Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
May 11, 2004 by and among Capital Trust, Inc., a Maryland corporation (the
"Company"), and X. X. Xxxxxxx Corporation, a Delaware corporation ("Berkley").
Berkley and its designated controlled Affiliates identified on Schedule A
attached hereto are each referred to in this Agreement as an "Initial Holder"
and are collectively referred to in this Agreement as the "Initial Holders"
(provided that only Berkley shall be a direct party hereto and responsible for
its obligations hereunder).
Recitals
WHEREAS, pursuant to the terms of that certain securities purchase
agreement, dated as of the date hereof, among the Company, the Initial Holders
and the stockholders named therein (the "Securities Purchase Agreement"), the
Company has agreed to sell to the Initial Holders and the Initial Holders have
agreed to purchase (1) at the Initial Closing 1,310,000 shares (the "Tranche 1
Shares") of class A common stock, par value $.01 per share, of the Company (the
"Common Stock") and a warrant (the "Warrant") initially exercisable for 365,000
shares (the "Warrant Shares") and (2) at the Subsequent Closing 325,000 shares
of Common Stock (the "Tranche 2 Shares") and together with the Tranche 1 Shares
and the Warrant Shares, the "Shares"); and
WHEREAS, pursuant to the Securities Purchase Agreement, the Company
has agreed to grant to the Holders (as defined below) the registration rights
set forth in this Agreement.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby agree as follows:
Section 1. Definitions.
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Capitalized terms used, but not otherwise defined herein, shall have
the meanings assigned to such terms in the Securities Purchase Agreement. As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or is under common control
with such Person. For the purposes of this definition, "control", when used with
respect to any Person, means possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of the such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms of "affiliated", "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent" means the principal placement agent on an agented placement
of Registrable Securities.
"Business Day" means a day other than a Saturday, Sunday or other day
on which banking institutions in New York, New York are permitted or required by
any applicable law to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" has the meaning set forth in the Recitals.
"Company" has the meaning set forth in the Preamble and also includes
the Company's successors.
"Continuously Effective" means, with respect to a specified
registration statement, that it shall not cease to be effective and current and
compliant with respect to applicable disclosure requirements and available for
Transfers of Registrable Securities thereunder, and shall not be subject to any
stop order or similar order issued by the Commission, for longer than either (i)
any ten (10) consecutive Business Days, or (ii) an aggregate of fifteen (15)
Business Days during the period specified in the relevant provision of this
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Demand Registration" shall have the meaning set forth in Section
2(a).
"Demanding Holders" shall have the meaning set forth in Section 2(a).
"Holder" or "Holders" means the Initial Holder(s) or each Person to
whom a Holder Transfers Registrable Securities in accordance with Section 7(c)
whenever such Person owns of record Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two or more Persons
with respect to the same Registrable Securities, the Company may act upon the
basis of the instructions, notice or election received from the registered owner
of such Registrable Securities.
"Initial Holder" or "Initial Holders" has the meaning set forth in
the Preamble
"Majority Selling Holders" means those Selling Holders whose
Registrable Securities included in such registration represent a majority of the
Registrable Securities of all Selling Holders included therein.
"NASD" means the National Association of Securities Dealers, Inc.
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"Person" means an individual, partnership, corporation, limited
liability company, trust, estate, or unincorporated organization, or other
entity, or a government or agency or political subdivision thereof.
"Register," "Registered" and "Registration" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act, and the declaration or ordering by the
Commission of effectiveness of such registration statement or document.
"Registrable Securities" means (i) the Tranche 1 Shares and Tranche 2
Shares purchased pursuant to the Securities Purchase Agreement; (ii) the Warrant
Shares issuable upon the exercise of the Warrant purchased pursuant to the
Securities Purchase Agreement; (iii) any shares of Common Stock or other
securities issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange by the Company generally for, or in
replacement by the Company generally of, the Shares; and (iv) any securities
issued in exchange for such shares of Common Stock in any merger, combination or
reorganization of the Company; provided, however, that Registrable Securities
shall not include any securities which have theretofore been registered pursuant
to this Agreement and sold by a Holder pursuant to the Securities Act or which
have been sold by a Holder to the public pursuant to Rule 144 or any similar
rules promulgated by the Commission pursuant to the Securities Act, and,
provided further, that the Company shall have no obligation under Section 2 to
register any Registrable Securities of any Holder if the Company shall deliver
to the Holders requesting such registration an opinion of counsel reasonably
satisfactory to such Holders and their counsel to the effect that such
Registrable Securities may be resold pursuant to Rule 144(k) under the
Securities Act (or any successor provision) or, at the time of calculation, one
hundred percent (100%) of such Holder's Registrable Securities may be resold in
a single ninety (90) day period under Rule 144 of the Securities Act. For
purposes of this Agreement, a Person will be deemed to be a Holder of
Registrable Securities whenever such Person has the then-existing right to
acquire such Registrable Securities (by conversion, purchase or otherwise),
whether or not such acquisition has actually been effected.
