Exhibit 10.2
STORAGE USA, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of November 12,1998, by and between Storage USA, Inc., a
Tennessee corporation (the "Company"), and Greene Street 1998 Exchange Fund,
L.P., a Delaware limited partnership (the "Purchaser").
This Agreement is made pursuant to the Private Placement Purchase
Agreement (the "Purchase Agreement"), dated November 12, 1998, between the
Company and the Purchaser and the Second Amended and Restated Agreement of
Limited Partnership and Amendment Nos. 1, 2, 3 and 4 thereto (collectively, the
"Partnership Agreement"). In order to induce the Purchaser to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
provided for in this Agreement to the Purchaser and its respective direct and
indirect transferees. The execution of this Agreement is a condition to the
closing of the transactions contemplated by the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the following
meanings:
Affiliate: (i) Any person directly or indirectly owning, controlling,
or holding, with power to vote ten percent or more of the outstanding voting
securities of such other person, (ii) any person ten percent or more of whose
outstanding voting securities are directly or indirectly owned, controlled, or
held, with power to vote, by such other person, (iii) any person directly or
indirectly controlling, controlled by, or under common control with such other
person, (iv) any executive officer, director, trustee or general partner of such
other person, and (v) any legal entity for which such person acts as an
executive officer, director, trustee or general partner. An indirect
relationship shall include circumstances in which a person's spouse, children,
parents, siblings or mothers-, fathers-, sisters or brothers-in-law is or has
been associated with a person.
Agreement: This Registration Rights Agreement, as the same may be
amended, supplemented or modified from time to time in accordance with the terms
hereof.
Business Day: With respect to any act to be performed hereunder, any
day, other than a Saturday or Sunday, that is neither a legal holiday nor a day
on which banking institutions in New York City, New York are authorized or
required by law, regulation or executive order to close.
Closing Date: November 12, 1998
Commission: The Securities and Exchange Commission.
Company: Storage USA, Inc., a Tennessee corporation, and any successor
corporation thereto.
Controlling person: As defined in Section 5(a) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the Commission pursuant thereto.
Form S-3. Such form under the Securities Act as is in effect on the
date hereof or any successor registration form under the Securities Act
subsequently adopted by the Commission that permits inclusion or incorporation
of substantial information by reference to other documents filed by the Company
with the Commission.
Holder: Each holder of any Registrable Shares.
Indemnified Party: As defined in Section 5(a) hereof.
Person: An individual, partnership, corporation, trust, unincorporated
organization, government or agency or political subdivision thereof, or any
other legal entity.
Proceeding: An action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or, to the knowledge of the person subject thereto,
threatened.
Prospectus: The prospectus included in any Registration Statement,
including any preliminary prospectus, and all other amendments and supplements
to any such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such prospectus.
Purchase Agreement: The Purchase Agreement is as defined in the
preamble.
Purchaser: Greene Street 1998 Exchange Fund, L.P.
Register, registered and registration: Such terms shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
Registrable Shares: Each of the Shares until (i) the date on which it
has been registered effectively pursuant to the Securities Act and disposed of
in accordance with a Registration Statement relating to it, (ii) the date on
which it is sold pursuant to Rule 144 (or any similar provisions then in
effect), (iii) the date on which it can be sold without restriction, pursuant to
an available exemption from registration under the Securities Act, or (iv) the
date on which it is sold to the Company.
Registration Statement: Any registration statement of the Company that
covers the resale of any of the Registrable Shares pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.
Rule 144: Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Rule 144A: Rule 144A promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Rule 424: Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the Commission thereunder.
Series A Preferred Stock: The 8 7/8% Series A Cumulative Redeemable
Preferred Stock of the Company.
Shares: The shares of Series A Preferred Stock being offered and sold
pursuant to the Purchase Agreement.
Underwritten Offering: A sale of securities of the Company to an
underwriter or underwriters pursuant to a Registration Statement for reoffering
to the public.
