SHAREHOLDERS' AGREEMENT
This SHAREHOLDERS' AGREEMENT is entered into as of October 7, 1997 by and
among INSIGNIA FINANCIAL GROUP, INC., a Delaware corporation (the "Company"),
and Xxxxxx X. Xxxxx, individually a resident of Gate Xxxxx, Ohio ("X. Xxxxx"),
Xxxxxx X. Xxxxx as Trustee of the Xxxxxx X. Xxxxx Declaration of Trust dated
April 25, 1988, as amended on August 10, 1995 ("X. Xxxxx 1988 Trust"), Xxxxxxx
X. Xxxxx, as Trustee of the Xxxxxx X. Xxxxx Dynasty Trust, dated July 12, 1994
("X. Xxxxx 1994 Trust"), Xxxxxxx X. Xxxxx, Trustee of the Xxxxxx X. Xxxxx
Dynasty Trust dated July 12, 1994 FBO Xxxxxxx Xxxxx ("Xxxxxxx Xxxxx Subtrust"),
Xxxxxxx X. Xxxxx, Trustee of the Xxxxxx X. Xxxxx Dynasty Trust dated July 12,
1994 FBO Xxxxx Xxxxx ("Xxxxx Xxxxx Subtrust"), Xxxxxxx X. Xxxxx, Trustee of the
Xxxxxx X. Xxxxx Dynasty Trust dated July 12, 1994 FBO Xxxxxxxx Xxxxx ("Xxxxxxxx
Xxxxx Subtrust"), (collectively X. Xxxxx, the X. Xxxxx 1988 Trust, the X. Xxxxx
1994 Trust, the Xxxxxxx Xxxxx Subtrust, the Xxxxx Xxxxx Subtrust, and the
Xxxxxxxx Xxxxx Subtrust are "Holders"; each of the Holders is a "Holder").
WHEREAS, the Company and the Holders and others have entered into a Stock
Purchase Agreement dated September 18, 1997 (the
"Purchase Agreement"); and
WHEREAS, in partial consideration for the Holders' agreement to sell all
their shares of the capital stock of Realty One, Inc., an Ohio corporation, to
Insignia RO, a subsidiary of the Company, the Company has agreed, in accordance
with the terms and conditions of the Purchase Agreement, on the Closing Date to
issue shares of its Common Stock to Holders in the following amounts
(collectively, the "Shares"):
NAME OF HOLDER NUMBER OF IFG PURCHASE SHARES Xxxxxx X. Xxxxx 37,103.2Xxxxxx
X. Xxxxx as Trustee of the Xxxxxx X. Xxxxx Declaration of Trust dated April25,
1988, as amended on August 10, 1995 33,148.7 Xxxxxxx X. Xxxxx, Trustee of the
Xxxxxx X. Xxxxx Dynasty Trust dated April 12, 1994 FBO Xxxxxxx Xxxxx 43,249.4
Xxxxxxx X. Xxxxx, Trustee of the Xxxxxx X. Xxxxx Dynasty Trust dated Jyly 12,
1994 FBO Xxxxx Xxxxx 43,249.35 Xxxxxxx X. Xxxxx, Trustee of the Xxxxxx X. Xxxxx
Dynasty Trust dated Jyly 12, 1994 FBO Xxxxx Xxxxx 43,249.35 WHEREAS, the parties
desire to enter into this Shareholders' Agreement to govern certain rights and
obligations of the parties with respect to the Shares (the "Agreement"); NOW,
THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows: Definitions. As used herein, the following terms shall have the
following meanings (all terms defined in this Section 1 or in other provisions
of this Agreement in the singular shall have the same meanings when used in the
plural and vice versa):
"Affiliate" means any Person (a) which directly or indirectly controls, or
is controlled by, or is under common control with, another Person, (b) which
directly or indirectly beneficially owns or holds 10% or more of any class of
voting stock of another Person, or (c) 10% or more of the voting stock which is
directly or indirectly beneficially owned or held by another Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise.
