REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of the 8th day of May,
1998, is entered into by and among BRANDYWINE REALTY TRUST, a Maryland real
estate investment trust (the "Trust"), BRANDYWINE OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership (the "Partnership"), and Xxxx X. Xxxxxxx, Xx.,
Xxxx X. Xxxxxxx, Xx., Xxxxx X. Xxxxxxx, Xx., Xxxx X. Xxxxxxx, Xxxxxxx X.
Xxxxxxx and Xxxxxx X. Xxxxxxx (collectively, the "Investors").
RECITALS
WHEREAS, the Investors hold ownership interests in certain
properties (the "Properties"). The ownership interests in the Properties will
be contributed to or at the direction of the Partnership in exchange for a
combination of cash and units of limited partnership interest ("Units") in the
Partnership in accordance with the terms of that certain Contribution
Agreement, dated as of April 7, 1998, by and among the Partnership, the
Investors and the other signatories thereto (the "Contribution Agreement");
WHEREAS, pursuant to the Partnership Agreement (as defined
below), the Units will be redeemable for cash or common shares of beneficial
interest, par value $.01 per share, of the Trust (the "Common Shares") upon
the terms and subject to the conditions contained therein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, and for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Definitions. In addition to the definitions set forth above, the
following terms, as used herein, have the following meanings:
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under common control with such
Person. For the purposes of this definition, "control", when used with respect
to any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this Registration Rights Agreement, as it may be
amended, supplemented or restated from time to time.
"Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized by law to
close.
"Commission" means the United States Securities and Exchange
Commission.
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Partnership Agreement" means the Amended and Restated Agreement
of Limited Partnership of the Partnership, dated as of November 18, 1997, as
previously amended and as the same may hereafter be amended, modified or
restated from time to time.
"Person" means an individual or a corporation, partnership,
limited liability company, association, trust, or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Registrable Securities" means any Common Shares issued or
issuable upon redemption of Units issued or issuable pursuant to the
Contribution Agreement; provided that such securities shall cease to
constitute Registrable Securities once: (i) a registration statement covering
such securities has been declared effective by the Commission and such
securities have been sold or transferred pursuant to such effective
registration statement; (ii) such securities may be sold pursuant to Rule
144(k) under the Securities Act; or (iii) such securities are sold pursuant to
Rule 144 under the Securities Act.
"Registration Expenses" means all expenses incident to the Trust's
performance of or compliance with Article 2, including, without limitation,
all registration and filing fees, all listing fees, all fees and expenses of
complying with securities or blue sky laws, and printing expenses, the fees
and disbursements of counsel for the Trust and of the Trust's independent
public accountants, but excluding fees and disbursements of counsel or other
advisors for the Investors and excluding any brokerage discounts or
commissions payable in connection with a sale of Registrable Securities.
"Rule 144" means Rule 144 under the Securities Act, as amended
from time to time (or any successor statute).
"Securities Act" means the Securities Act of 1933, as amended.
2. Registration Rights.
2.1 Registration Requirement.
2.1.1 Registration of Registrable Securities. Within 90 days
after the date hereof, the Trust shall prepare and file with the Commission,
and shall thereafter use its commercially reasonable efforts to cause to
become effective, a "shelf" registration statement under the Securities Act
covering the reoffer and resale of the Registrable Securities by the Investors
in an offering to be made on a continuous basis pursuant to Rule 415 under the
Securities Act.
2.1.2 Registration of Other Securities. Whenever the Trust
shall effect a registration pursuant to this Section 2.1, holders of
securities of the Trust who have
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registration rights may include all or a portion of such securities in such
registration and in the related registration statement.
2.1.3 Registration Statement Form S-3. Registrations under
this Section 2.1 shall only be required to be made on Form S-3, or any
successor form. In the event the Trust is not eligible to use Form S-3 to
register the Registrable Securities, it may delay the filing of the applicable
registration statement until that date on which the Trust is again eligible to
file a Form S-3. The Trust hereby represents and warranties to the Investors
that, as of the date hereof, the Trust is eligible to register the Registrable
Securities on Form S-3 and knows of no event that has occurred or is likely to
occur that will cause it to cease to remain so eligible.
2.1.4 Expenses. The Trust shall pay the Registration Expenses
in connection with the registration effected pursuant to this Section 2.1. If
a registration pursuant to this Section 2.1 is withdrawn or otherwise not
effected, other than at the request of Investors, the Trust shall pay the
Registration Expenses in connection therewith. If the registration is
withdrawn at the request of the Investors and if the Investors elect not to
have such registration count as their registration under this Section 2.1, the
Investors shall pay all the Registration Expenses of such registration, other
than the fees and expenses of counsel to the Trust or of any other holder of
Trust securities participating in the registration (a "Participating Holder").
