WARRANT AGREEMENT
by and between
ARDEN REALTY, INC.
and
AEW/LBA ACQUISITION CO. II, LLC
Dated as of Xxxxx 0, 0000
XXXXX REALTY INC.
THIS WARRANT AGREEMENT (the "Agreement"), dated as of March
2, 1998, is entered into by and among Arden Realty Inc., a
Maryland corporation (the "Company") and AEW/LBA Acquisition Co.
II, LLC, a California limited liability company ("Purchaser").
R E C I T A L S:
A. Pursuant to the terms and conditions of that
certain Agreement for Purchase and Sale of AEW/LBA Portfolio
dated as of December 15, 1997, by and among the Company, as
"Buyer," and the Purchaser and certain additional named parties,
as "Sellers," (the "Purchase Agreement"), the Company desires to
sell to the Purchaser warrants (each, a "Warrant", and
collectively, the "Warrants") to purchase up to an aggregate of
2,500,000 shares of common stock, $.01 par value per share
("Common Shares") (subject to adjustment) of the Company. The
Common Shares issuable upon exercise of the Warrants shall be
referred to as the "Warrant Shares."
B. Pursuant to the terms and conditions of the
Purchase Agreement, the Purchasers desire to purchase the
Warrants.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as
follows:
ARTICLE I
WARRANT CERTIFICATES
Section 1.1 Warrant Certificates. The warrant
certificates representing the Warrants purchased by the Purchaser
(the "Warrant Certificates") shall be issued in registered form
only and, together with the form of the election to purchase (the
"Election to Purchase") and assignment to be attached thereto,
shall be substantially in the form of Exhibit A attached hereto
and, in addition, may have such letters, numbers or other marks
of identification or designation and such legends, summaries, or
endorsements stamped, printed, lithographed or engraved thereon
as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as, in any particular
case, may be required in the opinion of counsel for the Company,
to comply with any law or with any rule or regulation of any
regulatory authority or agency, or to conform to customary usage.
Subject to the rights of exchange set forth in Section 1.4, the
Company shall issue an initial Warrant Certificate to Purchaser
representing the Warrants to purchase the full measure of
2,500,000 Common Shares.
Section 1.2 Execution of Warrant Certificates. The
Warrant Certificates shall be executed on behalf of the Company
by its Chairman or President and attested to by another
authorized officer of the Company, either manually or by
facsimile signature printed thereon. In the event that any
authorized officer of the Company who shall have signed any of
the Warrant Certificates shall cease to be an officer of the
Company either before or after delivery thereof by the Company to
any Purchaser, the signature of such person on such Warrant
Certificates shall be valid nevertheless and such Warrant
Certificates may be issued and delivered to those persons
entitled to receive the Warrants represented thereby with the
same force and effect as though the person who signed such
Warrant Certificates had not ceased to be an officer of the
Company.
Section 1.3 Registration of Warrant Certificates. The
Company shall number and register the Warrant Certificates in a
warrant register maintained by the Company as they are needed.
The Company may deem and treat the registered holder(s) of the
Warrant Certificates (the "Holders") as the absolute owner(s)
thereof for all purposes.
Section 1.4 Exchange and Transfer of Warrant
Certificates. (a) The Warrants (and any Warrant Shares issued
upon exercise of the Warrants) shall bear such restrictive legend
or legends as may be required by this Agreement and as may be
required by law and shall be transferable only in accordance with
the terms of this Agreement. Subject to the foregoing, the
Warrants shall be fully and freely transferable in whole or in
part.
(b) The Company shall from time to time register the
transfer of any outstanding Warrant Certificates in the warrant
register upon surrender thereof accompanied by a written
instrument or instruments of transfer in form reasonably
satisfactory to the Company duly executed by the Holder or
Holders thereof or by the duly appointed legal representative
thereof or by a duly authorized attorney. Upon any such
registration of transfer, the Company shall issue as promptly as
practicable and in any event within seven (7) days after receipt
of such notice of transfer a new Warrant Certificate to the
transferee(s).
(c) At any time and from time to time based upon the
transfer or exercise of fewer than all the Warrants represented
by any Warrant Certificate or otherwise, Warrant Certificates may
be exchanged at the option of the Holder(s) thereof when
surrendered to the Company at the address set forth in Section
4.5 hereof for another Warrant Certificate or Warrant
Certificates of like tenor and representing the right to purchase
in the aggregate a like number of Warrant Shares; provided that
the Company shall not be required to issue any Warrant
Certificate representing any fractional Warrant Shares.
(d) The Company shall pay all expenses, taxes and
other charges payable in connection with the preparation,
issuance and delivery of new Warrant Certificates, including,
without limitation, any transfer or stamp taxes.
