Exhibit 4.1
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
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THIS REGISTRATION RIGHTS AND LOCK-UP AGREEMENT (this
"Agreement"), is made and entered into as of January 27, 2004, by and among
Acadia Realty Trust, a Maryland real estate investment trust (the "REIT"),
Acadia Realty Limited Partnership, a Delaware limited partnership (the
"Partnership"), and the undersigned Klaff Realty, LP, a Delaware limited
Partnership ("Klaff"), which, at the Closing (the "Closing Date") of the
transactions contemplated by the Agreement of Contribution by and among Klaff
and Klaff Realty, Limited, the REIT, and the Partnership (the "Contribution
Agreement"), are receiving preferred units of limited partnership interests in
the Partnership ("Preferred Units") which are convertible into common units of
limited partnership interest in the Partnership ("OP Units"), which in turn, are
exchangeable for Conversion Shares (as defined below).
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, and intending to be legally bound hereby, the
REIT, the Partnership and Klaff hereby agree as follows:
1. Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
(a) "Commission" means the Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.
(b) "Conversion Shares" means the Shares issuable
upon exchange of the OP Units from time to time.
(c) "Exchange Act" means the Securities Exchange Act
of 1934, as amended, or any successor federal statute, and the rules and
regulations of the Commission issued under such Exchange Act, as they each may,
from time to time, be in effect.
(d) "Holder(s)" means a holder of Registrable Shares
entitled to the rights arising hereunder.
(e) "Participating Holder" means a Holder whose
Registrable Shares are included in a Registration Statement.
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(f) "Registration Expenses" means the expenses
described in Section 4 hereof.
(g) "Registration Statement" means a registration
statement filed by the REIT with the Commission for a public offering and sale
of equity securities of the REIT (other than a registration statement on Form
S-8 or Form S-4, or their successors, or any registration statement covering
only securities proposed to be issued in exchange for securities or assets of
another corporation).
(h) "Registrable Shares" means (i) the Conversion
Shares, (ii) any other Shares issued in respect of Conversion Shares, and (iii)
any other Shares issued with respect to the Shares issued in clauses (i) and
(ii) (because of share splits, share dividends, reclassifications,
recapitalizations, or similar events); provided, however, that Shares which are
Registrable Shares shall cease to be Registrable Shares (x) upon any sale
pursuant to a Registration Statement, or any other sale or transfer of the
Registrable Shares in any manner to any person or entity other than a Permitted
Transferee (as defined) or as otherwise expressly provided herein, or (y) in the
event that Registrable Shares may be freely sold and/or transferred pursuant to
Rule 144(k) under the Securities Act.
(i) "Securities Act" means the Securities Act of
1933, as amended, or any successor federal statute, and the rules and
regulations of the Commission issued under such Securities Act, as they each
may, from time to time, be in effect.
(j) "Shares" means Common Shares of Beneficial
Interest of the REIT, par value $.001 per share.
2. Certain Shelf Registration. Within ninety (90) days from
the date of this Agreement, the REIT shall, at its expense, file a shelf
Registration Statement pursuant to Rule 415 under the Securities Act to register
the Registrable Shares for resale, including for issuance upon conversion or
exchange of OP Units. The REIT shall, at its expense, use commercially
reasonable efforts to maintain the effectiveness of such shelf Registration
Statement until the earlier of (i) such time as when all of the Registrable
Shares have been disposed of or (ii) three years after the conversion or
exchange into Shares of all of the OP Units issued upon conversion of the
Preferred Units issued under the Contribution Agreement.
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3. Registration Procedures. If and whenever the REIT is
required by the provisions of this Agreement to effect the registration of any
of the Registrable Shares under the Securities Act, the REIT shall, at its
expense:
(a) prepare and file with the Commission a
Registration Statement with respect to such Registrable Shares and use best
efforts to cause that Registration Statement to become effective;
(b) use commercially reasonable efforts to cause the
Registration Statement to remain effective;
(c) subject to the provision of Section 2, promptly
prepare and file with the Commission any amendments and supplements to the
Registration Statement and the prospectus included in the Registration Statement
as may be necessary to keep the Registration Statement effective for the period
of time required by the Commission;
(d) promptly furnish to each Participating Holder
such reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the Participating Holders may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by such Participating Holders and included in the Registration Statement; and
(e) promptly use commercially reasonable efforts to
register or qualify the Registrable Shares covered by the Registration Statement
under the securities or Blue Sky laws of states within the United States as the
Participating Holders shall reasonably request; provided, however, that the REIT
shall not be required in connection with this subsection 3(e) to: (i) qualify as
a foreign corporation in any jurisdiction where, but for the requirements of
this subsection 3(e), it would not be obligated to be so qualified; (ii) execute
a general consent to service of process in any jurisdiction; (iii) subject
itself to taxation in any such jurisdiction; or (iv) register in any state
requiring, as a condition to registration, escrow or surrender of any REIT
securities held by any security holder other than the Participating Holders.
