EXHIBIT 10.8
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of October 1, 1997, between Banyan Strategic Realty Trust,
a Massachusetts business trust (together with all of its successors, by
merger or otherwise (the "Company"), and Xxxxxxx X. Xxxxxx ("Xxxxxx").
RECITALS
WHEREAS, the Company entered into an Employment Agreement, dated as
of October 1, 1997 (the "Employment Agreement") with Xx. Xxxxxx granting
Xx. Xxxxxx options to purchase an aggregate of 350,000 shares of the
Company's beneficial interest (the "Option Shares");
WHEREAS, the Company has previously issued shares of beneficial
interest to Xx. Xxxxxx in consideration of amounts earned by Xx. Xxxxxx
under an employment agreement between Xx. Xxxxxx and the Company (the
"Shares");
WHEREAS, neither the Shares nor the Option Shares have been
registered under the Securities Act and are subject to restrictions on
resale or other disposition; and
WHEREAS, the Company desires to grant on behalf of itself and all
successors, and Xx. Xxxxxx desires to accept, the registration rights set
forth in this Agreement in respect of the Registrable Shares.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises contained
herein and intending to be legally bound the parties agree as follows:
SECTION 1. DEFINITIONS.
As used in this Agreement, the following terms shall have the
following respective meanings:
"Holder" means Xx. Xxxxxx and any transferee or assignee as permitted
under Section 7 hereof.
"Registrable Shares" means the Shares and the Option Shares issued to
Xx. Xxxxxx, including any securities issued in respect thereof pursuant to
a stock dividend, stock split, recapitalization or similar event. As to
any particular Registrable Shares, once issued such securities shall cease
to be Registrable Shares when (A) a registration statement with respect to
the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in
accordance with such registration statement, or (B) such securities shall
have been sold in accordance with Rule 144 (or any successor provision)
under the Securities Act.
The terms "register," "registered" and "registration" refer to the
preparation and filing with the SEC of a registration statement or similar
document in compliance with the Securities Act and the declaration or
ordering of the effectiveness of such registration statement or document.
"Registration Expenses" means all expenses, except Selling Expenses,
incurred by the Company and the Holder while complying with Section 2 of
this Agreement. Registration Expenses shall include, without limitation,
all registration and filing fees and other qualification fees, blue sky
fees, printing expenses and fees and disbursement of the Company's and the
Holder's accountants and legal counsel incurred in any registration
pursuant to Section 2.
"SEC" means the United States Securities and Exchange Commission or
any successor agency.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Selling Expenses" means all underwriting discounts, selling
commissions and stock transfer taxes relating to the Holder's registered
securities.
"Senior Securities" means all shares of the Company's beneficial
interest issued or issuable under a Share Purchase Agreement to which the
Company is a party dated October 10, 1997 and covered by a registration
rights agreement to which the Company is a party dated October 10, 1997.
SECTION 2. REGISTRATION.
(a) PIGGYBANK REGISTRATION STATEMENT. If the Company proposes to
register any equity securities (or securities convertible into or
exchangeable for equity securities), whether or not for sale for its own
account (other than a registration relating to the sale of securities to
participants in a dividend reinvestment plan, a registration on Form S-4
relating to a business combination or similar transaction permitted to be
registered on such Form S-4, a registration on Form S-8 relating to the
sale of securities to participants in a stock or employee benefit plan, a
registration pursuant to demand rights granted to the holders of Senior
Securities and a registration pursuant to Section 2(b) of this Agreement)
the Company will give written notice to the Holder of the Company's
intention to effect such a registration and include in such registration
all Registrable Shares with respect to which the Company has received
written notice from the Holder of inclusion therein within 30 days after
the date of the Company's notice, PROVIDED, HOWEVER, that:
(i) if, at any time after giving written notice of its
intention to register any securities and, prior to the effective date of
the Registration Statement filed in connection with such registration, the
Company shall determine for any reason not to register such securities, the
Company may, at its election, give written notice of such determination to
the Holder, and, thereupon, the Company shall be relieved of its obligation
to register any Registrable Shares in connection with the withdrawn or
unfiled registration (but not of its obligation to pay the Registration
Expenses in connection therewith pursuant to Section 3 hereto); and
(ii) if such registration shall be in connection with an
underwritten public offering, and the underwriter or managing underwriter,
as the case may be, shall advise the Company that in its opinion the number
of shares requested to be included in the registration or offering exceeds
the number of such securities which can be sold in such offering, the
amount to be registered shall be allocated pro rata among the Company, the
Holder and the other holders of the Company's securities desiring to
participate in the registration based on the number of shares initially
proposed to be included by the Company and the holders; provided, HOWEVER,
that if the underwritten public offering is (x) the first to occur after
October 10,1997 and (y) completed prior to March 31,1999, then the amount
to be registered shall be allocated first to the Company, second pro rata
among the holders of Senior Securities desiring to participate in the
registration based on the number of shares initially proposed to be
included in the registration by the holders of Senior Securities, third to
the Holder, and then pro rata among the other holders of the Company's
securities requested to be included in the registration based on the number
of shares initially proposed to be included by such holders; and
(iii) if any registration pursuant to this Section 2(a) is an
underwritten public offering, the Holder agrees to enter into customary
agreements (including, if requested, an underwriting agreement), and take
such other customary actions in connection therewith as the Company or the
underwriter(s) shall reasonably request in order to consummate such
registration, including, but not limited to, entering into any "Lock-up
Agreements" requested by the underwriter(s).
