EXHIBIT 10.13
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of the ____ day of __________________, by and among CB Commercial
Holdings, Inc., a Delaware corporation (the "Company"), and Kajima U.S.A. Inc.,
a corporation organized under the laws of Delaware ("Kajima"), Fukoku Mutual
Life Insurance Company, a corporation organized under the laws of Japan
("Fukoku"), Kasen Development, Inc., a corporation organized under the laws of
Japan ("Kasen"), and S.R.E.S.-Fifth Avenue, Inc., a corporation organized under
the laws of Delaware ("SRESFA") (Kajima, Fukoku, Kasen and SRESFA are
hereinafter individually referred to as "Preferred Stockholder" and collectively
referred to as "Preferred Stockholders").
RECITALS
WHEREAS, the Preferred Stockholders currently hold collectively an
aggregate of 4,000,000 shares of the Company's Series A-1, Series A-2 and Series
A-3 Preferred Stock (the "Existing Preferred Stock");
WHEREAS, subject to the issuance of a number of shares of a new class of
common stock, par value $.01 per share (the "New Common Stock"), not to exceed
5,000,000 shares, pursuant to a Proposed Public Offering (as defined below), the
Company has proposed a recapitalization (the "Recapitalization") pursuant to
which, among other things, each share of Series A-1, Series A-2 and Series A-3
Existing Preferred Stock will be automatically converted into a new class of
Series A-1, Series A-2 and Series A-3 preferred stock, respectively, which will
replace the Series A-1, Series A-2 and Series A-3 Existing Preferred Stock (the
4,000,000 shares of new Series A-1, Series A-2 and Series A-3 preferred stock
held collectively by the Preferred Stockholders into which the Existing
Preferred Stock automatically converts pursuant to the Recapitalization is
referred to herein as the "New Preferred Stock");
WHEREAS, the New Preferred Stock is convertible into a lesser number of
shares of New Common Stock at the option of the holder thereof;
WHEREAS, pursuant to that certain Agreement dated as of August 30, 1996
between the Company and the Preferred Stockholders (the "Voting Agreement"),
each Preferred Stockholder agreed to vote in favor of amending and restating the
Company's Certificate of Incorporation (the "New Certificate") and By-laws,
effective upon completion of the Proposed Public Offering, to effectuate the
Recapitalization, and the Company and the Preferred Stockholders agreed to enter
into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereto agree as follows:
SECTION 1
Restrictions on Transferability of Securities;
Registration Rights
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1.1 Certain Definitions. As used in this Agreement, the following terms
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shall have the meanings set forth below:
(a) "Affiliate" with respect to any Preferred Stockholder or Holder means
any entity that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with, such Preferred
Stockholder or Holder or any Affiliate thereof.
(b) "Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
(c) "Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
(d) "Holder" means any Preferred Stockholder who holds Registrable
Securities and any holder of Registrable Securities to whom the registration
rights conferred by this Agreement have been validly transferred in compliance
with Sections 1.2, 1.3 and 1.9 hereof.
(e) "Proposed Public Offering" means a sale of New Common Stock, not to
exceed 5,000,000 shares, for not less than $18.75 per share in an underwritten
offering registered under the Securities Act, which is completed on or before
March 31, 1997, which results in aggregate proceeds to the Company (prior to
underwriters' discounts and expenses relating to the issuance) of $75,000,000 or
more and which results in the approval for quotation of such New Common Stock on
the National Association of Securities Dealers Automated Quotation System or the
listing of such New Common Stock on The New York Stock Exchange.
(f) "Registrable Securities" means (i) shares of New Common Stock issued or
issuable pursuant to the conversion of the New Preferred Stock in accordance
with the New Certificate following consummation of the Proposed Public Offering
and (ii) any New Common Stock issued as a dividend or other distribution with
respect to or in exchange for or in replacement of the shares referenced in (i)
above; provided, however, that Registrable Securities shall not include any
shares of New Common Stock which have previously been registered or which have
been sold to the public and any shares of New Common Stock acquired other than
pursuant to the conversion of New Preferred Stock which was acquired by the
automatic conversion of Existing Preferred Stock pursuant to the
Recapitalization.
