Exhibit 10.7
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of May 13, 1998 by and between Reckson Service Industries, Inc., a
Delaware corporation (the "Company") and Xxxxxx X. Xxxxxxx, Xxxxx Xxxxxxx,
Xxxxx X. Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx X. Xxxxxxx and Xxxxxxxx X. Xxxxxxx
(each, a "Holder", and collectively, the "Holders").
In consideration of the mutual promises and agreements set forth herein,
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Registration.
(a) Demand Registration. Until the date on which all of the
Registrable Shares (as hereinafter defined) have become eligible for sale
pursuant to Rule 144 promulgated under the Securities Act, subject to the
conditions set forth in this Agreement, any of the Holders of Registrable
Shares may request that the Company cause to be filed a registration statement
(a "Demand Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), relating to the sale by the Holder of its
Registrable Shares in accordance with the terms hereof. As used in this
Agreement, the term "Registrable Shares" means the shares of common stock,
par value $.01 per share (the "Shares") of the Company beneficially owned
by the Holders excluding (A) Shares for which a Registration Statement
relating to the sale thereof shall have become effective under the Securities
Act and which have been disposed of under such Registration Statement, (B)
Shares sold pursuant to Rule 144 under the Securities Act or otherwise or (C)
Shares eligible for sale pursuant to Rule 144 under the Securities Act. Upon
receipt of any such request, the Company shall promptly give written notice of
such proposed registration to all other Holders of Registrable Shares. Such
Holders shall have the right, by giving written notice to the Company within
fifteen (15) days after the notice referred to in the preceding sentence has
been given by the Company to elect to have included in the Demand Registration
Statement such of their Registrable Shares as such Holders may request in such
notice of election. Thereupon, the Company (i) will prepare such Registration
Statement for filing with the Securities and Exchange Commission (the "SEC")
within 90 days from such request and (ii) will use its best efforts to cause
such Registration Statement to be declared effective by the SEC for all
Registrable Shares which the Company has been requested to register as soon as
practicable thereafter. The Company agrees to use its best efforts to keep a
Demand Registration Statement filed pursuant to Rule 415 continuously
effective until the earliest of (a) the date on which the Holders no longer
hold any Registrable Shares registered under the Registration Statement, (b)
the date on which the Registrable Shares may be sold by the Holders pursuant
to Rule 144 promulgated under the Securities Act or (c) the date which is
twelve (12) months from the effective date of such Demand Registration
Statement. The Company shall not be required to file and effect a new Demand
Registration Statement pursuant to this Section l(a) until a period of twelve
(12) months has elapsed from the effective date of the registration statement
with respect to Registrable Shares covered by a prior registration request.
(b) Piggyback Registration. If at any time while any Registrable Shares
are outstanding (without any obligation to do so) the Company proposes to file
a registration statement under the Securities Act with respect to a primary
offering of Shares solely for cash (other than a registration statement
(i) on Form S-8 or any successor form to such Form or in connection with any
employee or director welfare, benefit or compensation plan, (ii) on Form S-4
or any successor form to such Form or in connection with an exchange offer,
(iii) in connection with a rights offering exclusively to existing holders of
Shares, (iv) in connection with an offering solely to employees of the
Company or its affiliates, or (v) relating to a transaction pursuant to Rule
145 of the Securities Act), whether or not for its own account (a "Piggyback
Registration Statement"), the Company shall give prompt written notice of such
proposed filing to the Holders. The notice referred to in the preceding
sentence shall offer Holders the opportunity to register such amount of
Registrable Shares as each Holder may request (a "Piggyback Registration").
Any Demand Registration Statement and any Piggyback Registration Statement are
sometimes hereinafter referred to as a "Registration Statement." Subject to
the provisions of Section 2 below, the Company shall include in such Piggyback
Registration all Registrable Shares requested to be included in the
registration and qualification for sale under the blue sky or securities laws
of the various states and in any underwriting in connection therewith for
which the Company has received written requests for inclusion therein within
fifteen (15) calendar days after the notice referred to above has been given
by the Company to the Holders. Holders of Registrable Shares shall be
permitted to withdraw all or part of the Registrable Shares from a Piggyback
Registration at any time prior to the effective date of such Piggyback
Registration. If a Piggyback Registration is an underwritten primary
registration on behalf of the Company and the managing underwriter advises the
Company that the total number of Shares requested to be included in such
registration exceeds the number of Shares which can be sold in such offering,
the Company will include in such registration in the following priority: (i)
first, all Shares the Company proposes to sell and (ii) second, up to the full
number of applicable Registrable Shares requested to be included in such
registration and, which in the opinion of such managing underwriter, can be sold
without adversely affecting the price range or probability of success of such
offering, which shall be allocated among the Holders and all other
stockholders requesting registration pursuant to an effective registration
rights agreement with the Company on a pro rata basis (based on the aggregate
number of Registrable Shares and Shares of such other stockholders).
