REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of
this 30th day of September, 1998, by and between Inland Real Estate
Corporation, a Maryland corporation (the "Company") and B.I.J. Limited
Partnership, an Illinois limited partnership ("BIJ").
WHEREAS, the Company is the Managing Member of Inland Joliet Commons
L.L.C., an Illinois limited liability company (the "LLC") and BIJ is a
Member of the LLC;
WHEREAS, the LLC was formed for the purposes and upon the terms and
subject to the conditions set forth in an operating agreement dated
September 30, 1998, and entered into by and between the Company and BIJ
(the "Operating Agreement");
WHEREAS, pursuant to the Operating Agreement, BIJ was granted 469,480
membership units in the LLC (the "LLC Units") and BIJ has the right,
subject to the terms and conditions set forth therein, to require the
Company to acquire all or a portion of BIJ's LLC Units (the "Tendered
Units") in Exchange for either REIT Shares or the Cash Amount, as provided
therein; and
WHEREAS, in order to induce BIJ to enter into the Operating
Agreement, the Company has agreed to provide for the benefit of BIJ the
registration rights set forth in this Agreement with respect to BIJ's LLC
Units, subject to the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the foregoing, the mutual
premises and agreements set forth herein, and other valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1. CERTAIN DEFINITIONS
A. "Agreement" means this Registration Rights Agreement.
B. "BIJ" means B.I.J. Limited Partnership, an Illinois limited
partnership.
C. "Blackout Notice" means the notice described in Article 5.
D. "Business Day" means all weekdays except Saturday and Sunday and
those days that are legal holidays of the United States
government.
E. "Cash Amount" has the meaning ascribed to it in the Operating
Agreement.
F. "Company" means Inland Real Estate Corporation, a Maryland
corporation.
G. "Demanding Holder" means a Holder demanding registration of its
Registrable Shares in accordance with Article 4.
H. "Effective Date" has the meaning ascribed to it in the Operating
Agreement.
I. "Exchange" has the meaning ascribed to it in the Operating
Agreement.
J. "Expiration Date" means the date described in Article 2(B) of
this Agreement.
K. "Holder" means BIJ and any transferee or assignee permitted under
Article 9 of this Agreement.
L. "Indemnified Party" has the meaning ascribed to it in Article 8
of this Agreement.
M. "Indemnifying Party" has the meaning ascribed to it in Article 8
of this Agreement.
N. "LLC" means Inland Joliet Commons L.L.C., an Illinois limited
liability company.
O. "LLC Unit" means one membership interest in the LLC.
P. "Listing Event" means an event by which the Company lists its
shares on a national securities exchange or designates its shares
for quotation on the NASDAQ National Market System.
Q. "Operating Agreement" means the operating agreement of the LLC
entered into by and between the Company and BIJ dated as of
September 30, 1998.
R. "Person" means any individual, partnership, corporation, limited
liability company, association, unincorporated organization,
trust or other entity.
S. "REIT Shares" has the meaning ascribed to it in the Operating
Agreement.
T. "register," "registered" and "registration" mean 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.
U. "Registrable Shares" means: (1) any REIT Shares issued upon the
Exchange of Tendered Units pursuant to the Operating Agreement;
(2) any common stock of the Company issued or issuable with
respect to the securities referred to in (1), by way of a stock
dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other
reorganization and (3) any other shares of common stock of the
Company held by Persons holding securities described in clauses
(1) and (2), inclusive, above. As to any particular Registrable
Shares, such securities shall cease to be Registrable Shares
when: (a) they have been distributed to the public pursuant to an
offering registered under the Securities Act or (b) sold to the
public through a broker, dealer or market maker in compliance
with Rule 144 under the Securities Act (or any similar rule then
in force).
For purposes of this Agreement, a Holder of LLC Units for which
REIT Shares are issuable upon an Exchange but for which an
Exchange has not been completed, shall be deemed to be a Holder
of Registrable Shares and the Registrable Shares shall be deemed
to be in existence and the Holder may exercise rights as a Holder
of Registrable Shares hereunder as of the Effective Date whether
or not an Exchange has occurred. Such Holder shall, however,
complete an Exchange on or prior to the date the SEC declares a
registration pursuant to Article 3 or 4 effective and prior to
the date the Holder initiates a sale pursuant to a registration
under Article 2 and further provided, any such Exchange may be
made with the condition precedent that such registration is
declared effective or such sale be initiated.