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(g) "Registration Expenses" means all expenses incurred in effecting any
registration pursuant to this Agreement, including, without limitation, all
registration, qualification, and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses,
and expenses of any regular or special audits incident to or required by any
such registration, but shall not include Selling Expenses.
(h) "Restricted Period" means the period commencing on the first date any
of the New Common Stock to be sold in the Proposed Public Offering is released
for sale to the public and continuing until and including a date twelve (12)
months thereafter.
(i) "Rule 144" means Rule 144 as promulgated by the Commission under the
Securities Act, as such Rule may be amended from time to time, or any similar
successor rule that may be promulgated by the Commission.
(j) "Rule 144 Period" means the period beginning on the first date any of
the New Common Stock to be sold in the Proposed Public Offering is released for
sale to the public pursuant to the Proposed Public Offering and continuing until
the offer and sale of New Common Stock acquired by a Preferred Stockholder upon
conversion of the New Preferred Stock is no longer subject to the volume
limitation provisions of Rule 144, either by this Agreement or by operation of
law.
(k) "Rule 145" means Rule 145 as promulgated by the Commission under the
Securities Act, as such Rule may be amended from time to time, or any similar
successor rule that may be promulgated by the Commission.
(l) "Securities Act" means the Securities Act of 1933, as amended, or any
similar successor federal statute and the rules and regulations thereunder, all
as the same shall be in effect from time to time.
(m) "Selling Expenses" means all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and fees and
disbursements of counsel for any Holder.
1.2 Restrictions on Transfer at Any Time. Each Preferred Stockholder and
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each Holder agrees not to make any disposition of all or any portion of the New
Preferred Stock or any Registrable Securities at any time unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 1.2 and:
(a) There is then in effect a registration statement under the Securities
Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) (i) Such Preferred Stockholder or Holder shall have notified the
Company of the proposed disposition and shall have furnished the Company with a
statement of the circumstances surrounding the proposed disposition and such
other information as is reasonably requested by the Company, and (ii) at the
request of the Company, such Preferred
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Stockholder or Holder shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such disposition will not
require registration of such shares under the Securities Act. Each certificate
representing the New Preferred Stock and Registrable Securities shall be stamped
or otherwise imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws):
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED, ASSIGNED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT OR
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
THE SHARES REPRESENTED HEREBY ARE ALSO SUBJECT TO RESTRICTIONS ON TRANSFER
WHICH ARE SET FORTH IN A REGISTRATION RIGHTS AGREEMENT. A COPY OF SUCH
AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE
CORPORATION. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF IT, AGREES
TO BE BOUND BY THE PROVISIONS OF SUCH AGREEMENT.
1.3 Restrictions on Transfer During Restricted Period.
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In addition to the obligations set forth in Section 1.2 hereof, each
Preferred Stockholder and each Holder further agrees (i) not to directly or
indirectly sell, offer, pledge, hypothecate, make any short sale of, contract to
sell, grant any option to purchase or otherwise transfer or dispose of or in any
way transfer the economic risk of ownership in any Registrable Securities or New
Preferred Stock or any other securities convertible into, exchangeable for or
exercisable for New Common Stock or New Preferred Stock or any rights to
purchase or acquire New Common Stock or New Preferred Stock, owned either of
record or beneficially by the undersigned for up to 180 days from the date the
New Common Stock to be sold in the Proposed Public Offering is released for sale
to the public (the "Lockup Period"); and (ii) that if, after the Lockup Period,
but during the Restricted Period, any Preferred Stockholder or Holder sells,
offers to sell or otherwise disposes of Registrable Securities or New Preferred
Stock convertible into Registrable Securities, whether or not in connection with
a distribution, or participates or has a direct or indirect participation in any
such undertaking, at a price less than the price at which New Common Stock is
sold to the public in the Proposed Public Offering, such Preferred Stockholder
or Holder, as the case may be, shall comply with the volume limitations set
forth in Rule 144(e) of the Securities Act, regardless of whether the provisions
of Rule 144 would otherwise apply to such a transaction, unless such sale, offer
for sale or other disposition is pursuant to one or more block trades made from
time to time which do not involve a brokers' transaction executed on any
exchange or in the over-the-counter market. The Company may impose stop
transfer instructions with respect to the New Preferred Stock and Registrable
Securities subject to the
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foregoing restriction. The transfer restrictions of this Section 1.3 shall also
apply to any Affiliate of a Preferred Stockholder or Holder to which Registrable
Securities are transferred and each Preferred Stockholder and Holder hereby
agrees to cause any of its Affiliates to which it intends to transfer
Registrable Securities to agree in writing to be so bound prior to making any
such transfer.