(e) The Warrants may not be sold or transferred in
violation of the stock ownership restrictions set forth in the
Company Charter (the "Charter") and any such attempted sale or
transfer shall be subject to the remedies set forth in the
Charter subject to the Holder's rights pursuant to Section 2.4
hereof.
Section 1.5 Lost, Stolen, Mutilated or Destroyed
Warrant Certificates. If any Warrant Certificate shall be
mutilated, lost, stolen or destroyed, the Company shall issue,
execute and deliver, in exchange and substitution for and upon
cancellation of such mutilated Warrant Certificate, or in lieu of
or in substitution for such lost, stolen or destroyed Warrant
Certificate, a new Warrant Certificate representing an equivalent
number of Warrants or Warrant Shares. If required by the
Company, the Holder of the mutilated, lost, stolen or destroyed
Warrant Certificate must provide indemnity reasonably sufficient
to protect the Company from any loss which it may suffer if the
Warrant Certificate is replaced. Any new Warrant Certificate
shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or
destroyed Warrant Certificate shall be at any time enforceable by
anyone.
Section 1.6 Cancellation of Warrant Certificates. Any
Warrant Certificate surrendered upon the exercise of Warrants or
for exchange or transfer, or purchased or otherwise acquired by
the Company, shall be canceled and shall not be reissued by the
Company; and, except as provided in Section 2.6 with respect to
the exercise of fewer than all of the Warrants evidenced by a
Warrant Certificate or in Section 1.4 with respect to an exchange
or transfer, no Warrant Certificate shall be issued hereunder in
lieu of such canceled Warrant Certificate. Any Warrant
Certificate so canceled shall be destroyed by the Company.
ARTICLE II
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
Section 2.1 Exercise Price. Each Warrant Certificate
shall, when duly issued by the Company, entitle the Holder
thereof to purchase from the Company, subject to the terms and
conditions of this Agreement, the number of fully paid and
nonassessable Warrant Shares evidenced thereby at a purchase
price equal to the Exercise Price (as defined below) or such
adjusted number of Warrant Shares at such adjusted purchase price
as may be established from time to time pursuant to the
provisions of Article III hereof, payable in full in accordance
with Section 2.4, at the time of exercise of the Warrant. For
the foregoing purposes, the following meanings shall apply:
(a) "Exercise Price shall refer to $29.56875 per
share of Common Shares. Notwithstanding the foregoing, the
Exercise Price per Common Share shall be increased by an
amount equal to the amount, if any, by which the Market
Value (as defined below) per Common Share as of the Date of
Exercise exceeds the Exercise Price (determined without
reference to such increase) by more than $6.00 per Common
Share. The $6.00 figure shall be referred to as the "Cap
Amount." The Exercise Price determined pursuant to the
initial sentence of this subsection (a) and without
reference to any increase based upon Market Value and the
Cap Amount shall be referred to as the "Basic Exercise
Price."
(b) "Date of Exercise" with respect to any
Warrant means the date on which such Warrant is exercised as
provided in this Agreement.
(c) "Closing Price" for any date shall mean the
last sale price reported in The Wall Street Journal regular
way or, in case no such reported sale takes place on such
date, the average of the last reported bid and asked prices
regular way, in either case on the New York Stock Exchange.
(d) "Trading Days" with respect to the Common
Shares means days on which the New York Stock Exchange is
open for business.
(e) "Market Value" on a per share basis, means
the average of the daily Closing Prices of the Common Shares
for the ten (10) consecutive Trading Days ending on the
Trading Day immediately preceding a Date of Exercise.
Section 2.2 Legend. The Purchaser hereby acknowledges
that the Warrants and Warrant Shares are being and will be issued
and sold in a transaction not involving any public offering
within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), and that the Warrants and Warrant Shares have
not and shall not have been registered under the Securities Act.
Except for any distribution of Warrants to the Distributee (as
defined in Section 2.3) and without prejudice to the Purchaser's
right at all times to sell or otherwise dispose of all or any
part of the Warrants and Warrant Shares pursuant to an effective
registration statement under the Securities Act or under an
exemption from registration available under the Securities Act,
the Purchaser hereby agrees not to offer, sell, transfer or
otherwise dispose of any of the Warrants or Warrant Shares it is
issued pursuant to the Purchase Agreement in the absence of the
registration unless the Purchaser delivers to the Company an
opinion of a lawyer experienced in securities matters and
reasonably satisfactory to the Company in form and substance
reasonably satisfactory to the Company, to the effect that the
proposed sale, transfer or other disposition may be effected
without registration under the Securities Act and under
applicable state securities or "blue sky" laws. The Purchaser
hereby further acknowledges that each certificate representing
the Warrants and Warrant Shares shall bear a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION UNLESS THE COMPANY HAS
BEEN FURNISHED WITH AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT
THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION
MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES OR
"BLUE SKY" LAWS."