(b) DEMAND REGISTRATION STATEMENT. The Holder may at any time, by
delivery of written notice to the Company, request that the Company
register the offer and sale of all or a portion of the Registrable Shares
held by the Holder under the Securities Act and register or qualify under
applicable securities laws, and, subject to the provisions of this
Agreement, the Company shall effect such demand registration promptly;
PROVIDED, HOWEVER, that the Company shall have no obligation under this
Section 2(b) if the sale of the Registrable Shares by the Holder is then
covered under any other registration statement (including, pursuant to
Section 2(a) hereof) that includes such shares on a continuing basis.
Each notice to the Company delivered pursuant to the preceding
paragraph shall set forth the number of shares to be sold and the proposed
manner of sale. The maximum number of such demands under this Section 2(b)
shall be three (3). A demand registration will not count as a demand
registration hereunder unless it is declared effective by the SEC and
remains effective for at least ninety (90) days or such shorter period
which shall terminate when all of the Registrable Shares covered by such
demand registration have been sold pursuant to such demand registration;
PROVIDED, HOWEVER, that in the event a registration statement is withdrawn
at the request of the Holder, the Holder will be deemed to have used one of
the demand rights granted pursuant to this Section 2(b). These rights are
in addition to, and shall not limit, the registration rights of the Holder
granted pursuant to Section 2(a) hereunder. No other holder, except for
the holders of Senior Securities shall be entitled to participate in a
registration under this Section 2(b).
If the managing underwriter of an underwritten offering under this
Section 2(b) advises the Company in writing that in its opinion the number
of shares requested to be included in such registration exceeds the number
which can be sold in such offering, the Company will include in such
registration only the number of shares which, in the opinion of such
underwriter, can be sold allocated pro rata among the Holder and the
holders of Senior Securities requested to be included in the registration,
based on the number of shares initially proposed to be included by the
Holder and the holders of Senior Securities; provided, HOWEVER, that if the
underwritten public offering is (x) the first to occur after October 10,
1997 and (y) completed prior to March 31,1999, then the amount to be
registered shall be allocated first to the holders of Senior Securities and
second to the Holder.;
If any of the Registrable Shares covered by a demand registration are
to be sold in an underwritten offering, the Holder shall have the right to
select the managing underwriter(s) to administer the offering.
(c) NOTICE OF EFFECTIVENESS. Upon declaration of effectiveness by
the SEC of a registration statement filed pursuant to this Agreement, the
Company shall give written notice thereof to the Holder.
(d) BLACKOUT PERIODS. Following the effective date of any
registration statement filed pursuant to this Section 2, the Company shall
be entitled, from time to time, to notify the Holder to discontinue offers
or sales of securities pursuant to such registration statement for
Registrable Shares for the period of time stated in such notice, up to a
maximum of one hundred eighty (180) consecutive days (such notice being a
"Blackout Notice"), if the Company determines, in its reasonable business
judgment, that the disclosure required in connection with such offers and
sales would materially damage the prospects for successfully completing an
acquisition, corporate reorganization, securities offering or other
voluntary transaction undertaken by the Company (which the Company would
not be required to disclose at such time other than in connection with the
Holder's registration statement) that is material to the Company and its
subsidiaries taken as a whole. Such notice shall be signed by an
authorized officer of the Company and shall certify such determination.
The Holder agrees that upon receipt of a Blackout Notice the Holder shall
discontinue offers or sales of Registrable Shares pursuant to any such
registration statement for the period of time stated in the Blackout Notice
(up to a maximum of one hundred eighty (180) consecutive days) and the time
period set forth in Subsection 2(e) shall be tolled during such period.
The Company shall not cause more than one hundred eighty (180) days within
any period of three hundred sixty (360) consecutive days to be subjected to
Blackout Notices and shall use its best commercially reasonable efforts to
minimize the period of time subjected to Blackout Notices.