"Business Day" means any day on which commercial banks are not authorized
or required to close in New York, New York, and shall also include any legal
holiday observed by the New York Stock Exchange.
"Closing Date" means October 10, 1997.
"Commission" means the Securities and Exchange Commission or any successor
thereto.
"Common Stock" means the Company's authorized Class A Common Stock, par
value $0.01 per share, as constituted on the Closing Date, and any other stock
of the Company into which such Common Stock may thereafter be changed or which
may be issued to the holders of shares of Common Stock upon any reclassification
thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect on the date hereof, applied on a basis consistent with
those used in the preparation of the financial statements for the first fiscal
year of the Company ending after the Closing Date (except for changes concurred
in by the Company's independent public accountants).
"Holders' Representative" means Xxxxxx X. Xxxxx or such other individual
designated in writing (by notice to the Company) as the Holders' Representative
from time to time by Holders owning a majority of the Registerable Shares.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
"Piggyback Registration" has the meaning set forth in Section 2.
"Registerable Securities" means (i) all Shares, and (ii) all Common Stock
issued as a dividend or other distribution to the Holder with respect to, or in
exchange for, or in replacement of, any of the Shares held by the Holder,
including any other capital stock or other security issued by the Company in a
reclassification of the Common Stock of the Company (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) after the date of this
Agreement. As to any particular Registerable Securities, once issued such
Registerable Securities shall cease to be Registerable Securities when (i) a
registration statement with respect to the sale of such Registerable Securities
shall become effective under the Securities Act and such Registerable Securities
shall have been disposed of in accordance with such registration statement, (ii)
such Registerable Securities shall have been sold to the public pursuant to Rule
144 (or any successor provision) under the Securities Act, (iii) new
certificates for such Registerable Securities not bearing a legend restricting
further transfer shall have been delivered by the Company and subsequent
disposition of them shall not require registration or qualification for them
under the Securities Act or any similar state law then in force in the State of
Delaware or such other state in which the Company is domiciled, or (iv) such
Registerable Securities shall have ceased to be outstanding. Notwithstanding the
above, "Registrable Securities" shall not mean or include any securities
acquired by Holder in the public market or through any other source or
intermediary.
"Registration", "register", "registered" means a registration effected by
preparing and filing a registration statement in compliance with the Securities
Act and the declaration or ordering of the effectiveness of such registration
statement.
"Registration Expenses" means any and all expenses incident to the
registration (including maintenance of the effectiveness of any registration, as
required under this Agreement) of the Registerable Securities pursuant to this
Agreement, including, without limitation, (a) all registration and filing fees
required by or payable to the Commission, any stock exchange or the National
Association of Securities Dealers, Inc., (b) all fees and expenses to comply
with state securities or blue sky laws (including reasonable fees and
disbursements of counsel for the underwriters, if any, in connection with blue
sky qualifications), (c) all printing, messenger and delivery expenses, (d) all
fees and disbursements of counsel for the Company and the Company's independent
public accountants, including the expenses of any special audits and/or "cold
comfort" or other accountants' letters required by or incident to such
registration, (e) fees and disbursements of underwriters imposed on the Company
by the underwriting agreements to which the Company is a party and the
reasonable fees and expenses of any special experts retained in connection with
the requested registration, and (f) the reasonable fees (not to exceed $2,500)
of one counsel for the Holders in connection with each such registration
retained by the Holders of a majority of the Registerable Securities being
registered. Notwithstanding the above, "Registration Expenses" does not mean or
include, and the Company shall not be liable under any circumstances for, the
following:
any expenses in connection with any amendment or supplement to the
Registration Statement or prospectus filed more than 180 days after the
effective date of such Registration Statement because any Holder of Registrable
Securities has not effected the disposition of the securities requested to be
registered. (Holder acknowledges that the Company shall have no obligation to
Holder to file any such amendment or supplement regardless of the obligation or
readiness of Holder to pay all expenses incurred in connection therewith.); or
any discounts, or commissions to any underwriter with respect to the
securities sold by a Holder of Registrable Securities.
