Registration Expenses. In addition, in connection with
each registration, the Company shall pay the reasonable fees and expenses of one
counsel to represent the interests of a Holder selling Registrable Securities in
such registration. Notwithstanding the foregoing, in the event that any Holder
or Holders require the Company to conduct an underwritten public offering of
Registrable Securities pursuant to Section 2(a) prior to 12 months after the
date hereof, each such Holder or Holders shall pay its pro rata share of all
Registration Expenses.
11. 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 the other party any other communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be delivered in person, mailed
by registered or certified mail (return receipt requested) or sent by overnight
courier service or via facsimile transmission (which is confirmed), as follows:
(a) 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 11, which address initially
-15-