(c) The Company shall notify each Holder of the effectiveness of the
Registration Statement and shall furnish to each Holder such number of copies
of the Registration Statement as the Holder may reasonably request (including
any amendments, supplements and exhibits), the prospectus contained therein
(including each preliminary prospectus), any documents incorporated by
reference in the Registration Statement and such other documents as the Holder
may reasonably request in order to facilitate its sale of the Registrable
Shares in the manner described in the Registration Statement.
(d) The Company shall prepare and file with the SEC from time to time
such amendments and supplements to the Registration Statement and prospectus
used in connection therewith as may be necessary to keep the Registration
Statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all the Registrable Shares until the
earlier of (a) such time as all of the Registrable Shares have been disposed
of in accordance with the intended methods of disposition by the Holders as
set forth in the Registration Statement or (b) the date on which the
Registration Statement ceases to be effective in accordance with the terms of
this Section 1. Upon five (5) business days' notice, the Company shall file
any supplement or post-effective amendment to the Registration Statement with
respect to such Holder's interests in or plan of distribution of Registrable
Shares that is reasonably necessary to permit the sale of the Holder's
Registrable Shares pursuant to the Registration Statement and the Company
shall file any necessary listing applications or amendments to the existing
applications to cause the shares to be then listed or quoted on the primary
exchange or quotation system on which the Shares are then listed or
quoted.
(e) The Company shall promptly notify each Holder of, and confirm in
writing, any request by the SEC for amendments or supplements to the
Registration Statement or the prospectus related thereto or for additional
information. In addition, the Company shall promptly notify each Holder of,
and confirm in writing, the filing of the Registration Statement, any
prospectus supplement related thereto or any post-effective amendment to the
Registration Statement and the effectiveness of any post-effective amendment.
(f) The Company shall immediately notify each Holder, at any time when a
prospectus relating to the Registration Statement is required to be delivered
under the Securities Act, of the happening of any event as a result of which
the prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. In such event, the
Company shall promptly prepare and furnish to each Holder with a reasonable
number of copies of a supplement to or an amendment of such prospectus as may
be necessary so that, as thereafter delivered to the purchasers of Registrable
Shares, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.
2. State Securities Laws. Subject to the conditions set forth in this
Agreement, the Company shall, promptly upon the filing of a Registration
Statement including Registrable Shares, file such documents as may be
necessary to register or qualify the Registrable Shares under the securities
or "Blue Sky" laws of such states as any Holder may reasonably request, and
the Company shall use its best efforts to cause such filings to become
effective; provided, however, that the Company shall not be obligated to
qualify as a foreign corporation to do business under the laws of any such
state in which it is not then qualified or to file any general consent to
service of process in any such state. Once effective, the Company shall use
its best efforts to keep such filings effective until the earlier of (a) such
time as all of the Registrable Shares have been disposed of in accordance with
the intended methods of disposition by the Holder as set forth in the
Registration Statement, (b) in the case of a particular state, a Holder has
notified the Company that it no longer requires an effective filing in such
state in accordance with its original request for filing or (c) the date on
which the Registration Statement ceases to be effective. The Company shall
promptly notify each Holder of, and confirm in writing, the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Registrable Shares for sale under the securities or "Blue
Sky" laws of any jurisdiction or the initiation or threat of any proceeding
for such purpose.
3. Expenses. The Company shall bear all expenses incurred in connection
with the registration of Registrable Shares pursuant to Section 1(b) of this
Agreement. Additionally, the Company shall bear all expenses incurred in
connection with the registration of the Registrable Shares pursuant to Section
1(a) of this Agreement for each Registration Statement registering $1 million
or more of Registrable Shares, and each Holder shall bear a portion of all
expenses incurred by the Company in connection with a registration in which
Registrable Shares of such Holder is included pursuant to Section 1(a) of this
Agreement based on the ratio of the number of Registrable Shares of such
Holder included to the total number of Shares so registered for each
Registration Statement registering less than $1 million of Registrable Shares.
Such expenses shall include, without limitation, all printing, legal and
accounting expenses incurred by the Company and all registration and filing fees
imposed by the SEC, any state securities commission or the New York Stock
Exchange or, if the Shares are not then listed on the New York Stock Exchange,
the principal national securities exchange or national market system on which
the Shares are then traded or quoted. Holders shall be responsible for any
brokerage or underwriting commissions and taxes of any kind (including, without
limitation, transfer taxes) with respect to any disposition, sale or transfer
of Registrable Shares and for any legal, accounting and other expenses incurred
by them.