1.4 Company Registration.
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(a) If during the Rule 144 Period the Company shall determine to register
any New Common Stock for its own account or for the account of any entity
exercising registration rights (other than pursuant to (i) the Proposed Public
Offering, (ii) a registration, other than a firmly underwritten registration,
pursuant to a written request by securityholders pursuant to registration rights
granted by the Company with respect to shares issued after the date hereof,
(iii) a registration relating to an employee benefit plan, a dividend or
interest reinvestment plan or other similar plan, (iv) a registration relating
to a corporate reorganization or other transaction under Rule 145 of the
Securities Act, a reclassification, merger, consolidation or acquisition, (v) a
registration on any registration form that does not permit secondary sales or
(vi) a registration relating to shares of New Common Stock issued or issuable
upon the exercise of rights, options or warrants to acquire New Common Stock or
upon the conversion or exchange of indebtedness, shares of capital stock or
other securities other than New Preferred Stock), the Company will:
(i) promptly give to each Holder written notice thereof which shall
describe the proposed registration and distribution; and
(ii) use its best efforts to include in such registration (and any
related qualification under blue sky laws or other compliance), except as
set forth in Section 1.4(b) below, and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made by any Holder and received by the Company within fifteen
(15) days after the Company provides the written notice described in clause
(i) above. Such written request may specify all or a part of a Holder's
Registrable Securities and any other Registrable Securities held by an
Affiliate of such Holder which such Holder is entitled to register pursuant
to Section 1.9.
(b) Underwriting. If the registration with respect to which the Company
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gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.4(a)(i). In such event, the right of any Holder to
registration pursuant to this Section 1.4 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute Registrable Securities through such underwriting
shall (together with the Company and the other holders of securities of the
Company with registration rights to participate therein distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected by the Company.
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Notwithstanding any other provision of this Section 1.4, if the
representative of the underwriters advises the Company in writing that marketing
factors require a limitation on the number of shares to be underwritten or
offered or sold for the account or persons other than the Company, the
representative may exclude all Registrable Securities from, or limit the number
of Registrable Securities to be included in, the registration and underwriting.
The Company may limit, to the extent so advised by the underwriters, the amount
of securities (including Registrable Securities) to be included in the
registration by the Company's shareholders (including the Holders), or may
exclude, to the extent so advised by the underwriters, such underwritten or
other securities entirely from such registration. The Company shall so advise
all holders of securities requesting registration pursuant to Section
1.4(a)(ii), and the number of shares of securities that are entitled to be
included in the registration and underwriting shall be allocated first to the
Company for securities being sold for its own account and thereafter as set
forth in Section 1.11. If any person does not agree to the terms of any such
underwriting, such person shall be excluded therefrom by written notice from the
Company or the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
1.5 Expenses of Registration. All Registration Expenses incurred in
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connection with any registration, qualification or compliance pursuant to
Section 1.4 shall be borne by the Company. All Selling Expenses relating to
securities so registered shall be borne by the holders of such securities pro
rata on the basis of the number of shares of securities so registered on their
behalf.
