EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of June 27, 2003,
is entered into by and among Xxxxxxx Properties, Inc., a Maryland corporation
(the "Company"), Xxxxxxx Properties, L.P., a Maryland limited partnership (the
"Operating Partnership"), and the unit holders whose names are set forth on the
signature pages hereto (each a "Unit Holder" and collectively, the "Unit
Holders").
RECITALS
WHEREAS, in connection with the initial public offering of
shares of the Company's common stock, par value $.01 per share (the "Common
Stock"), the Company, the Operating Partnership and the Unit Holders as the
parties which hold ownership interests in certain office properties and other
assets (the "Properties") will engage in certain formation transactions (the
"Formation Transactions") whereby the Unit Holders will contribute to the
Operating Partnership their interests in the Properties and other assets;
WHEREAS, the Unit Holders will receive units of limited
partnership interests ("OP Units") in the Operating Partnership in exchange for
their respective interests in the Properties and other assets and the Company
will be the general partner of the Operating Partnership;
WHEREAS, pursuant to the Partnership Agreement (as defined
below) OP Units owned by the Xxxxxxx Persons (as defined below) will be
redeemable for cash or exchangeable for shares of Common Stock of the Company
upon the terms and subject to the conditions contained therein; and
WHEREAS, the Unit Holders are willing to contribute their
respective interests in the Properties and other assets in consideration of
receiving, among other things, the registration rights set forth in Article II
hereof.
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:
ARTICLE I
DEFINITIONS
SECTION 1.1. 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.
"Articles of Incorporation" means the Amended and Restated
Articles of Incorporation of the Company as filed with the Secretary of State of
the State of Maryland on June____, 2003, as the same may be amended, modified or
restated from time to time.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in The City of New York or Los Angeles,
California are authorized by law to close.
"Commission" means the Securities and Exchange Commission.
"Demand Registration" means a Demand Registration as defined
in Section 2.2.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder.
"Exchangeable OP Units" means OP Units which may be redeemable
for cash or exchangeable for Common Stock pursuant to Section 8.6 of the
Partnership Agreement (without regard to any limitations on the exercise of such
exchange right as a result of the Ownership Limit Provisions).
"General Partner" means the Company or its successors as
general partner of the Operating Partnership.
"Holder" means any Xxxxxxx Person who is the record or
beneficial owner of any Registrable Security or any assignee or transferee of
such Registrable Security (including assignments or transfers of Registrable
Securities to such assignees or transferees as a result of the foreclosure on
any loans secured by such Registrable Securities) to the extent (x) permitted
under the Partnership Agreement and (y) such assignee or transferee agrees in
writing to be bound by all the provisions hereof, unless such Registrable
Security is acquired in a public distribution pursuant to a registration
statement under the Securities Act or pursuant to transactions exempt from
registration under the Securities Act where securities sold in such transaction
may be resold without subsequent registration under the Securities Act.
"Immediate Family" of any individual means such individual's
estate and heirs or current spouse, or former spouse, parents, parents-in-law,
children (whether natural or adoptive or by marriage), siblings and
grandchildren and any trust or estate, all of the beneficiaries of which consist
of such individual or any of the foregoing.
"Initial Public Offering" means the offering of the Company's
Common Stock pursuant to the Form S-11 Registration Statement (No. 333-101170)
filed by the Company with the Commission under the Securities Act.
"Xxxxxxx Persons" means (i) any Unit Holder, (ii) any partner,
member or stockholder of the Unit Holders, (iii) any Affiliates of any such
partner, member or stockholder, and (iv) the Immediate Family of any of the
foregoing.
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"Market Value" means, with respect to the Common Stock, the
average of the daily market price for the ten (10) consecutive trading days
immediately preceding the date of a written request for registration pursuant to
Section 2.2(a). The market price for each such trading day shall be: (i) if the
Common Stock is listed or admitted to trading on any securities exchange or the
NASDAQ-National Market System, the closing price, regular way, on such day, or
if no such sale takes place on such day, the average of the closing bid and
asked prices on such day, in either case as reported in the principal
consolidated transaction reporting system, (ii) if the Common Stock is not
listed or admitted to trading on any securities exchange or the NASDAQ-National
Market System, the last reported sale price on such day or, if no sale takes
place on such day, the average of the closing bid and asked prices on such day,
as reported by a reliable quotation source designated by the Company, or (iii)
if the Common Stock is not listed or admitted to trading on any securities
exchange or the NASDAQ-National Market System and no such last reported sale
price or closing bid and asked prices are available, the average of the reported
high bid and low asked prices on such day, as reported by a reliable quotation
source designated by the Company, or if there shall be no bid and asked prices
on such day, the average of the high bid and low asked prices, as so reported,
on the most recent day (not more than (10) days prior to the date in question)
for which prices have been so reported; provided that if there are no bid and
asked prices reported during the ten (10) days prior to the date in question,
the Market Value of the Common Stock shall be determined by the Board of
Directors of the Company acting in good faith on the basis of such quotations
and other information as it considers, in its reasonable judgment, appropriate.