"Resale Period Commencement" means the second anniversary of the Closing
Date.
"Rule 144" means Rule 144 promulgated by the Commission under the
Securities Act, as such Rule may be amended from time to time, or any similar or
successor provision at any time in force.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
"Shares" means the shares of Common Stock issued to Holders as partial
consideration for the sale to Insignia RO, Inc., a subsidiary of the Company, by
the Holders of all their shares in Realty One, Inc. pursuant to the Purchase
Agreement and any other stock of the Company into which such Shares may
thereafter be changed or which may be issued to the holders of shares of Common
Stock upon any reclassification thereof.
"Subsidiary" of any Person means any corporation or other entity of which
at least a majority of the securities or other ownership interests having
ordinary voting power (absolutely or contingently) for the election of directors
or other persons performing similar functions are at the time owned directly or
indirectly by such Person.
All terms not defined in this Section 1 shall have the same meaning and
definition as in the Purchase Agreement.
Piggyback Registration.
Notice Of Registration. Subject to the provisions of Section 9(b) of this
Agreement, if the Company, at any time following the earlier of the death of X.
Xxxxx or the Resale Period Commencement and terminating on the date on which all
the Registerable Shares of all the Holders first become eligible to be sold in a
single transaction under Rule 144, proposes to register any Common Stock under
the Securities Act (other than pursuant to a registration statement on Form S-4
or S-8 or any successor form of securities to be offered in a transaction of the
type referred to in Rule 145 under the Securities Act or to employees of the
Company pursuant to any employee benefit plan, respectively) for its own
account, the Company will each such time promptly, but not less than thirty (30)
days prior to the filing date of such a registration statement (unless the
Company has filed a registration statement within thirty (30) days prior to the
date hereof, in which event, the Company will provide such notice on the date
hereof), give written notice to the Holder of its intention to effect that
registration and of the rights of the Holder under this Agreement to participate
therein ("Piggyback Registration"), which notice shall include a list of
jurisdictions in which the Company intends to qualify such securities under
applicable state securities laws or blue sky laws and the estimated filing date
for the registration statement. Upon the written request of one or more Holders,
if holding at least Fifty Thousand (50,000) shares of Registerable Securities,
made within ten (10) days after receipt of any such notice (which request shall
specify the number and class of Registerable Securities intended to be disposed
of by such Holder(s)), the Company will include in the Piggyback Registration
(and any related qualification under applicable state securities laws or blue
sky laws) all Registerable Securities which the Company has been so requested to
register; provided, however, that the Company shall not be required to include
any such Registerable Securities unless the Holder(s) shall request the
registration of a minimum of 25,000 shares of such Registerable Securities. The
Company shall be entitled, in its sole and absolute discretion, to terminate any
proposed registration initiated by it, to withdraw the registration statement
related to any such registration and to terminate any offering involved in such
terminated registration without the consent of the Holder. Such Holder shall be
permitted to withdraw all or part of such securities from a Piggyback
Registration at any time prior to the declaration of the effectiveness of such
registration statement by the Commission; provided, however, such Holder shall
reimburse the Company for any Registration Expenses incurred in connection with
or arising out of such Registerable Securities being withdrawn. For purposes of
this Section 2(a), in the event the Company changes the number of shares of
Common Stock issued and outstanding as a result of a stock split, stock
dividend, recapitalization, reorganization or any other transaction in which any
security of the Company or any other entity or cash is issued or paid in respect
of the outstanding shares of the Common Stock, the numbers 50,000 and 25,000
shall be proportionately adjusted.
