(ATTACHMENT "G" EXHIBIT 4.2)
THIS REGISTRATION RIGHTS AGREEMENT, dated as of October 31, 1997, is
entered into by and among Xxxxxx Realty Corporation, a Maryland corporation (the
"Company" or the "REIT"), Xxxxxx Realty, L.P., a Delaware limited partnership
(the "Operating Partnership"), and the unit holders whose names are set forth on
the signature pages hereto (each, a "Unit Holder" and collectively, the "Unit
Holders").
RECITALS
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WHEREAS, in connection with the acquisition of certain properties (the
"Properties") currently owned by the group of affiliated entities collectively
known as "The Xxxxx Group" ("TAG"), as set forth in that certain Contribution
Agreement by and among TAG and the Operating Partnership of even date herewith,
the Company, the Operating Partnership and the Unit Holders will engage in
certain transactions whereby the Unit Holders will contribute to the Operating
Partnership their indirect interests in the Properties;
WHEREAS, the Unit Holders will receive units of limited partnership
interests ("OP Units") in the Operating Partnership in exchange for their
respective indirect interests in the Properties;
WHEREAS, pursuant to the Partnership Agreement (as defined below), OP
Units owned by the Unit Holders will be redeemable for cash or, at the Company's
election, exchangeable for shares of common stock, par value $.01 per share, of
the Company (the "Common Stock") upon the terms and subject to the conditions
contained therein; and
WHEREAS, the Unit Holders are willing to contribute their respective
indirect interests in the Properties in consideration of receiving the
registration rights provided for in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. In addition to the definitions set forth
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above, the following terms, as used herein, have the following meanings:
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under common control with such
Person. For the purposes of this definition, "control" when used with respect
to any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this Registration Rights Agreement, as it may be
amended, supplemented or restated from time to time.
"Articles of Incorporation" means the Articles of Amendment and
Restatement of the Company as filed with the Secretary of State of the State of
Maryland on January 21, 1997, as the same may be amended, modified or restated
from time to time.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York or Los Angeles, California are
authorized by law to close.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time or any successor statute thereto, as interpreted by the applicable
regulations thereunder.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchangeable OP Units" means OP Units which may be redeemable for
cash or exchangeable for Common Stock pursuant to Section 8.6 of the Partnership
Agreement (without regard to any limitations on the exercise of such exchange
right as a result of the Ownership Limit Provisions, as defined below).
"General Partner" means the Company or its successors as general
partner of the Operating Partnership.
"Holder" means any Unit Holder who is the record or beneficial owner
of any Registrable Security or any assignee or transferee of such Registrable
Security (including assignments or transfers of Registrable Securities to such
assignees or transferees as a result of the foreclosure on any loans secured by
such Registrable Securities) unless such Registrable Security is acquired in a
public distribution pursuant to a registration statement under the Securities
Act or pursuant to transactions exempt from registration under the Securities
Act, in each such case where securities sold in such transaction may be resold
without subsequent registration under the Securities Act.
"Incapacitated" shall have the meaning set forth in the Partnership
Agreement.
"Ownership Limit Provisions" mean the various provisions of the
Articles of Incorporation set forth in Article IV thereof restricting the
ownership of Common Stock by certain Persons to specified percentages of the
outstanding Common Stock.
"Partnership Agreement" means the amended and restated agreement of
limited partnership of the Operating Partnership dated as of January 31, 1997
and the First Amendment thereto of even date herewith, as the same may be
amended, modified or restated from time to time.
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"Person" means an individual or a corporation, partnership, limited
liability company, association, trust, or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Piggy-Back Registration" means a Piggy-Back Registration as defined
in Section 2.2 hereof.
"REIT" means a real estate investment trust under Section 856 through
Section 860 of the Code.