"Rule 144" and "Rule 145" mean Rule 144 and Rule 145 promulgated
under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Selling Holders" means, with respect to a specified registration
pursuant to this Agreement, the Holders whose Registrable Securities are
proposed to be included in such registration.
"Securities Purchase Agreement" has the meaning set forth in the
Recitals.
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"Transfer" means and includes the act of selling, giving,
transferring, creating a trust (voting or otherwise), assigning or otherwise
disposing of (other than pledging, hypothecating or otherwise transferring as
security or any transfer upon any merger or consolidation) (and correlative
words shall have correlative meanings); provided however, that any transfer or
other disposition upon foreclosure or other exercise of remedies of a secured
creditor after an event of default under or with respect to a pledge,
hypothecation or other transfer as security shall constitute a Transfer.
"Underwriters' Representative" means the managing underwriter, or ,
in the case of a co-managed underwriting, the managing underwriter designated as
the Underwriters' Representative by the co-managers.
Section 2. Demand Registration.
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(a) Request for Demand Registration.
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(i) Subject to Sections 2(b), 2(d) and 2(e) below, at any time, if
one or more Holders shall make a written request to the Company (the
"Demanding Holders"), the Company shall cause there to be filed with the
Commission a registration statement meeting the requirements of the
Securities Act (a "Demand Registration"), and each Demanding Holder shall be
entitled to have included therein (subject to Section 3 hereof) all or such
number of such Demanding Holder's Registrable Securities as the Demanding
Holder shall request in writing. Any request made pursuant to this Section
2(a) shall be addressed to the attention of the Secretary of the Company, and
shall specify the number of Registrable Securities to be registered, the
intended methods of disposition thereof and that the request is for a Demand
Registration pursuant to this Section 2(a).
(ii) Whenever the Company shall have received a demand pursuant to
Section 2(a) to effect the Demand Registration of any Registrable Securities,
the Company shall promptly give written notice of such proposed registration
to all Holders of Registrable Securities, if any. Any such Holder may, within
twenty (20) days after receipt of such notice, request in writing that all of
such Holder's Registrable Securities, or any portion thereof designated by
such Holder, be included in the registration and such request shall not be
considered one of the Demand Registrations under Section 2(a) to which
Holders are entitled under Section 2(b)(i).
(b) Limitations on Demand Registrations.
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(i) The Company shall be obligated to effect no more than four Demand
Registrations in total and no more than two such registrations in any
twelve-month period. For purposes of the preceding sentence, registration
shall not be deemed to have been effected (A) unless a registration statement
with respect thereto has become effective, (B) if after such registration
statement has
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become effective, such registration or the related offer, sale
or distribution of Registrable Securities thereunder is interfered with by
any stop order, injunction or other order or requirement of the Commission or
other governmental agency or court for any reason not attributable to the
Selling Holders and such interference is not thereafter eliminated, or (C) if
the conditions to closing specified in the underwriting agreement, if any,
entered into in connection with such registration are not satisfied or waived
by reason of a failure on the part of the Company, unless caused by a Selling
Holder. If the Company shall have complied with its obligations under this
Section 2, a right to demand a registration pursuant to Section 2(a) shall be
deemed to have been satisfied upon the earlier of (X) the date as of which
all of the Registrable Securities included therein shall have been disposed
of pursuant to a registration statement, (Y) the date when all of the
Registrable Securities covered by the Registration Statement cease to be
Registrable Securities and (Z) the date as of which such Demand Registration
shall have been Continuously Effective for a period of not less than one
hundred eighty (180) days ("Minimum Effective Period").