2. Registration
If the Company shall receive from the Holders of at least twenty-five
(25) percent of all outstanding Registrable Shares a written request or requests
that the Company effect a registration covering the resale of the Registrable
Shares and any related qualification or compliance under applicable state
securities or "Blue Sky" laws with respect to all or a part of the Registrable
Shares owned by such Holders, which, at the option of the Holders of a majority
of the Registrable Shares requested to be registered, may be a "shelf" offering
pursuant to Rule 415 under the Securities Act, then the Company will:
(a) Notice. Promptly give written notice of the proposed registration
and the Holders' request therefor, and any related qualification or compliance,
to all other Holders of Registrable Shares; and
(b) Registration. As soon as practicable, use commercially reasonable
efforts to effect such registration and all such qualifications and compliances
as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Holders' Registrable Shares as are
specified in such request, together with all or such portion of the Registrable
Shares of any other Holders joining in such request as are specified in a
written request given within twenty (20) days after receipt of such written
notice from the Company; provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance pursuant
to this Section 2:
(i) if the Holders, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Shares and such other securities (if any) at an
aggregate price to the public of less than $2,500,000;
(ii) if the Company shall furnish to the Holders a
certificate signed by the President or Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, that such registration and sale would (a) require disclosure of a
previously undisclosed material development involving the Company which
disclosure would have a material adverse effect on the Company or its prospects
or (b) materially interfere with any financing, acquisition, corporate
reorganization or other material transaction involving the Company then under
consideration, then the Company shall have the right to defer the filing of such
registration statement for a period of not more than 120 days after receipt of
the request of the Holders under this Section 2;
(iii) in any particular jurisdiction in which the
Company would be required to qualify to do business as a foreign corporation or
to execute a general consent to service of process in effecting such
registration, qualification, or compliance, unless the Company is already
subject to service or required to be so qualified in such jurisdiction and
except as may be required by the Securities Act; or
(iv) if within 14 days after its receipt of a written
request to effect such registration, the Company causes to be delivered to the
Holders an opinion of counsel reasonably acceptable to the Holders to the effect
that the proposed disposition of Registrable Shares by the Holders will not
require registration under the Securities Act, it being specifically understood
and agreed that the Holders will promptly furnish to the Company and such
counsel all information such counsel may reasonably request in order to enable
such counsel to determine whether it would be able to render such opinion.
(c) Expenses. The Company shall pay all expenses incurred in connection
with the registration contemplated by this Section 2, (excluding underwriters'
or brokers' discounts and commissions), including, without limitation, all
filing, registration and qualification, printers' and accounting fees and the
fees and disbursements of counsel for the Company.
(d) One Registration. The Company shall not be obligated to effect more
than one registration hereunder.
3. Registration Procedures. In connection with the obligations of the Company
with respect to any registration pursuant to this Agreement, the Company shall
use commercially reasonable efforts to effect or cause to be effected the
registration of the Registrable Shares under the Securities Act to permit the
sale of such Registrable Shares by the Holder or Holders in accordance with the
Holders' intended method or methods of distribution, and the Company shall:
(a) prepare and file with the Commission, as specified in this
Agreement, a Registration Statement, which Registration Statement shall comply
as to form in all material respects with the requirements of the applicable form
and include all financial statements required by the Commission to be filed
therewith, and use its reasonable best efforts to cause such Registration
Statement to become effective and remain effective for two years or until all
such Registrable Shares have been sold;
(b) subject to Section 3(i) hereof, prepare and file with the
Commission such amendments and post-effective amendments to each such
Registration Statement as may be necessary to keep such Registration Statement
effective for the applicable period; cause each such Prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 or any similar rule that may be adopted under the
Securities Act; and comply with the provisions of the Securities Act applicable
to the Company with respect to such Registration Statement during the applicable
period;
(c) furnish to the Holder of Registrable Shares without charge as many
copies of each Prospectus, including each preliminary Prospectus, and any
amendment or supplement thereto and such other documents as such Holder may
reasonably request, in order to facilitate the public sale or other disposition
of the Registrable Shares;
(d) use commercially reasonable efforts to register or qualify, or
obtain an exemption from registration or qualification for, all Registrable
Shares by the time the applicable Registration Statement is declared effective
by the Commission under all applicable state securities or "blue sky" laws of
such jurisdictions as the Holder of Registrable Shares covered by a Registration
Statement shall reasonably request in writing, keep each such registration or
qualification or exemption effective during the period such Registration
Statement is required to be kept effective and do any and all other acts and
things that may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in each such jurisdiction of such Registrable Shares
owned by such Holder; provided, however, that the Company shall not be required
to (i) qualify generally to do business in any jurisdiction or to register as a
broker or dealer in such jurisdiction where it would not otherwise be required