"Registrable Securities" means shares of Common Stock of the Company
at any time owned, either of record or beneficially, by any Holder and no matter
how acquired (including, without limitation, shares of Common Stock issuable
upon exchange of Exchangeable OP Units) until (i) a registration statement
covering such securities has been declared effective by the Commission and such
shares have been sold or transferred pursuant to such effective registration
statement, (ii) such shares are sold under circumstances in which all of the
applicable conditions of Rule 144 under the Securities Act (or any similar
provisions then in force) under the Securities Act are met or under which such
shares may be sold pursuant to Rule 144(k) under the Securities Act, or (iii)
such shares have been otherwise transferred in a transaction that would
constitute a sale thereof under the Securities Act, the Company has delivered a
new certificate or other evidence of ownership for such shares not bearing the
Securities Act restricted stock legend and such shares may be resold without
subsequent registration under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Holder" means a Holder who is selling Registrable Securities
pursuant to a registration statement under the Securities Act pursuant to this
Agreement.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal and not as part of such dealer's market-making
activities.
ARTICLE II.
REGISTRATION RIGHTS
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Section 2.1. Shelf Registration.
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(a) The Company shall prepare and file a "shelf"
registration statement with respect to shares of Common Stock issuable upon the
exchange of Exchangeable OP Units covering the issuance by the Company of such
shares of Common Stock and the resale thereof by the Holders on an appropriate
form for an offering to be made on a continuous basis pursuant to Rule 415 under
the Securities Act (the "Shelf Registration Statement") and shall use its best
efforts to cause the Shelf Registration Statement to be declared effective on or
before the third anniversary of the date of this Agreement (or, with respect to
the Holders set forth on Schedule 1, on the later to occur of (i) January 31,
1999 or (ii) one year from the date of issuance of such OP Units to such Holder)
and to keep such Shelf Registration Statement continuously effective
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for a period ending when all shares of Common Stock covered by the Shelf
Registration Statement have been issued and resold.
(b) In furtherance of Section 4(b) of the First Amendment to
the Partnership Agreement of even date herewith, if a Lender (as defined
therein) has exercised its remedies under a pledge of the OP Units and becomes
the owner of such OP Units, then, to the extent that such Lender is entitled to
the Redemption Right as set forth in Section 4(b) of the First Amendment to the
Partnership Agreement, such Lender may require the Company to file a Shelf
Registration Statement, or amend an existing Shelf Registration Statement, for
the resale of the Common Stock issuable upon exchange of such OP Units and the
Company shall use its best efforts to cause such Shelf Registration Statement to
become effective (or to be so amended, as applicable) as soon as commercially
practicable, and to keep such Shelf Registration Statement continuously
effective for a period ending when all shares of Common Stock covered by the
Shelf Registration Statement have been resold.
(c) In furtherance of Section 4(c) of the First Amendment to
the Partnership Agreement of even date herewith, following the occurrence of a
Change of Control (as defined therein), and to the extent the Investors are
entitled to exercise Redemption Rights pursuant to the provisions of Section
4(c), the Company will file a Shelf Registration Statement, or amend the
existing Shelf Registration Statement, for the resale of the Common Stock
issuable upon exchange of the OP Units held by such Investors, and the Company
will use its best efforts to cause such Shelf Registration Statement to become
effective (or to be so amended, as applicable) as soon as commercially
practicable, and to keep such Shelf Registration Statement continuously
effective for a period ending when all shares of Common Stock covered by the
Shelf Registration have been sold.
Section 2.2. Piggy-Back Registration.
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(a) If the Company proposes to file a registration statement
under the Securities Act with respect to an offering by the Company for its own
account (a "Primary Registration") or for the account of any of its respective
securityholders of Common Stock (other than (i) any registration statement filed
by the Company under the Securities Act relating to an offering of Common Stock
for its own account as a result of the exercise of the exchange rights set forth
in Section 8.6 of the Partnership Agreement, and covering the resale by the
Holders of the shares of common stock received in such exchange, or (ii) a
registration statement on Form S-4 or S-8 (or any substitute form that may be
adopted by the Commission) or filed in connection with an exchange offer or
offering of securities solely to the Company's existing securityholders) (a
"Secondary Registration"), then the Company shall give written notice of such
proposed filing to the Holders of Registrable Securities as soon as practicable
(but in no event less than ten (10) days before the anticipated filing date),
and such notice shall offer such Holders the opportunity to register such number
of shares of Registrable Securities as each such Holder may request (a "Piggy-
Back Registration"). The Company shall use its commercially reasonable efforts
to cause the managing Underwriter or Underwriters of a proposed underwritten
offering to permit the Registrable Securities requested to be included in a
Piggy-Back
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Registration to be included on the same terms and conditions as any similar
securities of the Company included therein.
