1
Exhibit 10.4
[XXXXX DIVERSIFIED LLC LETTERHEAD]
October , 1997
Xx. Xxxxxxx X. Xxxxx
Chairman
W.P. Xxxxx & Co., Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Dear Xxxx:
This will confirm the understanding and agreement (the "Agreement")
between W.P. Xxxxx & Co., Inc. ("W.P. Xxxxx") and Xxxxx Diversified LLC (the
"Company") as follows:
1. The Company hereby engages W.P. Xxxxx as the Company's exclusive
financial advisor for the purpose of providing financial
advisory services to the Company in connection with the
consolidation by merger of nine subsidiary limited partnerships
of the Company into nine public limited partnerships in the
Corporate Property Associates series of limited partnerships,
hereinafter referred to as the "Consolidation" or the
"Transaction."
2. In connection with its services as financial advisor hereunder,
W.P. Xxxxx agrees to:
(a) assist in the preparation of any registration statement,
consent solicitation statement, prospectus, private
placement memorandum or other offering documents,
including any amendments or supplements thereto (the
"Offering Documents"), in connection with the
Transaction, which Offering Documents will not be made
available to or used in discussions with prospective
investors until the Offering Documents and their use for
that purpose have been approved by the Company;
2
Xx. Xxxxxxx X. Xxxxx
W.P. Xxxxx & Co., Inc.
Page 2
(b) assist the Company in preparing descriptive materials including sales
literature for presentation in connection with the Consolidation; all
matters of form and content in respect of such materials shall be
subject to approval by the Company, which shall be responsible for
the accuracy and completeness of such materials;
(c) advise and assist the Company, and any legal counsel engaged by the
Company, in structuring any Transaction.
3. (a) The Company hereby engages W.P. Xxxxx to act as its consultant with
respect to each offering of Equity Securities made in connection with
the Transaction. In the event a Transaction involves a Public
Offering, the Company shall: (i) with the advice and assistance of
W.P. Xxxxx, prepare a registration statement (the "Registration
Statement") relating to the Securities, which conforms with the
requirements of the Securities Act of 1933, as amended (the "Act"),
and the rules and regulations of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations of the Securities
and Exchange Commission (the "SEC") thereunder and any other laws
applicable to the Public Offering, and contains the disclosures
required thereunder; (ii) file the Registration Statement with the
SEC as soon as practicable thereafter.
(b) With respect to any Public Offering or Private Placement of
Securities, the Company will cooperate fully with W.P. Xxxxx and
provide all information and take all actions reasonably requested by
X.X. Xxxxx to effect the issuance and sale of the Securities,
including, but not limited to, the registration or qualification of
the Securities in such jurisdictions as W.P. Xxxxx
3
Xx. Xxxxxxx X. Xxxxx
W.P. Xxxxx & Co., Inc.
Page 3
and the Company may mutually agree; provided, however, that the Company
will not be obligated to execute or file any general consent to service of
process.
4. The Company shall make available to W.P. Xxxxx all information concerning
the business, assets, operations, financial condition and prospects of the
Company, the Properties or the owners thereof, which W.P. Xxxxx reasonably
requests in connection with the performance of its obligations hereunder.
All such information provided by or on behalf of the Company shall be
complete and accurate and not misleading, and W.P. Xxxxx shall be entitled
to rely upon the accuracy and completeness of all such information without
independent verification. The Company shall continue to advise W.P. Xxxxx
regarding any material developments or matters relating to the Company or
the Properties which occur during the term of W.P. Xxxxx engagement
hereunder.
5. As compensation for the services rendered by X.X. Xxxxx hereunder upon
completion of the consolidation the Company shall pay W.P. Xxxxx in the
form of warrants to purchase shares of the Company (the "Listed Shares").
If all the CPA(R) Partnerships participate in the consolidation, W.P. Xxxxx
will receive warrants to purchase 2,284,800 Listed Shares at $21 per Share
and 725,930 Listed Shares at $23 Per Share. The Warrants will be
exercisable 10 years beginning one year after the date the consolidation is
complete.