Underwriting. If the registration for which the Company gives written
notice under Section 2(a) above is for a registered primary public offering
involving an underwriting, the Company shall so advise the Holder as part of
such written notice. All holders proposing to distribute their securities
through such underwriting (together with the Company and other holders, if any,
of securities of the Company participating therein) shall enter into an
underwriting agreement in customary form with the representative of the
underwriter(s) selected by the Company. After a registration statement covering
the securities to be sold in connection with such underwritten Piggyback
Registration has been declared effective by the Commission, such securities
shall be sold in accordance with the method of distribution described therein.
Cut Backs. If the managing underwriter for a Piggyback Registration advises
the Company that, in its opinion, the number of securities of a class sought to
be included in such registration exceeds the maximum number (the "Piggyback
Maximum Number") of securities of such class which can be sold in an orderly
manner in such offering within a price range reasonably acceptable to the
Company, the Company shall be entitled to reduce the aggregate number of
securities included in the registration based on requests by the holders of
Registerable Securities and like securities to an aggregate number equal to the
Piggyback Maximum Number, with participation in the offering being allocated (i)
first, among all holders for whom the Company is making a required demand
registration, if any, (ii) second, for the account of the Company; (iii) third,
pro rata among all holders requesting piggyback registration of such securities
(based upon the number of securities sought to be registered by each such
Holder) that either have been granted registration rights by the Company with
priority over the holders of certain other registration rights or have been
granted registration rights that are not subject to any "cut backs," and (iv)
fourth, pro rata among all other holders of Registerable Securities with
piggyback registration rights and with respect to whom the Company has consented
to register securities (based upon the number of securities sought to be
registered by each such Holder); provided, however, that, notwithstanding the
foregoing, the Company shall have first priority in any public offering of its
securities initiated by the Company and the participation of others otherwise
shall be in the order and based on the allocation set forth above.
Registration Procedures. If and whenever the Company is required by this
Agreement to notify holders of Registerable Securities of a proposed
registration of securities under the Securities Act, then, unless such offering
is terminated by the Company, the Company will:
with such information promptly and timely furnished by Holder regarding the
securities held by Holder and the intended method of disposition thereof as the
Company shall reasonably request and as shall be required in connection with the
action to be taken by the Company, the Company shall prepare and file with the
Commission a registration statement with respect to such securities and use
reasonable efforts to cause such registration statement to become and remain
effective until such securities have all been sold in accordance with the
intended methods of disposition disclosed in the registration statement;
furnish to each seller of securities and each underwriter, if any, of the
securities being sold by such seller such number of copies of such registration
statement and of each amendment and supplement therein, such number of copies of
the prospectus, including a preliminary prospectus and summary prospectus, and
such other documents, as such seller or underwriter may reasonably request in
order to facilitate the public sale or other disposition of the securities owned
by such seller, including, prior to filing, drafts thereof;
use reasonable efforts to register or qualify the securities covered by
such registration statement under such other securities or blue sky laws of such
jurisdictions in the United States as a seller or underwriter shall reasonably
request, and do such other acts and things as may be necessary or advisable to
enable such seller and underwriter to consummate the public sale or other
disposition in such jurisdictions of the securities owned by such seller, except
that the Company shall not for any such purpose be required to execute or file
any general consent to service of process or be obligated to qualify to do
business under the laws of any jurisdiction where it has not previously done so;
notify each seller of any securities covered by such registration
statement, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the Company's becoming aware that 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 the light of the circumstances then existing, and at the request
of any such seller promptly prepare and furnish to such seller a reasonable
number of copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of such securities, 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 the light of the circumstances then existing;
otherwise to comply with all applicable rules and regulations of the
Commission;
use reasonable best efforts to list such securities on any securities
exchange on which the Common Stock of the Company is then listed, if the listing
of such securities is then permitted under the rules of such exchange;
provide a transfer agent and registrar for all the securities covered by
such registration statement not later than the effective date of such
registration statement;
enter into such underwriting, indemnity or similar agreements with the
underwriters in customary form and take such other actions as may be reasonably
necessary in order to expedite or facilitate the disposition of such securities;
and
permit any seller of the Registerable Securities included in such
registration statement to reasonably participate in the preparation of such
registration statement and to insert in such registration statement such
material in writing which in the reasonable judgment of such seller (which
judgment shall be reasonably concurred with by the Company) should be included
in such registration statement, including information regarding the securities
owned by such seller and the intended method of disposition;
(j) notify counsel for the Holders of Registerable Shares included in such
Piggyback Registration promptly and confirm the notice in writing when such
registration statement or any post-effective amendment to such registration
statement, shall have become effective, or any supplement to the prospectus or
any amendment prospectus shall have been filed.