V . "Registration Expenses" means all expenses except Selling
Expenses incurred by the Company and Holder(s) while complying
with Article 2, 3 or 4 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 disbursements of the Company's and
Holder's accountants, legal counsel and other representatives
incurred in any registration pursuant to Articles 2, 3 or 4.
Fees and disbursements made to accountants and legal counsel for
the Holder(s) shall be limited to those fees and disbursements
incurred for one accountant and one legal counselor, each
selected by the Holder(s) participating in a registration
holding a majority of the then outstanding Registrable Shares.
In the event the legal counselor representing the Holder(s) is
unable to grant a legal opinion necessary to effect a
registration due to a legal conflict of interest, then the
affected Holder(s) may each select other legal counsel, as
applicable, for the sole purpose of delivering such opinion and
the fees and expenses incurred for such counselor shall be paid
for by the Company.
W. "Requesting Holder" means a Holder requesting registration of its
Registrable Shares in accordance with Article 3 of this
Agreement.
X. "SEC" means the United States Securities and Exchange Commission
or any successor agency.
Y. "Securities Act" means the Securities Act of 1933, as amended
from time to time and any successor statute.
Z. "Selling Expenses" means all underwriting discounts, selling
commissions and stock transfer taxes relating to any Holder's
registered shares.
AA. "Shelf Registration" means the registration described in Article
2 of this Agreement.
BB. "Tendered Units" means those LLC Units owned by a Holder which
the Holder desires the Company to acquire in Exchange for REIT
Shares or the Cash Amount.
ARTICLE 2. SHELF REGISTRATION
A. Right to a Shelf Registration. Concurrent with the Company's
filing of an application to a national securities exchange or the
NASDAQ National Market System to commence a Listing Event, the
Company shall file with the SEC a registration statement on Form
S-3 (or a similar form) and pursuant to Rule 415 (or a similar
rule then in force) promulgated under the Securities Act, as
amended from time to time (the "Shelf Registration"), registering
all Registrable Shares, including all Registrable Shares issuable
upon an Exchange of the LLC Units held by any Holder whether or
not such Exchange has occurred. The Company shall use its
reasonable efforts to cause such Shelf Registration to be
declared effective by the SEC at or near the same time as the
Listing Event. The Company has not and shall not enter into any
agreement which grants to any Person the right to have such
Person's registrable shares registered in the same registration
statement as that filed pursuant to Article 2.
B. Period of Effectiveness of the Shelf Registration. The Company
shall file with the SEC from time to time any amendments and
supplements to the Shelf Registration as may be necessary to keep
the registration effective until the Expiration Date (as defined
below). The "Expiration Date" shall be eighteen (18) calendar
months (or such shorter period as Rule 415 promulgated under the
Securities Act, as amended from time to time, may require; in
which case the Company shall cause another (other)
registration(s) pursuant to this Article 2 to become effective
and such registration(s) shall remain effective for a period of
time so that when such period is added to the period of
effectiveness of any prior registration(s) under this Article 2,
the total period of effectiveness of the registrations caused
pursuant to this Article 2 shall equal eighteen (18) calendar
months) from the later of the following to occur:
1. the date on which the SEC declares the Shelf Registration
effective; or
2. the date one year after the Effective Date.
If during the eighteen (18) month period of effectiveness of the
Shelf Registration, the Company gives to the Holders a Blackout
Notice pursuant to Article 5, the Company shall extend the Shelf
Registration for the same time period as that set forth in the
Blackout Notice or, if such extension is prohibited by Rule 415,
the Company shall cause another (other) registration(s) pursuant
to this Article 2 to become effective and such registration(s)
shall remain effective for a period of time so that when such
period is added to the period of effectiveness of any prior
registration(s) under this Article 2, the total period of
effectiveness of the registrations caused pursuant to this
Article 2 shall equal eighteen (18) calendar months.