(ii) Notwithstanding the foregoing, the Demand Registration rights
granted to the Holders in Section 2(a) are subject to the following
limitations: (A) each registration in respect of a Demand Registration must
include Registrable Securities having an aggregate market value of at least
$5,000,000, which market value shall be determined by multiplying the number
of Registrable Securities to be included in the Demand Registration by the
proposed per share offering price (provided that (x) the limitation set forth
in this clause (A) shall not be in effect at any time the Holders'
Registrable Securities are not able to be sold under Rule 144 because of the
Company's failure to comply with the information requirements thereunder,
unless at such time, the Company's counsel delivers a written opinion of
counsel, which shall be in a form reasonably satisfactory to such Holder's
counsel, to such Holders to the effect that such Holder's Registrable
Securities may be publicly offered and sold without registration under the
Act and (y) if the Underwriters' Representative or Agent advises the Company
in writing that, in its opinion, the amount of securities requested to be
included in such offering exceeds the amount which can be sold in such
offering without adversely affecting the marketability of the offering, the
minimum aggregate market value of Registrable Securities to be included in
such Demand Registration may be reduced to the extent required, but in no
event may the aggregate market value of the Registrable Securities included
therein be lower than $2,000,000); (B) the Company shall not be required to
cause a registration pursuant to Section 2(a) to be declared effective within
a period of one hundred twenty (120) days of the effective date of any
registration statement of the Company effected in connection with a Demand
Registration, provided the Company has not breached its obligations under
Section 2(a); (C) the Demand Registration rights contained herein shall be
subject to the terms and conditions of the registration rights and other
terms and conditions contained in Section 7.3 of
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the Preferred Share Purchase Agreement, dated as of June 16, 1997, as
amended, between the Company, formerly known as California Real Estate
Investment Trust, and Veqtor Finance Company, LLC, and Section 6 of the
Registration Rights Agreement, dated as of July 28, 1998, among the Company,
Vornado Realty L.P., EOP Operating Limited Partnership, Mellon Bank N.A., as
trustee for General Motors Hourly-Rate Employees Pension Trust and Mellon
Bank N.A., as trustee for General Motors Salaried Employees Pension Trust
(the "Existing Registration Rights") and the Company shall not be required to
cause a registration pursuant to Section 2(a) to be declared effective or to
include any Registrable Securities in a Demand Registration hereunder to the
extent not permitted by the Existing Registration Rights; (D) the Company
shall not be required to file a registration statement at any time prior to
October 11, 2004 nor have any registration statement declared effective prior
to November 11, 2004 if filed prior thereto unless Purchaser is permitted to
sell, transfer or otherwise dispose of Registrable Securities prior to such
time pursuant to Section 2.7 of the Securities Purchase Agreement; (E) the
Company shall not be required to file a registration statement or to keep a
registration statement effective and current and compliant with respect to
applicable disclosure requirements and the Company shall be permitted to
suspend the use of any then effective registration statement if the Chief
Executive Officer or the Chief Financial Officer of the Company certifies to
the Holders in writing the existence of circumstances relating to a material
pending development, including, but not limited to a pending or contemplated
material acquisition or merger or other material transaction or event, which
would require additional disclosure by the Company in the registration
statement of previously non-public material information which the Company in
its good faith judgment has a bona fide business purpose for keeping
confidential and the nondisclosure of which in the registration statement
might cause the registration statement to fail to comply with applicable
disclosure requirements; provided, however, that the Company may not delay
the filing of a registration or documents necessary to keep an existing
registration statement effective and current and compliant nor suspend the
use thereof for such reason for more than ninety (90) days in the aggregate
in any calendar year; and (F) the Company shall not be required to file a
registration statement or to keep a registration statement effective and
current and compliant and the Company shall be permitted to suspend the use
of any then effective registration statement during the period starting with
the date fifteen (15) days prior to the Company's good faith estimate, as
certified in writing by an executive officer of the Company to the Holders,
of the date of the proposed pricing of an underwritten public offering of
equity securities of the Company for the account of the Company whether
covered by a prospectus under primary registration statement filed
specifically for the proposed offering or a prospectus supplement under an
effective primary shelf registration statement on file pursuant to Rule 415
under the Securities Act, and ending on the date ninety (90) days following
the consummation of such underwritten public offering; provided, however, in
the case of foregoing clauses
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(E) and (F), the Minimum Effective Period shall be extended by the
aggregate number of days of such period of restriction.
(c) Effective Demand Registration. Following receipt of a request for
a Demand Registration, the Company shall:
(i) file the registration statement with the Commission as promptly
as practicable, and shall use the Company's commercially reasonable efforts
to have the registration declared effective under the Securities Act as soon
as reasonably practicable, in each instance giving due regard to the need to
prepare current financial statements, conduct due diligence and complete
other actions that are reasonably necessary to effect a registered public
offering; and
(ii) use the Company's commercially reasonable efforts to keep the
relevant registration statement Continuously Effective for no less than the
Minimum Effective Period or until such earlier date as of which all the
Registrable Securities under the registration statement filed pursuant to the
Demand Registration shall have been disposed of in the manner described in
the registration statement. Notwithstanding the foregoing, if for any reason
the effectiveness of a registration pursuant to this Section 2 is suspended
or such registration statement shall not be current and compliant with
respect to applicable disclosure requirements, the Minimum Effective Period
shall be extended by the aggregate number of days of such suspension or
period of non-compliance.
(d) Form of Registration Statement. A registration pursuant to this
Section 2 shall be on such appropriate registration form of the Commission as
shall (i) be selected by the Company and be reasonably acceptable to the
Majority Selling Holders and (ii) permit the disposition of the Registrable
Securities in accordance with the intended method or methods of disposition
specified in the request pursuant to Section 2(a).