Section 2.3 Accredited Investor; Investment Intent.
The following shall be true (i) with respect to the Purchaser and
each Distributee (as defined below) at the time of original
issuance of the Warrants and (ii) with respect to the Holder of
any Warrant upon the exercise of such Warrant with respect to the
issuance of Warrant Shares:
(a) Such person is an "accredited investor" as defined in
Regulation D promulgated under the Securities Act.
(b) The Warrants and/or Warrant Shares acquired or to be
acquired by such person are being sold or will be acquired for
such person's own account for investment only and not with a view
to, or with any present intention of, a distribution or resale
thereof in violation of the Securities Act or state or "blue sky"
laws, without prejudice to such person's right at all times to
sell or otherwise dispose of all or any xxx of the Warrants or
Warrant Shares pursuant to an effective registration statement
under the Securities Act or under an exemption from registration
available under the Securities Act.
"Distributee" shall mean any person who receives Warrants or
Warrant Shares pursuant to a distribution by the Purchaser or a
member of the Purchaser to their respective constituent
shareholders, partners or members.
Section 2.4 Exercise of Warrants. The Warrants may be
exercised prior to the Expiration Date (as hereinafter defined)
at the Exercise Price at any time and from time to time subject
to the limits on ownership of the Company stock set forth in the
Company Charter and the provisions of this Section 2.4. The
Warrants shall expire at 5:00 p.m., New York City time, on March
2, 2001 (the "Expiration Date"). The Warrants may be exercised
by surrendering the Warrant Certificates representing such
Warrants to the Company at its address set forth in Section 4.5,
together with the Election to Purchase duly completed and
executed, accompanied by payment in full, as set forth below, to
the Company of the Exercise Price for each Warrant Share with
respect to which such Warrants are being exercised. Such
Exercise Price shall be paid in full by (i) cash or a certified
check or a wire transfer in same day funds in an amount equal to
the Exercise Price multiplied by the number of Warrant Shares
then being purchased or (ii) delivery to the Company of that
number of Common Shares having a Market Value equal to the
Exercise Price multiplied by the number of Warrant Shares then
being purchased. In the alternative, the Holder of a Warrant
Certificate may exercise its right to purchase some or all of the
Warrant Shares subject to such Warrant Certificate, on a net
basis, such that, without the exchange of any funds, such Holder
receives that number of Warrant Shares subscribed to pursuant to
such Election to Purchase less that number of Common Shares
having an aggregate Market Value on the Exercise Date equal to
the aggregate Exercise Price that would otherwise have been paid
by such Holder for the number of Warrant Shares subscribed to
pursuant to such Election to Purchase (a "Net Cashless
Exercise"). Notwithstanding any other provision of this
Agreement, no Warrant Shares shall be issued in respect of any
exercise of a Warrant by any Holder to the extent that the
ownership or right to acquire Warrant Shares pursuant to such
exercise by such Holder would:
(a) for so long as the Company is in compliance with the
REIT Requirements (as defined below), cause the Company to
violate the REIT Requirements and such Holder shall have no right
under this Agreement or the Warrants to acquire Warrant Shares to
the extent that such acquisition could cause such Holder to
beneficially own (as such term is defined under the Internal
Revenue Code of 1986, as amended (the "Code") for purposes of the
REIT Requirements) Warrant Shares in excess of the Ownership
Limit (as defined below);
(b) otherwise be prohibited under the Company's Amended and
Restates Articles of Incorporation (as amended from time to
time); or
(c) otherwise cause the Company to be in violation of the
REIT Requirements.
To the extent that any attempted exercise of Warrants would be in
violation of this Section 2.4, it shall be null and void ab
initio and, except as otherwise provided in this Section 2.4,
such Holder shall not acquire any interest in any Warrant Shares
otherwise issuable upon such exercise; provided, however, that
(i) at such Holder's request the Company shall be required to pay
in cash to such Holder the value of the Warrant Shares otherwise
issuable upon such exercise based on the higher of (x) the Market
Value with respect to the exercise giving rise to the violation
or (y) the average of the daily Closing Prices of the Common
Shares for the ten (10 ) consecutive Trading Days ending on the
Trading Day immediately preceding the date of payment of such
cash amount, and (ii) if the Holder exercised the right described
in the foregoing clause (i), such Holder's Warrants shall be
deemed to have been canceled to the extent of the right to
acquire the Warrant Shares for which such Holder shall have been
compensated in cash. "Ownership Limited" shall mean 9.8% (in
value or in number of shares, whichever is more restrictive) of
the outstanding Common Shares. "REIT Requirements" shall mean
the requirements for the Company to (i) continue to qualify as a
real estate investment trust under the Code and the rules and
regulations promulgated thereunder and (ii) avoid any federal
income or excise tax liability.
