EXHIBIT 4.3
[EXECUTION COPY]
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of this 8th day of
January, 1998 (this "Agreement"), by and among HRE Properties, Inc., a Maryland
corporation (the "Company"), and each person executing a counterpart of the
signature page to this Agreement (each individually an "Initial Purchaser" and
collectively the "Initial Purchasers").
W I T N E S S E T H :
WHEREAS, upon the terms and subject to the conditions of the
Subscription Agreement dated as of January 8, 1998, by and among each of the
Initial Purchasers and the Company (the "Subscription Agreement"), the Company
has agreed to issue and sell to the Initial Purchasers, and the Initial
Purchasers have agreed to purchase from the Company, an aggregate of 350,000
shares, par value $.01 per share, of the Company's 8.99% Series B Senior
Cumulative Preferred Stock (the "Preferred Stock") on the terms and conditions
set forth therein; and
WHEREAS, in order to induce the Initial Purchasers to enter
into the Subscription Agreement and to consummate the transactions contemplated
thereby, the Company has agreed to provide the Initial Purchasers with certain
registration rights with respect to the Preferred Stock as more fully set forth
herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
(a) "Affiliate" of any specified Person means any other Person
who directly, or indirectly through one or more intermediaries, is in control
of, is controlled by, or is under common control with, such specified Person.
For purposes of this definition, control of a Person means the power, directly
or indirectly, to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise; and the terms "controlling" and
"controlled" have the respective meanings correlative to the foregoing.
(b) "Commission" means the Securities and Exchange Commission.
(c) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission thereunder, or any
similar successor statute.
(d) "Purchasers" mean the Initial Purchasers and any
transferee or assignee of Registrable Securities who agrees to become bound by
all of the terms and provisions of this Agreement by executing a counterpart to
this Agreement.
(e) "Person" means any individual, partnership, corporation,
limited liability company, joint stock company, association, trust,
unincorporated organization, or a government or agency or political subdivision
thereof.
(f) "Prospectus" means the prospectus (including, without
limitation, any preliminary prospectus and any final prospectus filed pursuant
to Rule 424(b) under the Securities Act, including any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance on Rule 430A under the Securities Act)
included in the Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by the Registration Statement and by all
other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act and incorporated
by reference therein.
(g) "Registrable Securities" mean the shares of Preferred
Stock, or any other securities issued in respect of such securities upon any
stock split, stock dividend, recapitalization, merger or other reorganization,
issued to or held by each Purchaser; provided, however, that a share of
Preferred Stock, or of such other securities issued in respect thereof, shall
cease to be a Registrable Security for purposes of this Agreement when it no
longer is a Restricted Security.
(h) "Registration Statement" means a registration statement of
the Company filed on an appropriate form under the Securities Act providing for
the registration of, and the sale on a continuous or delayed basis by the
holders of, all of the Registrable Securities pursuant to Rule 415 under the
Securities Act, including the Prospectus contained therein and forming a part
thereof, any amendments to such registration statement and supplements to such
Prospectus, and all exhibits and other material incorporated by reference in
such registration statement.
(i) "Restricted Security" means any share of Preferred Stock,
or any other security issued in respect of such security upon any stock split,
stock dividend, recapitalization, merger or other reorganization, except any
such share that (i) has been registered pursuant to an effective registration
statement under the Securities Act and sold in a manner contemplated by the
Prospectus included in the Registration Statement, (ii) has been transferred in
compliance with the resale provisions of Rule 144 under the Securities Act (or
any successor provision thereto) or is transferable pursuant to paragraph (k) of
Rule 144 under the Securities Act (or any successor provision thereto), or (iii)
otherwise has been transferred and a new share of Preferred Stock not subject to
transfer restrictions under the Securities Act has been delivered by or on
behalf of the Company.
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(j) "Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder, or any
similar successor statute.