"Ownership Limit Provisions" mean the various provisions of
the Company's Charter set forth in ARTICLE SEVENTH thereof restricting the
ownership of Common Stock by Persons to specified percentages of the outstanding
Common Stock.
"Partnership Agreement" means the amended and restated
agreement of limited partnership of the Operating Partnership dated as
of____________, 2003, as the same may 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.
"Piggy-Back Registration" means a Piggy-Back Registration as
defined in Section 2.3.
"Registrable Securities" means shares of Common Stock of the
Company at any time owned, either of record or beneficially, by any Xxxxxxx
Person and issued upon exchange of Exchangeable OP Units received in the
Formation Transactions (including, without limitation, shares of Common Stock
issuable upon exchange of Exchangeable OP Units) and any additional Common Stock
issued as a dividend, distribution or exchange for, or in respect of such shares
until (i) a registration statement covering such shares has been declared
effective by the Commission and such shares have been disposed of pursuant to
such effective registration statement, (ii) such shares are sold under
circumstances in which all of the applicable conditions of Rule 144 (or any
similar provisions then in force) under the Securities Act are met or under
which such shares may be sold pursuant to Rule 144(k), (iii) such shares held by
such Person
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may be sold pursuant to Rule 144 under the Securities Act and could be sold in
one transaction in accordance with the volume limitations contained in Rule
144(e)(l)(i) under the Securities Act, or (iv) such shares have been otherwise
transferred in a transaction that would constitute a sale thereof under the
Securities Act, the Company has delivered a new certificate or other evidence of
ownership for such shares not bearing the Securities Act restricted stock legend
and such shares may be resold without subsequent registration under the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended
and the rules and regulations promulgated thereunder.
"Selling Holder" means a Holder who is selling Registrable
Securities pursuant to a registration statement under the Securities Act.
"Shelf Registration Statement" means a Shelf Registration
statement as defined in Section 2.1.
"Underwriter" means a securities dealer who purchases any
Registrable Securities as principal and not as part of such dealer's
market-making activities.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1. Shelf Registration. Commencing on or after
fourteen (14) months after the consummation date of the Initial Public Offering,
the Company shall prepare and file a "shelf" registration statement with respect
to shares of Common Stock issuable upon the exchange of Exchangeable OP Units on
an appropriate form for an offering to be made on a continuous basis pursuant to
Rule 415 under the Securities Act (the "Shelf Registration Statement") and shall
use its best efforts to cause the Shelf Registration Statement to be declared
effective on or as soon as practicable thereafter, and to keep such Shelf
Registration Statement continuously effective for a period ending when all
shares of Common Stock covered by the Shelf Registration Statement are no longer
Registrable Securities. In the event that the Company fails to file, or if filed
fails to maintain the effectiveness of, a Shelf Registration Statement, Holders
of shares of Common Stock issuable upon the exchange of Exchangable OP Units may
make a written request for a Demand Registration (as defined below) pursuant to
Section 2.2 herein or Piggy Back Registration (as defined below) pursuant to
Section 2.3 herein; provided, further, that if and so long as a Shelf
Registration Statement is on file and effective, then the Company shall have no
obligation to effect a Demand Registration or Piggy Back Registration.
SECTION 2.2. Demand Registration.
(a) Request for Registration. Subject to Section
2.1 hereof, commencing on or after the date which is eighteen (18) months after
the consummation date of the Initial Public Offering, Holders of Registrable
Securities may make a written request for registration under the Securities Act
of all or part of its or their Registrable Securities (a "Demand Registration");
provided, that the Company shall not be obligated to effect more than one Demand
Registration in any twelve month period; and provided, further, that the number
of shares of Registrable Securities proposed to be sold by the Holders making
such written request shall have a Market Value of at least $5,000,000. Subject
to the foregoing, the number of
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Demand Registrations which may be made pursuant to this Section 2.2 shall be
unlimited. Any such request will specify the number of shares of Registrable
Securities proposed to be sold and will also specify the intended method of
disposition thereof. Within ten (10) days after receipt of such request, the
Company will give written notice of such registration request to all other
Holders of the Registrable Securities and include in such registration all such
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within twenty (20) Business Days after the
receipt by the applicable Holder of the Company's notice. Each such request will
also specify the number of shares of Registrable Securities to be registered and
the intended method of disposition thereof. Unless the Holder or Holders of a
majority of the Registrable Securities to be registered in such Demand
Registration shall consent in writing, no other party, including the Company
(but excluding another Holder of a Registrable Security), shall be permitted to
offer securities under any such Demand Registration.