C. Notice of Listing Event. When the Company files an application
to list its shares on a national securities exchange or to
designate its shares for quotation on the NASDAQ National Market
System, the Company shall deliver written notice of such filing
to all Holders.
D. Notice of Intent to Sell. A Holder who desires to sell its
Registrable Shares pursuant to the Shelf Registration shall
deliver to the Company written notice of its intent to sell.
Within five (5) Business Days of this notice being given, the
Company shall file any supplement or post effective amendment to
the Shelf Registration with respect to the plan of distribution
of such Holder's ownership interest in Registrable Shares that is
necessary to permit the sale of the Holder's Registrable Shares
pursuant to the Shelf Registration.
E. Notice of Effectiveness. The Company shall notify each Holder of
the SEC's declaration that a registration pursuant to this
Article 2 is effective.
ARTICLE 3. PIGGYBACK REGISTRATION RIGHTS
A. Right to Piggyback. At any time after the Expiration Date, if
the Company proposes to register any equity securities or
securities convertible into or exchangeable for equity securities
(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 Form S-4, a
registration on Form S-8 relating to the sale of securities to
participants in a stock or employee benefit plan and Demand
Registrations, as set forth in Article 4 of this Agreement), the
Company shall give written notice to all Holder(s) of Registrable
Shares, of the Company's intention to effect a registration and
include in the registration all Registrable Shares for which the
Company has received written requests from a Holder of
Registrable Shares for inclusion therein within twenty (20) days
after the date the Company's notice has been given (acting in
such capacity the Holder is a "Requesting Holder"); provided
however, that:
1. if, at any time after the Company gives written notice of its
intention to register any securities and, prior to the
effective date of the registration statement filed in
connection with the registration, the Company shall determine
for any reason not to register any securities, the Company
may, at its election, give written notice of its
determination to the Requesting Holder(s) and, thereupon, the
Company shall be relieved of its obligation to register any
Registrable Shares in connection with such withdrawn or
unfiled registration (but not of its obligation to pay the
Registration Expenses in connection therewith pursuant to
Article 6 hereto); and
2. if the registration is in connection with an underwritten
public offering and the underwriter or managing underwriter,
as the case may be, advises the Company that, in its opinion,
the number of shares requested to be included in the
registration or offering exceeds the number of shares which
can be sold in the offering, then the number of shares to be
registered shall first be allocated to the Company; second,
pro rata among the Requesting Holders desiring to participate
in the registration, based on the number of shares initially
proposed to be included in the registration by the Requesting
Holder; and third, pro rata among the other holders of the
Company's shares who requested to be included in the
registration, based on the number of shares initially
proposed to be included by the holders.
B. Selection of Underwriter. If any registration pursuant to this
Article 3 is an underwritten public offering, the Requesting
Holder(s) shall not have the right to select the managing
underwriter to administer the offering and the Requesting
Holder(s) agree to enter into customary agreements (including, if
requested, an underwriting agreement), and take any other
customary actions in connection with the offering as the Company
or the underwriter(s) shall reasonably request to consummate the
registration.
C. Notice of Effectiveness. The Company shall give written notice
to each Holder whose Registrable Shares are included in a
registration statement filed pursuant to this Article 3 of the
SEC's declaration that the registration statement is effective.
ARTICLE 4. DEMAND REGISTRATION RIGHTS
A. Right to Demand Registration. At any time after the Expiration
Date, the Holder(s) of a majority of the then outstanding
Registrable Shares may make a written demand to the Company to
register the offer and sale of all or a portion of the
Registrable Shares held by the Holder(s) (the "Demanding Holder")
under the Securities Act and register or qualify under applicable
securities laws, and subject to this Agreement, the Company shall
effect the demand registration promptly; provided, however:
1. the Company shall have no obligation under this Article 4 if
the demand to register such shares has been made by the
Holder(s) of fewer than a majority of the then outstanding
Registrable Shares;
2. the Company shall have no obligation under this Article 4 if
the registration of the Registrable Shares by the Demanding
Holder(s) is then covered under any other registration
statement (including, a registration pursuant to Article 3
hereof) that includes the offering of such shares on a
continuing basis;
3. if the offering is underwritten and the managing underwriter
advises the Company in writing that in its opinion the number
of shares requested to be included in the registration
exceeds the number which can be sold in the offering, the
Company will include in the registration only the number of
shares which in the opinion of such underwriter can be sold.
