Exhibit 10.1
WARRANT REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of March 7, 2000 between RECKSON SERVICE INDUSTRIES, INC., a Delaware
corporation (the "Company"), and GOTHAM PARTNERS, L.P., a New York limited
partnership, Gotham Partners III, L.P., a New York limited partnership, and
Gotham Partners International, Ltd., a Cayman exempted company (the "Buyers").
RECITALS
WHEREAS, the Company is executing and delivering to the Buyers warrants
(the "Warrants") to purchase an aggregate of 1,500,000 shares of common stock,
par value $0.01 per share, of the Company, subject to adjustment as described
therein (the "Warrant Shares"), for cash at a price of $70.00 per Warrant
Share, subject to adjustment as described therein, exercisable on or after
March 7, 2001 and before the close of business on June 7, 2003, and the Buyers
are simultaneously purchasing the Warrant for an aggregate of $30,000,000 in
same-day funds and delivering the same to the Company;
WHEREAS, as an inducement to the Buyers to purchase the Warrant, the
Company desires to grant to the Buyers the registration rights set forth in
this Agreement, subject to the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein contained, the receipt and sufficiency of which is hereby
acknowledged, and subject to the terms and conditions set forth herein, the
parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a Saturday, a Sunday, or a day on
which banking institutions in The City of New York are authorized or required
by law, executive order or regulation to remain closed.
"Company" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
"Effectiveness Period" shall have the meaning set forth in Section 2(a)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Holder" shall mean holders of record of any Registrable Securities.
"Inspectors" shall have the meaning set forth in Section 3(i) hereof.
"Issue Date" shall mean the date of original issuance of the Warrants or,
as applicable, the date of issuance of the Warrant Shares you exercise of the
Warrants.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability corporation, or a government or
agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Shelf Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and, in each case, including all documents incorporated by
reference therein.
"Records" shall have the meaning set forth in Section 3(k) hereof.
"Registrable Securities" shall mean the Warrants and the Warrant Shares;
provided, however, that (i) that Warrant Shares shall cease to be Registrable
Securities when the earlier of the following occurs (1) a Shelf Registration
Statement with respect to such Warrant Shares for the resale thereof shall
have been declared effective under the Securities Act and such Warrant Shares
shall have been disposed of pursuant to such Shelf Registration Statement, (2)
the Warrants or the Warrant Shares shall have been sold to the public pursuant
to Rule 144 (or any similar provision then in force, but not Rule 144A) under
the Securities Act or the Warrant Shares are eligible to be sold without
restriction as contemplated by Rule 144 or (3) the Warrant Shares shall have
ceased to be outstanding and (ii) the Warrants shall cease to be Registrable
Securities when the earlier of the following occurs (1) a Shelf Registration
Statement with respect to such Warrants for the resale thereof shall have been
declared effective under the Securities Act and such Warrants shall have been
disposed of pursuant to such Shelf Registration Statement, (2) the Warrants
shall have been sold to public pursuant to Rule 144 (or any similar provision
then in force, but not Rule 144A) under the Securities Act or the Warrants are
eligible to be sold without restrictions as contemplated by Rule 144 or (3)
the Warrants shall cease to be outstanding.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky laws
(including reasonable fees and disbursements of one counsel for all
underwriters or Holders as a group in connection with blue sky qualification
of any of the Registrable Securities), (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing and
distributing any Shelf Registration Statement, any Prospectus and any
amendments or supplements thereto, (iv) all fees and expenses incurred in
connection with the listing, if any, of the Registrable Securities on any
securities exchange or quoted on the Nasdaq National Market, (v) all fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any "cold comfort" letters required by
or incident to such performance and compliance.
"Rule 144(k) Period" shall mean a period of two years (or such shorter
period as may hereafter be referred to in Rule 144(k) under the Securities Act
(or similar successor rule)) from the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(a) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(a) hereof
which covers all of the Registrable Securities on an appropriate form 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 post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all documents incorporated by
reference therein.
"Warrant" shall have the meaning set forth in the recitals hereto.