(b) Withdrawal from Registration. Any Holder requesting
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inclusion of Registrable Securities pursuant to this Section 2.2 may, at any
time prior to the effective date of the registration statement relating to such
registration, revoke such request by delivering written notice of such
revocation to the Company; provided, however, that if the Company, in
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consultation with its financial and legal advisors, determines that such
revocation would materially delay the registration or otherwise require a
recirculation of the prospectus contained in the registration statement, then
such Holder shall have no such right to revoke its request. If the withdrawal of
any Registrable Securities would allow, within the marketing limitations set
forth above, the inclusion in the underwriting of a greater number of shares of
Registrable Securities, then, to the extent practicable and without delaying the
underwriting, the Company shall offer to the Holders an opportunity to include
additional shares of Registrable Securities in the proportions discussed in
Section 2.3 below.
(c) Termination or Withdrawal by the Company. The Company
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shall have the right to terminate or withdraw any registration initiated by it
under this Section 2.2 prior to the effectiveness of such registration whether
or not any Holder has elected to include securities in such registration.
Section 2.3. Reduction of Offering. Notwithstanding anything contained
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herein, if the managing Underwriter or Underwriters of an offering described in
Section 2.2 hereof are of the opinion that (i) the size of the offering that the
Holders, the Company and/or such other persons intend to make or (ii) the kind
of securities that the Holders, the Company and/or any other persons or entities
intend to include in such offering are such that the success of the offering
would be materially and adversely affected by inclusion of the Registrable
Securities requested to be included, then (A) if the size of the offering is the
basis of such Underwriter's opinion, the amount of securities to be offered for
the accounts of Holders shall be reduced pro rata (according to the Registrable
Securities proposed for registration) to the extent necessary to reduce the
total amount of securities to be included in such offering to the amount
recommended by such managing Underwriter or Underwriters; provided that if
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securities are being offered for the account of other persons or entities as
well as the Company, then (1) in the case of a Primary Registration, the
reduction in the amount of securities requested to be offered shall be made
first pro rata among securities offered for the accounts of Holders and such
other persons or entities, and (2) in the case of a Secondary Registration, the
reduction in the amount of securities requested to be offered shall be made in
accordance with the terms of the registration rights agreement pursuant to which
such Secondary Registration is made, provided that if any such registration
rights agreement is silent with respect to reductions in shares being registered
thereunder, then with respect to the Registrable Securities intended to be
offered by Holders, the proportion by which the amount of such class of
securities intended to be offered by Holders is reduced shall not exceed the
proportion by which the amount of such class of securities intended to be
offered by such other persons or entities is reduced and (B) if the combination
of securities to be offered is the basis of such Underwriter's opinion, (x) the
Registrable Securities to be included in such offering shall be reduced as
described in clause (A) above (subject to the
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proviso in clause (A)) or, (y) if the actions described in clause (x) would, in
the judgment of the managing Underwriter, be insufficient to substantially
eliminate the adverse effect that inclusion of the Registrable Securities
requested to be included would have on such offering, such Registrable
Securities will be excluded from such offering.
Section 2.4. Registration Procedures; Filings; Information. In
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connection with any Shelf Registration Statement under Section 2.1 hereof, the
Company will use its best efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of
disposition thereof as quickly as practicable, and in connection with any such
request:
(a) The Company will as expeditiously as possible prepare and
file with the Commission a registration statement on any form for which the
Company then qualifies or which counsel for the Company shall deem appropriate
and which form shall be available for the sale of the Registrable Securities to
be registered thereunder in accordance with the intended method of distribution
thereof, and use its best efforts to cause such filed registration statement to
become and remain effective for a period of not less than 180 days or in the
case of a Shelf Registration Statement as provided in Section 2.1 hereof.