Indemnification.
Indemnification by the Company. To the extent permitted by applicable law,
the Company will indemnify each Holder and such Holder's Affiliates
("Indemnified Person"), with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, against all claims,
losses, damages, costs, expenses and liabilities whatsoever (or actions in
respect thereof) arising out of or based on (i) any untrue statement (or alleged
untrue statement) of a material fact contained in any registration statement,
prospectus, offering circular or other similar document (including any related
registration statement, notification or the like) 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 in the light of the
circumstances under which they were made, or (ii) any violation by the Company
of the Securities Act or any state securities law or of any rule or regulation
promulgated under the Securities Act or any state securities law or any common
law or any other law applicable to the Company in connection with any such
registration, qualification or compliance, and will reimburse each Indemnified
Person, for any legal and any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action unless such action arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company by an
instrument duly executed by any Holder and stated to be specifically for use
therein or furnished in writing by any Holder to the Company in response to a
request by the Company stating specifically that such information will be used
by the Company therein. It is expressly acknowledged that the Company shall not
indemnify a Holder or a Holder's Affiliates, if such Holder, or its Affiliates
made an untrue statement or failed to state a material fact to the Company and
if the use of such information by the Company in connection with its
registration statement causes the claim, loss, damages, cost, expense or
liability for which indemnification is being sought. Notwithstanding the
foregoing, the liability of the Company shall not exceed an amount equal to the
net proceeds realized by each such Holder of Registerable Shares sold as
contemplated herein.
Indemnification by the Holder. To the extent permitted by applicable law,
each Holder will, if Registerable Securities held by or issuable to such Holder
are included in the securities to which such registration, qualification or
compliance is being effected, indemnify the Company, each of the directors and
officers of the Company, each Affiliate of the Company, each of the directors
and officers of each Affiliate of the Company, and each underwriter, if any, of
the Company's securities covered by such registration statement, and each person
who controls the Company within the meaning of the Securities Act against all
claims, losses, damages, costs, expenses and liabilities whatsoever (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 similar document (including
any related registration statement, notification or the like) 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 in the light of the
circumstances under which they were made, and will reimburse the Company, such
directors, officers, persons or underwriters for any legal or other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, cost, expense, liability or action, in each case to the
extent, but only 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 strict conformity with written information furnished to the Company by an
instrument duly executed by such Holder and stated to be specifically for use
therein or furnished by the Holder to the Company in response to a request by
the Company stating specifically that such information will be used by the
Company therein. Notwithstanding the foregoing, the liability of any such Holder
shall not exceed an amount equal to the net proceeds realized by each such
Holder of Registerable Shares sold as contemplated herein.
Indemnification Mechanics. Each party entitled to indemnification under
this Section 4 (the "Indemnified Party") shall give notice to the party or
parties 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 any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party (whose approval shall
not unreasonably be withheld). The failure of any Indemnified Party to give
notice as provided herein shall relieve the Indemnifying Party of its
obligations under this Agreement only to the extent that such failure to give
notice shall materially adversely prejudice the Indemnifying Party in the
defense of any such claim or any such litigation. 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. If any such Indemnified Party shall have
been advised by counsel chosen by it that there may be one or more legal
defenses available to such Indemnified Party that are different from or
additional to those available to the Indemnifying Party, the Indemnifying Party
shall not have the right to assume the defense of such action on behalf of such
Indemnified Party and will reimburse such Indemnified Party and any person
controlling such Indemnified Party for the reasonable fees and expenses of any
counsel retained by the Indemnified Party, it being understood that the
Indemnifying Party shall not, in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys for such Indemnified Party
or controlling person, which firm shall be designated in writing by the
Indemnified Party to the Indemnifying Party.