"Warrant Shares" shall have the meaning set forth in the recitals hereto,
and shall also include any other securities for which the Warrants become
exercisable.
2. Registration Under the Securities Act.
(a) Shelf Registration. The Company shall use its reasonable best
efforts to file or cause to be filed, within 180 days after the date hereof, a
Shelf Registration Statement providing for the resale by the Holders of all of
the Registrable Securities and to have such Shelf Registration Statement
declared effective by the SEC. No Holder of Registrable Securities shall be
entitled to include any of its Registrable Securities in any Shelf
Registration pursuant to this Agreement unless and until such Holder agrees in
writing to be bound by all of the provisions of this Agreement applicable to
such Holder and furnishes to the Company in writing, within 10 Business Days
after receipt of a request therefor, such information as the Company may,
after conferring with counsel with regard to information relating to Holders
that would be required by the SEC to be included in such Shelf Registration
Statement or Prospectus included therein, reasonably request for inclusion in
any Shelf Registration Statement or Prospectus included therein. Each Holder
as to which any Shelf Registration is being effected agrees to furnish to the
Company all information with respect to such Holder necessary to make the
information previously furnished to the Company by such Holder not materially
misleading.
The Company agrees to use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective and the Prospectus usable
for resales during the Rule 144(k) Period or for such shorter period which
will terminate when the Warrant or all of the Warrant Shares covered by the
Shelf Registration Statement have been sold pursuant to the Shelf Registration
Statement or otherwise cease to be Registrable Securities (the "Effectiveness
Period"); provided, however, that for 105 calendar days or less (consisting of
no more than three separate periods of consecutive days) in any twelve-month
period, the Company shall be permitted, by giving written notice to the
holders of Registrable Securities, to suspend resales of Warrants or Warrant
Shares: (i) if the Shelf Registration Statement is no longer effective or the
Prospectus usable for resales due to circumstances relating to pending
developments, public filings with the SEC and similar events, (ii) because the
Prospectus includes an untrue statement of a material fact or omits to state a
material fact necessary in order to make statements therein, in the light of
the circumstances under which they were made, not misleading or (iii) if the
Company is engaged in or has completed an underwritten public offering and the
underwriters' lock-up period with respect to sales of common stock (or
securities convertible into common stock) has not expired. Each Holder agrees
that it shall not dispose of Registrable Securities under the Shelf
Registration Statement in any underwritten offering by one or more Holders of
less than an aggregate of $15 million of Registrable Securities determined on
the price per share offered to the public. The Company will, in the event a
Shelf Registration Statement is declared effective, provide to each Holder a
reasonable number of copies of the Prospectus which is a part of the Shelf
Registration Statement, and, at that time, notify each such Holder that the
Shelf Registration Statement has become effective. The Company further agrees
to supplement or amend the Shelf Registration Statement if and as required by
the rules, regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement or by the Securities
Act or by any other rules and regulations thereunder for shelf registrations,
and the Company agrees to furnish to the Holders of Registrable Securities
copies of any supplement or amendment to the Prospectus promptly after its
being used or filed with the SEC.
(b) Expenses. The Company, as issuer of the Warrant Shares, shall
pay all Registration Expenses in connection with any Shelf Registration
Statement filed pursuant to Section 2(a) hereof and will reimburse any single
counsel designated in writing by the Holders of a majority of the Registrable
Securities to act as counsel for the Holders of the Registrable Securities in
connection with a Shelf Registration Statement, which other counsel shall be
reasonably satisfactory to the Company; provided however, that such
reimbursement shall in no event exceed an aggregate of $10,000. Except as
provided herein, each Holder shall pay all expenses of its counsel,
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to
the Shelf Registration Statement.