(e) Selection of Underwriters. If any registration pursuant to
Section 2(a) involves an underwritten offering (whether on a "firm," "best
efforts" or "all reasonable efforts" basis or otherwise), or an agented
offering, the Majority Selling Holders shall have the right to select the
underwriter or underwriters and manager or managers to administer such
underwritten offering or the placement agent or agents for such agented
offering; provided, however, that each Person so selected shall be reasonably
acceptable to the Company.
Section 3. Registration Procedures.
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(a) Obligations of the Company. Whenever required under Section 2 to
effect a Demand Registration of any Registrable Securities, the Company shall
use its commercially reasonable efforts to:
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(i) Prepare and file with the Commission a registration statement
with respect to such Registrable Securities (which registration statement
shall be available for the Selling Holders' intended method of distribution
and comply in all material respects with the requirements of the applicable
form and include all financial statements required by the Commission to be
filed therewith) and cause such registration statement to become effective.
(ii) Notify each Selling Holder when the registration statement and
any post-effective amendments thereto are declared effective.
(iii) Notify each Selling Holder of the receipt of any comments from
the Commission with respect to the registration statement and, subject to
Section 2(b)(ii), respond to such comments and prepare and file with the
Commission, if necessary, such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement or any document incorporated therein by reference or
file any other required document as may be necessary to comply with the
provisions of the Securities Act and rules thereunder with respect to the
disposition of all securities covered by such registration statement and the
instructions applicable to the registration form used by the Company. In the
event that any Registrable Securities included in a registration statement
subject to, or required by, this Agreement remain unsold at the end of the
period during which the Company is obligated to use its commercially
reasonable efforts to maintain the effectiveness of such registration
statement, the Company may file a post-effective amendment to the
registration statement for the purpose of removing such securities from
registered status.
(iv) Furnish to each Selling Holder of Registrable Securities,
without charge, such numbers of copies of the registration statement, any
pre-effective or post-effective amendment thereto, the prospectus, including
each preliminary prospectus and any amendments or supplements thereto, in
each case in conformity with the requirements of the Securities Act and the
rules thereunder, and such other related documents as any such Selling Holder
may reasonably request in order to facilitate the disposition of Registrable
Securities owned by such Selling Holder.
(v) Register and qualify the securities covered by such registration
statement under such other securities or blue sky laws of such states or
jurisdictions as shall be reasonably requested by the Underwriters'
Representative or Agent (as applicable, or if inapplicable, the Majority
Selling Holders) and to keep such qualification effective during the period
such registration statement is effective and obtain the withdrawal of any
order suspending the effectiveness of a registration statement, or the
lifting of any suspension of the qualification (or exemption from
qualification) of the offer and transfer of any of the Registrable Securities
in any jurisdiction, at the earliest possible moment; provided, however,
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that the Company shall not be required in connection therewith or as
a condition thereto to qualify to do business, subject itself to taxation in
any such jurisdiction, or to file a general consent to service of process in
any such states or jurisdictions.
(vi) in the event of any underwritten or agented offering, enter into
and perform the Company's obligations under an underwriting or agency
agreement (including indemnification and contribution obligations of
underwriters or agents and representations and warranties by the Company to
the Selling Holders and the underwriters), in usual and customary form, with
the managing underwriter or underwriters of or agents for such offering and
use its commercially reasonable efforts to obtain executed lock-up agreements
from the officers and directors of the Company and from the holders of more
than 5% of the Company's equity securities, if requested by the underwriters.
The Company shall also cooperate with the Majority Selling Holders and the
Underwriters' Representative or Agent for such offering in the marketing of
the Registrable Shares, including making available the Company's officers,
accountants, counsel, premises, books and records for such purpose, but the
Company shall not be required to incur any material out-of-pocket expense
pursuant to this sentence and shall not be required to conduct a road-show in
connection therewith.
(vii) Notify each Selling Holder of any stop order issued or
threatened to be issued by the Commission in connection therewith and take
all reasonable actions required to prevent the entry of such stop order or to
remove it if entered.
(viii) Notify each Selling Holder of the happening of any transaction
or event during the period a registration statement is effective which is of
a type specified in Section 2(b)(ii)(C) or as a result of which such
registration statement or the related prospectus contains any untrue
statement of a material fact or omits to state any material fact required to
be stated therein or necessary to make the statements therein in light of the
circumstances under which they were made (in the case of any prospectus), not
misleading.
(ix) Make generally available to the Company's security holders
copies of an earnings statement satisfying the provisions of Section 11(a) of
the Securities Act no later than ninety (90) days following the end of the
12-month period beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of each registration statement
filed pursuant to this Agreement.