(b) The Company will, if requested, prior to filing a
registration statement or prospectus or any amendment or supplement thereto,
furnish to each Selling Holder and each Underwriter, if any, of the Registrable
Securities covered by such registration statement or prospectus copies of such
registration statement or prospectus or any amendment or supplement thereto as
proposed to be filed, and thereafter furnish to such Selling Holder and
Underwriter, if any, such number of conformed copies of such registration
statement, each amendment and supplement thereto (in each case including all
exhibits thereto and documents incorporated by reference therein), the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as such Selling Holder or Underwriter may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Selling Holder.
(c) After the filing of the registration statement, the
Company will promptly notify each Selling Holder of Registrable Securities
covered by such registration statement of any stop order issued or threatened by
the Commission and take all reasonable actions required to prevent the entry of
such stop order or to remove it if entered.
(d) The Company will use its best efforts to (i) register or
qualify the Registrable Securities under such other securities or blue sky laws
of such jurisdictions in the United States (where an exemption is not available)
as any Selling Holder or managing Underwriter or Underwriters, if any,
reasonably (in light of such Selling Holder's intended plan of distribution)
requests and (ii) cause such Registrable Securities to be registered with or
approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of the Company and do any and all other
acts and things that may be reasonably necessary or advisable to enable such
Selling Holder to consummate the disposition of the Registrable Securities owned
by such Selling Holder; provided that the Company will not
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be required to (A) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (d), (B)
subject itself to taxation in any such jurisdiction or (C) consent to general
service of process in any such jurisdiction.
(e) The Company will immediately notify each Selling Holder
of such Registrable Securities, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the occurrence of an
event requiring the preparation of a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances then
existing, not misleading and promptly make available to each Selling Holder a
reasonable number of copies of any such supplement or amendment.
(f) The Company will enter into customary agreements
(including an underwriting agreement, if any, in customary form) and take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities.
(g) The Company will make available for inspection by any
Selling Holder of such Registrable Securities, any Underwriter participating in
any disposition pursuant to such registration statement and any attorney,
accountant or other professional retained by any such Selling Holder or
Underwriter (collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any Inspectors in
connection with such registration statement. Records which the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in such registration statement or (ii) the release of such Records
is ordered pursuant to a subpoena or other order from a court of competent
jurisdiction. Each Selling Holder of such Registrable Securities agrees that
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 or its Affiliates or otherwise
disclosed by it unless and until such is made generally available to the public.
Each Selling Holder of such Registrable Securities further agrees that it will,
upon learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at its expense,
to undertake appropriate action to prevent disclosure of the Records deemed
confidential.
(h) The Company will furnish to each Selling Holder and to
each Underwriter, if any, a signed counterpart, addressed to such Selling Holder
or Underwriter, of (i) an opinion or opinions of counsel to the Company and (ii)
a comfort letter or comfort letters from the Company's independent public
accountants (to the extent permitted by the standards of the American Institute
of Certified Public Accountants), each in customary form and covering such
matters of the type customarily covered by opinions or comfort letters, as the
case may be,
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as the Holders of a majority of the Registrable Securities included in such
offering or the managing Underwriter or Underwriters therefor reasonably
requests.
(i) The Company will otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission, and make available
to its securityholders, as soon as reasonably practicable, an earnings statement
covering a period of twelve (12) months, beginning within three (3) months after
the effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of
the Commission promulgated thereunder (or any successor rule or regulation
hereafter adopted by the Commission).
(j) The Company will use its best efforts to cause all such
Registrable Securities to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
The Company may require, as a condition precedent to the obligations
of the Company under this Agreement, each Selling Holder of Registrable
Securities to promptly furnish in writing to the Company such information
regarding such Selling Holder, the Registrable Securities held by it and the
intended method of distribution of the Registrable Securities as the Company may
from time to time reasonably request and such other information as may be
legally required in connection with such registration.