Section 2.5 Issuance of Common Shares. As promptly as
practicable after the Date of Exercise of any Warrants and in any
event within seven (7) days after receipt of the Election to
Purchase, the Company shall issue, or cause its transfer agent to
issue, a certificate or certificates for the number of non-
fractional Warrant Shares (the "Common Share Certificate"),
registered in accordance with the instructions set forth in the
Election to Purchase, together with cash for fractional Warrant
Shares as provided in Section 3.9. All Warrant Shares issued
upon the exercise of any Warrants shall be validly authorized and
issued, fully paid, non-assessable, free of preemptive rights and
free from all taxes, liens, charges and security interests in
respect of the issuance thereof. Each person in whose name any
such Common Share Certificate is issued shall be deemed for all
purposes to have become the holder of record of the Common Shares
represented thereby on the Date of Exercise of the Warrants
resulting in the issuance of such shares, irrespective of the
date of issuance or delivery of such Common Share Certificate.
The Company shall pay all expenses, taxes and other charges
payable in connection with the preparation, issuance and delivery
of new Common Share Certificates, including, without limitation,
any transfer or stamp taxes.
Section 2.6 Certificates for Unexercised Warrants. In
the event that, prior to the Expiration Date, a Warrant
Certificate is exercised with respect to fewer than all of the
Warrant Shares issuable on such exercise a new Warrant
Certificate representing the remaining Warrant Shares shall be
issued and delivered pursuant to the provisions hereof; provided
that the Company shall not be required to issue any Warrant
Certificate representing any fractional Warrant Shares.
Section 2.7 Reservation of Common Shares; Listing.
The Company shall at all times reserve and keep available, free
from preemptive rights, for issuance upon the exercise of
Warrants, the maximum number of its authorized but unissued
shares of Common Shares which may then be issuable upon the
exercise in full of all outstanding Warrants. If the Common
Shares are listed on any U.S. national securities exchange at the
time of any issuance of Warrant Shares, then such maximum number
of Common Shares shall be duly listed thereon.
Section 2.8 No Impairment. The Company shall not by
any action, including, without limitation, amending its articles
of incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of the Warrants
or this Agreement, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights
of the Holders against impairment. Without limiting the
generality of the foregoing, the Company shall obtain all such
authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under the Warrants.
Section 2.9 Restrictions on Transfer of Warrant
Shares. Any Holder or Holders of Warrant Shares shall be
prohibited from the transfer of the Warrant Shares pursuant to
the registration rights set forth in this Agreement during the
limited period commencing on the date of this Agreement and
ending on the earlier to occur of (a) the date thirty-six days
following the Company's completion of financings (i.e., public
offering or a private placement of the Company's equity
securities, debt transactions, joint venture or any combination
of the foregoing) in which the proceeds received by the Company
are adequate to consummate the transactions contemplated by the
Purchase Agreement or (b) the date six months following the date
of this Agreement.
ARTICLE III
ADJUSTMENT PROVISIONS
Section 3.1 Adjustment of Exercise Price. Subject to
the provisions of this Article III, the Exercise Price in effect
from time to time shall be subject to adjustment, as follows:
(a) In the event that the Company shall (i) declare a
dividend or make a distribution on the outstanding Common Shares
in additional Common Shares, (ii) subdivide or reclassify the
outstanding Common Shares into a greater number of shares, or
(iii) combine or reclassify the outstanding Common Shares into a
fewer number of shares, the Exercise Price shall be adjusted and
determined after the record date for such dividend or
distribution or the effective date of such subdivision,
combination or reclassification, as the case may be, as follows:
each of the Basic Exercise Price and the Cap Amount in effect
immediately prior thereto shall be multiplied by a fraction, of
which the numerator shall be the number of Common Shares
outstanding immediately before such dividend, distribution,
subdivision, combination or reclassification, and of which the
denominator shall be the number of Common Shares outstanding
immediately after such dividend, distribution, subdivision,
combination or reclassification. Any Common Shares issuable in
payment of a dividend shall be deemed to have been issued
immediately prior to the record date for such dividend for the
purpose of calculating the number of outstanding Common Shares
under this Section. Such adjustments shall be made successively
whenever any event specified above shall occur.