1.6 Registration Procedures. In the case of each registration effected by
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the Company pursuant to Section 1.4, at its expense, the Company will use its
best efforts to:
(a) Keep such registration effective for a period equal to the earlier of
(i) the date the Holder or Holders have completed the distribution described in
the registration statement relating thereto or (ii) sixty (60) days; provided,
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however, that such 60-day period shall be extended for a period of time equal to
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the period the Holder refrains from selling any securities included in such
registration at the request of an underwriter of Registrable Securities of the
Company;
(b) Prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement and otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission;
(c) Furnish such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the prospectus, as a Holder
from time to time may reasonably request; and
(d) Notify each seller of Registrable Securities covered by such
registration statement at any time when a prospectus relating to the
registration is required to be delivered under the Securities Act, upon
discovery that, or upon the happening of any event as a result
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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.
(e) Cause all such Registrable Securities registered pursuant hereto to be
listed on each securities exchange on which similar securities issued by the
Company are then listed.
1.7 Indemnification.
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(a) The Company will indemnify each Holder, each of its officers, directors
and partners, legal counsel, and accountants and each person controlling such
Holder within the meaning of Section 15 of the Securities Act, with respect to
which registration, qualification, or compliance has been effected pursuant to
Section 1.4 hereof, and each underwriter, if any, and each person who controls
within the meaning of Section 15 of the Securities Act any underwriter, against
all expenses, claims, losses, damages, and liabilities (or actions, proceedings,
or settlements in respect thereof) (collectively, "Losses") arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or registration statement
incident to any such registration, qualification, or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each such Holder, each of its officers, directors, partners,
legal counsel, and accountants and each person controlling such Holder, each
such underwriter, and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating and defending or settling any such Loss, provided that the Company
will not be liable in any such case to the extent that (i) any such Loss arises
out of or is based on any untrue statement or omission based upon written infor-
mation furnished to the Company by such Holder or underwriter expressly for use
therein or (ii) the Company has advised such Holder of an event as a result of
which the prospectus included in the registration statement covering any
Registrable Securities, 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 not misleading in light of the
circumstances then existing, and any such claim, loss, damage, liability or
expense is caused by such Holder having offered or sold Registrable Securities
notwithstanding such notice prior to receipt of a supplement or amended
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such 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, and the omission or misstatement was caused by
such event and corrected in the supplement or amended prospectus; provided,
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however, that the Company shall not be liable in any such case to the extent
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that any such claim, loss, damage, liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus if (i) such Holder failed to
send or deliver a copy of the prospectus with or prior to the delivery of
written confirmation of the sale of Registrable Securities to the person
asserting such claim, loss, damage, liability or expense who purchased such
Registrable Securities which are the subject thereof and (ii) the
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prospectus would have corrected such untrue statement or omission or alleged
untrue statement or alleged omission; and provided further, that the Company
shall not be liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission in the prospectus,
if such untrue statement or alleged untrue statement, omission or alleged
omission is corrected in an amendment or supplement to the prospectus and if,
having previously been furnished by or on behalf of the Company, with copies of
the prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such prospectus as so amended or supplemented, prior to or concurrently
with the sale of a Registrable Security to the person asserting such claim,
loss, damage, liability or expense who purchased such Registrable Security which
is the subject thereof from such Holder. It is agreed that the indemnity
agreement contained in this Section 1.7(a) shall not apply to amounts paid in
settle ment of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent has not
been unreasonably withheld).