2. Registration.
(a) The Company shall prepare and file with the Commission a
Registration Statement under the Securities Act relating to the offer and sale
of the Registrable Securities and shall use its reasonable best efforts to cause
the Commission to declare such Registration Statement to be effective under the
Securities Act on or prior to January 8, 1999, all in accordance with the terms
of this Agreement.
(b) If the offering pursuant to a Registration Statement
contemplated by Section 2(a) involves an underwritten offering, the Purchasers
who hold at least 66-2/3% of the Registrable Securities subject to such
underwritten offering shall have the right to select one legal counsel to
represent their interests, and a managing underwriter to administer the
offering, which managing underwriter shall be reasonably satisfactory to the
Company. The Purchasers who hold the Registrable Securities to be included in
such underwriting shall pay all underwriting discounts and commissions of such
managing underwriter (and any other underwriter) and all legal fees and expenses
of the Purchasers' legal counsel with respect to their Registrable Securities.
3. Obligations of the Company. In connection with the
registration of the Registrable Securities, the Company shall:
(a) promptly (i) prepare and file with the Commission such
amendments (including post-effective amendments) to the Registration Statement
and supplements to the Prospectus as may be necessary to keep the Registration
Statement continuously effective and in compliance with the provisions of the
Securities Act applicable thereto so as to permit the Prospectus forming a part
thereof to be current and useable by Purchasers for resales of the Registrable
Securities for a period of two years from the date on which the Registration
Statement is first declared effective by the Commission (the "Effective Time")
or such shorter period that will terminate when all the Registrable Securities
covered by the Registration Statement have been (A) sold pursuant thereto in
accordance with the plan of distribution provided in the Prospectus, (B)
transferred pursuant to Rule 144 under the Securities Act or (C) otherwise
transferred in a manner that results in the delivery of new securities not
subject to transfer restrictions under the Securities Act (the "Registration
Period"), and (ii) take all lawful action such that each of (A) the Registration
Statement and any amendment thereto does not, when it becomes effective, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, not
misleading, and (B) the Prospectus forming part of the Registration Statement,
and any amendment or supplement thereto, does not at any time during the
Registration Period include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Notwithstanding the foregoing provisions of this Section 3(a),
the
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Company may, during the Registration Period, suspend the use of the Prospectus
for a period not to exceed 60 days (whether or not consecutive) in any 12-month
period if the Board of Directors of the Company determines in good faith that
because of valid business reasons, including pending mergers or other business
combination transactions, planned acquisitions or divestitures of assets, or
pending material corporate developments and similar events, it is in the best
interests of the Company to suspend such use, and prior to or contemporaneously
with suspending such use the Company provides the Purchasers with written notice
of such suspension, which notice need not specify the nature of the event giving
rise to such suspension. At the end of any such suspension period, the Company
shall provide the Purchasers with written notice of the termination of such
suspension;
(b) during the Registration Period, comply with the provisions
of the Securities Act with respect to the disposition of all Registrable
Securities of the Company covered by the Registration Statement until such time
as all of such Registrable Securities have been disposed of in accordance with
the intended methods of disposition by the Purchasers as set forth in the
Prospectus forming part of the Registration Statement;
(c) (i) prior to the filing with the Commission of the
Registration Statement (including any amendments thereto) and the distribution
or delivery of any Prospectus (including any supplements thereto), provide draft
copies thereof to the Purchasers and reflect in such documents all such comments
as the Purchasers (and their counsel) reasonably may propose and (ii) furnish to
each Purchaser whose Registrable Securities are included in the Registration
Statement and its legal counsel identified to the Company, (A) promptly after
the same is prepared and publicly distributed, filed with the Commission, or
received by the Company, one copy of the Registration Statement, each
Prospectus, and each amendment or supplement thereto, and (B) such number of
copies of the Prospectus and all amendments and supplements thereto, and such
other documents, as such Purchaser may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Purchaser;
(d) (i) register and qualify the Registrable Securities
covered by the Registration Statement under such securities or "blue sky" laws
of such jurisdictions as the Purchasers who hold at least 66-2/3% of the