to qualify but for this Section 3(d), (ii) subject itself to taxation in any
such jurisdiction or (iii) submit to the general service of process in any such
jurisdiction; provided, further, that if the Company fails to list the
Registrable Shares on a national stock exchange or qualify for quotation on an
automatic quotation system at or prior to the time the Registration Statement is
declared effective by the Commission because it fails to meet requirements for
such listing or quotation regarding the number of holders, the obligation in
this Section 3(d) shall not require the Company to register or qualify the
Registrable Shares in any jurisdiction where the Company reasonably concludes,
based upon the advice of securities counsel, that such registration or
qualification would require unreasonable effort (including, without limitation,
amendments to the Company's charter or bylaws) or expense;
(e) notify the Holder of Registrable Shares promptly and, if requested
by such Holder, confirm such advice in writing (i) when a Registration Statement
has become effective and when any post-effective amendments and supplements
thereto become effective, (ii) of the issuance by the Commission or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
and (iii) of the happening of any event during the period a Registration
Statement is effective as a result of which such Registration Statement or the
related Prospectus 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, and (iv) at the written request of any such
Holder, promptly to furnish to such Holder a reasonable number of copies of a
supplement to or an amendment of such Prospectus as may be necessary so that, as
thereafter delivered to the purchaser 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;
(f) upon written request, furnish to the Holder of Registrable Shares
copies of any request by the Commission or any state securities authority for
amendments or supplements to a Registration Statement and Prospectus or for
additional information;
(g) make every commercially reasonable effort to avoid the issuance of,
or if issued to obtain the withdrawal of, any enjoining order suspending the use
or effectiveness of a Registration Statement or the lifting of any suspension of
the qualification (or exemption from qualification) of any of the Registrable
Shares for sale in any jurisdiction, at the earliest possible moment;
(h) upon written request, furnish to the Holder of Registrable Shares,
without charge, at least one conformed copy of each Registration Statement and
any post-effective amendment thereto (without documents incorporated therein by
reference or exhibits thereto, unless requested);
(i) upon the occurrence of any event contemplated by Section 3(e)(iii)
hereof, use commercially reasonable efforts to prepare a supplement or
post-effective amendment to a Registration Statement or the related Prospectus
or any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the Registrable
Shares, such Prospectus will not contain any 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, in the light of the circumstances under which they
were made, not misleading;
(j) If requested by the representative of the underwriters, if any, or
any Holders of Registrable Shares being sold in connection with such offering,
(i) promptly incorporate in a prospectus supplement or post-effective amendment
such information as the representative of the underwriters, if any, or such
Holders indicate relates to them or otherwise reasonably request be included
therein, and (ii) make all required filings of such prospectus supplement or
such post-effective amendment as soon as practicable after the Company has
received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment; provided, however, that the Company
shall not be required to take any action pursuant to this Section 3 that would,
in the opinion of counsel for the Company, violate applicable law;
(k) make available for inspection by representatives of the Holder of
the Registrable Shares and the representative of any underwriters participating
in any disposition pursuant to a Registration Statement and any special counsel
or accountant retained by such Holders or underwriters, all financial and other
records, pertinent corporate documents and properties of the Company and cause
the respective officers, directors and employees of the Company to supply all
information reasonably requested by any such representatives, the representative
of the underwriters, the special counsel or accountants in connection with a
Registration Statement; provided, however, that such records, documents or
information that the Company determines, in good faith, to be confidential and
notifies such representatives, representative of the underwriters, special
counsel or accountants are confidential shall not be disclosed by the
representatives, representative of the underwriters, special counsel or
accountants unless (i) the disclosure of such records, documents or information
is necessary to avoid or correct a misstatement or omission in a Registration
Statement, (ii) the release of such records, documents or information is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction, or
(iii) such records, documents or information have been generally made available
to the public;
(l) otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission and make generally available
to its securityholders, as soon as reasonably practicable, earnings statements
covering at least 12 months that satisfy the provisions of Section 1l(a) of the
Securities Act and Rule 158 (or any similar rule promulgated under the
Securities Act) thereunder;
(m) provide and cause to be maintained a transfer agent for all
Registrable Shares covered by any Registration Statement from and after a date
not later than the effective date of such Registration Statement; and
(n) in connection with any sale or transfer of Registrable Shares that
will result in such securities no longer being Registrable Shares, cooperate
with the Holders and the representative of the underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing the
Registrable Shares to be sold, which certificates shall not bear any restrictive
legends, and to cause the issuance of certificates representing such Registrable
Shares in such denominations and registered in such names as the representative
of the underwriters, if any, or Holders may request at least two Business Days
prior to any sale of the Registrable Shares.