(b) Each Holder will, if Registrable Securities held by him are included in
the securities as to which such registration, qualification, or compliance is
being effected, furnish to the Company in writing such information as the
Company reasonably requests for use in connection with any prospectus,
preliminary prospectus, offering circular or registration statement, and will
indemnify the Company, each of its directors, officers, partners, legal counsel,
and accountants and each underwriter, if any, of the Company's securities
covered by such a registration statement, each person who controls the Company
or such underwriter within the meaning of Section 15 of the Securities Act, each
other such Holder and each of its officers, directors, and partners, and each
person controlling such Holder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular, or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, directors,
officers, partners, legal counsel, and accountants, persons, underwriters, or
control persons for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability, or action, in each case to the extent that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular, or other document in
reliance upon and in conformity with written information furnished to the
Company by such Holder expressly for inclusion therein; provided, however, that
the obligations of such Holder hereunder shall not apply to amounts paid in
settlement of any such claims, losses, damages, or liabilities (or actions in
respect thereof) if such settlement is effected without the consent of such
Holder (which consent shall not be unreasonably withheld). The Company shall be
entitled to receive indemnities from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution to the same extent as provided above with respect to information so
furnished in writing by such persons expressly for use in any prospectus,
registration statement, offering circular or other document.
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(c) Each party entitled to indemnification under this Section 1.7 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 1.7, to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 1.7 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage, or expense referred to therein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into by a Holder in connection with the underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
1.8 Information by Holder. Each Holder of Registrable Securities shall
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furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may request in writing and
as shall be reasonably required in con nection with any registration,
qualification, or compliance referred to in Section l.
1.9 Transfer or Assignment of Registration Rights. The rights to cause
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the Company to register securities granted to a Holder by the Company under this
Section 1 may be
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transferred or assigned by a Preferred Stockholder only to a transferee or
assignee of all (but not less than all) shares of New Preferred Stock and
Registrable Securities (as presently constituted and subject to subsequent
adjustments for stock splits, stock dividends, reverse stock splits, and the
like) held by such Preferred Stockholder, provided that the Company is given
written notice prior to such transfer or assignment, stating the name and
address of the transferee or assignee and identifying the securities with
respect to which such registration rights are being transferred or assigned,
and, provided further, that the transferee or assignee of such rights assumes
the obligations of such Preferred Stockholder under this Agreement.
Notwithstanding the foregoing, a Preferred Stockholder may, pursuant to its
registration rights granted hereunder, cause Registrable Securities validly
transferred pursuant to this Agreement to an Affiliate of such Preferred
Stockholder to be registered to the same extent and subject to the same terms
and conditions as the Registrable Securities held by such Preferred Stockholder.
1.10 "Market Stand-Off" Agreement in Connection with an Underwritten
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Public Offering. If requested by the Company and an underwriter of New Common
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Stock (or other securities) of the Company, a Holder shall not sell or otherwise
transfer or dispose of any Registrable Securities (or other securities) of the
Company held by such Holder (other than those included in the registration)
during a reasonable and customary period of time (not to exceed 180 days) after
the effective date of a registration statement of the Company filed under the
Securities Act. The Company may impose stop-transfer instructions with respect
to the shares (or securities) subject to the foregoing restriction.
1.11 Allocation of Registration Opportunities. In any circumstance in
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which all of the Registrable Securities and other shares of New Common Stock of
the Company (other than shares of New Common Stock issued or issuable upon
conversion of shares of any currently unissued series of New Preferred Stock of
the Company) with registration rights (the "Other Shares") requested to be
included in a registration on behalf of the Holders or other selling
shareholders cannot be so included as a result of limitations of the aggregate
number of shares of Registrable Securities and Other Shares that may be so
included, the number of shares of Registrable Securities and Other Shares that
may be so included shall be allocated among the Holders and other selling
shareholders requesting inclusion of shares pro rata on the basis of the number
of shares of Registrable Securities and Other Shares that would be held by such
Holders and other selling shareholders, assuming conversion; provided, however,
so that such allocation shall not operate to reduce the aggregate number of
Registrable Securities and Other Shares to be included in such registration, if
any Holder or other selling shareholder does not request inclusion of the
maximum number of shares of Registrable Securities and Other Shares allocated to
him pursuant to the above-described procedure, the remaining portion of his
allocation shall be reallocated among those requesting Holders and other selling
shareholders whose allocations did not satisfy their requests pro rata on the
basis of the number of shares of Registrable Securities and Other Shares which
would be held by such Holders and other selling shareholders, assuming
conversion, and this procedure shall be repeated until all of the shares of
Registrable Securities and Other Shares which may be included in the
registration on behalf of the Holders and other selling shareholders have been
so allocated.