Each Selling Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 2.4(e)
hereof, such Selling Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement and prospectus
covering such Registrable Securities until such Selling Holder's receipt of the
copies of the supplemented or amended prospectus contemplated by Section 2.4(e)
hereof, and, if so directed by the Company, such Selling Holder will deliver to
the Company all copies, other than permanent file copies then in such Selling
Holder's possession, of the most recent prospectus covering such Registrable
Securities at the time of receipt of such notice. Each Selling Holder of
Registrable Securities agrees that it will immediately notify the Company at any
time when a prospectus relating to the registration of such Registrable
Securities is required to be delivered under the Securities Act of the happening
of an event as a result of which information previously furnished by such
Selling Holder to the Company in writing for inclusion in such prospectus
contains an 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 in which they were made, not misleading. In the
event the Company shall give such notice, the Company shall extend the period
during which such registration statement shall be maintained effective
(including the period referred to in Section 2.4(a) hereof) by the number of
days during the period from and including the date of the giving of notice
pursuant to Section 2.4(e) hereof to the date when the Company shall make
available to the Selling Holders of Registrable Securities covered by such
registration statement a prospectus supplemented or amended to conform with the
requirements of Section 2.4(e) hereof.
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Section 2.5. Registration Expenses. In connection with any
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registration statement required to be filed hereunder, the Company shall pay the
following registration expenses incurred in connection with the registration
hereunder (the "Registration Expenses"): (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) printing expenses, (iv)
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), (v) the fees
and expenses incurred in connection with the listing of the Registrable
Securities on each securities exchange on which similar securities issued by the
Company are then listed, (vi) reasonable fees and disbursements of counsel for
the Company and customary fees and expenses for independent certified public
accountants retained by the Company (including the expenses of any comfort
letters or costs associated with the delivery by independent certified public
accountants of a comfort letter or comfort letters requested pursuant to Section
2.4(h) hereof), (vii) the reasonable fees and expenses of any special experts
retained by the Company in connection with such registration, and (viii)
reasonable fees and expenses of one counsel (who shall be reasonably acceptable
to the Company) for the Selling Holders. The Company shall have no obligation to
pay any underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities, or any out-of-pocket expenses of the Holders (or the
agents who manage their accounts) or any transfer taxes relating to the
registration or sale of the Registrable Securities.
Section 2.6. Indemnification by the Company. The Company agrees to
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indemnify and hold harmless each Selling Holder of Registrable Securities, its
officers, directors and agents, and each Person, if any, who controls such
Selling Holder within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Registrable Securities (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by 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 in which they were made, not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Company by such Selling Holder or on
such Selling Holder's behalf expressly for inclusion therein. The Company also
agrees to indemnify any Underwriters of the Registrable Securities, their
officers and directors and each Person who controls such Underwriters within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act on
substantially the same basis as that of the indemnification of the Selling
Holders provided in this Section 2.6, provided that the foregoing indemnity with
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respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter of the Registrable Securities from whom the person asserting any
such losses, claims, damages or liabilities purchased the Registrable Securities
which are the subject thereof if such person did not receive a copy of the
prospectus (or the prospectus as supplemented) at or prior to the confirmation
of the sale of such Registrable Securities to such person in any case where such
delivery is required by
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the Securities Act and the untrue statement or omission of a material fact
contained in such preliminary prospectus was corrected in the prospectus (or the
prospectus as supplemented).
Section 2.7. Indemnification by Holders of Registrable Securities.
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Each Selling Holder agrees, severally but not jointly, to indemnify and hold
harmless the Company, its officers, directors and agents and each Person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Selling Holder, but only with
respect to information relating to such Selling Holder furnished in writing by
such Selling Holder or on such Selling Holder's behalf expressly for use in any
registration statement or prospectus relating to the Registrable Securities, or
any amendment or supplement thereto, or any preliminary prospectus. In case any
action or proceeding shall be brought against the Company or its officers,
directors or agents or any such controlling person, in respect of which
indemnity may be sought against such Selling Holder, such Selling Holder shall
have the rights and duties given to the Company, and the Company or its
officers, directors or agents or such controlling person shall have the rights
and duties given to such Selling Holder, by Section 2.6 hereof. Each Selling
Holder also agrees to indemnify and hold harmless Underwriters of the
Registrable Securities, their officers and directors and each Person who
controls such Underwriters within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act on substantially the same basis as that of
the indemnification of the Company provided in this Section 2.7.