In addition, the Company may require the Holder of Registrable
Shares to furnish to the Company such information regarding the proposed
distribution by such Holder of such Registrable Shares as the Company may from
time to time reasonably request in writing or as shall be required to effect the
registration of their Registrable Shares.
The Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(e)(iii)
hereof, such Holder will immediately discontinue disposition of Registrable
Shares pursuant to a Registration Statement until such Holder's receipt of the
copies of the supplemented or amended Prospectus. If so directed by the Company,
such 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 Holder's
possession, of the Prospectus covering such Registrable Shares current at the
time of receipt of such notice.
4. Black-Out Period.
(a) Following the effectiveness of a Registration Statement (and the
filings with any state securities commissions), the Company may direct the
Holder to suspend sales of the Registrable Shares for such times as the Company
reasonably may determine are necessary and advisable, including upon the
occurrence of any of the following events: (i) an Underwritten Offering by the
Company where the Company is advised by the managing underwriter(s) for such
Underwritten Offering that sale of Registrable Shares under the Registration
Statement would have a material adverse effect on the offering, or (ii) pending
negotiations relating to, or consummation of, a transaction or the occurrence of
an event (x) that would require additional disclosure of material information by
the Company in the Registration Statement (or such filings), (y) as to which the
Company has a bona fide business purpose for preserving confidentiality, or (z)
that renders the Company unable to comply with Commission requirements, in each
case under circumstances that would make it impractical or inadvisable to cause
the Registration Statement (or such filings) to become effective or to promptly
amend or supplement the Registration Statement on a post-effective basis, as
applicable (a "Suspension Event"); provided, however that any such Suspension
Event shall not exceed 120 days during any 12 month period.
(b) In the case of a Suspension Event, the Company shall give written
notice (a "Suspension Notice") to the Holders to suspend sales of the
Registrable Shares so that the Company may correct or update the Registration
Statement (or such filings); provided, however, that such suspension shall
continue only for so long as the Suspension Event or its effect is continuing.
No Holder shall effect any sales of the Registrable Shares pursuant to such
Registration Statement (or such filings) at any time after it has received a
Suspension Notice from the Company. If so directed by the Company, the Holders
will deliver to the Company all copies of the Prospectus covering the
Registrable Shares held by them at the time of receipt of the Suspension Notice.
The Holders may recommence effecting sales of the Registrable Shares pursuant to
the Registration Statement (or such filings) following further notice to such
effect (an "End of Suspension Notice") from the Company, which End of Suspension
Notice shall be given by the Company promptly following the conclusion of any
Suspension Event.
5. Indemnification and Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless (i) the Purchaser, (ii) each Holder of the Registrable Shares,
(iii) each person, if any, who controls (within the meaning of the Securities
Act or the Exchange Act) any of the foregoing (any of the persons referred to in
this clause (iii) being hereinafter referred to as a "controlling person"), and
(iv) the respective officers, directors, partners, employees, representatives
and agents of the Purchaser, each Holder of the Registrable Shares, or any
controlling person thereof (any person referred to in clause (i), (ii), (iii) or
(iv) may hereinafter be referred to as an "Indemnified Party"), as follows:
(i) from and against any and all loss, claim, liability,
damage and expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Registrable Shares were
registered under the Securities Act including all documents incorporated therein
by reference, or the omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading or arising
out of any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto), including
all documents incorporated therein by reference; provided, however, that such
indemnity with respect to any Prospectus shall not inure to the benefit of the
Holder (or any controlling person thereof) to the extent that any such loss,
claim, liability, damage or expense arises out of such Holder's failure to send
or give a copy of the final Prospectus, as the same may be then supplemented or
amended, to the person asserting an untrue statement or alleged untrue statement
or omission or alleged omission at or prior to the written confirmation of the
sale of Registrable Shares to such person if such statement or omission was
corrected in such final Prospectus.