(b) Upon each adjustment of the Exercise Price
pursuant to subsection (a), each Warrant shall thereupon evidence
the right to purchase that number of Warrant Shares (calculated
to the nearest hundredth of a share) obtained by multiplying the
number of Warrant Shares purchasable immediately prior to such
adjustment upon exercise of the Warrant by a fraction, of which
the numerator shall be the number of Common Shares outstanding
immediately after the dividend, distribution, subdivision,
combination or reclassification, and of which the denominator
shall be the number of Common Shares outstanding immediately
prior such dividend, distribution, subdivision, combination or
reclassification.
(c) In the event of any capital reorganization, other
than in the cases referred to in subsection (a), or the
consolidation or merger of the Company with or into another
corporation (other than a merger or consolidation in which the
Company is the continuing corporation and which does not result
in any reclassification of the outstanding Common Shares or the
conversion of such outstanding Common Shares into shares of other
stock or other securities or property), or the sale or conveyance
of the property of the Company as an entirety or substantially as
an entirety (collectively such actions being hereinafter referred
to as "Reorganizations"), there shall thereafter be deliverable
upon exercise of any Warrant (in lieu of the number of Warrant
Shares theretofore deliverable) the number of shares of stock or
other securities or property to which a holder of the number of
Warrant Shares which would otherwise have been deliverable upon
the exercise of such Warrant would have been entitled upon such
Reorganization if such Warrant had been exercised in full
immediately prior to such Reorganization. In the event of any
Reorganization, appropriate adjustment, as determined in good
faith by the Company's Board of Directors, shall be made in the
application of the provisions herein set forth with respect to
the rights and interests of Holders so that the provisions set
forth herein shall thereafter be applicable, as nearly as
possible, in relation to any shares or other property thereafter
deliverable upon exercise of Warrants. Any such adjustment shall
be made by and set forth in a supplemental agreement prepared by
the Company or any successor thereto, between the Company and any
successor thereto, and shall for all purposes hereof conclusively
be deemed to be an appropriate adjustment. The Company shall not
effect any such Reorganization, unless upon or prior to the
consummation thereof the successor corporation, or if the Company
shall be the surviving corporation in any such Reorganization and
is not the issuer of the shares of stock or other securities or
property to be delivered to holders of Common Shares outstanding
at the effective time thereof, then such issuer, shall assume by
written instrument the obligation to deliver to the Holder of any
Warrant Certificate such shares of stock, securities, cash or
other property as such holder shall be entitled to purchase in
accordance with the foregoing provisions.
Section 3.2 Notice of Certain Actions. In the event
the Company shall (a) declare any dividend payable in stock to
the holders of its Common Shares or make any other distribution
in property other than cash to the holders of its Common Shares,
(b) offer to the holders of its Common Shares rights to subscribe
for or purchase any shares of any class of stock or any other
rights or options, or (c) effect any reclassification of its
Common Shares (other than a reclassification involving merely the
subdivision or combination of outstanding Common Shares) or any
capital reorganization or any consolidation or merger (other than
a merger in which no distribution of securities or other property
is made to holders of Common Shares) or any sale, transfer or
other disposition of its property, assets and business
substantially as an entirety, or the liquidation, dissolution or
winding up of the Company; then, in each such case, the Company
shall exercise good faith efforts to cause notice of such
proposed action to be mailed to each Holder
Section 3.3 Certificate of Adjustments. The Company
shall perform any computations and determine any adjustments
required to be made under this Agreement (including any
computations and adjustments pursuant to Section 2.3(b) and this
Article III) (the "Adjustments") and may cause an independent
public accounting firm selected by the Company to verify each
Adjustment. As promptly as practicable after determining any
Adjustment, the Company shall prepare a certificate executed by
the Chief Financial Officer of the Company setting forth such
Adjustment and mail such certificate to each Holder (an
"Adjustment Notice"). The Adjustment Notice shall include in
reasonable detail (a) the events precipitating the Adjustment,
(b) the computations relating to such Adjustment and (c) the
Exercise Price, Cap Amount and the number of shares or the
securities or other property purchasable upon exercise of each
Warrant after giving effect to such Adjustment. In the event
that the Holders of Warrants entitling such Holders to purchase a
majority of the Warrant Shares subject to purchase upon exercise
of Warrants at the time outstanding (the "Required Interest")
shall disagree with any Adjustment, the Required Interest shall
give notice thereof (the "Dispute Notice") to the Company within
15 days after the Adjustment Notice. Upon receipt of the Dispute
Notice, the Company shall promptly engage a third party
independent public accounting firm acceptable to the Required
Interest to make an independent determination of such disputed
Adjustment (the "Independent Adjustment"). The Independent
Adjustment shall be final and binding on the Company and all
Holders. If the disputed Adjustment and the Independent
Adjustment differ by an amount of 5% or less of the disputed
Adjustment, then the costs of conducting the independent
determination shall be borne equally by the Company and the
Required Interest; if the disputed Adjustment is greater than the
Independent Adjustment by more than 5% of the disputed
Adjustment, then the costs of conducting the independent
determination shall be borne entirely by the Required Interest
(pro rata, in accordance with the number of Warrants held by
each, with each subject Holder severally liable); and if the
Independent Adjustment is greater than the disputed Adjustment by
more than 5% of the disputed Adjustment, then the costs of
conducting the independent determination shall be borne entirely
by the Company; provided that in each case costs separately
incurred by the Company and any Holders shall be separately borne
by them.