(b) Effective Registration. A registration will
not count as a Demand Registration until it has become effective.
(c) Selling Holders Become Party to Agreement.
Each Holder acknowledges that by asserting or participating in its registration
rights pursuant to this Article II, he or she may become a Selling Holder and
thereby will be deemed a party to this Agreement and will be bound by each of
its terms.
(d) Priority on Demand Registrations. If the
Holders of a majority of shares of the Registrable Securities to be registered
in a Demand Registration so elect by written notice to the Company, the offering
of such Registrable Securities pursuant to such Demand Registration shall be in
the form of an underwritten offering. The Company shall select the book-running
managing Underwriter in connection with any such Demand Registration; provided
that such managing Underwriter must be reasonably satisfactory to the Holders of
a majority of the shares of the Registrable Securities. The Company may select
any additional investment banks and managers to be used in connection with the
offering; provided that such additional investment bankers and managers must be
reasonably satisfactory to a majority of the Holders making such Demand
Registration. To the extent 10% or more of the Registrable Securities so
requested to be registered are excluded from the offering in accordance with
Section 2.4, the Holders of such Registrable Securities shall have the right to
one additional Demand Registration under this Section in such twelve-month
period with respect to such Registrable Securities.
SECTION 2.3. Piggy-Back Registration. Subject to Section 2.1
hereof, if the Company proposes to file a registration statement under the
Securities Act with respect to an underwritten equity offering by the Company
for its own account or for the account of any of its respective securityholders
of any class of security (other than (i) any registration statement filed by the
Company under the Securities Act relating to an offering of Common Stock for its
own account as a result of the exercise of the exchange rights set forth in
Section 8.6 of the Partnership Agreement, (ii) any registration statement filed
in connection with a demand registration other than a Demand Registration under
this Agreement or (iii) a registration statement on Form S-4 or S-8 (or any
substitute form that may be adopted by the Commission) or filed in connection
with an exchange offer or offering of securities solely to the Company's
existing securityholders), then the Company shall give written notice of such
proposed filing to
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the Holders of Registrable Securities as soon as practicable (but in no event
less than ten (10) days before the anticipated filing date), and such notice
shall offer such Holders the opportunity to register such number of shares of
Registrable Securities as each such Holder may request (a "Piggy-Back
Registration"). The Company shall use its commercially reasonable efforts to
cause the managing Underwriter or Underwriters of a proposed underwritten
offering to permit the Registrable Securities requested to be included in a
Piggy-Back Registration to be included on the same terms and conditions as any
similar securities of the Company included therein.
SECTION 2.4. Reduction of Offering. Notwithstanding anything
contained herein, if the managing Underwriter or Underwriters of an offering
described in Section 2.2 or 2.3 deliver a written opinion to the Company and the
Holders of the Registrable Securities included in such offering that (i) the
size of the offering that the Holders, the Company and such other persons intend
to make or (ii) the kind of securities that the Holders, the Company and/or any
other persons or entities intend to include in such offering are such that the
success of the offering would be materially and adversely affected by inclusion
of the Registrable Securities requested to be included, then (A) if the size of
the offering is the basis of such Underwriter's opinion, the amount of
securities to be offered for the accounts of Holders shall be reduced pro rata
(according to the Registrable Securities proposed for registration) to the
extent necessary to reduce the total amount of securities to be included in such
offering to the amount recommended by such managing Underwriter or Underwriters;
provided that, in the case of a Piggy-Back Registration, if securities are being
offered for the account of other persons or entities as well as the Company,
then with respect to the Registrable Securities intended to be offered by
Holders, the proportion by which the amount of such class of securities intended
to be offered by Holders is reduced shall not exceed the proportion by which the
amount of such class of securities intended to be offered by such other persons
or entities is reduced; and (B) if the combination of securities to be offered
is the basis of such Underwriter's opinion, (x) the Registrable Securities to be
included in such offering shall be reduced as described in clause (A) above
(subject to the proviso in clause (A)) or, (y) if the actions described in
clause (x) would, in the judgment of the managing Underwriter, be insufficient
to substantially eliminate the adverse effect that inclusion of the Registrable
Securities requested to be included would have on such offering, such
Registrable Securities will be excluded from such offering.