If the number of shares which can be sold is less than the
number of shares proposed to be registered, then the number
of shares to be registered shall first be allocated pro rata
among the Demanding Holders based on the number of shares
initially proposed to be included by each Demanding Holder;
and second pro rata among the other holders of the Company's
shares who requested to be included in the registration,
based on the number of shares initially proposed to be
included by the holders; and
4. if, while a registration demand is pending, the Company's
Board of Directors with the advice of counsel, determine that
the filing of a registration statement would require the
disclosure of non-public material information and the
disclosure of which would have a material adverse effect on
the Company or would otherwise adversely affect a material
financing, acquisition, disposition, merger or other
comparable transaction, the Company shall deliver a
certificate to that effect signed by one of its officers to
the Demanding Holder(s). In this case, the Company shall not
be required to effect a registration pursuant to this Article
4 until the date upon which the material information is
disclosed to the public or ceases to be material.
B. Notice to the Company. Each notice to the Company delivered
pursuant to this Article 4 shall set forth: (1) the name of the
Demanding Holder(s) requesting registration and (2) the number of
shares to be registered. Within ten (10) days after receipt of
notice from a Demanding Holder, the Company shall notify all
other Holders, if any, and offer to each other Holder the
opportunity to include their shares in the registration. Each
other Holder shall have fifteen (15) days following receipt of
the Company's notice to elect (by providing to the Company
written notice) to have their Registrable Shares included in the
registration.
C. Selection of Underwriters. If any registration pursuant to this
Article 4 is an underwritten public offering, the Demanding
Holder(s) shall have the right to select the managing
underwriter(s) to administer the offering, subject to the
approval of the Company, which approval shall not be unreasonably
withheld.
D. Notice of Effectiveness. The Company shall give written notice
to each Holder whose Registrable Shares are included in a
registration statement filed pursuant to this Article 4 of the
SEC's declaration that the registration statement is effective.
E. Minimum Period of Effectiveness. The Company shall cause a
registration statement filed pursuant to this Article 4 to remain
effective for at least one hundred eighty (180) days from the
date it is declared or ordered effective by the SEC.
ARTICLE 5. BLACKOUT RIGHTS
Following the effective date of any registration statement filed
pursuant to Article 2, 3 or 4 of this Agreement, the Company shall be
entitled, from time to time, to notify the Holder(s) to discontinue
offers or sales of shares pursuant to such registration statement for
Registrable Shares for the period of time stated in the notice (the
"Blackout Notice"), if the Company determines, in its reasonable
business judgment, that the disclosure required in connection with
the offers and sales of the Registrable Shares could materially
damage the Company's ability to successfully complete an acquisition,
corporate reorganization, securities offering or other voluntary
transaction undertaken by the Company (which information 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. The time
period for which the Holder(s) must discontinue offers or sales of
shares pursuant to a Blackout Notice shall be for any period the
Company reasonably believes is necessary, and if, the Company is
unable to determine the duration of such period at the time the
Blackout Notice is issued, the Blackout Notice may state that the
period extends "until the Holder(s) is (are) otherwise notified by
the Company." The Company shall not cause more than one hundred
eighty (180) days, in the aggregate, within any period of three
hundred sixty (360) consecutive days to be subject to a Blackout
Notice. The Blackout Notice shall be signed by an authorized officer
of the Company and shall certify the Company's determination. Each
Holder agrees that upon receipt of a Blackout Notice each 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.
ARTICLE 6. REGISTRATION EXPENSES
Any Registration Expenses incurred in connection with registering a
Holder's Registrable Shares shall be paid for by the Company in all
registrations pursuant to Article 2 or 3 except any Selling Expenses
relating to shares of any Holder whose shares are included in the
registration shall be borne by the Holder and the Company shall have
no liability therefor. Any Registration Expenses and Selling Expenses
incurred in connection with registering a Holder's Registrable Shares
pursuant to Article 4 shall be paid for by the Holder(s)
participating in such registration and the Company shall have no
liability therefor.