Section 3.4 Warrant Certificate Amendments.
Irrespective of any adjustments pursuant to this Article III,
Warrant Certificates theretofore or thereafter issued need not be
amended or replaced, but certificates thereafter issued shall
bear an appropriate legend or other notice of any adjustments;
provided the Company may, at its option, issue new Warrant
Certificates evidencing Warrants in such form as may be approved
by its Board of Directors to reflect any adjustment in the
Exercise Price and number of Warrant Shares purchasable under the
Warrants.
Section 3.5 Fractional Shares. The Company shall not
be required upon the exercise of any Warrant to issue fractional
Warrant Shares which may result from adjustments in accordance
with this Article III to the Exercise Price or number of Warrant
Shares purchasable under each Warrant. If more than one Warrant
is exercised at one time by the same Holder, the number of full
Warrant Shares which shall be issuable upon the exercise thereof
shall be computed based on the aggregate number of Warrant Shares
purchasable upon exercise of such Warrants. With respect to any
final fraction of a share called for upon the exercise of any
Warrant or Warrants, the Company shall pay an amount in cash to
the Holder of the Warrants in respect of such final fraction in
an amount equal to the Market Value of a Common Share as of the
Date of Exercise of such Warrants, multiplied by such fraction.
All calculations under this Section 3.5 shall be made to the
nearest hundredth of a share.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Payment of Taxes and Charges. The Company
will pay all taxes (other than income taxes) and other government
charges in connection with the issuance or delivery or transfer
of the Warrants and the initial issuance or delivery of Warrant
Shares upon the exercise of any Warrants and payment of the
Exercise Price.
Section 4.2 Changes to Agreement. The Company, when
authorized by its Board of Directors, with the written consent of
Holders of 75% of the outstanding Warrants may amend or
supplement this Agreement, except that no amendment which
increases the Exercise Price or reduces the number of Warrant
Shares or otherwise economically impairs the value of the
Warrants shall be enforceable against a Holder who has not
consented in writing to such amendment.
Section 4.3 Assignment. All the covenants and
provisions of this Agreement by or for the benefit of the Company
or the Holders shall bind and inure to the benefit of their
respective successors and assigns.
Section 4.4 Successor to Company. In the event that
the Company merges or consolidates with or into any other
corporation or sells or otherwise transfers its property, assets
and business substantially as an entirety to a successor
corporation or other entity, the Company shall use its best
efforts to have such successor corporation or other entity assume
in writing each and every covenant and condition of this
Agreement to be performed and observed by the Company, and such
successor corporation or other entity shall be deemed, upon the
closing of such merger, consolidation, transfer or sale, to have
so assumed such liabilities whether or not such assumption is
made in writing.
Section 4.5 Notices. Any notice or demand required by
this Agreement to be given or made by any Holder to or on the
Company shall be sufficiently given or made if sent by
first-class or registered mail, postage prepaid, addressed as
follows:
Arden Realty, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
with a copy to: Pircher, Xxxxxxx & Xxxxx
1999 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Any notice or demand required by this Agreement to be given or
made by the Company to or on Purchaser shall be sufficiently
given or made if sent by first-class or registered mail, postage
prepaid, addressed to Purchaser and sent to the address set forth
below (or, if a subsequent Holder, the address of such Holder on
the Company's warrant register):
Spectrum Investments II, L.P.
c/o Xxxxxx-Xxxxxxx & Associates
0000 Xxx Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxxx
and
Eastrich 175, LLC
c/o AEW Capital Management, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx
with a copy to: Heller, Ehrman, White & XxXxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
and a copy to: Orrick, Xxxxxxxxxx & Suttcliffe
000 Xx. Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx
Any notice or demand required by this Agreement to be given or
made by the Company to or on any Holder shall be sufficiently
given or made, whether or not such Holder receives the notice,
five (5) days after mailing, if sent by first-class or registered
mail, postage prepaid, addressed to such Holder at its last
address as shown on the books of the Company. Otherwise, such
notice or demand shall be deemed given when received by the party
entitled thereto.