Contribution. If the indemnification provided for in this Section 4 is
unavailable to an Indemnified Party (other than by reason of any exception
provided in Section 4(a) or 4(b) hereof) in respect of any losses, claims,
damages, costs, expenses or liabilities for which such Indemnified Party is
entitled to be indemnified hereunder, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages,
costs, expenses or liabilities in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions which resulted in such losses, claims, damages, costs, expenses
or liabilities, as well as any other relevant equitable considerations. The
relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of losses, claims, damages, costs, expenses or liabilities
referred to above shall be deemed to include, subject to the limitations set
forth in Section 4(c), any legal or other fees or expenses reasonably incurred
by such party in connection with any investigation or proceeding. The parties
hereto agree that it would not be just and equitable if contribution pursuant to
this Section 4(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 this Section 4(d). 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 is not guilty of such
fraudulent misrepresentation. If indemnification is available under this Section
4, the indemnifying parties shall indemnify each indemnified party to the full
extent provided for in this Section 4 without regard to the relative fault of
such Indemnifying Party or Indemnified Party or any other equitable
consideration provided for in this Section 4(d).
Registration Expenses. The Company shall pay all Registration Expenses in
connection with any Piggyback Registration requested by Holder pursuant to
Section 2.
Information Rights. Holder, if included in any Piggyback Registration,
shall furnish to the Company such written information regarding Holder as the
Company may request in writing and as shall be required in connection with any
registration, qualification, or compliance referred to in this Agreement.
8. Rule 144 Covenants. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale of
restricted securities to the public without registration, the Company agrees to:
a. Make and keep available public information regarding the Company, as
those terms are understood and defined in Rule 144 under the Securities Act;
b. File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
c. Furnish to the Holder, as long as a Holder owns any Registrable
Securities, forthwith upon written request (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144, the
Securities Act, and the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company, and (iii) such other reports and documents so
filed as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration.
9. Sale Restrictions.
(a) Sales During Registration Periods.
Holder shall not sell any Common Stock of the Company under Rule 144 or
otherwise exempt from registration during the period beginning on the earlier
of:
(i) thirty (30) prior to the date any registration statement is filed with
the Commission by the Company (provided that the Company provides to Holder
written notice of the Company's good faith intention to file a registration
statement on the date specified in such notice, all of which information Holder
agrees to maintain in strict confidence until such registration shall be
declared effective by the Commission); or
(ii) the date of Holder's receipt of written notice from the Company of the
Company's good faith intention to file with the Commission within 30 days
following such notice a registration statement on the date specified in such
notice as the proposed filing date, all of which information Holder agrees to
maintain in strict confidence until such registration shall be declared
effective by the Commission; or
(iii) the date of Holder's receipt of written notice from the Company that
the Company has filed a registration statement with the Commission on the date
specified in such notice as the filing date;
and ending on the earlier of (i) ninety (90) days after the effective date
of such registration, or three hundred (300) days after the date of filing if
such registration has not become effective by that time, or (ii) the date when
any directors or executive officers of the Company sell Common Stock under Rule
144 or otherwise exempt from registration.