If the REIT has delivered a preliminary or final prospectus to
a Participating Holder and, after having done so,
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the prospectus is amended to comply with the requirements of the Securities Act,
the REIT shall promptly notify such Participating Holder and, if requested, such
Participating Holder shall immediately cease making offers of Registrable Shares
and return all prospectuses to the REIT. The REIT shall promptly provide
Participating Holders with revised prospectuses and, following receipt of the
revised prospectuses, Participating Holders shall be free to resume making
offers of the Registrable Shares.
Notwithstanding any other provisions of this Agreement to the
contrary, upon receipt by a Participating Holder of a written notice signed by
the Chief Executive Officer, General Counsel or Chief Financial Officer of the
REIT, to the effect set forth below, the REIT shall not be obligated during a
reasonable period of time thereafter to effect any registrations pursuant to
this Agreement, and each such Participating Holder agrees that it will
immediately suspend sales of Shares under any effective Registration Statement
for a reasonable period of time, in either case not to exceed 90 days, at any
time during which, in the REIT's reasonable judgment, (i) there is a development
involving the REIT or any of its affiliates which is material but which has not
yet been publicly disclosed or (ii) sales pursuant to the Registration Statement
would materially and adversely affect an underwritten public offering for the
account of the REIT or any other material financing project or where a proposed
or pending material merger or other material acquisition or material business
combination or material disposition of the REIT's assets, to which the REIT or
any of its affiliates is, or is expected to be, a party. In the event a
registration is postponed or sales by a Participating Holder pursuant to an
effective Registration Statement are suspended in accordance with this
paragraph, there shall be added to the period during which the REIT is obligated
to keep a Registration Statement effective the number of days for which the
Registration Statement was postponed or sales were suspended.
4. Expenses of Registration. The REIT will pay all
Registration Expenses of all registrations under this Agreement. For purposes of
this Agreement, the term "Registration Expenses" shall mean all expenses
incurred by the REIT in complying with this Agreement, including without
limitation, all registration and filing fees, exchange listing fees, printing
expenses, the fees and disbursements of counsel for the REIT and the reasonable
fees and disbursements of one counsel selected by the Participating Holders, the
fees and disbursements of the REIT's accountants, state Blue Sky fees and
expenses, and the expense
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of any special audits incident to or required by any such registration, but
excluding underwriting discounts and selling commissions.
5. Indemnification.
(a) Indemnification of Participating Holders. In the
event of any registration of any of the Registrable Shares under the Securities
Act pursuant to this Agreement, the REIT will indemnify and hold harmless each
Participating Holder, each of its directors and officers and each other person,
if any, who controls such Participating Holder within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities to which such Participating Holder or controlling person may become
subject under the Securities Act, the Exchange Act, Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement under
which such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon 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 in which they were made, not misleading;
and the REIT will reimburse such Participating Holder and each such controlling
person for any legal or any other expenses reasonably incurred by such
Participating Holder or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the REIT will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or omission made in such Registration Statement, preliminary
prospectus or prospectus, or any such amendment or supplement, in reliance upon
and in conformity with information furnished to the REIT, in writing, by or on
behalf of any Participating Holder or controlling person specifically for use in
the preparation thereof; and provided further, however, that any indemnification
contained in this paragraph with respect to any preliminary prospectus shall not
inure to the benefit of any person who otherwise is entitled to indemnification
hereunder on account of any loss, liability, claim, damage or expense if a copy
of an amended or supplemental preliminary prospectus, or the final prospectus,
shall have been delivered or sent to such
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person within the time required by the Securities Act, and the untrue statement
or omission of a material fact was corrected in such amended or supplemental
preliminary prospectus or final prospectus and provided that such person did not
deliver such amended or supplemental preliminary prospectus or final prospectus
on a timely basis.
