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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") made and
entered into as of this 14th day of November, 1996 by and among BRANDYWINE
REALTY TRUST, a Maryland real estate investment trust (the "Company"), RAI REAL
ESTATE ADVISERS, INC. ("RAI"), as the voting trustee of a voting trust executed
by the Commonwealth of Pennsylvania State Employes' Retirement System as
shareholder and RAI as voting trustee dated as of November 6, 1996 (the "Voting
Trust").
BACKGROUND
Pursuant to a Contribution Agreement, dated November 6, 1996,
by and among, inter alia, the Company and the Voting Trust (the "Contribution
Agreement"), the Company has issued to the Voting Trust (a) 481,818 shares of
the Company's Series A Convertible Preferred Shares (the "Preferred Shares"),
par value $.01 per share, and may issue additional Preferred Shares on June 10,
1998, and December 31, 1999 (such issued and issuable Preferred Shares are
collectively referred to as the "Property Shares") and (b) a warrant (the
"Warrant") to purchase 400,000 shares of the Company's common shares of
beneficial interest par value $.01 per share (the "Common Stock").
Pursuant to a Securities Purchase Agreement dated as of
November 6, 1996 by and between the Company and the Voting Trust (the
"Securities Purchase Agreement"), the Company is obligated to issue to the
Voting Trust additional Common Stock or Preferred Shares (the "Additional
Shares").
To induce the Voting Trust to enter into the foregoing
transactions, the Company has agreed to provide it 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 the Persons who have registration
rights with respect to certain securities of the Company pursuant to either of
the Additional Registration Rights Agreements.
"Additional Registration Rights Agreements" means that certain
Registration Rights Agreement dated August 22, 1996 to which the Company is a
party and the Registration Rights Agreement which the Company will enter into
with Xxxxxx Xxxxxxx Institutional Fund, Inc. - U.S. Real Estate Portfolio and
Xxxxxx Xxxxxxx SICAV Subsidiary, SA.
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"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.
"Business Day" means any day on which the American Stock
Exchange is open for trading.
"Closing Date" means the date of closing under the
Contribution Agreement.
"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.
"Fair Market Value" means:
(a) If the Registrable Security is listed on a
national securities exchange or admitted to unlisted trading privileges on such
exchange or listed for trading on The NASDAQ Stock Market, the fair market
value shall be the last reported sale price of the Registrable Security on such
exchange or system on the last business day prior to the date the determination
of fair market value is made, or if no such sale is made on such day, the
average closing bid and asked prices of the Registrable Security for such day
on such exchange or system; or
(b) If the Registrable Security is not so listed
or admitted to unlisted trading privileges, the fair market value shall be the
mean of the last reported bid and asked prices reported by the National
Quotation Bureau, Inc., on the last business day prior to the date the
determination of fair market value is made; or
(c) If the Registrable Security is not so listed
or admitted to unlisted trading privileges and bid and asked prices are not so
reported, the fair market value per share shall be an amount, not less than 90%
of the book value per share of the Registrable Security as at the end of the
most recent fiscal year of the Company ending prior to the date the
determination of fair market value is made, determined in such reasonable
manner as may be prescribed in good faith by the Board of Trustees of the
Company.
"Holders" means the Voting Trust 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
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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 Additional Shares (to the extent they are shares of Common Stock), (ii) all
or any portion of any shares of Common Stock that may be issued upon conversion
of, or in exchange for, the Property Shares or the Additional Shares (to the
extent they are Preferred Shares), (iii) all or any portion of any shares of
Common Stock that may be issued upon the exercise of, or in exchange for, the
Warrant, (iv) any additional shares of Common Stock 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 (v) any other shares of
Common Stock 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. Any time this Agreement requires the vote or consent
of the Holder of a "majority" or other stated percentage of the Registrable
Securities, the term Registrable Securities shall, solely for purposes of
calculating such vote, be deemed to include the Registrable Securities that
could be issued under the Preferred Shares and the Warrant and any other
securities exercisable or exchangeable for, or convertible into, Registrable
Securities. The term Registrable Securities shall not include the Preferred
Shares or the Warrant.
"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 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
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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
Article 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.
2. DEMAND REGISTRATION; SHELF REGISTRATION.
(a) (i) A Holder or Holders 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 or Holders (the "Requesting Holders"),
representing in the aggregate not less than twenty percent of the Registrable
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Securities, for sale in the manner specified in such notice (including, but not
limited to, an underwritten public offering); provided, however, that no such
request may be made when the Voting Trust would be prohibited from selling
Registrable Securities pursuant to an effective registration statement under
the Securities Act by the terms of the Standstill Agreement, dated the Closing
Date, between the Company and the Voting Trust; provided further, 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 Holders 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 Holders' 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 all 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 all 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
Holders of a majority in aggregate amount 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 the
Holders of a majority in aggregate amount of the Registrable Securities being
registered, 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
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.
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(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 Holders' 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 Holders, 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-1 or 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-1 or 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) 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 Holders to register at
least 20% of the aggregate Registrable Securities 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
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an underwritten public offering. By closing under the Securities Purchase
Agreement, the Voting Trust 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 Additional Shares (or, if applicable, all shares of Common Stock
issuable upon conversion of the Additional Shares). The Company shall, within
five (5) Business Days after its receipt of any Requesting Holders' notice
under this Section 2(b), give written notice of such request to all other
Holders and all 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
Holders' 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
Holders, or (B) to effect any registration pursuant to this Section 2(b) during
the fiscal year during which Registrable Securities are registered pursuant to
Section 2(a) of this Agreement, or (C) to register any Registrable Securities
under this Section 2(b) (other than pursuant to the Deemed Additional Share
Request) unless it shall receive requests from Holders to register at least 10%
of the aggregate Registrable Securities 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.