(e) EFFECTIVENESS OF REGISTRATION STATEMENTS. The Company shall
cause any registration statement filed pursuant to this Section 2 to remain
effective for at least ninety (90) days after it is declared or ordered
effective (increased by the period of any "Blackout Notice" described in
(d) above) or until the Holder has completed the distribution described
therein, whichever first occurs.
SECTION 3. EXPENSES OF REGISTRATION.
The Company shall bear the Registration Expenses arising out of all
registrations hereunder; PROVIDED, HOWEVER, that all Selling Expenses
relating to the securities of the Holder shall be borne by the Holder and
the Company shall have no liability therefor.
SECTION 4. REGISTRATION PROCEDURES.
For each registration, qualification or compliance carried out by the
Company pursuant to this Agreement, the Company shall give the Holder
written notice of the initiation of such registration, qualification or
compliance and the Company will:
(a) provide to the Holder, if participating in such registration, a
reasonable number of copies, without charge, of the registration statement,
preliminary prospectus, final prospectus and any other documents as may
reasonably be necessary to facilitate a public offering;
(b) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective
and to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement during
the effectiveness of such registration statement;
(c) use its best efforts to register or qualify all securities
covered by such registration statement under such securities or blue sky
laws of such jurisdiction as the Holder shall reasonably request, except
that the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it is not so qualified, or to subject itself to taxation in any
such jurisdiction or to consent generally to service of process in any such
jurisdiction; and
(d) immediately notify the Holder, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of
the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes 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 not
misleading in light of the circumstances then existing, and at the request
of the Holder prepare and furnish to the Holder a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
Registrable Shares, such prospectus shall not 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 not misleading in light
of the circumstances then existing.
SECTION 5. INFORMATION BY HOLDER.
The Holder, when participating in any registration, shall provide the
Company, when requested, with written information regarding itself, its
ownership of securities of the Company, the distribution proposed by the
Holder and such other information as may be legally required in connection
with such registration. Such writing shall expressly state that it is
being furnished to the Company for use in the preparation of a registration
statement, preliminary prospectus, supplementary prospectus, final
prospectus or amendment or supplement thereto, as the case may be. The
Holder agrees, by its acceptance of the benefits provided to it hereunder,
to furnish promptly to the Company all information required to be disclosed
in order to make any previously furnished information not misleading.
SECTION 6. INDEMNIFICATION.
(a) The Company will indemnify the Holder, against all expenses,
claims, losses, damages and liabilities (or actions in respect thereof),
including without limitation any of the foregoing incurred in the defense
and settlement of any litigation, (i) arising out of or based upon any
untrue statement (or alleged untrue statement) of a material fact contained
in any registration statement, preliminary prospectus, prospectus or
documents incorporated by reference therein, or based upon any omission (or
alleged omission) of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) incurred
or arising out of any violation by the Company of the Securities Act or any
rule or regulation promulgated under the Securities Act; PROVIDED, HOWEVER,
that the Company will not be under an obligation to indemnify the Holder if
any of the foregoing are made in reliance upon information furnished to the
Company by the Holder in writing expressly for inclusion in such
registration statements.
(b) The Holder will indemnify the Company, its directors and
officers, and each person who controls the Company within the meaning of
Section 15 of the Securities Act, against all expenses, claims, losses,
damages and liabilities incurred (or actions in respect thereof) arising
out of any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement or based upon any omission (or
alleged omission) of a material fact required to be stated therein or
necessary to make the statements therein not misleading to the extent made
in reliance upon information furnished to the Company by the Holder in
writing expressly for inclusion in such registration statement.
(c) Each party entitled to indemnification under this Section 6
("Indemnified Party") shall give prompt notice to the party required to
provide indemnification ("Indemnifying Party") as soon as the Indemnified
Party has actual knowledge of any claim for which indemnity may be sought,
and shall permit the Indemnifying Party to assume and control the defense
of any such claim or any litigation resulting therefrom, provided that the
Indemnified Party will have the right to select counsel, subject to the
approval of the Indemnifying Party (whose approval shall not be
unreasonably withheld), to defend such claim or litigation, and provided
further that the Indemnified Party may participate in such defense at the
Indemnified Party's expense. The Indemnifying Party shall not, without the
prior written consent of the Indemnified Party, consent to the entry of any
judgment or enter into any settlement which (i) provides for any remedy
other than the prompt payment of damages (and expenses) by the Indemnifying
Party, without the admission of wrongdoing on the part of the Indemnified
Party and (ii) does not include an unconditional provision releasing
Indemnified Party from all liability in respect of such claim or
litigation. The failure of any Indemnified Party to give notice of a claim
subject to indemnification shall not relieve the Indemnifying Party of its
obligations under this Agreement except to the extent the failure to give
such notice is materially prejudicial to the Indemnifying Party's ability
to defend such claim. Notwithstanding anything to the contrary in this
paragraph, the Indemnifying Party shall not have the right to assume the
defense for matters as to which there is a conflict of interest with, or
separate and different defenses available to, the Indemnified Party. In
defending such a claim the Indemnified Party shall conduct the defense and
settlement thereof, but the expenses, fees and disbursements therefore
shall be promptly paid by the Indemnifying Party.