2.1.5 Effective Registration Statement. A registration
pursuant to this Section 2.1 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has been declared
effective by the Commission or (ii) if after it has become effective, such
registration is interfered with by any stop order, injunction or other order
or requirement of the Commission or other governmental agency or court for any
reason and has not thereafter become effective.
2.1.6 Limitations on Registration.
(i) In no event shall the Trust be required to effect more
than one registration pursuant to this Section 2.1.
(ii) Notwithstanding anything herein, if the Trust
reasonably believes that the filing of a registration statement with the
Commission would adversely affect the contemplated activities of the Trust, then
the Trust may postpone the filing of the applicable registration statement for a
period not in excess of 30 days or, in the event the filing is being postponed
in connection with a proposed underwritten public offering of the Trust's
securities, for such longer period (not to exceed an additional 30 days) as may
be reasonably requested by the managing underwriter for such proposed offering.
(iii) Notwithstanding anything herein, if the filing of a
registration statement pursuant to this Agreement would require the Trust to
include in a filing with the Commission financial statements of probable or
completed acquisitions in order that such registration statement be in
compliance with rules and regulations of the Commission, then
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the Trust may delay the filing of such registration statement until it has
included the requisite financial statements (including any necessary pro forma
financial information) in a filing with the Commission.
2.2 Registration Procedures.
2.2.1 In connection with the registration of any Registrable
Securities under the Securities Act as provided in Section 2.1, the Trust shall
as promptly as practicable (and in any event in compliance with the 90-day time
limit specified in Section 2.1):
(i) prepare and file with the Commission the requisite
registration statement to effect such registration and thereafter use
commercially reasonable efforts to cause such registration statement to become
and remain effective;
(ii) use commercially reasonable efforts to prepare and
file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to
keep such registration statement effective and to comply with provisions of the
Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement until all of such Registrable Securities
have been sold thereunder;
(iii) furnish to the Investors such number of conformed
copies of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed under Rule
424 under the Securities Act, in conformity with the requirements of the
Securities Act, and such number of copies of such other documents as the
Investors may reasonably request;
(iv) use commercially reasonable efforts (x) to register
or qualify all Registrable Securities under such other securities or Blue Sky
laws of such States of the United States of America where an exemption is not
available and as the Investors shall reasonably request, (y) to keep such
registration or qualification in effect for so long as such registration
statement remains in effect, and (z) to take any other action which may
reasonably be necessary or advisable to enable the Investors to consummate the
disposition in such jurisdictions of the Registrable Securities to be sold by
the Investors, except that the Trust shall not for any such purpose be required
to qualify generally to do business as a foreign trust in any jurisdiction
wherein it would not, but for the requirements of this paragraph (iv), be
obligated to be so qualified or to consent to general service of process in any
such jurisdiction;
(v) notify the Investors upon discovery that, or upon the
happening of any event as a result of which, the prospectus included in the
registration statement filed pursuant to this Agreement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the
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statements therein not misleading, in the light of the circumstances under which
they were made, and at the request of the Investors, use its best efforts to
promptly prepare and furnish to the Investors such number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers 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 in the light of the circumstances under which they were made;
(vi) use commercially reasonable efforts to list all
Registrable Securities covered by such registration statement on any national
securities exchange or over-the-counter market, if any, on which Registrable
Securities covered by such registration statement are then listed.
(vii) use commercially reasonable efforts to (i) comply
with all applicable rules and regulations of the Commission and (ii) in
accordance with Section 11(a) of the Securities Act and Rule 158 thereunder,
make available to its securityholders, as soon as reasonable practicable, an
earnings statement covering the period of at least 12 months, but not more than
18 months, beginning with the first quarter after the effective date of the
registration statement covering the Registrable Securities.
The Investors agree that upon receipt of any notice from the
Trust of the happening of an event of the kind described in Section 2.2.1(v),
the Investors shall forthwith discontinue their disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until the Investors' receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2.2.1(v).
2.2.2 The Trust will use commercially reasonable efforts during
the term of this Agreement to (i) file with the Commission such information as
is specified under Rule 144 for so long as there are holders of Registrable
Securities and (ii) take all other action as may be required as a condition to
the availability of Rule 144.
2.3. Holdback Agreements; Information Blackout.
2.3.1 Holdback Agreements. In connection with an underwritten
public offering of securities of the Trust, the Investors agree that, if
required by the underwriter or underwriters, they will not effect any public
sale or distribution, including any sale pursuant to Rule 144 under the
Securities Act, of any Registrable Securities, during the period commencing 10
days prior to the expected commencement of the offering and ending 30 days after
the closing of such offering.