(x) Make available for inspection by any Selling Holder, any
underwriter participating in such offering and the representatives of such
Selling Holder and Underwriter (but not more than one firm of counsel to such
Selling Holders), all financial and other information as shall be reasonably
requested by them, and provide the Selling Holders, any underwriter
participating in such offering and the representatives of such Selling
Holders and Underwriters the
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opportunity discuss the business affairs of the Company with its
principal executives and independent public accountants who have certified
the audited financial statements included in such registration statement in
each case all as necessary to enable them to exercise their due diligence
responsibility under the Securities Act; provided, however, that information
that the Company determines, in good faith, to be confidential and which the
Company advises such Person in writing is confidential shall not be disclosed
unless such Person signs a confidentiality agreement reasonably satisfactory
to the Company or the related Selling Holder of Registrable Securities agrees
to be responsible for such Person's breach of confidentiality on terms
reasonably satisfactory to the Company.
(xi) Obtain a so-called "comfort letter" from the Company's
independent public accountants, and legal opinions of counsel to the Company
addressed to the Selling Holders, in customary form and covering such matters
of the type customarily covered by such letters, and in a form that shall be
reasonably satisfactory to Majority Selling Holders. The Company shall
furnish to each Selling Holder a signed counterpart of any such comfort
letter or legal opinion. Delivery of any such opinion or comfort letter shall
be subject to the recipient furnishing such written representations or
acknowledgements as are customarily provided by selling shareholders who
receive such comfort letters or opinions.
(xii) Provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement.
(xiii) Cause the Registrable Securities to continue to be listed on
the New York Stock Exchange, Inc.
(xiv) Provide a CUSIP number for the Registrable Securities prior to
the effective date of the first registration statement including Registrable
Securities.
(xv) Take such other actions as are reasonably required in order to
expedite or facilitate the disposition of Registrable Securities included in
each such registration.
(b) Holders' Obligations. In connection with any registration
pursuant to Section 2, each Selling Holder agrees, as applicable:
(i) to execute the underwriting agreement, if any, agreed to by the
Majority Selling Holders or the Company, as the case may be;
(ii) that it will not offer or sell its Registrable Securities under
the registration statement until it has received copies of the supplemented
or amended
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prospectus contemplated by Section 3(a)(iii) and receives notice that
any post-effective amendment (if required) has become effective;
(iii) that, upon receipt of any notice from the Company of the
happening of any transaction or occurrence of any event of the kind specified
in Sections 2(b)(ii)(C), 2(b)(ii)(D), 3(a)(iii), 3(a)(vii) or 3(a)(viii),
such Holder will forthwith discontinue disposition of Registrable Securities
pursuant to any registration statement at issue until such Holder's receipt
of copies of a supplemented or amended prospectus contemplated by Section
3(a)(iii) and receives notice that any post-effective amendment (if required)
has become effective or until it is advised in writing by the Company that
the use of the applicable prospectus and registration statement 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
registration statement and prospectus covering such Registrable Securities
current at the time of receipt of such notice; and
(iv) that the Company may require each Selling Holder as to which any
registration is being effected to furnish to it such information regarding
such Selling Holder, the number of the Registrable Securities owned by it and
the intended method of disposition of such Registrable Securities as may be
required to effect the registration of such Selling Holder's Registrable
Securities, and to cooperate with the Company in preparing such registration,
the Company may exclude from such registration the Registrable Securities of
any Selling Holder who fails to furnish such information within 5 Business
Days after receiving such request and to provide such cooperation, and the
Company shall have no obligation to register under the Securities Act the
Registrable Securities of a proposed Selling Holder who so fails to furnish
such information or provide such cooperation.
(c) Lock-Up Agreement. If requested in writing by the Company, each
Holder agrees to execute a lock-up agreement pursuant to which such Holder shall
not effect any public or private sale or distribution, including sales pursuant
to Rule 144 of the Securities Act (but excluding Transfers, whether public or
private to an Affiliate of such Holder), of Common Stock, or any securities
convertible into or exchangeable or exercisable for such securities, held by
such Holder during the period starting with date fifteen (15) days prior to the
Company's good faith estimate, as certified in writing by an executive officer
of the Company to the Holders, of the date of the proposed pricing of an
underwritten public offering of equity securities of the Company for the account
of the Company whether covered by a prospectus under primary registration
statement filed specifically for the proposed offering or a prospectus
supplement under an effective primary shelf registration statement on file
pursuant to Rule 415 under the Securities Act, and ending on the date ninety
(90) days following the consummation of such
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underwritten public offering; provided, however, that each Holder
shall be required to execute a lock-up agreement in accordance with this Section
3(c) only in the event that each other stockholder of the Company holding 5% or
more of the then outstanding Common Stock on a fully-diluted basis (including
securities convertible into or exchangeable for Common Stock) executes a lock-up
agreement on substantially the same terms as set forth herein.