(c) Effective Shelf Registration Statement. A Shelf Registration
Statement will not be deemed to have become effective unless it has been
declared effective by the SEC; provided, however, that if, after it has been
declared effective, the offering of Registrable Securities pursuant to such
Shelf Registration Statement is interfered with by any stop order, injunction
or other order or requirement of the SEC or any other governmental agency or
court, such Shelf Registration Statement will be deemed not to have been
effective during the period of such interference, until the offering of
Registrable Securities pursuant to such Shelf Registration Statement may
legally resume. The Company will be deemed not to have used its reasonable
best efforts to cause a Shelf Registration Statement to become, or to remain,
effective during the requisite period if it voluntarily takes any action that
would result in any such Shelf Registration Statement not being declared
effective or that would result in the Holders of Registrable Securities
covered thereby not being able to offer and sell such Registrable Securities
during that period, unless such action is within the scope of the second
paragraph of Section 2(a) hereof or is required by applicable law.
(d) Specific Enforcement. The parties hereto acknowledge that there
may be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may suffer material irreparable
injury, that it may not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, in addition to any other
remedy to which the aggrieved party may be entitled at law or in equity, the
aggrieved party may obtain such relief as may be required to specifically
enforce the other party's obligations hereunder. In addition, if the Company
notifies the Holder of a suspension period pursuant to Section 2(a) and the
Holder thereafter resells Warrants or Warrant Shares in deliberate violation
of such notice, then such Holder shall be deemed to have materially breached
this Agreement and shall have no further rights hereunder.
3. Registration Procedures. In connection with the obligations of
the Company with respect to the Shelf Registration Statement and Prospectus
pursuant to Section 2(a) hereof, the Company shall use its reasonable best
efforts to:
(a) prepare and file with the SEC a Shelf Registration Statement as
prescribed by Section 2(a) hereof within the relevant time period
specified in Section 2(a) hereof on the appropriate form under the
Securities Act, which form shall (i) be selected by the Company, (ii) be
available for the sale of the Registrable Securities by the selling
Holders thereof, and (iii) comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith; and the Company
shall use its reasonable best efforts to cause such Shelf Registration
Statement to become and remain effective and the Prospectus usable for
resales in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Shelf Registration Statement as may be necessary to
keep such Shelf Registration Statement effective for the Effectiveness
Period, subject to the proviso contained in the second paragraph in
Section 2(a), and cause each Prospectus to be supplemented, if so
determined by the Company or requested by the SEC, by any required
prospectus supplement and as so supplemented to be filed pursuant to Rule
424 (or any similar provision then in force) under the Securities Act,
and comply with the provisions of the Securities Act, the Exchange Act
and the rules and regulations promulgated thereunder applicable to it
with respect to the disposition of all Registrable Securities covered by
a Shelf Registration Statement during the Effectiveness Period in
accordance with the intended method or methods of distribution by the
selling Holders thereof described in this Agreement;
(c) register or qualify the Registrable Securities under all
applicable state securities or "blue sky" laws of such jurisdictions by
the time the applicable Shelf Registration Statement is declared
effective by the SEC as any Holder of Registrable Securities covered by a
Shelf Registration Statement and each underwriter of an underwritten
offering of Registrable Securities shall reasonably request in writing in
advance of such date of effectiveness, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such
Holder and underwriter to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder;
provided, however, that the Company shall not be required to (i) qualify
as a foreign corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to qualify but for this Section
3(c), (ii) file any general consent to service of process in any
jurisdiction where it would not otherwise be subject to such service of
process or (iii) subject itself to taxation in any such jurisdiction if
it is not then so subject;
(d) promptly notify each Holder of Registrable Securities, their
counsel and the managing underwriters, if any, and promptly confirm such
notice in writing (i) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a Shelf
Registration Statement or the qualification of the Registrable Securities
in any jurisdiction described in Section 3(c) hereof or the initiation of
any proceedings for that purpose, (ii) if, between the effective date of
a Shelf Registration Statement and the closing of any resale of
Registrable Securities covered thereby, the representations and
warranties of the Company contained in any purchase agreement, securities
sales agreement or other similar agreement cease to be true and correct
in all material respects, and (iii) of the happening of any event or the
failure of any event to occur or the discovery of any facts, during the
Effectiveness Period, which makes any statement made in a Shelf
Registration Statement or the related Prospectus untrue in any material
respect or which causes such Shelf Registration Statement or Prospectus
to omit 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;
(e) obtain the withdrawal of any order suspending the effectiveness
of the Shelf Registration Statement at the earliest possible moment;
(f) cooperate with the selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any
restrictive legends and registered in such names as the selling Holders