Registrable Securities being offered may reasonably request, (ii) prepare and
file in such jurisdictions such amendments (including post-effective amendments)
and supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof at all times during the Registration Period,
(iii) take all such other lawful actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the Registration
Period, and (iv) take all such other lawful actions as may be reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (A) qualify to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(d), (B) subject itself to general taxation in any such
jurisdiction or (C) file a general consent to service of process in any such
jurisdiction;
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(e) as promptly as practicable after becoming aware of such
event, notify each Purchaser of the occurrence of any event, as a result of
which the Prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
promptly prepare an amendment to the Registration Statement and supplement to
the Prospectus to correct such untrue statement or omission, and deliver such
number of copies of such supplement and amendment to each Purchaser as such
Purchaser may reasonably request;
(f) as promptly as practicable after becoming aware of such
event, notify each Purchaser who holds Registrable Securities being sold (or, in
the event of an underwritten offering, the managing underwriter) of the issuance
by the Commission of any stop order or other suspension of the effectiveness of
the Registration Statement at the earliest possible time and take all lawful
action to effect the withdrawal, recession or removal of such stop order or
other suspension;
(g) at any time after January 8, 2001, upon receipt of a
written request from the Purchasers holding at least 66-2/3% of the outstanding
Preferred Stock that the Company apply for listing of the Preferred Stock, use
its reasonable best efforts to cause the listing of the Preferred Stock on the
New York Stock Exchange, Inc. (the "NYSE") or, if the Preferred Stock shall not
then be eligible for listing on the NYSE, to apply for listing of the Preferred
Stock on the American Stock Exchange, Inc. (the "AMEX") or, if the Preferred
Stock shall not then be eligible for listing on the AMEX, to apply for quotation
of the Preferred Stock through the National Association of Securities Dealers,
Inc. Automated Quotation System (the date of any such listing, the "Listing
Date");
(h) subsequent to the Listing Date, maintain a transfer agent
and registrar, which may be a single entity, for the Preferred Stock;
(i) cooperate with the Purchasers who hold Registrable
Securities being offered to facilitate the timely preparation and delivery of
certificates for the Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts, as the case may be, as the
Purchasers reasonably may request and registered in such names as the Purchasers
may request; and, at the Effective Time, deliver and cause legal counsel
selected by the Company to deliver to the transfer agent for the Registrable
Securities (with copies to the Purchasers whose Registrable Securities are
included in the Registration Statement) an appropriate instruction and opinion
of such counsel;
(j) take all such other lawful actions necessary to expedite
and facilitate the disposition by the Purchasers of their Registrable Securities
in accordance with the intended methods therefor provided in the Prospectus;
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(k) make generally available to its securityholders as soon as
practicable, but in any event not later than 18 months after (i) the effective
date (as defined in Rule 158(c) under the Securities Act) of the Registration
Statement, (ii) the effective date of each post-effective amendment to the
Registration Statement, and (iii) the date of each filing by the Company with
the Commission of its Annual Report on Form 10-K, an earnings statement of the
Company and its subsidiaries complying with Section 11(a) of the Securities Act
and the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(l) in the event of an underwritten offering, promptly include
or incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information as the managing underwriter may
reasonably request to be included therein and to which the Company does not
reasonably object and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after it is notified of the
matters to be included or incorporated in such Prospectus supplement or
post-effective amendment;
(m) enter into such customary agreements (including an
underwriting agreement in customary form in the event of an underwritten
offering) and take all such other lawful action to expedite and facilitate the
registration and disposition of the Registrable Securities, and in connection
therewith, if an underwriting agreement is entered into, cause the same to
contain indemnification provisions and procedures substantially identical to
those set forth in this Agreement;
(n) (i) make reasonably available for inspection by
Purchasers, any underwriter participating in any disposition pursuant to the
Registration Statement, and any attorney, accountant or other agent retained by
such Purchasers or any such underwriter all relevant financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and (ii) cause the Company's officers, directors and employees to