Section 4. Expenses of Registration. The Company shall bear and pay
all expenses incurred in connection with any registration, filing, or
qualification of Registrable Securities with respect to a Demand Registration
for each Selling Holder, including all registration, exchange listing,
accounting, filing and NASD fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the reasonable fees and disbursements
of counsel for the Company, and of the Company's independent public accountants,
including the expenses of "comfort letters" required by or incident to such
performance and compliance and reasonable fees and disbursements of one firm of
counsel for the Initial Holders (selected by the Selling Holders who constitute
Majority Selling Holders); provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 2 if the registration is subsequently withdrawn at the request of the
Selling Holders (if such request is not made as a result of any action or
inaction of the Company) (in which case all Selling Holders and any other
Holders of Registrable Securities to be included in the registration shall bear
such expenses pro rata according to their number of shares requested to be
registered), unless all Holders of Registrable Securities then outstanding agree
that such withdrawn registration shall constitute one of the Demand
Registrations under Section 2(a) hereof. Holders shall be responsible for any
underwriting discounts and commissions and taxes of any kind (including without
limitation, transfer taxes) relating to any disposition, sale or transfer of
Registrable Securities.
Section 5. Indemnification; Contribution.
(a) Indemnification by the Company. If any Registrable Securities are
included in a registration statement under this Agreement:
(i) To the extent permitted by applicable law, the Company shall
indemnify and hold harmless each Selling Holder, each Person, if any, who
controls such Selling Holder within the meaning of the Securities Act, and each
officer, director, trustee, partner, and employee of such Selling Holder and
such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint or several), including reasonable attorneys'
fees and disbursements and expenses of investigation, incurred by such party
pursuant to any actual or threatened action, suit, proceeding or investigation,
or to which any of the foregoing Persons may become subject under the Securities
Act, the Exchange Act or other federal or state laws, insofar as such losses,
claims,
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damages, liabilities and expenses arise out of or are based upon any
of the following statements, omissions or violations:
(A) Any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein, or any
amendments or supplements thereto or any document incorporated by
reference therein;
(B) Any omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the
statements therein (in light of the circumstances under which they
were made in the case of any prospectus) not misleading; or
(C) Any violation or alleged violation by the Company of the
federal securities laws, any applicable state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange
Act or any applicable state securities law;
provided, however, that the indemnification required by this Section 5(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if such settlement is effected without the consent of the
Company, which consent shall not be unreasonably withheld, nor shall the Company
be liable in any such case for any such loss, claim, damage, liability or
expense to the extent that it arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any such
Registration Statement in reliance upon and in conformity with written
information furnished to the Company by a Holder, underwriter or the indemnified
party expressly for use in connection with such registration; provided, further,
that the indemnity agreement contained in this Section 5(a) shall not apply to
any underwriter to the extent that any such loss is based on or arises out of an
untrue statement or alleged untrue statement of a material fact, or an omission
or alleged omission to state a material fact, contained in or omitted from any
preliminary prospectus if the final prospectus shall correct such untrue
statement or alleged untrue statement, or such omission or alleged omission, and
a copy of the final prospectus has not been sent or given to such Person at or
prior to the confirmation of sale to such Person. The Company shall also
indemnify underwriters participating in the distribution of the Registrable
Securities, their officers, directors, agents and employees and each Person who
controls such Persons (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) to the same extent as provided above with
respect to the indemnification of the Selling Holders.
(ii) Indemnification by Holder. If any of a Selling Holder's
Registrable Securities are included in a registration statement under this
Agreement, to the extent permitted by applicable law, such selling Holder
shall indemnify and hold harmless the Company, each of its directors, each of
its officers who shall have signed the registration statement, each Person,
if any, who
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controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, any other Selling Holder, any controlling
Person of any such other selling Holder and each officer, director, partner,
and employee of such other Selling Holder and such controlling Person,
against any and all losses, claims, damages, liabilities and expenses (joint
and several), including reasonable attorneys' fees and disbursements and
expenses of investigation, incurred by such party pursuant to any actual or
threatened action, suit, proceeding or investigation, or to which any of the
foregoing Persons may otherwise become subject under the Securities Act, the
Exchange Act or other federal or state laws, insofar as such losses, claims,
damages, liabilities and expenses arise out or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
applicable registration statement, including any preliminary prospectus or
final prospectus contained therein, or any amendments or supplements thereto
or 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 (in light of the circumstances under
which they were made in the case of any prospectus) not misleading or any
violation or alleged violation by any Holder or underwriter of the federal
securities laws, any applicable state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any
applicable state securities law, but only to the extent, that such untrue
statement or omission had been contained in any information furnished in
writing by such Selling Holder to the Company expressly for use in connection
with such registration; provided, however, that (x) the indemnification
required by this Section 5(b) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or expense if settlement is
effected without the consent of the relevant Selling Holder of Registrable
Securities, which consent shall not be unreasonably withheld, and (y) in no
event shall the amount of any indemnity under this Section 5(b) exceed the
gross proceeds from the applicable offering received by such selling Holder.