2.3.2 Information Blackout. At any time when a registration
statement effected pursuant to this Section 2 relating to Registrable Securities
is effective, upon written notice from the Trust to the Investors that the Trust
has determined in good faith that sale of Registrable Securities pursuant to the
registration statement would require disclosure by the
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Trust of non-public material information not otherwise required, in the judgment
of the Trust, to be disclosed under applicable law, the Investors shall suspend
sales of Registrable Securities pursuant to such registration statement until
the earlier of (a) 30 days after the Trust makes such good faith determination
and (b) such time as the Trust notifies the Investors that such material
information has been disclosed to the public or has ceased to be material or
that sales pursuant to such registration statement may otherwise be resumed.
2.4 Preparation. In connection with the preparation and filing of
any registration statement under the Securities Act in which the Investors are
selling shareholders, the Trust shall give the Investors not less than 15 days
prior written notice of the preparation of such registration statement and give
the Investors and their counsel and accountants the opportunity to review and
comment on, at the Investors' expense, the applicable portions, relating to the
Investors (including the Selling Shareholder and Plan of Distribution sections),
of the registration statement, each prospectus included therein or filed with
the Commission, and each amendment thereof or supplement thereto (provided that
the Investors shall furnish the Trust with comments on any such amendment or
supplement as promptly as the Trust shall reasonably require).
2.5 Indemnification.
2.5.1 Indemnification by the Trust. In the event of any
registration of any securities of the Trust under the Securities Act in which
the Investors are or may be selling shareholders, the Trust shall, and hereby
does, indemnify and hold harmless, the Investors, insofar as losses, claims,
damages, or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon (a) any untrue
statement or alleged untrue statement of any fact contained in any registration
statement under which such securities were registered under the Securities Act,
any preliminary prospectus, final prospectus, or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a 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, or (b) any violation by the Trust, its trustees, officers,
employees or agents of this Agreement or any law applicable to and in connection
with such registration, and the Trust shall reimburse the Investors for any
legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or proceeding
described in clauses (a) or (b); provided, however, that the Trust shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with information furnished to the Trust by the
Investors. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Investors and shall survive the
transfer of such securities by the Investors.
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2.5.2 Indemnification by the Investors If any Registrable
Securities are included in any registration statement, the Investors shall
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 2.5.1 above) the Trust and each trustee, officer and employee
of the Trust and each Person who controls the Trust within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
information furnished to the Trust by the Investors; provided, however, that an
Investor's obligations hereunder shall be limited to an amount equal to the net
proceeds received by such Investor from the sale of Registrable Securities sold
pursuant to such registration statement.
2.5.3 Notice of Claims, Etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding paragraphs of this Section 2.5,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party, immediately give written notice to the latter of
the commencement of such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 2.5, except to the extent that the indemnifying party is materially
prejudiced by such failure. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that the indemnifying
parties may agree, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party shall not
be liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof other than
reasonable out of pocket costs related to the indemnified party's cooperation
with the indemnifying party, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties arises in respect of such claim after the assumption of the defense
thereof. No indemnifying party shall be liable for any settlement of any action
or proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Consent of the indemnified party
shall be required for the entry of any judgment or to enter into a settlement
only when such judgment or settlement 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 such claim or litigation.
2.5.4 Contribution. If the indemnification provided for in this
Section 2.5 shall for any reason be held by a court to be unavailable to an
indemnified party under Section 2.5.1 or 2.5.2 hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, then, in lieu of
the amount paid or payable under Sections 2.5.1 or 2.5.2
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hereof, the indemnified party and the indemnifying party under Sections 2.5.1 or
2.5.2 hereof shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating the same), (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Trust on one hand and the
Investors on the other or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
the relative fault of the Trust on one hand and the Investors on the other that
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations; provided, however that
no Investor will be required to contribute any amount in excess of the net
offering proceeds received by such Investor with respect to the Registrable
Securities sold by such Investor pursuant to the registration statement. No
Person guilty of fraudulent misrepresentation (within the meaning of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. In addition, no Person shall be
obligated to contribute hereunder any amounts in payment for any settlement of
any action or claim, effected without such Person's written consent, which
consent shall not be unreasonably withheld.
3. Amendments. This Agreement may be modified or amended only with the
written consent of the Trust and holders of a majority of the then outstanding
Units. Except as otherwise specifically provided herein, no delay on the part of
any party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party
hereto of any right, power or privilege hereunder operate as a waiver of any
other right, power or privilege hereunder nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any right, power or privilege
hereunder.
4. Entire Agreement. This Agreement represents the entire understanding
and agreement among the parties hereto with respect to the subject matter hereof
and supersedes all other prior and contemporaneous agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
5. Severability. If any provision of this Agreement, or the application
of such provision to any party or circumstance, shall be held invalid, the
remainder of this Agreement or the application of such provision to other
parties or circumstances, to the extent permitted by law, shall not be affected
thereby; provided, that the parties shall negotiate in good faith with respect
to an equitable modification of the provision or application thereof held to be
invalid.