Section 2.8. Conduct of Indemnification Proceedings. In case any
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proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
Sections 2.6 or 2.7 hereof, such person (an "Indemnified Party") shall promptly
notify the person against whom such indemnity may be sought (an "Indemnifying
Party") in writing and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Party, and shall assume the payment of all fees and expenses. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Indemnified Parties, such firm shall be designated in writing by (i) in the case
of Persons indemnified pursuant to Section 2.6 hereof, by the Selling Holders
which owned a majority of the Registrable Securities sold under the applicable
registration statement and (ii) in the case of Persons indemnified pursuant to
Section 2.7 hereof, the Company. The Indemnifying Party shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying
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Party shall indemnify and hold harmless such Indemnified Parties from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Party shall have requested an Indemnifying Party to reimburse the
Indemnified Party for fees and expenses of counsel as contemplated by the third
sentence of this paragraph, the Indemnifying Party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than thirty (30) Business Days after
receipt by such Indemnifying Party of the aforesaid request and (ii) such
Indemnifying Party shall not have reimbursed the Indemnified Party in accordance
with such request prior to the date of such settlement. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in which any Indemnified
Party is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such proceeding.
Section 2.9. Contribution. If the indemnification provided for in
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Sections 2.6 or 2.7 hereof is unavailable to an Indemnified Party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each such 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 or liabilities (i)
as between the Company and the Selling Holders on the one hand and the
Underwriters on the other, in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Holders on the one
hand and the Underwriters on the other from the offering of the securities, or
if such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits but also the relative
fault of the Company and the Selling Holders on the one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations and (ii) as between the Company on the one
hand and each Selling Holder on the other, in such proportion as is appropriate
to reflect the relative fault of the Company and of each Selling Holder in
connection with such statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Holders on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and the Selling Holders bear to the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the prospectus. The relative fault of the Company
and the Selling Holders on the one hand and of the Underwriters on the other
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 and the
Selling Holders or by the Underwriters. The relative fault of the Company on
the one hand and of each Selling Holder on the other 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
11
Company or such Selling Holder, and the Company's and the Selling Holder's
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Selling Holders agree that it would not be just
and equitable if contribution pursuant to this Section 2.9 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in Sections 2.6 and 2.7
hereof shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 2.9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the securities of such Selling Holder were offered to the
public exceeds the amount of any damages which such Selling Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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. The Selling Holder's obligations to contribute pursuant to
this Section 2.9 are several in the proportion that the proceeds of the offering
received by such Selling Holder bears to the total proceeds of the offering
received by all the Selling Holders and not joint.
Section 2.10. Participation in Underwritten Registrations. No Person
-------------------------------------------
may participate in any underwritten registration hereunder unless such Person
(a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents in customary
form and reasonably required under the terms of such underwriting arrangements
and these registration rights provided for in this Article II.
Section 2.11. Rule 144. The Company covenants that it will file any
--------
reports required to be filed by it under the Securities Act and the Exchange Act
and that it will take such further action as any Holder may reasonably request,
all to the extent required from time to time to enable Holders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any Holder,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
12
Section 2.12. Holdback Agreements.
-------------------
(a) Restrictions on Public Sale by Holder of Registrable
----------------------------------------------------
Securities. To the extent not inconsistent with applicable law, each Holder
----------
whose securities are included in a registration statement agrees, upon receipt
of prior written notice from the Company received not later than 13 days prior
to the effective date of such registration statement, not to effect any public
sale or distribution of the issue being registered or a similar security of the
Company, or any securities convertible into or exchangeable or exercisable for
such securities, including a sale pursuant to Rule 144 under the Securities Act,
during the 10 days prior to, and during the 90-day period beginning on, the
effective date of such registration statement (except as part of such
registration), if and to the extent requested in writing by the Company in the
case of a non-underwritten public offering or if and to the extent requested in
writing by the managing Underwriter or Underwriters in the case of an
underwritten public offering.
