REGISTRATION RIGHTS AND LOCK-UP AGREEMENT

 

 

 

                                                                     Exhibit 4.1

 

 

                    REGISTRATION RIGHTS AND LOCK-UP AGREEMENT

                    -----------------------------------------

 

 

                  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   Registrat