Exhibit 10.6
BROAD STREET REALTY, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of November 22, 2022 among Broad Street Realty, Inc., a Delaware corporation (the “Company”), each of the investors listed on the signature pages hereto under the caption “Fortress Investors” (collectively with each Person, if any, who executes a Joinder as a “Fortress Investor” in accordance with this Agreement, the “Fortress Investors”) and each Person, if any, who executes a Joinder as an “Other Investor” in accordance with this Agreement (collectively, the “Other Investors”). Except as otherwise specified herein, all capitalized terms used in this Agreement are defined in Exhibit A attached hereto.
In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:
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Except as expressly provided herein, all out-of-pocket expenses incurred by the Company in connection with the performance of or compliance with this Agreement and/or in connection with any Demand Registration, Piggyback Registration or Shelf Offering, whether or not the same shall become effective, shall be paid by the Company, including: (i) all registration and filing fees, and any other fees and expenses associated with filings required to be made with the SEC or FINRA, (ii) all fees and expenses
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in connection with compliance with any securities or “blue sky” laws, (iii) all printing, duplicating, word processing, messenger, telephone and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company or other depositary and of printing prospectuses and Company Free Writing Prospectuses), (iv) all fees and disbursements of counsel for the Company and of all independent certified public accountants of the Company (including the expenses of any special audit and cold comfort letters required by or incident to such performance), (v) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange on which similar securities of the Company are then listed (or on which exchange the Registrable Securities are proposed to be listed in the case of the Qualified Public Offering), (vi) all applicable rating agency fees with respect to the Registrable Securities, (vii) all fees and disbursements of legal counsel for the Company, (viii) all reasonable and documented fees and disbursements of one legal counsel for selling Holders selected by the Fortress Investors (which may be the same counsel as selected for the Company) together with any necessary local counsel as may be required by the Fortress Investors, not to exceed $100,000 in connection with any single Demand Registration, Shelf Offering, Underwritten Block Trade or Piggyback Registration, if any; provided that such expenses may exceed such amount with the prior written consent of the Company, such consent not to be unreasonably withheld, (ix) all fees and expenses of any special experts or other Persons retained by the Company or the Fortress Investors in connection with any Registration, (x) all of the Company’s internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties) and (xi) if the underwriter for any underwritten offering reasonably determines a “road show” is necessary, all expenses incurred by the Company related to the “road show” for any underwritten offering. All such expenses are referred to herein as “Registration Expenses.” The Company shall not be required to pay, and each Person that sells securities pursuant to a Demand Registration, Shelf Offering or Piggyback Registration hereunder will bear and pay, all underwriting discounts and commissions applicable to the Registrable Securities sold for such Person’s account, any fees and expenses of brokers or counsel to any Holder (other than as set forth in clause (viii) of the immediately preceding sentence) and all transfer taxes (if any) attributable to the sale of Registrable Securities.
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“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS SET FORTH IN A REGISTRATION RIGHTS AGREEMENT, DATED AS OF NOVEMBER 22, 2022, AMONG THE ISSUER OF SUCH SECURITIES (THE “COMPANY”) AND CERTAIN OF THE COMPANY’S EQUITYHOLDERS, AS AMENDED. A COPY OF SUCH REGISTRATION RIGHTS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”
The legend set forth above will be removed from the certificates evidencing any securities that have ceased to be Registrable Securities.
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The Company’s address is:
Broad Street Realty, Inc.
7250 Woodmont Ave, Suite 350
Bethesda, Maryland 20814
Attention: Michael Jacoby
Email: mjacoby@broadstreetrealty.com
With a copy to:
Morrison & Foerster LLP
2100 L Street NW, Suite 900
Washington, DC 20037
Attention: David P. Slotkin; Andrew P. Campbell
Email: dslotkin@mofo.com; andycampbell@mofo.com
The Fortress Investors’ address is:
c/o Fortress Investment Group LLC
1345 Avenue of the Americas, 46th Floor
New York, New York 10105
Attention: David Moson
Email: dmoson@fortress.com
and to:
c/o Fortress Investment Group LLC
1345 Avenue of the Americas, 46th Floor
New York, New York 10105
Attention: General Counsel, Credit
Email: GC.credit@fortress.com
With a copy to:
Kirkland & Ellis LLP
300 North LaSalle
Chicago, Illinois 60654
Attention: Daniel Perlman, P.C.; Rachel Brown, P.C.