ARTICLE 7. REGISTRATION PROCEDURES
A. Whenever any Registrable Shares are to be registered pursuant to
this Agreement, and whenever the registration is effective, the
Company shall use its reasonable efforts to effect the
registration and the sale of such Registrable Shares in
accordance with the intended method of disposition thereof, and
pursuant thereto the Company shall as expeditiously as possible:
1. prepare and file with the SEC a registration statement with
respect to such Registrable Shares and use commercially
reasonable efforts to cause such registration statement to
become effective (before filing a registration statement,
prospectus or any amendments or supplements thereto, the
Company shall furnish to the counsel selected by the
Holder(s) of a majority of the Registrable Shares covered by
such registration statement copies of all such documents
proposed to be filed and in the case of a registration
pursuant to Article 4, the documents shall be subject to the
review and comment of such counsel);
2. provide to each Holder participating in a registration a
reasonable number of copies, without charge, of the
registration statement, preliminary prospectus and any other
documents as may commercially reasonably be necessary to
facilitate a public offering;
3. subject to Article 5, above, prepare and file with the SEC
any amendments and supplements to the registration statement
and the prospectus used in connection therewith as may be
necessary to keep the registration effective and to comply
with the provisions of the Securities Act with respect to the
disposition of all securities covered by the registration
statement during the effectiveness of the registration
statement and provide copies of any amendments or supplements
to each Holder participating in a registration;
4. use commercially reasonable efforts to register or qualify
all securities covered by a registration statement under the
securities or blue sky laws of each jurisdiction each Holder
reasonably requests, 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 consent generally to the service
of process in any such jurisdiction;
5. subject to Article 5, above, immediately notify each Holder
of Registrable Shares covered by a registration statement, 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 the
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 the prospectus
as may be necessary so that, as thereafter delivered to the
purchasers of the Registrable Shares, the 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;
6. enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions
as the Holder(s) of a majority of the Registrable Shares
being sold or the underwriter(s), if any, request in order to
expedite or facilitate the disposition of such Registrable
Shares;
7. make available for inspection by any seller of Registrable
Shares, any underwriter participating in any disposition
pursuant to such registration statement and any attorney,
accountant or other agent retained by any such seller or
underwriter, all financial and other records, pertinent
corporate documents and properties of the Company and cause
the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by
any such seller, underwriter, attorney, accountant or agent
in connection with such registration statement;
8. if a Listing Event has occurred, the Company shall cause all
securities covered by a registration to be listed on the
national securities exchange or designated for quotation on
the NASDAQ System, whichever the case may be;
9. provide a transfer agent and registrar for the securities
covered by a registration not later than the effective date
of such registration statement;
10. otherwise use commercially reasonable efforts to comply with
all applicable rules and regulations of the SEC and, if the
Company is no longer subject to the reporting requirements of
the Securities Exchange Act of 1934, make available to its
security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve
months beginning with the first day of the Company's first
full calendar quarter after the effective date of the
registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder;
11. in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or
suspending the qualification of any common stock included in
such registration statement for sale in any jurisdiction, the
Company shall use commercially reasonable efforts to obtain
the withdrawal of such order;
12. use commercially reasonable efforts to cause such Registrable
Securities covered by such registration statement to be
registered with or approved by such other governmental
agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such
Registrable Securities; and
13. use commercially reasonable efforts to obtain a cold comfort
letter from the Company's independent public accountants in
customary form and covering such matters of the type
customarily covered by cold comfort letters as the Company
deems appropriate, or in the case of a registration pursuant
to Article 4, as the Holders of the majority of the
Registrable Shares being included in such registration deem
appropriate; provided, however, in this case, the fees and
expenses incurred in obtaining the cold comfort letter shall
be paid for by such Holders.