6. Notices. All notices, requests and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
delivered (i) in person, (ii) by certified mail, return receipt requested, (iii)
by recognized overnight delivery service providing positive tracking of items
(for example, Federal Express), or (iv) by confirmed telecopier, in each case
addressed as follows:
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If to the Trust or the Partnership, addressed to:
c/o Brandywine Realty Trust
Newtown Square Corporate Campus
00 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, President and Chief Executive Officer
Fax: (000) 000-0000
with a copy in each instance to:
Xxxx X. Xxxxxxxx, General Counsel
Brandywine Operating Partnership, L.P.
Newtown Square Corporate Campus
00 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Fax: (000) 000-0000
If to the Investors, addressed to:
c/o Xxxx X. Xxxxxxx, Xx.
P. O. Xxx 0000
Xxxx Xxxx, XX 00000-0000
Fax: (000) 000-0000
and
c/o Xxxxx X. Xxxxxxx, Xx.
P. O. Xxx 0000
Xxxx Xxxx, XX 00000-0000
Fax: (000) 000-0000
with a copy in each instance to:
Xxxx X. Xxxxxxxx, Esquire
Xxxxxxxx Ingersoll
00 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
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or to such other address or addresses and to the attention of such other person
or persons as any of the parties may notify the other in accordance with the
provisions of this Agreement. All such notices, requests and other
communications shall be deemed to have been sufficiently given for all purposes
hereof only if given pursuant to the foregoing requirements as to both manner
and address, and only upon receipt (or refusal to accept delivery) by the party
to whom such notice is sent. Notices by the parties may be given on their behalf
by their respective attorneys.
7. Successors and Assigns. This Agreement shall inure to the benefit of
and shall be binding upon the Trust and its successors and permitted assigns. At
any time prior to the initial effectiveness of a registration pursuant to
Section 2.1, the rights to register securities granted by the Trust under this
Agreement may be assigned by any Investor, provided that (a) any assignee or
transferee of the Registrable Shares (i) acquires at least 10% of the number of
Registrable Shares that such Investor holds, and (ii)(A) is not a competitor of
the Trust, or (B) is a corporation or general or limited partnership controlled
by the Investor, a member of the Investor's immediate family or an irrevocable
trust established by the Investor on behalf of any one of the foregoing or for
the Investor for estate planning purposes or other purposes; (b) such transfer
may otherwise be and is effected in accordance with applicable securities laws;
and (c) such assignee or transferee agrees in writing to be bound by all of the
provisions of this Agreement. In the event of any transfer of rights in
accordance with this Section 7, the transferee shall have all of the rights and
obligations of an Investor under the terms of this Agreement.
8. Counterparts. This Agreement may be executed in counterparts, each
of which for all purposes shall be deemed to be an original and all of which
together shall constitute the same agreement.
9. Headings. The Section headings in this Agreement are for convenience
of reference only, and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.
10. Construction. This Agreement shall be governed, construed and
enforced in accordance with the laws of the Commonwealth of Pennsylvania without
regard to its principles of conflict of laws.
11. Recapitalizations, etc. In the event that any shares of beneficial
interest or other securities are issued in respect of, in exchange for, or in
substitution of, any Registrable Securities by reason of any reorganization,
recapitalization, reclassification, merger, consolidation, spin-off, partial or
complete liquidation, share dividend, split-up, sale of assets, distribution to
shareholders or combination of the shares of Registrable Securities or any other
similar change in the Trust's capital structure, appropriate adjustments shall
be made in this Agreement so as to fairly and equitably preserve, as far as
practicable, the original rights and obligations of the parties hereto under
this Agreement.
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12. Term. This Agreement shall continue in full force and effect until
the earlier of (i) six (6) years after the date hereof and (ii) the first date
on which the Investors may sell all of the Registrable Securities held by them
pursuant to Rule 144(k) under the Securities Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date first above written and delivered by their respective duly
authorized officers.
/s/ Xxxx X. Xxxxxxx, Xx.
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Xxxx X. Xxxxxxx, Xx.
/s/Xxxx X. Xxxxxxx, Xx.
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Xxxx X. Xxxxxxx, Xx.
/s/Xxxxx X. Xxxxxxx, Xx.
------------------------------------
Xxxxx X. Xxxxxxx, Xx.
/s/Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
/s/Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
/s/Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
BRANDYWINE OPERATING
PARTNERSHIP, L.P.
By: BRANDYWINE REALTY
TRUST, its sole general partner
By: /s/Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President & CEO
BRANDYWINE REALTY TRUST
By: /s/Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President & CEO
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