(b) Holding Period
Notwithstanding any other provision of this Agreement seemingly to the
contrary, without the consent of the Company (which may be withheld in its sole
discretion), none of the Shares may be sold, transferred, conveyed or assigned
until the earlier of: (i) the death of X. Xxxxx; or (ii) the Resale Period
Commencement. During the period between the Resale Period Commencement and the
third anniversary of the Closing Date, the Holders collectively may sell,
transfer, convey or assign up to one-half of the Shares. After the third
anniversary of the Closing Date, the Holders may sell, transfer, convey or
assign all the Shares. All the certificates evidencing the Shares shall bear a
legend setting forth the restriction contained in this Section 9(b). Each Holder
acknowledges that any sales, transfers, conveyances or assignments of the Shares
permitted by this Section 9(b) remain subject to compliance with the Securities
Act, including Rule 144, if applicable.
10. Notices. All notices and other communication provided for hereunder
shall be in writing and shall be sent by telex, telecopier or hand delivery: (a)
if to the Company, to:
Insignia Financial Group, Inc.
One Insignia Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxx X. Lines, Secretary & General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
with copies to:
Insignia Financial Group, Inc.
One Insignia Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
Xxxxxx, Xxxxxxxx & Xxxxxxx, PLC
SunTrust Center, Suite 1900
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: X. Xxxxx Green, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
and (b) if to Holder of the Registerable Securities, to the address of
Holder as shown in the stock record books of the Company, or to such other
address as any of the above shall have designated in writing to the Company,
with a copy to:
McDonald, Hopkins, Xxxxx & Xxxxx Co., L.P.A.
2100 Bank One Center
000 Xxxxxxxx Xxxxxx, X.
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. X'Xxxxx
All such notice and communication shall be deemed to have been given or
made (a) when delivered by hand, (b) when telexed, answer-back received, or (c)
when telecopied, receipt acknowledged.
11. Descriptive Headings. The headings in this Agreement are for
convenience only and shall not limit or otherwise affect the interpretation or
construction of this Agreement.
12. Severability. If for any reason any provision of this Agreement shall
be held invalid or unenforceable in whole or in part in any jurisdiction, such
provisions shall, as to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
13. Amendments, Etc. No amendment or waiver of any provision of this
Agreement shall be effective unless the same shall be in writing and signed by
each of the parties to this Agreement. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose given. No
failure on the part of any party to this Agreement to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof or preclude
any other or further exercise thereof or the exercise of any other right.
14. Counterparts. This Agreement may be executed in any number of
counterparts, all of which when taken together shall constitute one and the same
instrument.
15. Assignment and Consolidation or Merger.
Assignment. This Agreement may be assigned, transferred or otherwise
conveyed by Holder; provided, however, in the event Holder assigns, transfers or
otherwise conveys his interest in this Agreement, the assignee, transferee or
recipient of said interest shall be subject to all restrictions and requirements
hereof. Any attempted assignment, transfer or conveyance in violation of the
provisions of this Agreement shall be void. The exercise of rights pursuant to
this Agreement is limited to the Holder hereof and those who obtained any
purported rights hereunder in compliance with all assignment, transfer or
conveyance restrictions contained in this Agreement. This Agreement shall be
binding upon and inure to the benefit of the respective successors and permitted
assigns of the Company and the Holder.
Merger or Consolidation. In the case of any consolidation or merger of the
Company with or into another corporation, the consolidation of the Company with
or the merger of the Company with or into any other person, or in the event of
the sale, lease or other transfer of all or substantially all of the assets of
the Company to any other person, then in each case the rights granted to Holder
by this Agreement shall survive such consolidation, merger, sale, lease or other
transfer and shall thereafter be enforce-able against the entity succeeding as
to the rights and obligations of Company hereunder.
16. Survival of Representations and Warranties. The representations,
warranties, covenants and agreements of the Company and the Holder contained
herein or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement.
17. Attorneys' Fees. If any action or proceeding is brought to enforce the
terms of the Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees and costs.