supply all information reasonably requested by such Purchasers or any such
underwriter, attorney, accountant or agent in connection with the Registration
Statement, in each case, as is customary for similar due diligence examinations;
provided, however, that all records, information and documents that are
designated in writing by the Company as confidential, proprietary or containing
any material non-public information shall be kept confidential by such
Purchasers and any such underwriter, attorney, accountant or agent, unless such
disclosure is made pursuant to judicial process in a court proceeding (after
first giving the Company an opportunity promptly to seek a protective order or
otherwise limit the scope of the information sought to be disclosed) or is
required by law, or such records, information or documents become available to
the public generally or through a third party not in violation of an
accompanying obligation of confidentiality; and provided further that, if the
foregoing inspection and information gathering would otherwise disrupt the
Company's conduct of its business, such inspection and information gathering
shall, to the maximum extent possible, be coordinated on behalf of the
Purchasers and the other parties entitled thereto by one legal counsel
designated by and on behalf of the Purchasers;
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(o) in connection with any underwritten offering, make such
representations and warranties to the Purchasers participating in such
underwritten offering and to the underwriters in form, substance and scope as
are customarily made by issuers to underwriters in secondary underwritten
offerings;
(p) in connection with any underwritten offering, obtain
opinions of counsel to the Company (which counsel and opinions (in form, scope
and substance) shall be reasonably satisfactory to the managing underwriter)
addressed to the underwriters, covering such matters as are customarily covered
in opinions requested in secondary underwritten offerings and such other matters
as may be reasonably requested by the managing underwriter (it being agreed that
the matters to be covered by such opinions shall include, without limitation, as
of the date of the opinion and as of the Effective Time of the Registration
Statement or the most recent post-effective amendment thereto, as the case may
be, the absence from the Registration Statement and the Prospectus, including
any documents incorporated by reference therein, of untrue statements of
material facts or omissions of material facts required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading, subject
to customary limitations;
(q) in connection with any underwritten offering, obtain "cold
comfort" letters and updates thereof from the independent public accountants of
the Company (and, if necessary, from the independent public accountants of any
subsidiary of the Company or of any business acquired by the Company, in each
case for which financial statements and financial data are, or are required to
be, included in the Registration Statement), addressed to each underwriter
participating in such underwritten offering (if such underwriter has provided
such letter, representations or documentation, if any, required for such cold
comfort letter to be so addressed), in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
secondary underwritten offerings; and
(r) in connection with any underwritten offering, deliver such
documents and certificates as may be reasonably requested by the managing
underwriter.
4. Obligations of the Purchasers. In connection with the
registration of the Registrable Securities, the Purchasers shall have the
following obligations:
(a) It shall be a condition precedent to the obligations of
the Company to use its reasonable best efforts to complete the registration
pursuant to this Agreement with respect to the Registrable Securities of a
holder of Registrable Securities that (i) such holder has executed a counterpart
of this Agreement and is, in every other respect, a Purchaser, as such term is
defined and used herein, (ii) such holder has executed a written agreement to be
bound by Sections 5, 6 and 10 of the Subscription Agreement and (iii) such
Purchaser shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of the
Registrable Securities held by it as shall be reasonably required to effect the
registration of such Registrable Securities, and shall execute such documents in
connection with such registration as the Company may reasonably request. At
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least 20 days prior to the first anticipated filing date of the Registration
Statement, the Company shall notify each Purchaser of the information the
Company requires from each such Purchaser (the "Requested Information"), if such
Purchaser shall elect to have any of its Registrable Securities included in the
Registration Statement. If, at least five business days prior to the anticipated
filing date of the Registration Statement, the Company has not received the
Requested Information from a Purchaser (a "Non-Responsive Purchaser"), then the
Company may file the Registration Statement without including the Registrable
Securities of such Non-Responsive Purchaser.