Email: daniel.perlman@kirkland.com; rachel.brown@kirkland.com
and to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Attention: Timothy Cruickshank, P.C.; David Perechocky
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Email: tim.cruickshank@kirkland.com; david.perechocky@kirkland.com
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
BROAD STREET REALTY, INC. | |
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By: | /s/ Michael Z. Jacoby |
Name: | Michael Z. Jacoby |
Its: | Chief Executive Officer |
[Signature Page to Registration Rights Agreement]
FORTRESS INVESTORS: | |
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CF FLYER PE INVESTOR LLC | |
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By: | /s/ Scott Desiderio |
Name: | Scott Desiderio |
Title: | Deputy Chief Financial Officer |
[Signature Page to Registration Rights Agreement]
EXHIBIT A
DEFINITIONS
Capitalized terms used in this Agreement have the meanings set forth below.
“Affiliate” of any Person means any other Person controlled by, controlling or under common control with such Person; provided that the Company and its Subsidiaries will not be deemed to be Affiliates of any Holder. As used in this definition, “control” (including, with its correlative meanings, “controlling,” “controlled by” and “under common control with”) will mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities, by contract or otherwise).
“Agreement” has the meaning set forth in the recitals.
“Automatic Shelf Registration Statement” has the meaning set forth in Section 1(a).
“Business Day” means a day that is not a Saturday or Sunday or a day on which banks in New York City are authorized or requested by law to close.
“Charitable Gifting Event” means any transfer by a Fortress Investor, or any subsequent transfer by such holder’s members, partners or other employees, in connection with a bona fide gift to any Charitable Organization on the date of, but prior to, the execution of the underwriting agreement entered into in connection with any underwritten offering.
“Charitable Organization” means a charitable organization as described by Section 501(c)(3) of the Internal Revenue Code of 1986, as in effect from time to time.
“Common Equity” means the Company’s shares of common stock, par value $0.01 per share.
“Company” means Broad Street Realty, Inc., a Delaware corporation.
“Demand Registrations” has the meaning set forth in Section 1(a).
“End of Suspension Notice” has the meaning set forth in Section 1(f)(ii).
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor federal law then in force, together with all rules and regulations promulgated thereunder.
“Excluded Registration” means any registration (i) pursuant to a Demand Registration (which is addressed in Section 1(a)), (ii) in connection with registrations on Form S‑4 or S‑8 promulgated by the SEC (or any successor or similar forms), (iii) in connection with the Qualified Public Offering or (iv) in connection with any “at-the-market” equity distribution program or dividend reinvestment program of the Company.
“FINRA” means the Financial Industry Regulatory Authority.
“Fortress Investors” has the meaning set forth in the recitals; provided that any decision to be made under this Agreement by the Fortress Investors shall be made by the holders of a majority of all Fortress Investor Registrable Securities.
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“Fortress Investor Registrable Securities” means (i) any Common Equity held (directly or indirectly) by any Fortress Investor or any of its Affiliates, including any Common Equity issuable upon exercise, conversion or exchange of any warrants, other securities or other obligations (including any Preferred Membership Interest (as defined in the LLC Agreement)) or otherwise, and (ii) any equity securities of the Company or any Subsidiary issued or issuable with respect to the securities referred to in clause (i) above by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization.
“Free Writing Prospectus” means a free-writing prospectus, as defined in Rule 405.
“Holdback Period” has the meaning set forth in Section 3(a).
“Holder” means a holder of Registrable Securities who is a party to this Agreement (including by way of Joinder).
“Indemnified Parties” has the meaning set forth in Section 6(a).
“Company” has the meaning set forth in the preamble and shall include its successor(s).
“Joinder” has the meaning set forth in Section 9(a).
“LLC Agreement” the amended and restated limited liability company agreement, dated as of November 22, 2022, of Broad Street Eagles JV, LLC, a Delaware limited liability company, as amended, restated, amended and restated, modified and/or waived from time to time.
“Long-Form Registration Statement” has the meaning set forth in Section 1(a).
“Losses” has the meaning set forth in Section 6(c).
“Other Investors” has the meaning set forth in the recitals.