4. Indemnification by the Company. The Company agrees to indemnify each
of the Holders and their respective officers, directors, employees, agents,
representatives and affiliates, and each person or entity, if any, that
controls a Holder within the meaning of the Securities Act, and each other
person or entity, if any, subject to liability because of his, her or its
connection with a Holder, and any underwriter and any person who controls the
underwriter within the meaning of the Securities Act (an "Indemnitee") against
any and all losses, claims, damages, actions, liabilities, costs and expenses
(including without limitation reasonable attorneys' fees, expenses and
disbursements documented in writing), joint or several, arising out of or
based upon any untrue or alleged untrue statement of material fact contained
in the Registration Statement or any prospectus contained therein, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except insofar
as and to the extent that such statement or omission arose out of or was based
upon information regarding the Indemnitee or its plan of distribution which
was furnished to the Company by the Indemnitee expressly for use therein,
provided, further that the Company shall not be liable to any person who
participates as an underwriter in the offering or sale of Registrable Shares
or any other person, if any, who controls such underwriter within the meaning
of the Securities Act, in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon (i) an untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement, any such preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement in reliance upon and in conformity with
information furnished to the Company for use in connection with the
Registration Statement or the prospectus contained therein by such Indemnitee
or (ii) such Indemnitee's failure to send or give a copy of the final
prospectus furnished to it by the Company at or prior to the time such action
is required by the Securities Act to the person claiming an untrue statement
or alleged untrue statement or omission or alleged omission if such statement
or omission was corrected in such final prospectus.
5. Covenants of Holders. Each of the Holders hereby agrees (a) to
cooperate with the Company and to furnish to the Company, in a timely manner,
all such information in connection with the preparation of the Registration
Statement and any filings with any state securities commissions as the Company
may reasonably request, (b) to deliver or cause delivery of the prospectus
contained in the Registration Statement to any purchaser of the shares covered
by the Registration Statement from the Holder and (c) to indemnify the
Company, its officers, directors, employees, agents, representatives and
affiliates, and each person, if any, who controls the Company within the
meaning of the Securities Act, and each other person, if any, subject to
liability because of his connection with the Company, against any and all
losses, claims, damages, actions, liabilities, costs and expenses arising out
of or based upon (i) any untrue statement or alleged untrue statement of
material fact contained in either Registration Statement or the prospectus
contained therein, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, if and to the extent that such statement or omission
arose out of or was based upon information regarding the Holder or its plan of
distribution which was furnished to the Company by the Holder expressly for
use therein, or (ii) the failure by the Holder to deliver or cause to be
delivered the prospectus contained in the Registration Statement (as amended
or supplemented, if applicable) furnished by the Company to the Holder to any
purchaser of the shares covered by the Registration Statement from the Holder.
Notwithstanding the foregoing, (i) in no event will a Holder have any
obligation under this Section 5 for amounts the Company pays in settlement of
any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Holder (which consent shall not be
unreasonably withheld) and (ii) the total amount for which a Holder shall be
liable under this Section 5 shall not in any event exceed the aggregate
proceeds received by him or it from the sale of the Holder's Registrable
Shares in such registration.
6. Suspension of Registration Requirement.
(a) The Company shall promptly notify each Holder of, and confirm in
writing, the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose. The Company shall use its best efforts to obtain
the withdrawal of any order suspending the effectiveness of the Registration
Statement at the earliest possible moment.
(b) Notwithstanding anything to the contrary set forth in this Agreement,
the Company's obligation under this Agreement to use its best efforts to cause
the Registration Statement and any filings with any state securities
commission to become effective or to amend or supplement the Registration
Statement shall be suspended in the event and during such period as unforeseen
circumstances exist (including without limitation (i) an underwritten primary
offering by the Company if the Company is advised by the underwriters that
sale of the shares under the Registration Statement would have a material
adverse effect on the primary offering or (ii) pending negotiations relating
to, or consummation of, a transaction or the occurrence of an event that would
require additional disclosure of material information by the Company in the
Registration Statement or such filing, as to which the Company has a bona fide
business purpose for preserving confidentiality or which renders the Company
unable to comply with SEC requirements) (such unforeseen circumstances being
hereinafter referred to as a "Suspension Event") that would make it
impractical or unadvisable to cause the Registration Statement or such filings
to become effective or to amend or supplement the Registration Statement, but
such suspension shall continue only for so long as such event or its effect is
continuing but in no event will that suspension exceed 60 days. The Company
agrees not to exercise the rights set forth in this Section 6(b) more than
twice in any twelve month period. The Company shall notify the Holder of the
existence and, in the case of circumstances referred to in clause (i) of this
Section 6(b), of the nature of any Suspension Event.