or the underwriters may reasonably request at least two (2) Business Days
prior to the closing of any sale of Registrable Securities pursuant to
the Shelf Registration Statement;
(g) promptly after the occurrence of any event specified in Section
3(d)(i) or 3(d)(iii) hereof (subject to the suspension provisions set
forth in Section 2(a)), prepare a supplement or post-effective amendment
to the Shelf Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the
Registrable Securities, such Prospectus will not include any 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 were made, not misleading; and the Company
shall notify each Holder to suspend use of the Prospectus as promptly as
practicable after the occurrence of such an event, and each Holder hereby
agrees to suspend use of the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission;
(h) if requested by the Holders of Registrable Securities in
connection with a firm commitment underwritten offering of at least $15
million in public offering price of Registrable Securities: (i) enter
into such agreements (including underwriting agreements) as are customary
in underwritten offerings and make such representations and warranties to
the underwriters (if any), with respect to the business of the Company
and its subsidiaries as then conducted and with respect to the Shelf
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings,
and confirm the same if and when requested; (ii) obtain opinions of
counsel to the Company and updates thereof (which may be in the form of a
reliance letter) in form and substance reasonably satisfactory to the
managing underwriters covering the matters customarily covered in
opinions requested in underwritten offerings and such other matters as
may be reasonably requested by such underwriters (it being agreed that
the matters to be covered by such opinion may be subject to customary
qualifications and exceptions); (iii) obtain "cold comfort" accountants'
letters and updates thereof in form and substance reasonably satisfactory
to the managing underwriters from the independent certified public
accountants of the Company (and, if necessary, any other independent
certified public accountants of any business acquired by the Company for
which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each of the
underwriters, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection
with underwritten offerings and such other matters as reasonably
requested by such underwriters in accordance with Statement on Auditing
Standards No. 72; and (iv) if an underwriting agreement is entered into,
the same shall contain customary indemnification provisions and
procedures;
(i) if requested by Holders of Registrable Securities in connection
with a firm commitment underwritten offering of at least $15 million in
public offering price of Registrable Securities make reasonably available
for inspection by any selling Holder of Registrable Securities who
certifies to the Company that it has a current intention to sell
Registrable Securities pursuant to the Shelf Registration, any
underwriter participating in any such disposition of Registrable
Securities, if any, and any attorney, accountant or other agent retained
by any such selling Holder or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during the Company's
normal business hours, all financial and other records, pertinent
organizational and operational documents and properties of the Company
and its subsidiaries (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the
Company and its subsidiaries to supply all relevant information, in each
case reasonably requested by any such Inspector in connection with such
Shelf Registration Statement; Records which the Company, in good faith,
believes to be confidential and which it notifies the Inspectors are
confidential shall not be disclosed to any Inspector except where (i) the
disclosure of such Records or information is necessary to avoid or
correct a material misstatement or omission in such Shelf Registration
Statement, (ii) the release of such Records or information is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction or is necessary in connection with any action, suit or
proceeding or (iii) such Records or information previously has been made
generally available to the public; each selling Holder of such
Registrable Securities will be required to agree in writing that Records
and information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Company unless and until
such ceases to be material or is made generally available to the public
through no fault of an Inspector or a selling Holder; and each selling
Holder of such Registrable Securities will be required to further agree
in writing that it will, upon learning that disclosure of such Records or
information is sought in a court of competent jurisdiction, or in
connection with any action, suit or proceeding, give notice to the
Company and allow the Company at its expense to undertake appropriate
action to prevent disclosure of the Records and information deemed
confidential;
(j) comply with all applicable rules and regulations of the SEC so
long as any provision of this Agreement shall be applicable and make
generally available to its securityholders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no
later than 45 days after the end of any twelve-month period (or 90 days
after the end of any twelve-month period if such period is a fiscal year)
(i) commencing at the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the
Company after the effective date of a Shelf Registration Statement, which
statements shall cover said twelve-month periods, provided that the
obligations under this Section 3(j) shall be satisfied by the timely
filing of quarterly and annual reports on Forms 10-Q and 10-K under the
Exchange Act;
(k) cooperate with each seller of Registrable Securities covered by
a Shelf Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made
with the NASD; and
(l) take all other steps necessary to effect the registration of the
Registrable Securities covered by a Shelf Registration Statement
contemplated hereby.