18. Governing Law. This Agreement shall be governed by, and interpreted and
construed in accordance with, the laws of the State of Delaware. Venue for any
and all disputes arising out of or in connection with this Agreement shall be
exclusively in the federal and state courts in the State of Delaware. The
parties hereto consent and submit to the jurisdiction of such courts and waive
any objection to venue laid therein. Process in any action or proceeding
referred to in this Agreement may be served on any party anywhere in the world.
19. Waiver of Jury Trial. THE PARTIES WAIVE THE RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO,
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS AGREEMENT,
INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT.
20. Time of the Essence. Time is of the essence in performing and
interpreting this Agreement.
21. Further Assurances. The Company and the Holder hereby agree promptly to
execute at the other's reasonable request after the date hereof any documents or
materials related to the transactions contemplated by this Agreement.
22. Specific Performance. Each of the parties shall be entitled to specific
performance in the event of a breach by the other party of their respective
obligations hereunder. Such remedy shall be in addition to, but shall not
replace, any other remedies which might be available under this Agreement, at
law or in equity, including without limitation, actions for attorney's fees.
23. Representations of Company. The Company represents and warrants to
Holder as follows:
(a) Corporate Organization and Good Standing. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware, and is duly qualified and in good standing in all other
states where the nature of its business or operations or the ownership of its
property requires such qualification.
(b) Corporate Approval. The Company has full corporate power and authority
to execute and deliver this Agreement and all other documents and agreements to
be executed and delivered by it hereunder ("Transaction Documents") and to
consummate the transactions contemplated hereby. The board of directors of the
Company has duly and validly approved the execution, delivery, and performance
of this Agreement and the transactions contemplated herein. No other corporate
or legal proceedings on the part of the Company are necessary to approve and
authorize the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby. This Agreement constitutes, and the other
Transaction Documents, when executed, will constitute, the legal, valid, and
binding obligation and agreement of the Company enforceable against the Company
in accordance with its terms, subject only to the general law of creditors'
rights.
24. Termination. This Agreement shall terminate ten days after the third
anniversary of the Closing Date.
[REMAINER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
INSIGNIA FINANCIAL GROUP, INC.,
a Delaware corporation
/s/ Xxxxx X. Xxxxxxxx
---------------------
XXXXX X. XXXXXXXX,
EXECUTIVE MANAGING DIRECTOR
/s/ Xxxxxx X. Xxxxx
-------------------
XXXXXX X. XXXXX
XXXXXX X. XXXXX, TRUSTEE OF THE
XXXXXX X. XXXXX DECLARATION OF TRUST
DATED APRIL 25, 1988, AS AMENDED ON
AUGUST 10, 1995
/s/ Xxxxxx X. Xxxxx
-------------------
XXXXXX X. XXXXX, TRUSTEE
XXXXXXX X. XXXXX, TRUSTEE OF THE
XXXXXX X. XXXXX DYNASTY TRUST DATED
JULY 12, 1994
/s/ Xxxxxxx X. Xxxxx
--------------------
XXXXXXX X. XXXXX, TRUSTEE
XXXXXXX X. XXXXX, TRUSTEE OF THE
XXXXXX X. XXXXX DYNASTY TRUST DATED
JULY 12, 1994 FBO XXXXXXX XXXXX
/s/ Xxxxxxx X. Xxxxx
--------------------
XXXXXXX X. XXXXX, TRUSTEE
XXXXXXX X. XXXXX, TRUSTEE OF THE
XXXXXX X. XXXXX DYNASTY TRUST DATED
JULY 12, 1994 FBO XXXXX XXXXX
/s/ Xxxxxxx X. Xxxxx
--------------------
XXXXXXX X. XXXXX, TRUSTEE
XXXXXXX X. XXXXX, TRUSTEE OF THE
XXXXXX X. XXXXX DYNASTY TRUST DATED
JULY 12, 1994 FBO XXXXXXXX XXXXX
/s/ Xxxxxxx X. Xxxxx
--------------------
XXXXXXX X. XXXXX, TRUSTEE