(b) Indemnification of the REIT. In the event of any
registration of any of the Registrable Shares under the Securities Act pursuant
to this Agreement, each Participating Holder will indemnify and hold harmless
the REIT, each of its directors and officers and each person, if any, who
controls the REIT within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to which
the REIT, such directors and officers or controlling persons may become subject
under the Securities Act, Exchange Act, Blue Sky laws or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement under which such
Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained in the Registration Statement, or any
amendment or supplement to the Registration Statement, or arise out of or are
based upon any 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 in which they were made, not misleading, in each case only if such
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the REIT by or on behalf of such
Participating Holder or controlling person, specifically for use in connection
with the preparation of such Registration Statement, prospectus, amendment or
supplement. No Participating Holder shall be liable pursuant to this Section
5(b) for any amount in excess of the proceeds of the offering received by such
Participating Holder.
(c) Notice of Claim. Each party entitled to
indemnification under this Section 5 (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom; provided
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or
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litigation, shall be approved by the Indemnified Party (whose approval shall not
be unreasonably withheld); and, provided, further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 5 unless the failure to
provide such notice materially prejudices the defense by the Indemnifying Party
against such claim. The Indemnified Party may participate in such defense at
such party's expense (provided that the counsel of the Indemnifying Party shall
control the defense of such claim or proceeding); provided, however, that the
Indemnifying Party shall pay such expense if representation of such Indemnified
Party by the counsel retained by the Indemnifying Party would, in the opinion of
counsel of the Indemnified Party, be inappropriate due to actual or potential
differing interests between the Indemnified Party and any other party
represented by such counsel in such proceeding, it being understood, however,
that in such event, the Indemnifying Party shall be liable for the reasonable
fees and expenses of only one counsel for the Indemnified Parties. No
Indemnifying Party, in the defense of any such claim or litigation shall as to
an Indemnified Party, except with the consent of such Indemnified Party, consent
to entry of any judgment or enter into any settlement which 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 of such claim or
litigation, and no Indemnified Party shall consent to entry of any judgment or
settle such claim or litigation without the prior written consent of the
Indemnifying Party.
6. Rule 144. The REIT covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the Commission thereunder (or, if the REIT is
not required to file such reports, it will, upon the request of the holders of
the Registrable Securities, make publicly available such information as
necessary to permit sales pursuant to Rule 144 under the Securities Act) and it
will do all such other acts and things from time to time as reasonably requested
by the holders of the Registrable Securities to the extent required from time to
time to enable the holders of the Registrable Shares to sell Registrable Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereunder adopted
by the Commission.
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7. Cooperation. The Holders shall furnish to the REIT such
information regarding the Holders and the distribution proposed by Participating
Holders as the REIT may from time to time reasonably request in writing, and
shall do such reasonable acts and things as the REIT may from time to time
request, with respect to any registration, qualification or compliance referred
to in this Agreement and in order to permit the REIT to comply with the
requirements of law. Any failure by a Holder to make available such information
or to do such acts and things shall constitute a waiver by such Holder of its
rights to include such Holder's Registrable Shares in any such registration.
8. Restriction on Resale. Unless otherwise agreed by the REIT,
until the date on which there are no Registrable Shares, each Holder agrees that
it will not resell such Registrable Shares without registration under the
Securities Act, compliance with Rule 144 under the Securities Act or an opinion
of counsel for such Holder reasonably acceptable to the REIT, addressed to the
REIT, to the effect that no such registration is required. All reasonable costs,
fees and expenses of counsel in connection with such opinion shall be borne by
the REIT.
9. Lock-Up Agreement. In consideration of the REIT's agreement
to provide the Holders with the registration rights as set forth in this
Agreement, Klaff agrees with the REIT and the Partnership that it will not for a
period of three years commencing on the Closing Date or such lesser period if
permitted pursuant to the Certificate of Designation of Series B Units of even
date herewith (the "Lock-Up Period") (i) sell, assign, or otherwise transfer the
Preferred Units to be issued at the Closing (or the OP Units issuable upon
conversion of the Preferred Units) or (ii) convert any OP Units into Conversion
Shares. Notwithstanding the foregoing, the aforementioned prohibition shall not
apply to (x) conversion to OP Units; (y) a transfer of OP Units (which shall
nonetheless comply with any requirements or conditions to transfer in the
Partnership Agreement of the Partnership) to a Permitted Transferee; or (z) bona
fide pledge of OP Units (provided that the pledgee agrees to be bound by the
terms of this Agreement as if an original signatory thereto). For purposes of
this Section 10, the term "Permitted Transferees" means (i) any partner or other
equity owner of the Partnership or Klaff; (ii) any equity owner of any partner
or other equity owner of the Partnership or Klaff; (iii) members of the
Immediate Family (as defined below) of any person described in (i) or (ii); and
(iv) trusts for the benefit of, or
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entities controlled by, one or more of the persons described in (i), (ii) or
(iii); and/or (v) any public charity, public foundation or charitable
institution as defined in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended. For purposes of this Section 10, the term "Immediate Family"
means, with respect to any natural person, such natural person's spouse,
parents, parents-in-law, descendants, nephews, nieces, brothers, sisters,
brothers-in-law, sisters-in-law and children-in-law (including adopted persons).