Each Holder agrees that, upon receipt of any notice from the Company
of the occurrence of any event specified in Section 3(d)(i) or 3(d)(iii)
hereof, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to a Shelf Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated
by Section 3(g) hereof or until it is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be resumed, and, if so
directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies in such Holder's possession, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice. If the Company shall give any such notice to suspend the disposition
of Registrable Securities pursuant to a Shelf Registration Statement, the
Company shall use its reasonable best efforts to file and have declared
effective (if an amendment) as soon as practicable after the resolution of the
related matters an amendment or supplement to the Shelf Registration Statement
and related Prospectus.
4. Indemnification and Contribution. (a) The Company hereby agrees
to indemnify and hold harmless each Holder, each underwriter who participates
in an offering of the Registrable Securities and each Person, if any, who
controls any of such parties within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in a Shelf Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment
or supplement thereto) or the omission or alleged omission therefrom of a
material fact required to be stated therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, provided that, such settlement is
effected with the prior written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by
such Holder), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) of this Section 4(a);
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished in writing to the Company by
such Holder or underwriter, respectively, for use in the Shelf Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto).
(b) Each Holder or underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors and officers (including
each officer of the Company who signed the Shelf Registration Statement), and
each Person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense whatsoever described in the
indemnity contained in Section 4(a) hereof, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Shelf Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Holder or
underwriter, respectively, expressly for use in such Shelf Registration
Statement (or any amendment thereto) or such Prospectus (or any amendment or
supplement thereto); provided, however, that no Holder shall be liable for any
claims hereunder in excess of the amount of net proceeds received by such
Holder from the sale of Registrable Securities.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability which it may have under this Section 4 to the extent that
it is not materially prejudiced by such failure as a result thereof, and in
any event shall not relieve it from liability which it may have otherwise on
account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 4(a) or (b) above, counsel to the indemnified parties
shall be selected by such parties. An indemnifying party may participate at
its own expense in the defense of such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to local counsel), separate from their own counsel, for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 4 (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional written
release of each indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement set forth in this Section 4 is
for any reason held to be unenforceable by an indemnified party although
applicable in accordance with its terms, the Company, on the one hand, and the
Holders and underwriters, on the other hand, shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated
by such indemnity agreement incurred by the Company and the Holders and
underwriters, as incurred; provided, however, that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any Person that was not guilty of
such fraudulent misrepresentation. As between the Company, on the one hand,
and the Holders and underwriters, on the other hand, such parties shall
contribute to such aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by such indemnity agreement in such proportion as
shall be appropriate to reflect the relative fault of the Company, on the one
hand, and the Holders and underwriters, on the other hand, with respect to the
statements or omissions which resulted in such loss, liability, claim, damage
or expense, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand,
and the Holders and underwriters, on the other hand, 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 Company, on the one hand,
or by or on behalf of the Holders and underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Holders of
the Registrable Securities agree that it would not be just and equitable if
contribution pursuant to this Section 4 were to be determined by pro rata
allocation or by any other method of allocation that does not take into
account the relevant equitable considerations. For purposes of this Section 4,
each Affiliate of a Holder and each Person, if any, who controls a Holder or
such Affiliate within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
such Holder, and each director and officer of the Company and each Person, if
any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company.
5. Participation in an Underwritten Registration. No Holder may
participate in an underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in
the underwriting arrangement approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents reasonably required under the terms of
such underwriting arrangements.