Section 4.6 Defects in Notice. Failure to file any
certificate or notice or to mail any notice, or any defect in any
certificate or notice pursuant to this Agreement shall not affect
in any way the rights of any Holder or the legality or validity
of any adjustment made pursuant to Section 3.1 or 3.2 hereof.
Section 4.7 Governing Law. This Agreement and each
Warrant Certificate issued hereunder shall be governed by the
laws of the State of California without regard to principles of
conflicts of laws thereof.
Section 4.8 Standing. Nothing in this Agreement
expressed and nothing that may be implied from any of the
provisions hereof is intended, or shall be construed, to confer
upon, or give to, any person or corporation other than the
Company and the Holders any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition,
stipulation, promise or agreement contained herein; and all
covenants, conditions, stipulations, promises and agreements
contained in this Agreement shall be for the sole and exclusive
benefit of the Company and its successors and the Holders.
Section 4.9 Headings. The descriptive headings of the
articles and sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
Section 4.10 Counterparts. This Agreement may be
executed in any number of counterparts, each of which so executed
shall be deemed to be an original, and all of which together
shall constitute one and the same instrument.
Section 4.11 Availability of the Agreement. The
Company shall keep copies of this Agreement available for
inspection by Holders during normal business hours. Copies of
this Agreement may be obtained upon written request addressed to
the Company at the address set forth in Section 4.5.
Section 4.12 Entire Agreement. This Agreement,
including the Exhibits referred to herein and the other
agreements and writings specifically identified herein or
contemplated hereby, is complete, reflects the entire agreement
of the parties with respect to its subject matter, and supersedes
all previous written or oral negotiations, commitments and
writings.
IN WITNESS WHEREOF, the Company and the Purchaser have
executed and delivered this Warrant Agreement as of the date
first written above.
THE COMPANY:
ARDEN REALTY, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: President
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
EXHIBIT A
FORM OF WARRANT CERTIFICATE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR
PURSUANT TO THE SECURITIES OR "BLUE SKY" LAWS OF ANY STATE. SUCH
SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE ASSIGNED, EXCEPT PURSUANT TO (i) A
REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS
EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 OR RULE 144A UNDER SUCH
ACT, (iii) ANY OTHER EXEMPTION FROM REGISTRATION UNDER SUCH ACT
RELATING TO SUCH ACT, OR (iv) IN COMPLIANCE WITH ANY APPLICABLE
STATE OR PROVINCIAL SECURITIES LAWS.
IN ADDITION, ANY SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER
DISPOSITION OF THIS SECURITY IS RESTRICTED BY, AND THE RIGHTS OF
THE HOLDER OF SUCH SECURITY ARE SUBJECT TO THE TERMS AND
CONDITIONS CONTAINED IN, A WARRANT AGREEMENT DATED AS OF MARCH 2,
1998, A COMPLETE AND CORRECT COPY OF THE FORM OF WHICH WILL BE
FURNISHED BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST
AND WITHOUT CHARGE.
FURTHER, ANY SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER
DISPOSITION OF THIS SECURITY IS LIMITED BY THE CHARTER OF THE
ISSUER WHICH CONTAINS LIMITATIONS ON STOCK OWNERSHIP.
No. ___________
Certificate for ________ Warrants
NOT EXERCISABLE AFTER 5:00 P.M.,
NEW YORK CITY TIME, ON XXXXX 0, 0000
XXXXX REALTY INC.
WARRANT CERTIFICATE
THIS CERTIFIES that _______________________________, a
__________________________, or its registered assigns is the
registered holder (the "Registered Holder") of the number of
Warrants set forth above, each of which represents the right to
purchase one fully paid and non-assessable common share (the
"Common Shares"), of Arden Realty Inc., a Maryland (the
"Company"), at the Exercise Price (as defined in and determined
from time to time in accordance with the Warrant Agreement), by
surrendering this Warrant Certificate, with the form of Election
to Purchase attached hereto duly executed and by paying in full
the Exercise Price (the Common Shares issuable upon exercise of
the Warrants being referred to herein as the "Warrant Shares"),
subject to the limits on ownership of the Company Stock set forth
in the Charter Charter subject to the Holder's rights pursuant to
Section 2.4 of the Warrant Agreement. Payment of the Exercise
Price shall be made as set forth in the Warrant Agreement (as
hereinafter defined). No Warrant may be exercised after 5:00
P.M., New York City time, on March 2, 2001 (the "Expiration
Date"). All Warrants evidenced hereby shall thereafter become
void, subject to the terms of the Warrant Agreement hereinafter
referred to.