(b) In addition to the restrictions set forth in (a) above,
each Holder agrees not to effect any public sale or distribution of shares of
Common Stock or any security convertible into or exchangeable or exercisable for
shares of Common Stock, including a sale pursuant to Rule 144 under the
Securities Act, during the period beginning 10 days prior to, and ending 90 days
after, any public offering of equity securities by the Company. The Company
shall give prior written notice of such proposed public offering to Holders no
later than 13 days prior to such public offering. Notwithstanding the foregoing,
in the event the Company engages in a public offering of its equity securities
pursuant to a registration statement registering securities to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, the
Company will be entitled to give Holders three days prior written notice of such
proposed public offering and in such case each Holder agrees that the period set
forth above shall be changed to the period beginning two days prior to, and
ending 90 days after, any such public offering of equity securities by the
Company.
(c) If the Company determines in its good faith judgment
that the filing of the Shelf Registration Statement under Section 2.1 hereof or
the use of any related prospectus would require the disclosure of non-public
material information that the Company has a bona fide business purpose for
preserving as confidential or the disclosure of which would impede the Company's
ability to consummate a material transaction, and that the Company is not
otherwise required by applicable securities laws or regulations to disclose,
upon written notice of such determination by the Company, the rights of the
Holders to offer, sell or distribute any Registrable Securities pursuant to the
Shelf Registration Statement or to require the Company to take action with
respect to the registration or sale of any Registrable Securities pursuant to
the Shelf Registration Statement shall be suspended until the earlier of (i) the
date upon which the Company notifies the Holders in writing that suspension of
such rights for the grounds set forth in this Section 2.11(b) is no longer
necessary and (ii) 180 days. The Company agrees to give such notice as promptly
as practicable following the date that such suspension of rights is no longer
necessary.
(d) If all reports required to be filed by the Company
pursuant to the Exchange Act have not been filed by the required date without
regard to any extension, or if the
13
consummation of any business combination by the Company has occurred or is
probable for purposes of Rule 3-05 or Article 11 of Regulation S-X under the
Act, upon written notice thereof by the Company to the Holders, the rights of
the Holders to offer, sell or distribute any Registrable Securities pursuant to
the Shelf Registration Statement or to require the Company to take action with
respect to the registration or sale of any Registrable Securities pursuant to
the Shelf Registration Statement shall be suspended until the date on which the
Company has filed such reports or obtained and filed the financial information
required by Rule 3-05 or Article 11 of Regulation S-X to be included or
incorporated by reference, as applicable, in the Shelf Registration Statement,
and the Company shall notify the Holders as promptly as practicable when such
suspension is no longer required.
(e) Sales by Certain Officers and Directors of the Company.
------------------------------------------------------
Any sale or distribution of shares of Common Stock by a Holder who is a director
or officer of the Company and/or any Affiliate of the Company pursuant to a
Shelf Registration Statement and/or a Piggy-Back Registration shall be subject
to the volume and sale requirements of Rule 144 of the Securities Act as if such
shares had been issued to such Holder concurrently with the issuance of the
related OP Units and were being sold pursuant to Rule 144 without regard to Rule
144(k).
ARTICLE III.
MISCELLANEOUS
Section 3.1. New York Stock Exchange Listing. In the event that the
-------------------------------
Company shall issue any Common Stock in exchange for OP Units pursuant to
Section 8.6 of the Partnership Agreement, then in any such case the Company
agrees to cause any such shares of Common Stock to be listed on the New York
Stock Exchange prior to or concurrently with the issuance thereof by the
Company.
Section 3.2. Remedies. In addition to being entitled to exercise all
--------
rights provided herein and granted by law, including recovery of damages, the
Holders shall be entitled to specific performance of the rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
Section 3.3. 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 without the prior written consent of the Company and the
Holders or any such Holder's representative if any such Holder is Incapacitated.
No failure or delay by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon any breach thereof shall constitute a waiver of
any such breach or any other covenant, duty, agreement or condition.