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(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.
(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, give 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,
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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 Securities and Additional
Securities and the aggregate number of Registerable 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;
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(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 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
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)
hereto.
(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
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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) hereto.
(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
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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, 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.
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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.
(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
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public accountants who have certified its financial statements as shall be
necessary, in the reasonable opinion of the Holders of a majority in aggregate
amount 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.
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
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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 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 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
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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. Such firm shall be designated
in writing by the Holders of a majority in aggregate Fair Market Value of the
then Outstanding Registrable Securities in the case of parties indemnified
pursuant to Section 9(a) and by the Company in the case of parties indemnified
pursuant to Section 9(b). 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 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.
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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 the Holders 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 Article 11, which address initially is, with respect to the
Voting Trust, the address set forth in the Securities Purchase Agreement; and
(b) if to the Company, initially at the address set forth in the Securities
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Article 11. The furnishing of
any notice required hereunder may be waived in writing by the party entitled to
receive such notice. Every notice, demand, request, consent, approval,
declaration or other communication hereunder shall be deemed to have been duly
furnished or served on the party to which it is addressed, in the case of
delivery in person or by facsimile, on the date when sent (with receipt
personally acknowledged in the case of telecopied notice), in the case of
overnight mail, on the day after it is sent and in all other cases, five
business days after it is sent. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to the persons designated above to receive copies shall in no way adversely
affect the effectiveness of such notice, demand, request, consent, approval,
declaration or other communication.
12. ENTIRE AGREEMENT.
This Agreement represents the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof and supersedes any and all prior oral and written agreements,
arrangements and understandings among the parties hereto with respect to such
subject matter; and this Agreement can be amended, supplemented or changed, and
any provision hereof can be waived or a departure from any provision hereof can
be consented to, only by a written instrument making specific reference to this
Agreement signed by the Company and the Holders of at least 80% of the
Registrable Securities then outstanding; provided that any amendment that
adversely affects the rights of any Holder must be signed by the adversely
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affected Holder; provided further that any waiver must be signed by the party
entitled to the benefit of the term or matter being waived.
13. ARTICLE HEADINGS.
The article headings contained in this Agreement are for
general reference purposes only and shall not affect in any manner the meaning,
interpretation or construction of the terms or other provisions of this
Agreement.
14. APPLICABLE LAW.
This Agreement shall be governed by, construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania applicable to
contracts to be made, executed, delivered and performed wholly within such
state and, in any case, without regard to the conflicts of law principles of
such state.
15. SEVERABILITY.
If at any time subsequent to the date hereof, any provision of
this Agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or unenforceability of such provision shall have no effect
upon and shall not impair the enforceability of any other provision of this
Agreement.
16. EQUITABLE REMEDIES.
The parties hereto agree that irreparable harm would occur in
the event that any of the agreements and provisions of this Agreement were not
performed fully by the parties hereto in accordance with their specific terms
or conditions or were otherwise breached, and that money damages are an
inadequate remedy for breach of this Agreement because of the difficulty of
ascertaining and quantifying the amount of damage that will be suffered by the
parties hereto in the event that this Agreement is not performed in accordance
with its terms or conditions or is otherwise breached. It is accordingly
hereby agreed that the parties hereto shall be entitled to an injunction or
injunctions to restrain, enjoin and prevent breaches of this Agreement by the
other parties and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, such remedy
being in addition to and not in lieu of, any other rights and remedies to which
the other parties are entitled to at law or in equity.
17. NO WAIVER.
The failure of any party at any time or times to require
performance of any provision hereof shall not affect the right at a later time
to enforce the same. No waiver by any party of any condition, and no breach of
any provision, term, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
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18. COUNTERPARTS.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute but one and the same original instrument.
19. THIRD PARTY BENEFICIARIES; SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding
upon the successors, assigns and transferees of each of the parties hereto;
and; provided that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Registrable Securities in violation of the
terms of the Securities Purchase Agreement, the Warrant, the Standstill
Agreement of even date herewith between the Company and the Voting Trust, the
Contribution Agreement or applicable law. If any transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by operation of
law or otherwise, such Registerable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement.
21. NON-RECOURSE.
No recourse shall be had for any obligation of the Company
hereunder, or for any claim based thereon or otherwise in respect thereof,
against any past, present or future trustee, shareholder, officer or employee
of the Company, whether by virtue of any statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such other liability
being expressly waived and released by each other party hereto.
22. OTHER REGISTRATION RIGHTS AGREEMENTS.
The Company represents and warrants to the Holder that it (i)
has not granted any registration rights to any Person other than to the
Additional Holders pursuant to the Additional Registration Rights Agreements,
and (ii) has caused to be amended all agreements relating to registration
rights to which it is a party so that such agreements do not conflict with this
Agreement, including without limitation Sections 2(a)(iv) and 3(a)(ii) hereof.
The Company covenants and agrees that it will not grant any Person any
registration rights that are in conflict with this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and
delivered as of the date first above written.
BRANDYWINE REALTY TRUST
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Xxxx X. Xxxxxxx, Xx., Vice President
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RAI REAL ESTATE ADVISERS, INC.,
as voting trustee of a voting trust dated
November 6, 1996.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxx, President
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