(c) Each holder of Registrable Shares whose Registrable Shares are
covered by a Registration Statement filed pursuant to Section 1 hereof agrees,
if requested by the Company in the case of a non-underwritten offering or if
requested by the managing underwriter or underwriters in an underwritten
offering, not to effect any public sale or distribution of any of the
securities of the Company of any class included in such Registration
Statement, including a sale pursuant to Rule 144 or Rule 144A under the
Securities Act (except as part of such underwritten registration), during the
15-day period prior to, and during the 60-day period beginning on, the date of
effectiveness of each underwritten offering made pursuant to such Registration
Statement, to the extent timely notified in writing by the Company or the
managing underwriters; provided, however, that such 60-day period shall be
extended by the number of days from and including the date of the giving of
any notice pursuant to Section l(e) or (f) hereof to and including the date
when each seller of Registrable Shares covered by such Registration Statement
shall have received the copies of the supplemented or amended Prospectus
contemplated by Section l(f) hereof.
7. Black-Out Period. Following the effectiveness of the Registration
Statement and the filings with any state securities commissions, the Holders
agree that they will not effect any sales of the Registrable Shares pursuant
to the Registration Statement or any such filings at any time after they have
received notice from the Company to suspend sales as a result of the
occurrence or existence of any Suspension Event or so that the Company may
correct or update the Registration Statement or such filing. The Holder may
recommence effecting sales of Shares pursuant to the Registration
Statement or such filings following further notice to such effect from the
Company, which notice shall be given by the Company not later than five (5)
days after the conclusion of any such Suspension Event.
8. Additional Shares. The Company, at its option, may register, under any
registration statement and any filings with any state securities commissions
filed pursuant to this Agreement, any number of unissued Shares or any Shares
owned by any other shareholder or shareholders of the Company.
9. Contribution. If the indemnification provided for in Sections 4 and 5
is unavailable to an indemnified party with respect to any losses, claims,
damages, actions, liabilities, costs or expenses referred to therein or is
insufficient to hold the indemnified party harmless as contemplated therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, actions, liabilities, costs or
expenses in such proportion as is appropriate to reflect the relative fault of
the Company, on the one hand, and the Holder, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims,
damages, actions, liabilities, costs or expenses as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand,
and of the Holder, on the other hand, shall be determined by reference to,
among other factors, whether the untrue or alleged untrue statement of a
material fact or omission to state a material fact relates to information
supplied by the Company or by the Holder and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, however, that in no event shall the
obligation of any indemnifying party to contribute under this Section 9 exceed
the amount that such indemnifying party would have been obligated to pay by
way of indemnification if the indemnification provided for under Sections 4 or
5 hereof had been available under the circumstances.
The Company and the Holders agree that it would not be just and equitable
if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph.
No indemnified party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any indemnifying party who was not guilty of such fraudulent
misrepresentation.
10. No Other Obligation to Register. Except as otherwise expressly
provided in this Agreement, the Company shall have no obligation to the
Holders to register the Registrable Shares under the Securities Act.
11. Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented without the prior written consent of the
Company and the Holders.
12. Notices. Except as set forth below, all notices and other
communications provided for or permitted hereunder shall be in writing and
shall be deemed to have been duly given if delivered personally or sent by
telex or telecopier, registered or certified mail (return receipt requested),
postage prepaid or courier or overnight delivery service to the Company at the
following address and to the Holder at the address set forth on his signature
page to this Agreement (or at such other address for any party as shall be
specified by like notice, provided that notices of a change of address shall
be effective only upon receipt thereof), and further provided that in case of
directions to amend the Shelf Registration Statement pursuant to Section l(d)
or Section 5(a), a Holder must confirm such notice in writing by overnight
express delivery with confirmation of receipt:
If to the Company: Reckson Service Industries, Inc.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxx, President
and Chief Executive Officer
With a copy to: Xxxxx & Xxxx LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
In addition to the manner of notice permitted above, notices given
pursuant to Sections 1, 6 and 7 hereof may be effected telephonically and
confirmed in writing thereafter in the manner described above.
13. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Company. This
Agreement may not be assigned by any Holder and any attempted assignment
hereof by any Holder will be void and of no effect and shall terminate all
obligations of the Company hereunder with respect to such Holder.
14. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly within said State, without giving effect to the
conflict of law provisions thereof.
16. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and
of the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
17. Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred
to herein, with respect to such subject matter. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
RECKSON SERVICE INDUSTRIES, INC.
By:_____________________________
Name:
Title:
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
Xxxxxx X. Xxxxxxx
_________________________________
Xxxxx X. Xxxxxxx
_________________________________
Xxxxxxx Xxxxxx
_________________________________
Xxxxx Xxxxxxx
_________________________________
Xxxxxxxx X. Xxxxxxx
_________________________________
Xxxxx X. Xxxxxxx
_________________________________