(ii) from and 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 omission, if, and only if,
such settlement is effected with the written consent of the Company (which
consent shall not be unreasonably withheld); and
(iii) from and against any and all expense whatsoever, as
incurred (including reasonable fees and disbursements of one counsel, except as
otherwise provided in Section 5(c) hereof), 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
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement does not apply to the Holder
with respect to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written information
furnished to the Company by such Holder expressly for use in a Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto).
(b) Indemnification by Holders. Each Holder severally agrees to
indemnify and hold harmless the Company, each of its directors and officers
(including each officer of the Company who signed the Registration Statement),
each person, if any, who controls the Company, within the meaning of the
Securities Act and the Exchange Act, any underwriter and any Holder selling
securities under such Registration Statement or any of such other Holder's
partners, directors or officers or any person who controls such Holder within
the meaning of the Securities Act or the Exchange Act, against any and all loss,
liability, claim, damage and expenses described in the indemnity contained in
Section 5(a) hereof (provided, however, that any settlement described in Section
5(a)(ii) hereof is effected with the written consent of such Holder, which
consent shall not be unreasonably withheld), as incurred, but only with respect
to such untrue statement or omission, or alleged untrue statements or omissions,
made in a Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by the Holder expressly for use in
such Registration Statement (or any amendment thereto) or such Prospectus (or
any amendment or supplement thereto).
(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 shall not relieve it
from any liability that it may have under this indemnity agreement except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. If the indemnifying party so elects within a reasonable time after
receipt of such notice, the indemnifying party may assume the defense of such
action or proceeding at such indemnifying party's own expense with counsel
chosen by the indemnifying party and approved by the Indemnified Party or
parties in such action or proceeding, which approval shall not be unreasonably
withheld; provided, however, that if such Indemnified Party or parties
reasonably determines that a conflict of interest exists where it is advisable
for such Indemnified Party or parties to be represented by separate counsel or
that, upon advice of counsel, there may be legal defenses available to them that
are different from or in addition to those available to the indemnifying party,
then the indemnifying party shall not be entitled to assume such defense and the
Indemnified Party or parties shall be entitled to one separate counsel at the
indemnifying party's expense. If an indemnifying party is not entitled to assume
the defense of such action or proceeding as a result of the proviso to the
preceding sentence, such indemnifying party's counsel shall be entitled to
conduct such indemnifying party's defense, and counsel for the Indemnified Party
or parties shall be entitled to conduct the defense of such Indemnified Party or
parties, it being understood that both such counsel will cooperate with each
other to conduct the defense of such action or proceeding as efficiently as
possible. If an indemnifying party is not so entitled to assume the defense of
such action or does not assume such defense, after having received the notice
referred to in the first sentence of this paragraph, the indemnifying party or
parties will pay the reasonable fees and expenses counsel for the Indemnified
Party or parties. In such event, however, no indemnifying party will be liable
for any settlement effected without the written consent of such indemnifying
party. No indemnifying party shall, without the consent of the Indemnified
Party, consent to entry of any judgment or enter into a 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 an indemnifying party is entitled to assume, and
assumes, the defense of such action or proceeding in accordance with this
paragraph, such indemnifying party shall not be liable for any fees and expenses
for counsel for the Indemnified Parties incurred thereafter in connection with
such action or proceeding.
(d) Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this Section 5 is for any reason held to be unenforceable, unavailable or
insufficient although applicable in accordance with its terms, the Company and
Holder 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 Holder in such proportion as is appropriate to reflect the
relative fault of the indemnifiying party and the Indemnified Party, as well as
any other relevant equitable considerations. The relative fault of the
indemnifying party and the Indemnified Party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact related
to information supplied by the indemnifying party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such 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 is not guilty of such fraudulent misrepresentation. For purposes of this
Section 5, each person, if any, who controls a Holder within the meaning of
Section 15 of the Securities Act 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. Each party entitled to contribution
agrees that upon the service of a summons or other initial legal process upon it
in any action instituted against it in respect of which contribution may be
sought, it shall promptly give written notice of such service to the party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties of any such service shall not relieve the party from whom
contribution may be sought from any obligation it may have hereunder or
otherwise.