(d) If the indemnification provided for in this Section 6 is
unavailable to or unenforceable by the Company or the Holder in respect of
any expenses, claims, losses, damages, and liabilities referred to herein,
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 expenses, claims, losses, damages and liabilities
in such proportions as is appropriate to reflect the relative fault of the
Indemnifying Party and the Indemnified Parties in connection with the
actions or inactions which resulted in such expenses, claims, losses,
damages, and liabilities, as well as any other relevant equitable
considerations (including the relative fault and indemnification or
contribution obligations of other relevant parties). The relative fault of
the Indemnifying Party on the one hand and of the Indemnified Parties 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 Indemnifying Party or by the Indemnified Party, and by such
party's relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Holder agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. 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.
(e) The obligations of the Company and Holder under this Section 6
shall survive the completion of any offering of Registrable Shares in a
registration statement under this Agreement, and otherwise.
SECTION 7. TRANSFER OF REGISTRATION RIGHTS.
The Holder's rights under this Agreement may be assigned or
transferred (in whole or in part) to any party who is or becomes a holder
of Registrable Shares.
SECTION 8. AMENDMENT OF REGISTRATION RIGHTS.
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 Holder. Any amendment or waiver effected in accordance
with this Section 8 shall be binding upon the Holder, each transferee or
assignee of Holder pursuant to Section 7 of this Agreement.
SECTION 9. TERMINATION OF REGISTRATION RIGHTS.
The Holder shall not be entitled to exercise any right provided for
in Section 2 of this Agreement after the tenth anniversary of the date
hereof.
SECTION 10. NOTICES.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been made (i) when
delivered personally or by telecopier, (ii) if to a party in the same
country as the mailing party, when mailed first class registered or
certified mail, postage prepaid, or (iii) if to a party in a different
country from the sending party, on the second day following deposit with a
reputable commercial air courier, charges prepaid, to each respective party
as shown below:
(a) If to the Holder: Xx. Xxxxxxx X. Xxxxxx
Banyan Strategic Realty Trust
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopier: 000-000-0000
with a copy to: Xxxx Xxxxxx, Esq.
Xxxxxx, Xxxxx & Samotny Ltd.
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopier: 312-551-1101
(b) If to the Company to: Banyan Strategic Realty Trust
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopier: 000-000-0000
with a copy to: Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopier: 000-000-0000
SECTION 11. PARTIES IN INTEREST.
This Agreement shall be binding upon and inure to the benefit of each
party, and nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement. Nothing in this Agreement
is intended to relieve or discharge the obligation of any third person to
any party to this Agreement.
SECTION 12. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties 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.
SECTION 13. HEADINGS.
The headings in this Agreement are for convenience only and shall not
limit or otherwise affect the meaning hereof.
SECTION 14. GOVERNING LAW; JURISDICTION.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois, without regard to principles of conflict
of law.
Each party hereby irrevocably submits to and accepts for itself and
its properties, generally and unconditionally, the exclusive jurisdiction
of and service of process pursuant to the laws of the State of Illinois and
the rules of its courts, waives any defense of forum non conveniens and
agrees to be bound by any judgment rendered thereby arising under or out of
in respect of or in connection with this Agreement or any related document
or obligation. Each party further irrevocably designates and appoints the
individual identified in or pursuant to Section 10 hereof to receive
notices (not copies) on its behalf, as its agent to receive on its behalf
service of all process in any such action before any body, such service
being hereby acknowledged to be effective and binding service in every
respect. A copy of any such process so served shall be mailed by
registered mail to each party at its address provided in Section 10;
provided that, unless otherwise provided by applicable law, any failure to
mail such copy shall not affect the validity of the service of such
process. If any agent so appointed refuses to accept service, the
designating party hereby agrees that service of process sufficient for
personal jurisdiction in any action against it in the applicable
jurisdiction may be made by registered or certified mail, return receipt
requested, to its address provided in Section 10. Each party hereby
acknowledges that such service shall be effective and binding in every
respect. Nothing herein shall affect the right to serve process in any
other manner permitted by law.
SECTION 15. 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 16. ENTIRE AGREEMENT.
This Agreement contains the entire understanding of the parties with
respect to the subject matter of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
COMPANY:
BANYAN STRATEGIC REALTY TRUST,
a Massachusetts business trust
By: /S/ XXXXXX X. XXXXXXX
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Printed Name: Xxxxxx X. Xxxxxxx
Title: Vice President
/S/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