ARTICLE 8. INDEMNIFICATION
A. Holder's Right to Indemnification. The Company will indemnify
each Holder of Registrable Shares covered by any registration
statement, its officers, directors and partners and each person
who controls the Holder within the meaning of Section 15 of the
Securities Act 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 which:
1. arises out of or based upon any untrue statement of a
material fact contained in any registration statement,
preliminary prospectus, final prospectus, supplement to the
prospectus or documents incorporated by reference therein, or
based upon any omission of a material fact required to be
stated therein or necessary to make the statements therein
not misleading, or
2. is incurred or arising out of any violation by the Company of
the Securities Act or any rule or regulation promulgated
under the Securities Act.
Notwithstanding the foregoing, the Company will not be under any
obligation to indemnify any Holder if:
1. any of the foregoing are made in reliance upon information
furnished to the Company by the Holder or any of its agents
(including its underwriter(s)) in writing expressly for
inclusion in the registration statement, preliminary
prospectus, final prospectus, supplement to the prospectus,
or any documents incorporated by reference therein;
2. any of the foregoing are made in a preliminary prospectus or
prospectus and subsequently corrected in the final prospectus
or supplemental to the final prospectus, but the Holder(s)
failed to deliver the final prospectus or supplement;
provided, however, that the Holder(s) were given notice from
the Company that the final prospectus or supplement was
available and copies of the final prospectus or supplement
were made available to the Holder(s); or
3. the Holder(s) fail to deliver a prospectus or otherwise
comply with any federal or state securities laws.
B. Company's Right to Indemnification. Each Holder participating in
a registration pursuant to this Agreement will indemnify the
Company, its directors or officers, each person who controls the
Company within the meaning of Section 15 of the Securities Act,
and each other Holder and each of its officers and directors and
each person controlling the Holder(s) within the meaning of
Section 15 of the Securities Act, against all expenses, claims,
losses, damages and liabilities incurred (or action in respect
thereof) arising out of any untrue statement of a material fact
contained in any registration statement or based upon any
omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading to the
extent made (or not made in the case of an omission) in reliance
upon information furnished to the Company by the Holder or any of
its agents (including its underwriter(s)) in writing expressly
for inclusion in the registration statement and expressly in
response to the Company's specific written request for such
information for inclusion in the registration statement. The
obligation to indemnify shall be individual and not joint and
several.
C. Indemnification Procedure. Each party entitled to
indemnification under this Article 8 ("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. The Indemnifying Party may select legal counsel for
such defense, provided however, that if the Indemnified Party,
acting in good faith, believes that it has certain legal
defenses to any claim or litigation which are different from or
in conflict with those defenses available to the Indemnifying
Party, the Indemnified Party may select one independent attorney
to act on its behalf as legal counsel to defend the Indemnified
Party against any claim or litigation. The legal fees of the
independent attorney shall be paid for by the Indemnifying Party.
In any event, 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: (1)
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 (2) does
not include an unconditional provision releasing Indemnified
Party from all liability in respect of the claim or litigation.
The failure of any Indemnified Party to give notice of a claim
subject to indemnification shall not relieve Indemnifying Party
of its obligations under this Agreement except to the extent that
the failure to give such notice is materially prejudicial to
Indemnifying Party's ability to defend the claim.
D. Contribution. If the indemnification provided for in this
Article 8 is unavailable to or unenforceable by the Company or
the Holder(s) (or their controlling persons) in respect of any
expenses, claims, losses, damages, and liabilities referred to
herein, then each such Indemnifying Party, in lieu of
indemnifying an Indemnified Party, shall contribute to the amount
paid or payable by the Indemnified Party as a result of any
expenses, claims, losses, damages and liabilities in such
proportions as is appropriate to reflect the relative fault of
and relative benefit to the Indemnifying Party on the one hand
and the Indemnified Party on the other hand. These proportions
shall be determined by balancing equitable considerations such
as, among other things: (1) whether the untrue or alleged untrue
statement of 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, (2) by such
party's relative intent, knowledge, access to information and
opportunity to correct or prevent the statement or omission, and
(3) by such party's relative benefit received from the making of
the untrue or alleged untrue statement of material fact or the
omission or alleged omission to state a material fact.