Prior to the Expiration Date, subject to any applicable
laws, rules or regulations restricting transferability and to any
restriction on transferability that may appear on this Warrant
Certificate or in the Company Charter and in accordance with the
terms of the Warrant Agreement hereinafter referred to, the
Registered Holder shall be entitled to transfer this Warrant
Certificate, in whole or in part, upon surrender of this Warrant
Certificate at the principal office of the Company with the form
of assignment set forth hereon duly executed. Upon any such
transfer, a new Warrant Certificate or Warrant Certificates
representing the same aggregate number of Warrant Shares will be
issued in accordance with instructions in the form of assignment.
Upon the exercise of fewer than all of the Warrants to
purchase the Common Shares evidenced by this Warrant Certificate,
there shall be issued to the Registered Holder a new Warrant
Certificate in respect of the Warrants not exercised.
Prior to the Expiration Date, the Registered Holder shall be
entitled to exchange this Warrant Certificate, with or without
other Warrant Certificates, for another Warrant Certificate or
Warrant Certificates for the same aggregate number of Warrant
Shares, upon surrender of this Warrant Certificate at the
principal office of the Company.
Upon certain events provided for in the Warrant Agreement,
the Exercise Price and the number of Warrant Shares are required
to be adjusted.
No fractional shares will be issued upon the exercise of
Warrants. As to any final fraction of a Common Share which the
Registered Holder of one or more Warrant Certificates, the rights
under which are exercised in the same transaction, would
otherwise be entitled to purchase upon such exercise, the Company
shall pay the cash value thereof determined as provided in the
Warrant Agreement. No Warrant Certificate representing any
fractional Warrant Shares will be issued.
This Warrant Certificate is issued under and in accordance
with the Warrant Agreement dated as of March 2, 1998 (the
"Warrant Agreement") by and among the Company and the Purchaser
(as defined in the Warrant Agreement) and is subject to the term
and provisions contained in the Warrant Agreement. All
capitalized terms not defined herein shall have the meanings
given such terms as set forth in the Warrant Agreement.
This Warrant Certificate shall not entitle the Registered
Holder to any of the rights of a stockholder of the Company,
including, without limitation, the right to vote, to receive
dividends and other distributions, or to attend or receive any
notice of meetings of stockholders or any other proceedings of
the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its facsimile corporate
seal.
ARDEN REALTY, INC.
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
[Seal] Attest:
By:______________________________
Name: Xxxxxx X. Xxxxx
Title: Vice President
[Form of Assignment]
FOR VALUE RECEIVED, the undersigned hereby irrevocably
sells, assigns and transfers unto the Assignee named below all of
the rights of the undersigned represented by the within Warrant
Certificate, with respect to the number of Warrants to purchase
the Common Shares set forth below:
Name of Assignee Address No. of Warrants
and does hereby irrevocably constitute and appoint
_____________________ true and lawful Attorney, to make such
transfer on the books of Arden Realty Inc., maintained for that
purpose, with full power of substitution in the premises.
Dated: __________ ___, _____
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
[Form of Election To Purchase]
The undersigned hereby irrevocably elects to exercise
____________ of the Warrants represented by this Warrant
Certificate and to purchase the Common Shares issuable upon the
exercise of said Warrants, and requests that certificates for
such shares be issued and delivered as follows:
ISSUE TO:
(NAME)
(ADDRESS, INCLUDING ZIP CODE)
(SOCIAL SECURITY OR OTHER IDENTIFICATION NUMBER)
DELIVER TO:
(NAME)
at
(ADDRESS, INCLUDING ZIP CODE)
In full payment of the purchase price with respect to the
exercise of Warrants to purchase Common Shares, the undersigned:
hereby tenders payment of [U.S.$________] by cash,
certified check, cashier's check or money order payable in
United States currency to the order of the Company; or
hereby delivers to the Company that number of
Common Shares having a Market Value (as defined in the
Warrant Agreement) equal to the Exercise Price multiplied
by the number of Warrant Shares being purchased; or
hereby makes a Net Cashless Exercise (as defined
in the Warrant Agreement).
If the number of Warrants to purchase the Common Shares
hereby exercised is fewer than all the Warrants represented by
this Warrant Certificate, the undersigned requests that a new
Warrant Certificate representing the number of such full Warrants
not exercised be issued and delivered as follows:
ISSUE TO:
(NAME)
(ADDRESS, INCLUDING ZIP CODE)
(SOCIAL SECURITY OR OTHER IDENTIFICATION NUMBER)
DELIVER TO:
(NAME)
at
(ADDRESS, INCLUDING ZIP CODE)
Date: __________ ___, ______
______________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
PLEASE INSERT SOCIAL SECURITY OR
TAX I.D. NUMBER OF HOLDER