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1.12 Delay of Registration. No Holder shall have any right to take any
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action to restrain, enjoin, or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Section 1.
1.13 Termination of Registration Rights. The right of any Holder to
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request inclusion in any registration pursuant to this Agreement shall terminate
at the expiration of the Rule 144 Period.
SECTION 2
Representations and Warranties of Holders.
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Each Preferred Stockholder and each Holder hereby severally represents and
warrants on behalf of itself to the Company that:
2.1 Authorization. It has full power and authority to enter into this
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Agreement, and this Agreement constitutes its valid and legally binding
obligation.
2.2 Purchase Entirely for Own Account. The New Preferred Stock and the
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New Common Stock issuable upon conversion thereof (collectively, the
"Securities") will be acquired for investment for its own account, not as a
nominee or agent, and not with a view to the resale or distribution of any part
thereof, and that it has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this Agree-
ment, each Preferred Stockholder and each Holder further represents that it does
not have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Securities.
2.3 Disclosure of Information. Such Preferred Stockholder and such Holder
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believes it has received all the information it considers necessary or
appropriate for making an investment decision with respect to the
Recapitalization, the conversion of the Existing Preferred Stock into New
Preferred Stock. Such Preferred Stockholder and such Holder further represents
that it has had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the Recapitalization and the
conversion of the Existing Preferred Stock into New Preferred Stock.
2.4 Investment Experience. It is an experienced investor in securities
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and acknowledges that it is able to fend for itself, can bear the economic risk
of its investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Securities.
2.5 Restricted Securities. Each Preferred Stockholder and each Holder
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represents that it is familiar with Rule 144 and understands the resale
limitations imposed thereby and by the Securities Act.
SECTION 3
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Miscellaneous
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3.1 Covenant Regarding Prepayment of Certain Indebtedness.
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Notwithstanding any other agreement among the parties hereto, including the
Voting Agreement, the Company hereby covenants and agrees with the Preferred
Stockholders that, following the Proposed Public Offering and for so long as any
Preferred Stockholder holds any New Preferred Stock, the Company will not, and
will not permit CB Commercial Real Estate Group, Inc. ("CBC") to, voluntarily
prepay any Indebtedness unless the Company shall have first paid all unpaid
accrued dividends and any unpaid interest accrued thereon to the Preferred
Stockholders in accordance with the New Certificate, provided, however, nothing
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contained herein shall preclude the Company or CBC from making any prepayments
(a) required by the terms of any instrument relating to Indebtedness, (b) with
respect to any Indebtedness incurred in connection with the acquisition by the
Company of Westmark Realty Advisors L.L.C., (c) in connection with the
refinancing of any Indebtedness and (d) from the proceeds of the Proposed Public
Offering. For the purposes of this Section 3.1, (a) "Indebtedness" shall mean
(i) the obligations of CBC and the Company pursuant to that certain Third
Amended and Restated Senior Secured Credit Agreement to be effective upon
consummation of the Proposed Public Offering, as such agreement may be amended
from time to time, between CBC and The Sumitomo Bank, Limited and that certain
Guaranty to be effective upon consummation of the Proposed Public Offering, as
such guaranty may be amended from time to time from the Company to The Sumitomo
Bank, Limited, (ii) the obligations of CBC pursuant to that certain Amended and
Restated Senior Subordinated Credit Agreement to be effective upon consummation
of the Proposed Public Offering, as such agreement may be amended from time to
time, between CBC and Sumitomo Finance (Dublin) Limited and (iii) all
obligations for borrowed money for a term in excess of one year; provided that
the term Indebtedness shall not include trade accounts payable, accrued
commissions and other similar accrued current liabilities in respect of such
obligations, capitalized lease obligations, accounts payable and indebtedness
payable within one year, accruals for taxes, the current portion of any long-
term indebtedness required to be paid within one year and similar obligations.