4
Xx. Xxxxxxx X. Xxxxx
W.P. Xxxxx & Co., Inc.
Page 4
6. The Company shall:
a) indemnify W.P. Xxxxx and hold it harmless against any and all losses,
claims, damages or liabilities to which W.P. Xxxxx may become subject arising
in any manner out of or in connection with the rendering of services by W.P.
Xxxxx hereunder, unless it is finally judicially determined that such losses,
claims, damages or liabilities resulted directly from the gross negligence or
willful misconduct of W.P. Xxxxx; and
b) reimburse W.P. Xxxxx immediately for any legal or other expenses
reasonably incurred by it in connection with investigating, preparing to defend
or defending, or providing evidence in or preparing to serve or serving as a
witness with respect to, any lawsuits, investigations, claims or other
proceedings arising in any manner out of or in connection with the rendering of
services by W.P. Xxxxx xxxxxxxxx (including, without limitation, in
5
Xx. Xxxxxxx X. Xxxxx
W.P. Xxxxx & Co., Inc.
Page 5
connection with the enforcement of this Agreement and the
indemnification obligations set forth herein); provided,
however, that in the event a final judicial determination is
made to the effect specified in subparagraph 6(a) above,
Xxxxxx Brothers will remit to the Company any amounts
reimbursed under this subparagraph 6(b).
The Company agrees that the indemnification and reimbursement
commitments set forth in this paragraph 8 and the contribution
obligations set forth in paragraph 7 shall apply whether or not
W.P. Xxxxx is a formal party to any such lawsuits, claims or
other proceedings, that Xxxxxx Brothers is entitled to retain
separate counsel of its choice, subject to the reasonable
approval of the Company, in connection with any of the matters
to which such commitments relate and that such commitments shall
extend upon the terms set forth in this paragraph to any
controlling person, affiliate, director, officer, employee or
agent of W.P. Xxxxx (each, with Xxxxxx Brothers, an
"Indemnified Person"). The Company further agrees that, unless a
final judicial determination is made to the effect specified in
subparagraph 7(a) above, any settlement of a lawsuit, claim or
other proceeding against the Company arising out of the
transactions contemplated by this Agreement which is entered
into by the Company shall include an explicit and unconditional
release from the party bringing such lawsuit, claim or other
proceeding of all Indemnified Persons, which release shall be
reasonably satisfactory to W.P. Xxxxx.
7. The Company and W.P. Xxxxx agree that if any indemnification or
reimbursement sought pursuant to the preceding paragraph is judicially
determined to be unavailable for a reason other than the gross
negligence or willful misconduct of Xxxxxx Brothers, then, whether or
not W.P. Xxxxx is the Indemnified Person, the Company and W.P. Xxxxx
shall contribute to the losses, claims, damages, liabilities and
expenses for which such indemnification or reimbursement is held
unavailable: (i) in such proportion as is appropriate to reflect the
relative benefits to the Company on the one hand and W.P. Xxxxx on the
other hand, in connection with the transactions to which such
indemnification or reimbursement relates; or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative faults of the Company on
the one hand, and W.P. Xxxxx on the other hand, as well as any other
equitable considerations; provided, however, that in no event shall the
amount to be contributed by W.P. Xxxxx pursuant to this paragraph 8
exceed the amount of the fees actually received by W.P. Xxxxx hereunder.
6
Xx. Xxxxxxx X. Xxxxx
W.P. Xxxxx & Co., Inc.
Page 6
8. Except as contemplated by the terms hereof or as required by applicable law
or pursuant to an order entered or subpoena issued by a court of competent
jurisdiction, W.P. Xxxxx shall keep confidential all material nonpublic
information provided to it by the Company and shall not disclose such
information to any third party, other than such of its employees and
advisors as W.P. Xxxxx reasonably determines to have a need to know.