(e) Survival. The obligations of the Company and the Holders under this
Section 5 shall survive the completion of any offering of Registrable Shares in
a Registration Statement and otherwise.
6. Termination of the Company's Obligations. The Company shall have no
obligations pursuant to this Agreement with respect to any Registrable Shares
proposed to be sold by a Holder in a registration pursuant to this Agreement if,
in the opinion of counsel to the Company, all such Registrable Shares proposed
to be sold by a Holder may be sold in a three-month period without registration
under the Securities Act pursuant to Rule 144 under the Securities Act.
7. Miscellaneous
(a) Remedies. In the event of a breach by the Company, or by a Holder
of the Registrable Shares, of any of their obligations under this Agreement,
each Holder of the Registrable Shares of the Company, in addition to being
entitled to exercise all rights granted by law, including recovery and damages,
will be entitled to specific performance of its rights under this Agreement;
provided, however, that no Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, except if the written consent of the Holders of a majority in aggregate
principal amount of the then outstanding Registrable Shares is obtained;
provided, however, that for the purposes of this Agreement, Registrable Shares
that are owned, directly or indirectly, by either the Company or an Affiliate of
the Company are not deemed outstanding. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of the Registrable Shares whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders of the Registrable
Shares may be given by Holders of a majority of the Registrable Shares being
sold by such Holders pursuant to such Registration Statement; provided, however,
that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
(c) Notices. All notices and other communications provided for herein
shall be made in writing by hand-delivery, next-day air courier, certified
first-class mail, return receipt requested, telex or telecopy;
(i) if to the Company, to Storage USA, Inc., 165
Madison Avenue, Suite 125, Memphis, Tennessee 38103, Attention: General Counsel;
(ii) if to the Purchaser, to Greene Street 1998
Exchange Fund, L.P., c/o Goldman Sachs & Co., One New York Plaza, New York, New
York 10004, Attention: Elizabeth Groves;
(iii) if to any other person who is then the
registered Holder of any Registrable Shares, to the address of such Holder as it
appears in the Common Stock register of the Company.
Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given (v) when delivered by hand, if
personally delivered, (w) one Business Day after being timely delivered to a
next-day air courier, (x) five Business Days after being deposited in the mail,
postage prepaid, if mailed, (y) when answered back, if telexed, or (z) when
receipt is acknowledged by the recipient's telecopier machine, if telecopied.
(d) Successors and Assigns. Notwithstanding anything herein to the
contrary, the registration rights of a Holder hereunder may be assigned only to
a party who acquires at least 100,000 Registrable Shares; provided, however,
that no party may be assigned any of the foregoing rights unless the Company is
given written notice by the assigning party at the time of such assignment
stating the name and address of the assignee and identifying the Shares as to
which the rights in question are being assigned; and provided, further that any
such assignee shall receive such assigned rights subject to all the terms and
conditions of this Agreement, including, without limitation, the provisions of
this Section 7(d).
(e) 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.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee, as applied to contracts made
and performed within the State of Tennessee without regard to principles of
conflicts of law.
(g) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the terms of this
Agreement. All references made in this Agreement to "Section" refer to such
Section of this Agreement, unless expressly stated otherwise.
(i) Costs and Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover its reasonable costs and attorneys' fees in
addition to any other available remedy.
(j) Adjustment for Stock Splits, etc. Wherever in this Agreement there
is a reference to a specific number of shares, then upon the occurrence of any
subdivision, combination, or stock dividend of such shares, the specific number
of shares so referenced in this Agreement shall automatically be proportionally
adjusted to reflect the affect on the outstanding shares of such class or series
of stock by such subdivision, combination, or stock dividend.
(k) Aggregation of Stock. All shares held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, the parties have caused this Registration
Rights Agreement to be duly executed as of the date first written above.
THE COMPANY: STORAGE USA, INC.
By: /s/ Christopher P. Marr
Name: Christopher P. Marr
Title: Chief Financial Officer
THE PURCHASER: GREENE STREET 1998 EXCHANGE FUND L.P.
By: Goldman Sachs Management Partners,
L.P., General Partner
By: /s/ Elizabeth C. Groves
Name: Elizabeth C. Groves
Title: Vice President