In no event shall a Holder be jointly liable with any other Holder as a
result of its indemnification obligations.
(b) Conduct of Indemnification Proceedings. Promptly after receipt by
an indemnified party under this Section 5 of notice of the commencement of any
action, suit, proceeding, investigation or threat thereof made in writing for
which such indemnified party may make a claim under this Section 5, such
indemnified party shall deliver to the indemnifying party a written notice of
the commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel retained by the indemnifying party (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties); provided,
however, that such counsel shall be reasonably satisfactory to the indemnified
party. The failure to deliver written notice to the indemnifying party within a
reasonable time
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following the commencement of any such action, if it prejudices or results in
forfeiture of rights or defenses, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 5, to the extent of any
damage directly suffered by the indemnifying party as a result thereof. Any fees
and expenses incurred by the indemnified party (including any fees and expenses
incurred in connection with investigating or preparing to defend such action or
proceeding) shall be paid to the indemnified party, as incurred, within thirty
(30) days of written notice thereof to the indemnifying party. Any such
indemnified party shall have the right to employ separate counsel in any such
action, claim or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be the expenses of such indemnified
party unless (i) the indemnifying party has agreed to pay such fees and
expenses, (ii) the indemnifying party shall have failed to promptly assume the
defense of such action, claim or proceeding or (iii) the named parties to any
such action, claim or proceeding (including any impleaded parties) include both
such indemnified party and the indemnifying party, and such indemnified party
shall have been advised by counsel that there may be one or more legal defenses
available to it which are different from or in addition to those available to
the indemnifying party (in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action, claim or proceeding on behalf of
such indemnified party, it being understood, however, that the indemnifying
party shall not, in connection with any one such action, claim or proceeding or
separate but substantially similar or related actions, claims or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
additional firm of attorneys (together with appropriate local counsel) at any
time for all such indemnified parties. No indemnifying party shall be liable to
an indemnified party for any settlement of any action, proceeding or claim
without the written consent of the indemnifying party, which consent shall not
be unreasonably withheld.
(c) Contribution. If the indemnification required by this Section 5
from the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to in
this Section 5:
(i) The indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any action has been committed by,
or relates to information supplied by, such indemnifying party or indemnified
parties, and the parties' relative intent,
-15-
knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 5(a) and
Section 5(b), any legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in Section 5(d)(i). 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.
(d) Full Indemnification. If indemnification is available under this
Section 5, the indemnifying parties shall indemnify each indemnified party to
the full extent provided in this Section 5 without regard to the relative fault
of such indemnifying party or indemnified party or any other equitable
consideration referred to in Section 5(d)(i) hereof.
(e) Survival. The obligations of the Company and the Selling Holders
of Registrable Securities under this Section 5 shall survive the completion of
any offering of Registrable Securities pursuant to a registration statement
under this agreement, and otherwise.
Section 6. Covenants of the Company. The Company hereby agrees and
covenants as follows:
(a) The Company shall use its commercially reasonable efforts to file
as and when applicable, on a timely basis, all reports required to be filed by
it under the Exchange Act. If the Company is not required to file reports
pursuant to the Exchange Act, upon the request of any Holder of Registrable
Securities, the Company shall use its commercially reasonable efforts to make
publicly available the information specified in subparagraph (c)(2) of Rule 144.
The Company shall use its commercially reasonable efforts to take such further
action as may be reasonably required from time to time and as may be within the
reasonable control of the Company, to enable the Holders to Transfer Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 or any other exemption from registration.
Upon the request of any Holder of Registrable Securities, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements and, if not, the specifics thereof.
(b) In connection with any sale, transfer or other disposition by a
Holder of any Registrable Securities pursuant to Rule 144, the Company shall
cooperate
-16-
with such Holder to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
Securities Act legend, and enable certificates for such Registrable Securities
to be for such number of shares and registered in such names as the Holder may
reasonably request at least two Business Days prior to any sale of Registrable
Securities.
Section 7. Miscellaneous.
-------------
(a) Amendments and Waivers.
----------------------
(i) The provisions of this Agreement, including the provisions of
this Section 7(a), may not be amended, modified or supplemented, and waivers
or consents to departures from the provisions hereof may not be given without
the written consent of the Company and the Holders of a majority of the
outstanding Registrable Securities. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each Holder, each future
Holder of Registrable Securities, and the Company.