A transfer to any Permitted Transferee shall not be deemed effective, and the
REIT may issue stop transfer instructions to its transfer agent of the Shares in
connection with a purported transfer, unless and until the transferor shall give
the REIT written notice stating the name and address of the Permitted Transferee
and identifying the securities which are being transferred and the REIT shall
have received the written agreement of the Permitted Transferee to be bound by
the terms of this Agreement as if an original signatory hereto.
10. Miscellaneous.
(a) Controlling Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
(b) Notices. All notices and other communications
hereunder shall be in writing and shall be sent by certified mail, postage
prepaid, return receipt requested; by an overnight express courier service that
provides written confirmation of delivery; or by facsimile with written
confirmation by the sending machine or with telephone confirmation of receipt,
addressed as follows:
(i) If to REIT or Partnership:
Acadia Realty Trust
1311 Mamaroneck Avenue, Suite 260
White Plains, NY 10605
Attention: Robert Masters, Esq.
Telephone: 914-288-8139
Facsimile: 914-428-3646
Email: rmasters@acadiarealty.com
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(ii) If to Klaff:
Klaff Realty, LP
122 South Michigan Avenue
Chicago, IL 60603
Attention: Hersch M. Klaff
Telephone: 312-360-3102
Facsimile: 312-360-0606
Email: hklaff@klaff.com
With a copy to:
Allan J. Reich, Esq.
Seyfarth Shaw LLP
55 E. Monroe Street, Suite 4200
Chicago, IL 60603
Telephone: 312-781-8650
Facsimile: 312-269-8869
Email: areich@seyfarth.com
Any party may alter the address to which communications or
copies are to be sent by giving notice of such change of address in conformity
with the provisions of this paragraph for the giving of notice. Notices given
hereunder shall be deemed received upon actual receipt thereof or, in the case
of notice by mail, upon two days from the date notice is first deposited in the
mail in the manner provided above
(a) Binding Nature of Agreement. This Agreement shall
be binding upon and inure to the benefit of (i) the REIT and its successors and
assigns and (ii) each Holder and its heirs, successors and assigns.
(b) Transfer or Assignment of Registration Rights.
Subject to Section 10 hereof, the rights with respect to any Registrable Shares
to cause the REIT to register such securities granted to a Holder by the REIT
under this Agreement may be transferred or assigned by a Holder, in whole or in
part, to a transferee or assignee of any Registrable Shares (or any OP Units
which are convertible, exercisable or redeemable, directly or indirectly, for
Registrable Shares); provided that, in such case, the REIT shall be given
written notice stating the name and address of said transferee or assignee and
identifying the securities with respect to which such registration rights are
being transferred or assigned and the REIT shall have received the written
agreement of such transferee or assignee to be bound by the terms of this
Agreement.
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(c) Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears thereon, and all of which
shall together constitute one and the same instrument. This Agreement shall
become binding when one or more counterparts hereof, individually taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.
(d) Provisions Separable. The provisions of this
Agreement are independent of and separable from each other, and no provision
shall be affected or rendered invalid or unenforceable by virtue of the fact
that for any reason any other or others of them may be invalid or unenforceable
in whole or in part.
(e) Entire Agreement. This Agreement contains the
entire understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. This Agreement may not be modified or amended other
than by an agreement in writing.
(f) Paragraph Headings. The paragraph headings in
this Agreement are for convenience only; they form no part of this Agreement and
shall not affect its interpretation.
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IN WITNESS WHEREOF, the parties executed and delivered this
Agreement on the date first above written.
ACADIA REALTY TRUST
By:
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Name: Kenneth F. Bernstein
Title: President
ACADIA REALTY LIMITED PARTNERSHIP
By: Acadia Realty Trust,
its General Partner
By:
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Name: Kenneth F. Bernstein
Title: President
KLAFF REALTY, LP
By: Klaff Realty, Limited
By:
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Name:
Title:
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