14
Section 3.4. Notices. All notices and other communications in
-------
connection with this Agreement shall be made in writing by hand delivery,
registered first-class mail, telex, telecopier, or air courier guaranteeing
overnight delivery:
(1) if to any Unit Holder, at the address set forth on
Exhibit A hereto, or to such other address and to such other Persons as the Unit
Holders may hereafter specify in writing; and
(2) if to the Company, initially at 0000 Xxxx Xxxxxxxx
Xxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000 (Attention: President and Chief Executive
Officer), or to such other address as the Company may hereafter specify in
writing.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; when received if
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and on the next business day,
if timely delivered to an air courier guaranteeing overnight delivery.
Section 3.5. Successors and Assigns. Except as expressly provided in
----------------------
this Agreement, the rights and obligations of the Holders under this Agreement
shall not be assignable by any Holder to any Person that is not a Holder. This
Agreement shall be binding upon the parties hereto and their respective
successors and assigns.
Section 3.6. 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. Each party shall
become bound by this Agreement immediately upon affixing its signature hereto.
Section 3.7. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the State of California
without regard to the choice of law provisions thereof.
Section 3.8. 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.
Section 3.9. 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. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the Registrable Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
15
Section 3.10. Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Section 3.11. No Third Party Beneficiaries. Nothing express or implied
----------------------------
herein is intended or shall be construed to confer upon any person or entity,
other than the parties hereto and their respective successors and assigns, any
rights, remedies or other benefits under or by reason of this Agreement.
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
XXXXXX REALTY CORPORATION,
a Maryland corporation
By: /s/ Xxxx X. Xxxxxx, Xx.
---------------------------
Xxxx X. Xxxxxx, Xx.
President and Chief Executive Officer
XXXXXX REALTY, L.P., a Delaware limited
partnership
By: Xxxxxx Realty Corporation, a Maryland
corporation, its general partner
By: /s/ Xxxx X. Xxxxxx, Xx.
---------------------------
Xxxx X. Xxxxxx, Xx.
President and Chief Executive Officer
17
UNIT HOLDERS
UNIT HOLDERS WHO WILL RECEIVE UNITS ON THE DATE OF THE FIRST AMENDMENT:
XXXXXXX X. XXXXX, INC.
a California corporation
By: /s/ Xxxxxxx X. Xxxxx
-------------------------
Xxxxxxx X. Xxxxx,
President
COMMERCIAL MANAGEMENT CORPORATION,
a Tennessee corporation
By: /s/ Xxx Xxxxx
-------------------------
Xxx Xxxxx, President
XXXXX INVESTMENTS, INC.,
a Florida corporation
By: /s/ R.E. Xxxxx
-------------------------
R.E. Xxxxx, President
/s/ Xxxxxx X. Xxxxx
------------------------------
XXXXXX X. XXXXX, AN INDIVIDUAL
/s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
XXXXXX X. XXXXXXXXX, AN INDIVIDUAL
SELF DIRECTED INDIVIDUAL RETIREMENT
ACCOUNT(S) OF XXXXXX X. XXXXXXXXX
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxxxx, Owner
XXXXX DEVELOPMENT, INC.,
a California corporation
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxx
---------------------------
Title: CEO
-------------------------
18
THE FOLLOWING PERSONS MAY RECEIVE UNITS AFTER THE DATE OF THIS FIRST AMENDMENT
AND MAY EXECUTE THIS FIRST AMENDMENT AT A LATER DATE:
-------------------------------
T. XXXXXXX XXXXX, AN INDIVIDUAL
XXXXX & ASSOCIATES, INC.,
a California corporation
By: ________________________
Xxxx X. Xxxxx, President
LPL HOLDINGS, INC.,
a Delaware corporation
By: _________________________
Name: ________________________
Title: _______________________
19
EXHIBIT A
INTENTIONALLY OMITTED
SCHEDULE 1
Each of the following may elect not to receive Units or may become a signatory
to this Agreement at a closing which occurs after the original execution date.
LPL Holdings, Inc., a Delaware corporation
Xxxxx & Associates, Inc., a California corporation
Self Directed Individual Retirement Account(s) of Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx, an individual
