REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of the 30th day of May,
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 Supplementary classifying the Class A
Common Stock, 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 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 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 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
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 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 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 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 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 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 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.
ELLSF 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.
(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 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.
By:/s/ Xxxxxx Xxxxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxxxx
Title: President
ERP OPERATING LIMITED PARTNERSHIP*
By:/s/ Xxxxx X. Xxxxxx
---------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
BY: EQUITY RESIDENTIAL PROPERTIES
TRUST,
its general partner