“Other Investor Registrable Securities” means (i) any Common Equity held (directly or indirectly) by any Other Investors or any of their Affiliates, and (ii) any equity securities of the Company or any Subsidiary issued or issuable with respect to the securities referred to in clause (i) above by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization.
“Participating Fortress Investors” means any Fortress Investor(s) participating in the request for a Demand Registration, Shelf Offering, Piggyback Registration or Underwritten Block Trade.
“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.
“Piggyback Registrations” has the meaning set forth in Section 2(a).
“Public Offering” means any sale or distribution by the Company, one of its Subsidiaries and/or Holders to the public of Common Equity or other securities convertible into or exchangeable for Common Equity pursuant to an offering registered under the Securities Act.
“Qualified Public Offering” has the meaning given to it in the LLC Agreement.
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“Registrable Securities” means Fortress Investor Registrable Securities and Other Investor Registrable Securities. As to any particular Registrable Securities, such securities will cease to be Registrable Securities to the extent that (a) such securities have been sold or distributed pursuant to a Public Offering, (b) such securities have been distributed, sold or otherwise transferred in compliance with Rule 144 and shall no longer bear a legend restricting transfer under the Securities Act and subsequent public distribution of them shall not require registration under the Securities Act, (c) such securities have been repurchased by the Company or a Subsidiary of the Company or (d) with respect to the Registrable Securities held by any Holder (other than a Fortress Investor, without the consent of a Fortress Investor), together with its Affiliates, the first to occur of (A) the first date on which such Holder, together with its Affiliates, beneficially owns Registrable Securities that represent less than 2.5% of the issued and outstanding shares of Common Stock as of such date, and (B) the date on which such Holder, together with its Affiliates, is permitted to sell such Registrable Securities pursuant to Rule 144 without regard to the volume and manner of sale limitations contained thereunder. For purposes of this Agreement, a Person will be deemed to be a holder of Registrable Securities, and the Registrable Securities will be deemed to be in existence, whenever such Person has the right to acquire, directly or indirectly, such Registrable Securities (upon exercise, conversion or exchange of any warrants, other securities or other obligations or otherwise (including any Preferred Membership Interest (as defined in the LLC Agreement)), but disregarding any restrictions, conditions or limitations upon the exercise of such right), whether or not such acquisition has actually been effected, and such Person will be entitled to exercise the rights of a holder of Registrable Securities hereunder (it being understood that a holder of Registrable Securities may only request that Registrable Securities in the form of Common Equity be registered pursuant to this Agreement).
“Registration Expenses” has the meaning set forth in Section 5.
“Rule 144”, “Rule 158”, “Rule 405”, “Rule 415” and “Rule 430B” mean, in each case, such rule promulgated under the Securities Act (or any successor provision) by the SEC, as the same will be amended from time to time, or any successor rule then in force.
“Sale Transaction” has the meaning set forth in Section 3(a).
“SEC” means the U.S. Securities and Exchange Commission.
“Securities” has the meaning set forth in Section 3(a).
“Securities Act” means the Securities Act of 1933, as amended from time to time, or any successor federal law then in force, together with all rules and regulations promulgated thereunder.
“Shelf Offering” has the meaning set forth in Section 1(d)(i).
“Shelf Offering Notice” has the meaning set forth in Section 1(d)(i).
“Shelf Period” has the meaning set forth in Section 1(d)(v).
“Shelf Registration” has the meaning set forth in Section 1(a).
“Shelf Registrable Securities” has the meaning set forth in Section 1(d)(i).
“Shelf Registration Statement” has the meaning set forth in Section 1(d).
“Short-Form Registration Statement” has the meaning set forth in Section 1(a).
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“Subsidiary” means, with respect to the Company, any corporation, limited liability company, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by the Company or one or more of the other Subsidiaries of the Company or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity, a majority of the limited liability company, partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by the Company or one or more Subsidiaries of the Company or a combination thereof. For purposes hereof, a Person or Persons will be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons will be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or will be or control the managing director or general partner of such limited liability company, partnership, association or other business entity.
“Suspension Event” has the meaning set forth in Section 1(f)(ii).
“Suspension Notice” has the meaning set forth in Section 1(f)(ii).
“Suspension Period” has the meaning set forth in Section 1(f)(i).
“Violation” has the meaning set forth in Section 6(a).
“WKSI” means a “well-known seasoned issuer” as defined under Rule 405.
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