(b) Each Purchaser by its acceptance of the Registrable
Securities agrees to cooperate with the Company in connection with the
preparation and filing of the Registration Statement hereunder, unless such
Purchaser has notified the Company in writing of its election to exclude all of
its Registrable Securities from the Registration Statement or is otherwise a
Non- Responsive Purchaser.
(c) Each Purchaser agrees that, upon receipt of any notice
from the Company of the occurrence of any event of the kind described in Section
3(e) or 3(f), it shall immediately discontinue its disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Purchaser's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 3(e) and, if so directed by the
Company, such Purchaser shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Purchaser's possession of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice.
5. Holdback Agreements. In the event of an underwritten
offering, the Company and each Purchaser agrees not to effect any public sale or
distribution, including any sale pursuant to Rule 144 under the Securities Act,
of any Registrable Securities, and to use such Purchaser's best efforts not to
effect any such public sale or distribution of any other equity security of the
Company, or of any security convertible into or exchangeable or exercisable for
any equity security of the Company (in each case, other than as part of such
underwritten offering), within 7 days before or 90 days after the effective date
of such underwritten offering.
6. Expenses of Registration. All expenses other than
underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Section 3, including,
without limitation, all registration, listing, and qualification fees, printing
and engraving and accounting fees, the fees and disbursements of counsel for the
Company (but excluding the fees of any legal counsel selected by the
Purchasers), shall be borne by the Company.
7. Indemnification and Contribution.
(a) Indemnification by the Company. The Company shall
indemnify and hold harmless each Purchaser and each underwriter, if any, which
facilitates the disposition of
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Registrable Securities, and each of their respective officers and directors and
each Person who controls such Purchaser or underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act (each such
Person being sometimes hereinafter referred to as an "Indemnified Party") from
and against any losses, claims, damages or liabilities, joint or several, to
which such Indemnified Party may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
an omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, not misleading, or
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Prospectus or an omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company hereby agrees to
reimburse such Indemnified Party for all reasonable legal and other expenses
incurred by them in connection with investigating or defending any such action
or claim as and when such expenses are incurred; provided, however, that the
Company shall not be liable to any such Indemnified Party in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) an untrue statement or alleged untrue statement made in, or an
omission or alleged omission from, such Registration Statement or Prospectus in
reliance upon and in conformity with written information furnished to the
Company by such Indemnified Party expressly for use therein or (ii) in the case
of the occurrence of an event of the type specified in Section 3(e), the use by
the Indemnified Party of an outdated or defective Prospectus after the Company
has provided to such Indemnified Party the notice required by Section 3(e).
(b) Indemnification by the Purchasers and Underwriters. Each
Purchaser agrees, as a consequence of the inclusion of any of its Registrable
Securities in a Registration Statement, and each underwriter, if any, which
facilitates the disposition of Registrable Securities shall agree, as a
consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors (including any person who, with his or her consent, is named in the
Registration Statement as a director nominee of the Company), its officers who
sign the Registration Statement 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, against any losses, claims, damages or liabilities to
which the Company or such other Persons may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in such Registration
Statement or Prospectus or arise out of or are based upon the 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 the Prospectus), not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
holder or underwriter expressly for use therein, and (ii) reimburse the Company
for any
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reasonable legal or other expenses incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Notice of Claims, etc. Promptly after receipt by an
Indemnified Party of written notice of any investigation, claim, proceeding or
other action in respect of which indemnification is being sought (each, a
"Claim"), the Indemnified Party promptly shall notify the party against whom
indemnification pursuant to this Section 7 is being sought (the "Indemnifying
Party") of the commencement thereof; but the omission to so notify the
Indemnifying Party shall not relieve Indemnifying Party from any liability that
it otherwise may have to the Indemnified Party, except to the extent that the
Indemnifying Party is materially prejudiced and forfeits substantive rights and
defenses by reason of such omission. In connection with any Claim as to which
both the Indemnifying Party and the Indemnified Party are parties, the
Indemnifying Party shall be entitled to assume the defense thereof.