The Company and the Holder(s) agree that it would not be just and
equitable if contribution pursuant to this Article 8(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
the fraudulent misrepresentation.
E. Term of Indemnification Obligations. The obligations of the
Company and Holder(s) under this Article 8 shall survive the
completion of any offering of Registrable Shares in a
registration statement under this Agreement or otherwise and
shall extend for a period of two (2) years following completion
of the relevant offering.
ARTICLE 9. TRANSFER RESTRICTIONS
Any Holder's rights under this Agreement may be assigned or
transferred to any transferee or assignee permitted pursuant to
Section 11.3 of the Operating Agreement, who becomes a holder of
Registrable Shares, subject to the transfer restrictions set forth in
the legend contained on the certificates for such Registrable Shares.
ARTICLE 10. MISCELLANEOUS
A. Notices. All notices, requests, consent and other
communications hereunder shall be in writing to the persons set
forth below. Notice shall be deemed to have been given and/or
received: (1) on the date delivered if delivery is made
personally, (2) one (1) day after being deposited with a
reputable overnight courier (all charges prepaid), or (3) five
(5) days after being deposited into a U.S. Mailbox if mailed by
certified or registered mail, return receipt requested and
postage prepaid. Notices shall be delivered to the following
parties (or as otherwise instructed in writing from time to
time):
1. If to the Company:
a. Xx. Xxx Xxxxxxxxx
Inland Real Estate Corporation
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
2. If to BIJ:
a. Xx. Xxxxx Xxxxx
B.I.J. Limited Partnership
Xxx XXX Xxxxx
Xxxxxxx, Xxxxxxxx 00000
If BIJ transfers or assigns any of its rights under this
Agreement in accordance with Article 9, above, then BIJ shall
promptly provide to the Company, the name, address and telephone
number of such transferee or assignee.
B. 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.
C. Headings. The headings in this Agreement are for convenience
only and shall not limit or otherwise affect the meaning hereof.
D. Governing Law. The corporate law of the State of Maryland shall
govern all issues and questions concerning the relative rights of
the Company and its shareholders. All other issues and questions
concerning the construction, validity, interpretation and
enforcement of this Agreement shall be governed by, and construed
in accordance with the laws of the State of Illinois, without
giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of Illinois or any other
jurisdiction) that would cause the application of the laws of any
other jurisdiction other than the State of Illinois. In
furtherance of the foregoing, the internal law of the State of
Illinois shall control the interpretation and construction of
this Agreement, even though under that jurisdictions' choice of
law or conflict of law analysis, the substantive law of some
other jurisdiction would ordinarily apply.
E. Amendments. The provisions of this Agreement may be amended or
waived only upon the prior written consent of the Company and all
of the Holders of Registrable Shares.
F. Severability. In the event that any provision 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. Provided, however, that if the
provision(s) held to be invalid, illegal or unenforceable are
material to this Agreement and without such provision(s) this
Agreement is materially impaired or altered, then the entire
Agreement shall be declared invalid, illegal or unenforceable.
G. Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns
of the parties hereto whether so expressed or not. In addition,
whether or not any express assignment has been made, the
provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the
benefit of, and enforceable by, any subsequent holder of
Registrable Securities.
H. Remedies. Any Person having rights under any provisions of this
Agreement shall be entitled to enforce such rights specifically
to recover damages caused by reason of any breach of any
provision of this Agreement and to exercise any and all legal and
equitable rights available and all other rights granted by law.
The parties hereto agree and acknowledge that money damages may
not be an adequate remedy for any breach of any of the provisions
of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction
(without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce
or prevent any breach or violation of any provision of this
Agreement.
I. Mutual Covenant. Neither the Company nor the Holders shall enter
into any Agreement which violates the rights granted to each
party in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
INLAND REAL ESTATE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
Its: Vice President
B.I.J. LIMITED PARTNERSHIP
By: P.G.P., Inc., its General Partner
By: /s/ X.X. Xxxxxx
Its: President
By: Beavis, Inc., its General Partner
By: /s/ Xxxx Xxxxx
Its: President