(ii) Notice of any amendment, modification or supplement to this
Agreement adopted in accordance with this Section 7 shall be provided by the
Company to the Holders prior to the effective date of such amendment,
modification or supplement.
(b) Notices. All notices or other communications under this Agreement
shall be sufficient if in writing and delivered by hand or sent, postage prepaid
by registered, certified or express mail, or by recognized overnight air courier
service and shall be deemed given when so delivered by hand, or if mailed or
sent by overnight courier service, on the third Business Day after mailing (one
Business Day in the case of express mail or overnight courier service) to the
parties at the following addresses:
(i) if to the Initial Holders, to the addresses set forth under their
signatures on the signature page hereof and if to any other Holder to the
address contained in the records of the Company;
-17-
(ii) if to the Company, to:
Capital Trust, Inc.
000 Xxxx Xxxxxx,
00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Chief Executive Officer
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
or at such other address as the addressee may have furnished in
writing to the sender as provided herein.
(c) Assignment.
----------
(i) Except as expressly provided in this Section 7(c), the rights of
the parties hereto cannot be assigned and any purported assignment or
transfer to the contrary shall be void ab initio. So long as the terms of
this Section 7(c) are followed, any Holder may assign any of its rights under
this Agreement, without the consent of the Company, to any Person to whom
such holder Transfers any Registrable Securities or any rights to acquire
Registrable Securities so long as such Transfer is not made pursuant to an
effective Registration Statement or pursuant to Rule 144 or Rule 145 (or any
successor provisions) under the Securities Act or in any other manner or to
any Person the effect or consequences of which is to cause the Transferred
securities to be freely transferable without regard to the volume and manner
of sale limitations set forth in Rule 144 (or any successor provision) in the
hands of the transferee as of the date of such Transfer.
(ii) Notwithstanding Section 7(c)(i), no Holder may assign any of its
rights under this Agreement to any Person to whom such Holder Transfers any
Registrable Securities if the Transfer of such Registrable Securities
requires registration under the Securities Act.
(iii) The nature and extent of any rights assigned shall be as agreed
to between the assigning party and the assignee. No Person may be assigned
any rights under this Agreement unless (x) the Company is given written
notice by the assigning party at the time of such assignment stating the name
and address of the assignee, identifying the securities of the Company as to
which the rights in
-18-
question are being assigned, and providing a detailed description of
the nature and extent of the rights that are being assigned and (y) and the
assignee agrees in writing to be bound by and subject to the terms and
conditions of this Agreement, including, without limitation, the provisions
of this Section 7(c).
(iv) Notwithstanding the foregoing, Berkley may assign its rights,
under this Agreement without the prior written consent of the Company to one
or more of its designated controlled Affiliates provided that Berkley remains
responsible for the obligations under this Agreement with respect to such
assignee.
(d) Successors and Assigns; No Third Party Beneficiaries. This
Agreement will be binding upon and inure to the benefit of the parties hereto
and their successors and permitted assigns. Except as set forth herein and by
operation of law, no party to this Agreement may assign or delegate all or any
portion of its rights, obligations, or liabilities under this Agreement without
the prior written consent of the Company in the case of a Holder or without the
written consent of Holders holding a majority of Registrable Securities in the
case of the Company. Notwithstanding the foregoing, Berkley may assign its
rights, obligations and liabilities under this Agreement without the prior
written consent of the Company to one or more of its designated controlled
Affiliates provided that Berkley remains responsible for the obligations under
this Agreement with respect to such assignee. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties hereto and their respective successors and permitted assigns to the
extent contemplated herein.
(e) 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.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) 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
THE CONFLICTS OF LAW PRINCIPLES THEREOF.
(h) Specific Performance; Costs and Expenses. The parties hereto
acknowledge that there would be no adequate remedy at law if any party fails to
perform any of its obligations hereunder, and accordingly agree that each party,
in addition to any other remedy to which it may be entitled at law or in equity,
shall be entitled to compel specific performance of the obligations of any other
party under this Agreement in accordance with the terms and conditions of this
Agreement in any court of the United States or any State thereof having
jurisdiction.
-19-
(i) 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.
-20-
IN WITNESS WHEREOF, the undersigned Company has executed this
Agreement as of the date first written above.
CAPITAL TRUST, INC.
By:/s/ Xxxx X. Xxxxx
-----------------------
Name: Xxxx X. Xxxxx
Title: Chief Executive Officer
IN WITNESS WHEREOF, the undersigned Berkley has executed this
Agreement as of the date first written above.
/s/ Xxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxx
Address:
SCHEDULE A
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Admiral Insurance Company
Berkley Insurance Company
Berkley Regional Insurance Company
Nautilus Insurance Company