Notwithstanding the assumption of the defense of any Claim by the Indemnifying
Party, the Indemnified Party shall have the right to employ separate legal
counsel and to participate in the defense of such Claim, and the Indemnifying
Party shall bear the reasonable fees, out-of-pocket costs and expenses of such
separate legal counsel to the Indemnified Party if (and only if): (x) the
Indemnifying Party shall have agreed to pay such fees, costs and expenses; (y)
the Indemnified Party and the Indemnifying Party shall reasonably have concluded
that representation of the Indemnified Party by the legal counsel to the
Indemnifying Party would not be appropriate due to actual or, as reasonably
determined by legal counsel to the Indemnified Party, potentially differing
interests between such parties in the conduct of the defense of such Claim, or
if there may be legal defenses available to the Indemnified Party that are in
addition to or disparate from those available to the Indemnifying Party; or (z)
the Indemnifying Party shall have failed to employ legal counsel reasonably
satisfactory to the Indemnified Party within a reasonable period of time after
notice of the commencement of such Claim. If the Indemnified Party employs
separate legal counsel in circumstances other than as described in clauses (x),
(y) or (z) above, the fees, costs and expenses of such legal counsel shall be
borne exclusively by the Indemnified Party. Except as provided above, the
Indemnifying Party shall not, in connection with any Claim in the same
jurisdiction, be liable for the fees and expenses of more than one legal counsel
for the Indemnified Party. The Indemnified Party shall not, without the prior
written consent of the Indemnifying Party (which consent shall not unreasonably
be withheld), settle or compromise any Claim or consent to the entry of any
judgment that does not include an unconditional release of the Indemnifying
Party from all liabilities with respect to such Claim or judgment.
(d) Contribution. If the indemnification provided for in this
Section 7 is unavailable to or insufficient to hold harmless an Indemnified
Party under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each Indemnifying Party shall contribute to the amount paid or payable to such
Indemnified Party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and the Indemnified Party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof) as
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well as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by such Indemnifying Party or by such Indemnified Party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Section 7(d) were determined by pro rata allocation (even if the Purchasers and
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 this Section 7(d). The amount paid or payable by an Indemnified
Party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such Indemnified Party in connection
with investigating or defending any such action or claim. 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 obligations of the Purchasers
and any underwriters in this Section 7(d) to contribute shall be several, not
joint, and in proportion to the percentage of Registrable Securities registered
or underwritten by the Purchasers or underwriters, respectively.
(e) Notwithstanding any other provision of this Section 7, (i)
in no event shall any Purchaser be liable to any Person under this Section 7 for
any amounts in excess of the dollar amount of the proceeds to be received by
such Purchaser from the sale of such Purchaser's Registrable Securities (after
deducting any fees, discounts and commissions applicable thereto) pursuant to
the Registration Statement under which such Registrable Securities are to be
registered under the Securities Act, and (ii) in no event shall any underwriter
be required to undertake liability to any Person hereunder for any amounts in
excess of the aggregate discounts, commissions or other compensation payable to
such underwriter with respect to the Registrable Securities underwritten by it
and distributed pursuant to the Registration Statement.
(f) The obligations of the Company under this Section 7 shall
be in addition to any liability which the Company may otherwise have to any
Indemnified Party and the obligations of any Purchaser under this Section 7
shall be in addition to any liability which such Purchaser may otherwise have to
any Indemnified Party. The remedies provided in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
an Indemnified Party at law or in equity.
8. Rule 144. With a view to making available to the Purchasers
the benefits of Rule 144 under the Securities Act or any other similar rule or
regulation of the Commission that may at any time permit the Purchasers to sell
securities of the Company to the public without registration ("Rule 144"), the
Company agrees to:
(a) comply with the provisions of paragraph (c)(1) of Rule
144; and
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(b) file with the Commission in a timely manner all reports
and other documents required to be filed by the Company pursuant to Section 13
or 15(d) under the Exchange Act.