9. Except as required by applicable law, any advice to be provided by W.P.
Xxxxx under this Agreement shall not be disclosed publicly or made
available to third parties without the prior approval of W.P. Xxxxx and,
accordingly, such advice shall not be relied upon by any person or entity
other than the Company.
10. The Company agrees that W.P. Xxxxx has the right following the closing of a
Transaction to place advertisements in financial and other newspapers and
journals at its own expense describing its services to the Company
hereunder, provided that W.P. Xxxxx will submit a copy of any such
advertisements to the Company for its approval, which approval shall not be
unreasonably withheld.
11. The term of W.P. Xxxxx engagement hereunder shall extend from the date
hereof for a period of months. Subject to the provisions of paragraphs 6
through 15, which shall survive any termination or expiration of this
Agreement (including by operation of the preceding sentence), either party
may terminate W.P. Xxxxxx' engagement hereunder by giving the other
party at least 10 days' prior written notice.
12. At W.P. Xxxxx option, some or all of its services hereunder may be
performed by, and some or all of its fees may be paid to, an affiliate or
affiliates of W.P. Xxxxx and the term "W.P. Xxxxx" as used in this
Agreement shall include such affiliate or affiliates wherever appropriate
W.P. Xxxxx may retain the services of any third party to assist in
performing its duties under this Agreement, including due diligence,
provided that no such third party shall take any action on behalf of the
Company without the prior approval of the Company.
13. Nothing in this Agreement, expressed or implied, is intended to confer or
does confer on any person or entity other than the parties hereto or their
respective successors and assigns, and to the extent expressly set forth
herein, the Indemnified Persons, any rights or remedies under or by reason
of this Agreement or as a result
7
Xx. Xxxxxxx X. Xxxxx
W.P. Xxxxx & Co., Inc.
Page 7
of the services to be rendered by W.P. Xxxxx hereunder. The Company further
agrees that neither W.P. Xxxxx nor any of its controlling persons, affiliates,
directors, officers, employees or agents shall have any liability to the Company
for any losses, claims, damages, liabilities or expenses arising out of or
relating to this Agreement or the services to be rendered by W.P. Xxxxx
hereunder, unless it is finally judicially determined that such losses, claims,
damages, liabilities or expenses resulted directly from the gross negligence or
willful misconduct of W.P. Xxxxx.
15. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any
other provisions of this Agreement, which shall remain in full
force and effect.
16. (a) This Agreement may not be amended or modified except in
writing signed by each of the parties and shall be
governed by and construed and enforced in accordance
with the laws of the State of New York. The Company and
W.P. Xxxxx hereby irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the
courts of the State of New York and of the United States
District Courts located in the City of New York for any
lawsuits, claims or other proceedings arising out of or
relating to this Agreement and agree not to commence any
such law suit, claim or other proceeding except in such
courts.
(b) The Company and W.P. Xxxxx hereby irrevocably and
unconditionally waive any objection to the laying of
venue of any lawsuit, claim, or other proceeding arising
out of or relating to this Agreement in the courts or
the State of New York or the United States District
Courts located in the City of New York, and hereby
further irrevocably and unconditionally waive and agree
not to plead or claim in any such court that any such
lawsuit, claim or other proceeding brought in any such
court has been brought in an inconvenient forum.
(c) Any right to trial by jury with respect to any lawsuit,
claim or other proceeding arising out of or relating to
this Agreement or the services to be rendered by W.P.
Xxxxx hereunder is expressly and irrevocably waived by
X.X. Xxxxx and the Company.
8
Xx. Xxxxxxx X. Xxxxx
W.P. Xxxxx & Co., Inc.
Page 8
If the foregoing correctly sets forth the understanding and agreement
between W.P. Xxxxx and the Company, please so indicate in the space provided
for that purpose below, whereupon this letter shall constitute a binding
agreement as of the date first above written.
W.P. Xxxxx & Co. Inc.
By:
------------------------
AGREED:
Xxxxx Diversified LLC
By:
-------------------------
Xxxxxxx X. Xxxxx
Chairman