3.2 Governing law. This Agreement shall be governed in all respects by
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the laws of the State of New York, as if entered into by and between New York
residents exclusively for performance entirely within New York.
3.3 Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
3.4 Entire Agreement; Amendment; Waiver. This Agreement constitutes the
-----------------------------------
full and entire understanding and agreement between the parties with regard to
the subjects hereof. Neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated, except by a written instrument signed by the
Company and the holders of at least a majority of the Registrable Securities and
any such amendment, waiver, discharge or termination shall be binding on all the
Holders.
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3.5 Notices, etc. All notices and other communications required or
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permitted hereunder shall be in writing and shall be sent by facsimile
transmission, mailed by United States first-class mail, postage prepaid, or
delivered personally by hand or nationally recognized courier addressed (a) if
to a Preferred Stockholder or Holder, as indicated on the signature page hereof,
or at such other address as such Preferred Stockholder or Holder shall have
furnished to the Company in writing, or (b) if to the Company, at 000 Xxxxx
Xxxxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxxxxx, with a
copy to the attention of the Corporate Secretary, or at such other address as
the Company shall have furnished to each holder in writing. All such notices
and other written communications shall be effective (i) if sent by facsimile
transmission, upon confirmation of receipt, (ii) if mailed, seven (7) days after
mailing, and (iii) if delivered, upon delivery.
3.6 Delays or Omissions. No delay or omission to exercise any right,
-------------------
power or remedy accruing to any party hereunder, upon any breach or default of
another party hereunder shall impair any such right, power or remedy nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default therefore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement or any waiver on the part of any party of
any provisions or conditions of this Agreement must be made in writing and shall
be effective only to the extent specifically set forth in such writing.
3.7 Rights; Separability. Unless otherwise expressly provided herein, the
--------------------
rights of each Preferred Stockholder and each Holder hereunder are several
rights, not rights jointly held with any of the other Preferred Stockholder or
Holders. In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
3.8 Information Confidential. Each Preferred Stockholder and each Holder
------------------------
acknowledges that the information received by them pursuant hereto may be
confidential and for its use only, and it will not use such confidential
information in violation of the Exchange Act or reproduce, disclose or
disseminate such information to any other person (other than its employees or
agents having a need to know the contents of such information, and its
attorneys), except in connection with the exercise of rights under this
Agreement, unless the Company has made such information available to the public
generally or such Preferred Stockholder or Holder is required to disclose such
information by a governmental body.
3.9 Titles and Subtitles. The titles of the paragraphs and subparagraphs
--------------------
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
3.10 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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3.11 Effectiveness. This Agreement shall be of no further force and
-------------
effect in the event the Proposed Public Offering does not occur on or before
March 31, 1997.
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement effective as of the day and year first above written.
CB COMMERCIAL HOLDINGS, INC.
By:-------------------------------
Name:-----------------------------
Title:----------------------------
KAJIMA U.S.A. INC.
By:-------------------------------
Name:-----------------------------
Title:----------------------------
Address for Notice:
----------------------------------
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FUKOKU MUTUAL LIFE INSURANCE
COMPANY
By:-------------------------------
Name:-----------------------------
Title:----------------------------
Address for Notice:
----------------------------------
----------------------------------
KASEN DEVELOPMENT, INC.
By:-------------------------------
Name:-----------------------------
Title:----------------------------
Address for Notice:
----------------------------------
----------------------------------
-00-
X.X.X.X.-XXXXX XXXXXX, INC.
By:-------------------------------
Name:-----------------------------
Title:----------------------------
Address for Notice:
----------------------------------
----------------------------------
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