9. Assignment. Notwithstanding anything to the contrary
contained in this Agreement, the rights to have the Company register Registrable
Securities pursuant to this Agreement will not be transferred to a transferee of
Registrable Securities unless: (a) the Purchaser agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company as soon as practicable after such assignment; (b) the
Company is, as soon as practicable after such transfer or assignment, furnished
with written notice of (i) the name and address of such transferee or assignee
and (ii) the securities with respect to which such registration rights are being
transferred or assigned; (c) immediately following such transfer or assignment,
the securities so transferred or assigned to the transferee or assignee
constitute Restricted Securities; and (d) at or before the time the Company
receives the written notice contemplated by clause (b) of this sentence, the
transferee or assignee signs a counterpart of this Agreement or otherwise agrees
in writing with the Company to be bound by all of the provisions contained
herein.
10. Restrictions on Transferability. Each Purchaser
acknowledges and agrees that the Registrable Securities are subject to certain
transfer restrictions set forth in the Subscription Agreement, and each
Purchaser further acknowledges and agrees that certificates representing shares
of Registrable Securities shall be stamped or otherwise imprinted with legends
restricting the transferability thereof, in substantially the form set forth in
the Subscription Agreement.
11. Amendment and Waiver. Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Purchasers who hold at least 66-2/3% of
the Registrable Securities. Any amendment or waiver effected in accordance with
this Section 11 shall be binding upon each Purchaser and the Company.
12. Miscellaneous.
(a) A Person shall be deemed to be a holder of Registrable
Securities whenever such Person owns of record such 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 shall
act upon the basis of instructions, notice or election received from the
registered owner of such Registrable Securities.
(b) Notices required or permitted to be given hereunder shall
be in writing and shall be deemed to be sufficiently given when personally
delivered (by hand, by courier, by facsimile transmission, receipt confirmed) or
sent by certified mail, return receipt requested, properly addressed and with
proper postage pre-paid (i) if to the Company, to HRE Properties,
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Inc., 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxxxxxx 00000 Attn: Secretary, with a
copy to Coudert Brothers, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000, Attn:
Xxxxxx X. Xxxxx, Esq., (ii) if to the Initial Purchasers, at the respective
addresses set forth in the Subscription Agreement and (iii) if to any other
Purchaser, at such address as such Purchaser shall have provided in writing to
the Company, or at such other address as each such party furnishes by notice
given in accordance with this Section 12(b), and shall be effective, when
personally delivered, upon receipt and, when so sent by certified mail, four
calendar days after deposit with the United States Postal Service.
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York, without regard to applicable
conflict of laws principles. Each of the parties consents to the jurisdiction of
the federal courts whose districts encompass any part of the City of New York or
the state courts of the State of New York sitting in the City of New York in
connection with any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection including any objection based
on forum non conveniens, to the bringing of any such proceeding in such
jurisdictions. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceabil-2ity of this Agreement in any other jurisdiction.
(e) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and undertakings among the parties hereto with respect to the
subject matter hereof.
(f) Subject to all conditions herein, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto.
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
(h) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning thereof.
(i) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement.
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A facsimile transmission of this signed Agreement shall be legal and binding on
all parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered as of the date first above written.
HRE PROPERTIES, INC.
By:
----------------------------------
Name:
Title:
COBALT CAPITAL LLC
By: CGA Investment Management, Inc.,
as Manager
By:
----------------------------------
Name:
Title:
XXXXX FARGO & COMPANY
By:
----------------------------------
Name:
Title:
RETIREMENT PLAN OF THE BANK
OF NEW YORK COMPANY, INC.
By: The Bank of New York, as Trustee
By:
----------------------------------
Name:
Title:
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