6. Selection of Underwriters. The Holders of Registrable Securities
covered by the Shelf Registration Statement who desire to do so may sell their
Registrable Securities covered by such Shelf Registration in an underwritten
offering, subject to the provisions of Section 3(h) hereof. In any such
underwritten offering, the underwriter or underwriters and manager or managers
that will administer the offering will be selected by the Holders; provided,
however, that such underwriters and managers must be reasonably satisfactory
to the Company.
7. Miscellaneous.
(a) Rule 144. For so long as the Company is subject to the reporting
requirements of Section 13 or 15 of the Exchange Act and any Registrable
Securities or Warrant Shares which are no longer Registrable Securities solely
as a result of their issuance and sale pursuant to a Net Issue Exercise as
provided by Section 1.2 of the Warrant (collectively, "Eligible Securities")
remain outstanding, the Company will file the reports required to be filed by
it under the Securities Act and Section 13(a) or 15(d) of the Exchange Act and
the rules and regulations adopted by the SEC thereunder; provided, however,
that if the Company ceases to be so required to file such reports, it will,
upon the request of any Holder of Eligible Securities, (a) make publicly
available such information as is necessary to permit sales of its securities
pursuant to Rule 144 under the Securities Act and (b) take such further action
that is reasonable in the circumstances, in each case, to the extent required
from time to time to enable such Holder to sell its Eligible Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the Securities Act, as such rule may be
amended from time to time, or any similar rules or regulations hereafter
adopted by the SEC. Upon the request of any Holder of Eligible Securities, the
Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
(b) No Inconsistent Agreements. The Company has not entered into,
and will not enter into, any agreement which is inconsistent with the rights
granted to the Holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's other issued and
outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of a
majority of the Holders affected by such amendment, modification, supplement,
waiver or departure; provided that no amendment, modification or supplement or
waiver or consent to the departure with respect to the provisions of Section 4
hereof shall be effective as against any Holder unless consented to in writing
by such Holder. Notwithstanding the foregoing sentence, (i) this Agreement may
be amended, without the consent of any Holder, by written agreement signed by
the Company and the Buyers or their successors and assigns to cure any
ambiguity, to correct or supplement any provision of this Agreement that may
be inconsistent with any other provision of this Agreement or to make any
other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with other provisions of this
Agreement, (ii) this Agreement may be amended, modified or supplemented, and
waivers and consents to departures from the provisions hereof may be given, by
written agreement signed by the Company and the Buyers or their successors and
assigns to the extent that any such amendment, modification, supplement,
waiver or consent is, in their reasonable judgment, necessary or appropriate
to comply with applicable law (including any interpretation of the Staff of
the SEC) or any change therein and (iii) to the extent any provision of this
Agreement relates to the Buyers and no other Holders, such provision may be
amended, modified or supplemented, and waivers or consents to departures from
such provisions may be given, by written agreement signed by the Buyers and
the Company.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder
to the Company by means of a notice given in accordance with the provisions of
this Section 7(d), which address initially is, with respect to the Buyers, 000
Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and (ii) if to the
Company, initially at 1350 Avenue of the Americas, New York, New York and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an overnight courier, including
Federal Express or similar courier utilizing overnight delivery.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Buyer, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that nothing herein shall
be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Warrant; If any
transferee of any Holder shall acquire Registrable Securities, whether by
operation of law or otherwise, such Registrable 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 and such Person shall be entitled to receive the benefits hereof.
(f) Third Party Beneficiaries. Each Holder shall be a third party
beneficiary of the agreements made hereunder among the Company and the Buyers,
and the Buyers shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights
or the rights of Holders hereunder.
(g) 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.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without giving effect to
any provisions relating to conflicts of law.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes
all prior agreements and understandings between the parties with respect to
such subject matter.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed by one of their respective officers thereunto duly authorized.
RECKSON SERVICE INDUSTRIES, INC.
By:
--------------------------------------
Name:
Title:
GOTHAM PARTNERS, L.P.
By:
--------------------------------------
Name:
Title:
GOTHAM PARTNERS III, L.P.
By:
--------------------------------------
Name:
Title:
GOTHAM PARTNERS INTERNATIONAL, LTD.
By:
--------------------------------------
Name:
Title: