EXHIBIT 4.2
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REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
Dated as of ________ __, 1998
by and among
MAR MAR REALTY TRUST
and
the Persons Listed on
the Signature Page Hereto
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TABLE OF CONTENTS
1. Definitions..............................................................................................1
2. Lock-Up Agreement........................................................................................4
(a) Lock-Up Period..................................................................................4
(b) Exceptions......................................................................................4
3. Shelf Registration Under the Securities Act..............................................................5
(a) Filing of Shelf Registration Statement..........................................................5
(b) Expenses........................................................................................6
(c) Inclusion in Shelf Registration Statement.......................................................6
(d) Underwritten Offering...........................................................................6
(e) Selection of Underwriters.......................................................................7
(f) Piggyback Right.................................................................................7
4. Holdback Agreement.......................................................................................8
5. Registration Procedures..................................................................................8
6. Repurchase by Company of Shares Subject to Registration Notice..........................................13
7. Indemnification; Contribution...........................................................................13
(a) Indemnification by the Company.................................................................13
(b) Indemnification by Holders.....................................................................14
(c) Conduct of Indemnification Proceedings.........................................................14
(d) Contribution...................................................................................15
8. Rule 144 Sales..........................................................................................16
(a) Compliance.....................................................................................16
(b) Cooperation with Holders.......................................................................16
9. Miscellaneous...........................................................................................16
(a) Amendments and Waivers.........................................................................16
(b) Notices........................................................................................17
(c) Successors and Assigns.........................................................................17
(d) Counterparts...................................................................................17
(e) Headings.......................................................................................17
(f) Governing Law..................................................................................17
(g) Specific Performance...........................................................................17
(h) Entire Agreement...............................................................................17
(i) Limitation of Liability of Shareholders, Trustees and Officers
of the Company.................................................................................18
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REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
THIS REGISTRATION RIGHTS AND LOCK-UP AGREEMENT (this "Agreement") is
made and entered into as of _______ __, 1998, by and among MAR MAR REALTY TRUST
(the "Company") and the persons listed on the signature page hereto, including
their successors, assigns and transferees (herein referred to collectively as
the "Holders" and individually as a "Holder").
WHEREAS, on the date hereof each Holder is or will become the owner of
either Common Shares (as defined below) of the Company or Units (as defined
below) in the Operating Partnership (as defined below) in connection with the
"Formation Transactions" described in the IPO Registration Statement (as defined
below) or in connection with other grants, awards or transfers of Common Shares
or Units; and
WHEREAS, the Holders of Common Shares have agreed to enter into the
Lock-Up (as defined below) as provided in Section 2 below; and
WHEREAS, the Holders of Units in the Operating Partnership are subject,
pursuant to the terms of the Agreement of Limited Partnership of the Operating
Partnership, to substantially the same restrictions as are being agreed to by
the Holders of Common Shares pursuant to Section 2 below; and
WHEREAS, as a condition to receiving the consent or agreement of the
Holders to the Formation Transactions, the Company has agreed to grant the
Holders the registration rights provided for in Section 3 below; and
WHEREAS, as a condition to the initial public offering of the Common
Shares of the Company, the parties are willing to enter into the agreements
contained herein;
NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Closing Price" of the Common Shares for any given day shall mean (i)
if the Common Shares are listed or admitted to trading on a national securities
exchange, the reported last sale price of the Common Shares regular way on such
day or, in case no such sale takes place on such day, the average of the
reported closing bid and asked prices regular way, on such national securities
exchange on such day or (ii) if the Common Shares are not listed or admitted to
trading on any
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national securities exchange but are traded in the over-the-counter market, the
average of the closing bid and asked prices in the over-the-counter market on
such day.
"Common Shares" shall mean the common shares of beneficial interest,
par value $.01 per share, of the Company.
"Company" shall mean Mar Mar Realty Trust, a Maryland real estate
investment trust, and its successors.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Holder" or "Holders" shall mean the persons listed on the signature
page hereto, including their successors, assigns and transferees.
"IPO Registration Statement" shall mean the Registration Statement on
Form S-11 (No. 333- _____) relating to the initial public offering of the Common
Shares by the Company.
"Lock-up" shall have the meaning set forth in Section 2(a) hereof.
"Lock-up Period" shall have the meaning set forth in Section 2(a)
hereof.
"Operating Partnership" shall mean Mar Mar Realty, L.P., a Delaware
limited partnership, and its successors.
"Person" shall mean an individual, partnership, limited liability
company, corporation, trust, unincorporated organization or other legal entity
or a government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in the Shelf
Registration Statement, including any preliminary prospectus, and any amendment
or supplement thereto, including any supplement relating to the terms of the
offering of any portion of the Registrable Securities covered by the Shelf
Registration Statement, and in each case including all material incorporated by
reference therein.
"Registrable Securities" shall mean the Shares, excluding (i) Shares
that have been disposed of under the Shelf Registration Statement or any other
effective registration statement, (ii) Shares sold or otherwise transferred
pursuant to Rule 144 under the Securities Act, (iii) Shares that are held by
Holders who are not affiliates of the Company that are eligible for sale
pursuant to Rule 144(k) under the Securities Act, and (iv) Shares held by each
Holder who is an affiliate of the Company if all of such Shares are eligible for
sale pursuant to Rule 144 under the Securities Act and could be sold in one
transaction in accordance with the volume limitations contained in Rule
144(e)(1)(i) under the Securities Act.
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"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance with this Agreement, including, without limitation:
(i) all applicable registration and filing fees imposed by the SEC, the New York
Stock Exchange or the National Association of Securities Dealers, Inc. ("NASD"),
(ii) all fees and expenses incurred in connection with compliance with state
securities or "blue sky" laws (including reasonable fees and disbursements of
counsel in connection with qualification of any of the Registrable Securities
under any state securities or blue sky laws and the preparation of a blue sky
memorandum) and compliance with the rules of the NASD, (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing, printing and
distributing the Shelf Registration Statement, any Prospectus, certificates and
other documents relating to the performance of and compliance with this
Agreement, (iv) all fees and expenses incurred in connection with the listing,
if any, of any of the Registrable Securities on any securities exchange or
exchanges pursuant to Section 4(1) hereof, and (v) the fees and disbursements of
counsel for the Company and of the independent public accountants of the
Company, including the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance. Registration
Expenses shall specifically exclude underwriting discounts and commissions, the
fees and disbursements of counsel representing a Selling Holder or any
underwriter or agent acting on behalf of a Holder, and transfer taxes, if any,
relating to the sale or disposition of Registrable Securities by a Selling
Holder, all of which shall be borne by such Holder in all cases.
"Registration Notice" shall have the meaning set forth in Section 4(b)
hereof.
"Rule 144(f) Registrable Securities" shall mean that number of
Registrable Securities which, when aggregated with the number of Shares actually
sold pursuant to Rule 144 by the Holder, is equal to or less than the number
specified in paragraphs (1)(i), (ii) or (iii) of Rule 144(e), whichever is
greater, which Shares are sold in compliance with the "manner of sale"
requirement of Rule 144(f).
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Selling Holder" shall mean any Holder who sells Registrable Securities
pursuant to a public offering registered hereunder.
"Shares" shall mean any Common Shares issued to the Holders in
connection with the Formation Transaction, either directly or issued or issuable
upon conversion of their Units and any additional Common Shares issued as a
dividend distribution or exchange for, or in respect of such Common Shares.
"Shelf Registration" shall mean a registration required to be effected
pursuant to Section 3 hereof.
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"Shelf Registration Statement" shall mean a registration statement of
the Company (and any other entity required to be a registrant with respect to
such registration statement pursuant to the requirements of the Securities Act)
that covers all of the Registrable Securities to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act, or any similar
rule that may be adopted by the SEC, and all amendments (including
post-effective amendments) to such registration statement, and all exhibits
thereto and materials incorporated by reference therein.
"Unit Holders" shall mean the Holders (other than the Company)
receiving Units in the Formation Transactions and their respective successors,
assigns and transferees.
"Units" shall mean the limited partnership interests of the Operating
Partnership issued to Unit Holders in the Formation Transactions, which
interests are exchangeable for Common Shares, or at the Company's option, cash.
2. Lock-Up Agreement.
(a) Lock-Up Period. Each of the Holders hereby agrees that, except as
set forth in Section 2(b) below, from the date hereof until one year, following
the closing of the sale of Common Shares in connection with the Company's
initial public offering (the "Lock-up Period"), without the prior written
consent of the Company, it will not offer, pledge, sell, contract to sell, grant
any options for the sale of or otherwise dispose of, directly or indirectly
(collectively, "Dispose of"), any Shares (the "Lock-up").
(b) Exceptions. The following transfers of Shares shall not be subject
to the Lock-up set forth in Section 2(a):
(i) a Holder who is a natural person may Dispose of Shares to
his or her spouse, siblings, parents or any natural or adopted children
or other descendants or to any personal trust in which such family
members or such Holder retain the entire beneficial interest;
(ii) a Holder who is a natural person may Dispose of Shares on
his or her death to such Holder's estate, executor, administrator or
personal representative or to such Holder's beneficiaries pursuant to a
devise or bequest or by the laws of descent and distribution;
(iii) a Holder that is a corporation, partnership, trust or
other business entity may (A) Dispose of Shares to one or more other
entities that are wholly owned and controlled, legally and
beneficially, by such Holder or by a Person or Persons that directly or
indirectly wholly owns and controls such Holder or (B) Dispose of
Shares by distributing such Shares in a merger, dissolution,
liquidation, winding up or otherwise without consideration to the
equity owners of such corporation, partnership or business entity or to
any other corporation, partnership or business entity that is wholly
owned by such equity owners;
(iv) a Holder may Dispose of Shares as a bona fide gift; and
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(v) a Holder may Dispose of Shares pursuant to a pledge, grant
of security interest or other encumbrance effected in a bona fide
transaction with an unrelated and unaffiliated pledgee;
provided, however, that in the case of any transfer of Shares pursuant
to clauses (i) and (iii), the transfers shall each be effected pursuant
to a bona fide exemption under the Securities Act.
In the event any Holder Disposes of Shares described in this Section 2(b), such
Shares shall remain subject to this Agreement and, as a condition of the
validity of such disposition, the transferee (and any pledgee who acquires
Shares upon foreclosure or any transferee thereof) shall be required to execute
and deliver a counterpart of this Agreement. Thereafter, such transferee shall
be deemed to be a Holder for purposes of this Agreement.
3. Shelf Registration Under the Securities Act.
(a) Filing of Shelf Registration Statement. The Company shall cause to
be filed on the first business day after the first anniversary of the
consummation of the IPO the Shelf Registration Statement providing for the sale
by the Holders of all, but not less than all, of their Registrable Securities in
accordance with the terms hereof and will use its best efforts to cause such
Shelf Registration Statement to be declared effective by the SEC as soon
thereafter as is practicable. The Company agrees to use its best efforts to keep
the Shelf Registration Statement with respect to the Registrable Securities
continuously effective for a period expiring on the earlier of (i) the date on
which all of the Registrable Securities covered by the Shelf Registration
Statement have been sold pursuant thereto and (ii) the date on which (A) all
Shares (and all Shares that such Holders have the right to obtain in exchange
for Units) held by Holders who are not affiliates of the Company, in the opinion
of counsel for the Company, which counsel shall be reasonably acceptable to such
Holders, are eligible for sale pursuant to Rule 144(k) under the Securities Act
and (B) all Shares (and all Shares that such Holders have the right to obtain in
exchange for Units) held by each Holder who is an affiliate of the Company, in
the opinion of counsel for the Company, which counsel shall be reasonably
acceptable to such Holder, are eligible for sale pursuant to Rule 144 under the
Securities Act and could be sold in one transaction in accordance with the
volume limitations contained in Rule 144(e)(1)(i) under the Securities Act.
Subject to Sections 4(b), 4(i) and 5, the Company further agrees to amend the
Shelf Registration Statement if and as required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or any rules and
regulations thereunder.
(b) Expenses. Except as provided herein, the Company shall pay all
Registration Expenses in connection with the registration pursuant to Section
3(a) and the performance of the Company's obligations under this Section 3 and
Section 4. The Company shall not be liable for any underwriting discounts and
commissions, the fees and disbursements of counsel representing a Holder or any
underwriter or agent acting on behalf of a Holder, and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to the Shelf Registration Statement or Rule 144 under the Securities
Act.
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(c) Inclusion in Shelf Registration Statement. Any Holder who does not
provide the information reasonably requested by the Company in connection with
the Shelf Registration Statement as promptly as practicable after receipt of
such request, but in no event later than ten (10) days thereafter, shall not be
entitled to have its Registrable Securities included in the Shelf Registration
Statement.
(d) Underwritten Offering. If any of the Registrable Securities covered
by the Shelf Registration are to be sold in an underwritten public offering, the
Holder intending to pursue such underwritten offering shall deliver a notice to
the Company of such intent, and within ten days after receipt of the notice of
intent from such Holder for an underwritten offering, the Company shall give
written notice (the "Notice") of such notice of intent to all other Holders and
such other Holders shall be entitled to include in such an underwritten offering
all or part of their respective Registrable Securities by notice to the Company
for inclusion therein within 15 days after the Notice is given. All notices made
pursuant to this Section 3(d) shall specify the aggregate number of Registrable
Securities to be included. The Company agrees to cooperate with any such request
for an underwritten offering and to take all such other reasonable actions in
connection therewith as provided in Section 5(o).
In the case of any firm commitment underwritten offering, if the
managing underwriter or underwriters of such offering advise the Company in
writing that in its or their opinion the number of Registrable Securities
proposed to be sold in such offering exceeds the number of Registrable
Securities that can be sold in such offering without adversely affecting the
market for the Company's Common Shares, the Company will include in such
offering the number of Registrable Securities that in the opinion of such
managing underwriter or underwriters can be sold without adversely affecting the
market for the Company's Common Shares. In such event, the number of Registrable
Securities to be offered for the account of each Holder requesting to include
Registrable Securities in such offering (including the Holder providing the
initial Notice) shall be reduced pro rata on the basis of the relative number of
Registrable Securities requested by each such Holder to be included in such
offering to the extent necessary to reduce the total number of Registrable
Securities to be included in such offering to the number recommended by such
managing underwriter or underwriters.
(e) Selection of Underwriters. If any of the Registrable Securities
covered by the Shelf Registration are to be sold in an underwritten offering,
the Company shall have the right to select the investment banker or investment
bankers and manager or managers that will underwrite the offering; provided,
however, that such investment bankers and managers must be reasonably acceptable
to the Selling Holders.
4. Registration Procedures.
In connection with the obligations of the Company with respect to the
Shelf Registration Statement contemplated by Section 3 hereof, the Company
shall:
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(a) prepare and file with the SEC a registration statement, which
registration statement shall (i) be available for the sale of the Registrable
Securities in accordance with the intended method or methods of distribution by
the Selling Holders thereof and (ii) comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith;
(b) subject to the last three sentences of this Section 4(b) and
Section 4(i) hereof, (i) prepare and file with the SEC such amendments to such
registration statement as may be necessary to keep such registration statement
effective for the applicable period; (ii) cause the Prospectus to be amended or
supplemented as required and to be filed as required by Rule 424 or any similar
rule that may be adopted under the Securities Act; (iii) respond as promptly as
practicable to any comments received from the SEC with respect to the
registration statement or any amendment thereto; and (iv) comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during the applicable period
in accordance with the intended method or methods of distribution by the selling
Holders thereof. Notwithstanding anything to the contrary contained herein, the
Company shall not be required to take any of the actions described in Section
4(a), clauses (i), (ii) or (iii) in this Section 4(b), Section 4(d) or Section
4(i) with respect to each Holder of Registrable Securities (x) for a period not
to exceed ninety (90) days from the date of the Suspension Notice (as defined
below) to the extent that the Company is in possession of material non-public
information that the Board of Trustees in good ▇▇▇▇▇ ▇▇▇▇▇ advisable not to
disclose or the Company is engaged in active negotiations or planning for a
merger or material acquisition or disposition transaction and, in either case,
the Company delivers written notice (each, a "Suspension Notice") to each such
Selling Holder of Registrable Securities to the effect that it would be
impractical or unadvisable to cause the registration statement or such filings
to be made or to become effective or to amend or supplement the registration
statement, and that such Selling Holder may not make offers or sales under the
registration statement for a period not to exceed ninety (90) days from the date
of such Suspension Notice; provided, however, that the Company may deliver only
two such Suspension Notices within any twelve-month period, or (y) unless and
until the Company has received a written notice (a "Registration Notice") from a
Selling Holder that such Selling Holder intends to make offers or sales under
the registration statement as specified in such Registration Notice; provided,
however, that the Company shall have ten (10) business days to prepare and file
any such amendment or supplement after receipt of the Registration Notice or
such longer period as is reasonably necessary if such preparation and filing are
not commercially practicable within ten (10) business days or (z) to the extent
the Company elects pursuant to Section 5 hereof to purchase the Shares which are
the subject of the Registration Notice. Once a Selling Holder has delivered a
Registration Notice to the Company, such Selling Holder shall promptly provide
to the Company such information as the Company reasonably requests in order to
identify such Selling Holder and the method of distribution in a post-effective
amendment to the Registration Statement or a supplement to the Prospectus. Such
Selling Holder also shall notify the Company in writing upon completion of such
offer or sale or at such time as such Selling Holder no longer intends to make
offers or sales under the Registration Statement;
(c) furnish to each Selling Holder of Registrable Securities that has
delivered a Registration Notice to the Company, without charge, as many copies
of each Prospectus and any
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amendment or supplement thereto as such Selling Holder may reasonably request in
order to facilitate the public sale or other disposition of the Registrable
Securities; the Company consents to the use of the Prospectus and any amendment
or supplement thereto by each such Selling Holder of Registrable Securities in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus or amendment or supplement thereto;
(d) use its best efforts to register or qualify the Registrable
Securities by the time a registration statement is declared effective by the SEC
under all applicable state securities or blue sky laws of such jurisdictions in
the United States and its territories and possessions as any Holder of
Registrable Securities covered by the registration statement shall reasonably
request in writing, keep each such registration or qualification effective
during the period such registration statement is required to be kept effective
or during the period offers or sales are being made by a Holder that has
delivered a Registration Notice to the Company, whichever is shorter; provided,
however, that in connection therewith, the Company shall not be required to (i)
qualify as a foreign corporation to do business or to register as a broker or
dealer in any such jurisdiction where it would not otherwise be required to
qualify or register but for this Section 4(d), (ii) subject itself to taxation
in any such jurisdiction, or (iii) file a general consent to service of process
in any such jurisdiction;
(e) notify each Holder of Registrable Securities promptly and, if
requested by such Holder, confirm in writing, (i) when the registration
statement and any post-effective amendments thereto have become effective, (ii)
when any amendment or supplement to the Prospectus has been filed with the SEC,
(iii) of the issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of the registration statement or any part
thereof or the initiation of any proceedings for that purpose, (iv) if the
Company receives any notification with respect to the suspension of the
qualification of the Registrable Securities for offer or sale in any
jurisdiction or the initiation of any proceeding for such purpose, and (v) of
the happening of any event during the period the registration statement is
effective as a result of which (A) such registration statement contains any
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
or (B) the Prospectus as then amended or supplemented contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading;
(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the registration statement or any part thereof
as promptly as possible;
(g) furnish to each Selling Holder of Registrable Securities that has
delivered a Registration Notice to the Company, without charge, at least one
conformed copy of the applicable registration statement and any post-effective
amendment thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(h) cooperate with the Selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any Securities Act legend; and
enable certificates for such Registrable Securities to be issued for
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such numbers of shares and registered in such names as the Selling Holders may
reasonably request, upon at least ten business days prior to any sale of
Registrable Securities;
(i) subject to the last three sentences of Section 4(b) hereof, upon
the occurrence of any event contemplated by clause (x) of Section 4(b) or clause
(v) of Section 4(e) hereof, use its reasonable efforts promptly to prepare and
file an amendment or a supplement to the Prospectus or any document incorporated
therein by reference or prepare, file and obtain effectiveness of a
post-effective amendment to the registration statement, or file any other
required document, in any such case to the extent necessary so that, as
thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus as then amended or supplemented will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading;
(j) make available for inspection by the Selling Holders of Registrable
Securities that have provided a Registration Notice to the Company and any
counsel, accountants or other represen tatives retained by such Selling Holders
all financial and other records, pertinent corporate documents and properties of
the Company and cause the officers, directors and employees of the Company to
supply all such records, documents or information reasonably requested by such
Holders, counsel, accountants or representatives in connection with the
registration statement; provided, however, that such records, documents or
information which the Company determines in good faith to be confidential and
notifies such Selling Holders, counsel, accountants or representatives in
writing that such records, documents or information are confidential shall not
be disclosed by such Selling Holders, counsel, accountants or representatives
unless (i) such disclosure is ordered pursuant to a subpoena or other order from
a court of competent jurisdiction, or (ii) such records, documents or
information become generally available to the public other than through a breach
of this Agreement;
(k) a reasonable time prior to the filing of any registration statement
or any amendment thereto, or any Prospectus or any amendment or supplement
thereto, provide copies of such document (not including any documents
incorporated by reference therein unless requested) to the Selling Holders of
Registrable Securities that have provided a Registration Notice to the Company;
(l) use its reasonable efforts to cause all Registrable Securities to
be listed on any securities exchange on which similar securities issued by the
Company are then listed;
(m) provide a CUSIP number for all Registrable Securities, not later
than the effective date of the applicable registration statement;
(n) use its reasonable efforts to make available to its security
holders, as soon as reasonably practicable, an earning statement covering at
least 12 months which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder; and
(o) if requested by a Selling Holder or any underwriters engaged by
such Selling Holder for purposes of distributing the Registrable Securities,
enter into such agreements (including an
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underwriting agreement in form, scope and substance as is customary in
underwritten offerings) and take all such other reasonable actions in connection
therewith (including those reasonably requested by the underwriters or such
Selling Holder) in order to expedite or facilitate the disposition of such
Registrable Securities, and in such connection, (i) make such representations
and warranties to the underwriters with respect to the business of the Company
and the registration statement, Prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested; (ii) obtain
customary opinions of counsel to the Company and updates thereof (which shall be
in form and substance reasonably satisfactory to the Selling Holders or to the
underwriters and their counsel, as the case may be), addressed to such Selling
Holder and, if applicable, each of the underwriters; (iii) obtain "cold comfort"
letters and updates thereof from the independent certified public accountants of
the Company, addressed to such Selling Holder and, if applicable, each of the
underwriters, such letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection with any such
offerings (in each case, to the extent permitted by applicable accounting rules
and guidelines); (iv) if an underwriting agreement is entered into, the same
shall contain indemnification provisions and procedures no less favorable to the
underwriters than those set forth in Section 6 hereof and cross indemnification
by the underwriters in form and substance as is customary in connection with
such offering, in favor of the Company or the Selling Holders, as the case may
be; and (v) deliver such documents and certificates as may be reasonably
requested by the managing underwriters and their counsel to evidence the
continued validity of the representations and warranties made pursuant to clause
(i) above of this Section 4(o) and to evidence compliance with any customary
conditions contained in the underwriting agreement entered into by the Company.
The Company may require each Selling Holder of Registrable Securities
to furnish to the Company in writing such information regarding the proposed
distribution by such Selling Holder of such Registrable Securities as the
Company may from time to time reasonably request in writing.
In connection with and as a condition to the Company's obligations with
respect to the Shelf Registration Statement pursuant to Section 3 hereof and
this Section 4, each Selling Holder covenants and agrees that (i) it will not
offer or sell any Registrable Securities under the Shelf Registration Statement
until it has provided a Registration Notice pursuant to Section 4(b) and has
received copies of the Prospectus as then amended or supplemented as
contemplated by Section 4(c) and notice from the Company that the Registration
Statement and any post-effective amendments thereto have become effective as
contemplated by Section 4(e); (ii) upon receipt of any notice from the Company
contemplated by Section 4(b) (in respect of the occurrence of an event
contemplated by clause (x) of Section 4(b)) or Section 4(e) (in respect of the
occurrence of an event contemplated by clause (v) of Section 4(e)), such Selling
Holder shall not offer or sell any Registrable Securities pursuant to the Shelf
Registration Statement until such Selling Holder receives copies of the
supplemented or amended Prospectus contemplated by Section 4(i) hereof and
receives notice that any post-effective amendment has become effective, and, if
so directed by the Company, such Selling Holder will deliver to the Company (at
the expense of the Company) all copies in its possession, other than permanent
file copies then in such Selling Holder's possession, of the Prospectus as
amended or supplemented at the time of receipt of such notice; (iii) all offers
and sales
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by such Selling Holder under the registration statement must be completed within
sixty (60) days after the first date on which offers or sales can be made
pursuant to clause (i) above, and upon expiration of such sixty (60) day period,
the Selling Holder may not offer or sell any registrable securities under the
Registration Statement until it has again complied with the provisions of clause
(i) above; (iv) such Holder and any of its officers, directors or affiliates, if
any, must comply with the provisions of Regulation M under the Exchange Act as
applicable to them in connection with sales of Registrable Securities pursuant
to the Shelf Registration Statement; and (v) such Selling Holder and any of its
officers, directors or affiliates, if any, must enter into such written
agreements as the Company shall reasonably request to ensure compliance with
clause (iv) above.
5. Repurchase by Company of Shares Subject to Registration Notice.
(a) Upon receipt by the Company of a Registration Notice, the Company
may, but shall not be obligated to, purchase from such Selling Holder all, but
not less than all, of the Shares which are the subject of such Registration
Notice at a price per share equal to the greater of (i) the average of the
Closing Prices of the Common Shares for the five trading days immediately
preceding the date of the Registration Notice and (ii) the price offered to such
Selling Holder by any bona fide third-party offeror pursuant to a written
contract of sale. In the event the Company elects to purchase the Shares which
are the subject of a Registration Notice, the Company shall notify the Holder of
such Shares within five business days of the date of receipt of the Registration
Notice by the Company, which notice shall indicate: (i) that the Company will
purchase the Shares which are the subject of the Registration Notice, (ii) the
price per share, calculated in accordance with the preceding sentence, which the
Company will pay to such Holder and (iii) the date upon which the Company shall
repurchase such Shares, which date shall not be later than the tenth business
day after receipt of the Registration Notice relating to such Shares.
(b) If the Company elects to purchase the Shares which are the subject
of such Registration Notice in accordance with this Section 5, the Company shall
be relieved of its obligations under Section 4(b), (c), (d), (e), (g), (h), (i)
and (j) with respect to such Shares or as the result of such Registration
Notice.
6. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Holder and its officers and directors and each Person, if
any, who controls any Holder within the meaning of Section 15 of the Securities
Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to which such Holder, officer,
director or controlling Person may become subject under the Securities
Act or otherwise (A) that arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Shelf Registration Statement or any amendment thereto, or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading or (B) that arise out of or are based upon any untrue
statement or alleged untrue
11
statement of a material fact contained in any Prospectus or any
amendment or supplement thereto, or the omission or alleged omission to
state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or alleged untrue
statement or any omission or alleged omission contained in the Shelf
Registration Statement, if such settlement is effected with the written
consent of the Company; and
(iii) subject to the limitations set forth in Section 6(c),
against any and all expense whatsoever, as incurred (including
reasonable fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body,
commenced or threatened, in each case whether or not a party, or any
claim whatsoever based upon any such untrue statement or alleged untrue
statement or omission or alleged omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) above;
provided, however, that the indemnity provided pursuant to this Section 6(a)
shall not apply to any Holder with respect to any loss, liability, claim, damage
or expense that arise out of or are based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by such Holder
expressly for use in the Shelf Registration Statement or any amendment thereto
or the Prospectus or any amendment or supplement thereto.
(b) Indemnification by Holders. Each Holder severally agrees to
indemnify and hold harmless the Company and the other Selling Holders, and each
of their respective directors and officers (including each director and officer
of the Company who signed the Registration Statement), and each Person, if any,
who controls the Company or any other Selling Holder within the meaning of
Section 15 of the Securities Act, to the same extent as the indemnity contained
in Section 6(a) hereof, but only insofar as such loss, liability, claim, damage
or expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Shelf Registration
Statement or any amendment thereto or the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by such selling Holder for use therein relating to the
Holder's status as a selling security holder.
(c) Conduct of Indemnification Proceedings. Each indemnified party
shall give reasonably prompt notice to each indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party (i) shall not relieve
it from any liability which it may have under the indemnity agreement provided
in Section 6(a) or (b) above, unless and to the extent it did not otherwise
learn
12
of such action and the lack of notice by the indemnified party materially
prejudices the indemnifying party or results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) shall not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided under Section 6(a) or
(b) above. After receipt of such notice, the indemnifying party shall be
entitled to participate in and, at its option, jointly with any other
indemnifying party so notified, to assume the defense of such action or
proceeding at such indemnifying party's own expense with counsel chosen by such
indemnifying party and approved by the indemnified party, which approval shall
not be unreasonably withheld; provided, however, that, if the defendants in any
such action or proceeding include both the indemnified party and the
indemnifying party and the indemnified party reasonably determines, upon advice
of counsel, that a conflict of interest exists or that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, then the indemnified
party shall be entitled to one separate counsel, the reasonable fees and
expenses of which shall be paid by the indemnifying party. If the indemnifying
party does not assume the defense of any such action or proceeding, after having
received the notice referred to in the first sentence of this paragraph, the
indemnifying party will pay the reasonable fees and expenses of counsel (which
shall be limited to a single law firm in addition to any local counsel necessary
in connection with such action or proceeding) for the indemnified party. In such
event, however, the indemnifying party will not be liable for any settlement
effected without the written consent of such indemnifying party. If the
indemnifying party assumes the defense of any such action or proceeding in
accordance with this paragraph, such indemnifying party shall not be liable for
any fees and expenses of counsel for the indemnified party incurred thereafter
in connection with such action or proceeding except as set forth in the proviso
in the second sentence of this Section 6(c).
(d) Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this Section 6 is for any reason held to be unenforceable although applicable in
accordance with its terms, the Company and the Selling Holders shall contribute
to the aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Company and the Selling
Holders, in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and the Selling Holders on the other (in such
proportions that the selling Holders are severally, not jointly, responsible for
the balance), in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether the 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
the indemnified parties, and the parties' relative intent, pledge, access to
information and opportunity to correct or prevent such action.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6(d), no Selling Holder shall be
required to contribute
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any amount in excess of the amount by which the total price at which the
Registrable Securities of such Selling Holder were offered to the public exceeds
the amount of any damages which such Selling Holder would otherwise have been
required to pay by reason of such untrue statement or omission.
Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6(d), each Person, if
any, who controls a Holder within the meaning of Section 15 of the Securities
Act and directors and officers of a Holder shall have the same rights to
contribution as such Holder, and each director of the Company, each officer of
the Company who signed the Registration Statement and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as the Company.
7. Rule 144 Sales.
(a) Compliance. The Company covenants that, so long as it is subject to
the reporting requirements of the Exchange Act, it will file the reports
required to be filed by it under the Exchange Act so as to enable any Holder to
sell Registrable Securities pursuant to Rule 144 under the Securities Act.
(b) Cooperation with Holders. In connection with any sale, transfer or
other disposition by any Holder of any Registrable Securities pursuant to Rule
144 under the Securities Act, the Company shall cooperate with such Holder to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any Securities Act legend, and
enable certificates for such Registrable Securities to be for such number of
shares and registered in such names as the selling Holders may reasonably
request. The Company's obligation set forth in the previous sentence shall be
subject to the delivery, if reasonably requested by the Company or its transfer
agent, by counsel to such Holder, in form and substance reasonably satisfactory
to the Company and its transfer agent, of an opinion that such Securities Act
legend need not appear on such certificate.
8. Miscellaneous.
(a) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified, supplemented or
waived, nor may consent to departures therefrom be given, without the written
consent of the Company and the Holders of at least 80% of the outstanding
Registrable Securities (treating for the purpose of such computation the Holders
of Units as the Holders of Registrable Securities issuable upon exchange of such
Units); provided, however, that no amendment, modification, supplement or waiver
of, or consent to the departure from, the provisions of this Agreement, which
has the purpose or effect of reducing, impairing or adversely affecting the
right of any Holder, shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder of Registrable
Securities. Notice of any such amendment, modification, supplement, waiver or
consent adopted in
14
accordance with this Section 8(a) shall be provided by the Company to each
Holder of Registrable Securities at least thirty (30) days prior to the
effective date of such amendment, modification, supplement, waiver or consent.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery, (i) if to a Holder, at such Holder's registered address appearing on
the share register of the Company or the Unit register of the Operating
Partnership or (ii) if to the Company, at Independence Office Park, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Attention:
President.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is knowledged, if telecopied; or at the
time delivered if delivered by an air courier guaranteeing overnight delivery.
(c) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders. If any successor, assignee or transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding Registrable Securities
such Person shall be conclusively deemed to have agreed to be bound by all of
the terms and provisions hereof.
(d) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto 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.
(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland without giving effect to the
conflicts of law provisions thereof.
(g) Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to compel specific performance of the obligations of any other party under this
Agreement in accordance with the terms and conditions of this Agreement in any
court of the United States or any State thereof having jurisdiction.
(h) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and
15
understanding of the parties hereto in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(i) Limitation of Liability of Shareholders, Trustees and Officers of
the Company. ANY OBLIGATION OR LIABILITY WHATSOEVER OF THE COMPANY WHICH MAY
ARISE AT ANY TIME UNDER THIS AGREEMENT OR ANY OBLIGATION OR LIABILITY WHICH MAY
BE INCURRED BY IT PURSUANT TO ANY OTHER INSTRUMENT, TRANSACTION OR UNDERTAKING
CONTEMPLATED HEREBY SHALL BE SATISFIED, IF AT ALL, OUT OF THE COMPANY'S ASSETS
ONLY. NO SUCH OBLIGATION OR LIABILITY, OTHER THAN THIS AGREEMENT AS IT RELATES
TO EACH OF THE HOLDERS, SHALL BE PERSONALLY BINDING UPON, NOR SHALL RESORT FOR
THE ENFORCEMENT THEREOF BE HAD TO, THE PROPERTY OF ANY OF ITS SHAREHOLDERS,
TRUSTEES, OFFICERS, EMPLOYEES OR AGENTS (SOLELY AS A RESULT OF THEIR STATUS AS
SHAREHOLDERS, TRUSTEES, OFFICERS, EMPLOYEES OR AGENTS), REGARDLESS OF WHETHER
SUCH OBLIGATION OR LIABILITY IS IN THE NATURE OF CONTRACT, TORT OR OTHERWISE.
NOTWITHSTANDING THE FOREGOING, THIS SECTION 8(I) SHALL NOT IN ANY WAY AFFECT OR
LIMIT ANY OBLIGATION OR LIABILITY OF ANY HOLDER UNDER THIS AGREEMENT.
16
IN WITNESS WHEREOF, the parties have executed this Registration Rights
and Lock-Up Agreement as of the date first written above
MAR MAR REALTY TRUST
By: _____________________________________
Name: ____________________________________
Title: ____________________________________
HOLDERS:
SONIC FINANCIAL CORPORATION
By: _____________________________________
Name:
Title:
TOWN & COUNTRY FORD, INC.
By: _____________________________________
Name:
Title:
O. ▇▇▇▇▇▇ ▇▇▇▇▇
___________________________________________
PRIMAX PROPERTIES, LLC
By: _____________________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
___________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
___________________________________________
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