SECTION 2.5. Registration Procedures; Filings; Information. In
connection with any Shelf Registration Statement under Section 2.1 or whenever
Holders request that any Registrable Securities be registered pursuant to
Section 2.2 hereof, the Company will use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof as quickly as practicable, and in
connection with any such request:
(a) The Company will as expeditiously as
possible prepare and file with the Commission a registration statement on any
form for which the Company then qualifies or which counsel for the Company shall
deem appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with the
intended method of distribution thereof, and use its best efforts to cause such
filed registration statement to become and remain effective for a period of not
less than 270 days; provided that if the Company shall furnish to the Holders
making a request pursuant to Section 2.2 a certificate signed by either its
Chairman, Vice Chairman, Chief Executive Officer or President stating that
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in his or her good faith judgment it would be significantly disadvantageous to
the Company or its shareholders for such a registration statement to be filed as
expeditiously as possible, the Company shall have a period of not more than 180
days within which to file such registration statement measured from the date of
receipt of the request in accordance with Section 2.2.
(b) The Company will, if requested, prior to
filing a registration statement or prospectus or any amendment or supplement
thereto, furnish to each Selling Holder and each Underwriter, if any, of the
Registrable Securities covered by such registration statement copies of such
registration statement as proposed to be filed, and thereafter furnish to such
Selling Holder and Underwriter, if any, such number of conformed copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein),
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such Selling Holder or
Underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Selling Holder.
(c) After the filing of the registration
statement, the Company will promptly notify each Selling Holder of Registrable
Securities covered by such registration statement of any stop order issued or
threatened by the Commission and take all reasonable actions required to prevent
the entry of such stop order or to remove it if entered.
(d) The Company will use its best efforts to (i)
register or qualify the Registrable Securities under such other securities or
blue sky laws of such jurisdictions in the United States (where an exemption
does not apply) as any Selling Holder or managing Underwriter or Underwriters,
if any, reasonably (in light of such Selling Holder's intended plan of
distribution) requests and (ii) cause such Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of the Company and
do any and all other acts and things that may be reasonably necessary or
advisable to enable such Selling Holder to consummate the disposition of the
Registrable Securities owned by such Selling Holder; provided that the Company
will not be required to (A) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this paragraph (d),
(B) subject itself to taxation in any such jurisdiction or (C) consent to
general service of process in any such jurisdiction.
(e) The Company will immediately notify each
Selling Holder of such Registrable Securities, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
occurrence of an event requiring the preparation of a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and promptly make available to each Selling
Holder any such supplement or amendment.
(f) The Company will enter into customary
agreements (including an underwriting agreement, if any, in customary form) and
take such other actions as are reasonably required in order to expedite or
facilitate the disposition of such Registrable Securities.
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(g) The Company will make available for
inspection by any Selling Holder of such Registrable Securities, any Underwriter
participating in any disposition pursuant to such registration statement and any
attorney, accountant or other professional retained by any such Selling Holder
or Underwriter (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
Inspectors in connection with such registration statement. Records which the
Company determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in such registration statement or (ii) the release of such Records
is ordered pursuant to a subpoena or other order from a court of competent
jurisdiction. Each Selling Holder of such Registrable Securities agrees that
information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the company or its Affiliates unless and until
such is made generally available to the public. Each Selling Holder of such
Registrable Securities further agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential.
(h) The Company will furnish to each Selling
Holder and to each Underwriter, if any, a signed counterpart, addressed to such
Selling Holder or Underwriter, of (i) an opinion or opinions of counsel to the
Company and (ii) if eligible under SAS 72, a comfort letter or comfort letters
from the Company's independent public accountants, each in customary form and
covering such matters of the type customarily covered by opinions or comfort
letters, as the case may be, as the Holders of a majority of the Registrable
Securities included in such offering or the managing Underwriter or Underwriters
therefor reasonably requests.
(i) The Company will otherwise use its best
efforts to comply with all applicable rules and regulations of the Commission,
and make available to its securityholders, as soon as reasonably practicable, an
earnings statement covering a period of 12 months, beginning within three months
after the effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and Rule
158 of the Commission promulgated thereunder (or any successor rule or
regulation hereafter adopted by the Commission).
(j) The Company will use its best efforts to
cause all such Registrable Securities to be listed on each securities exchange
on which similar securities issued by the Company are then listed.
The Company may require each Selling Holder of
Registrable Securities to promptly furnish in writing to the Company such
information regarding such selling Holder, the Registrable Securities held by it
and the intended method of distribution of the Registrable Securities as the
Company may from time to time reasonably request and such other information as
may be legally required in connection with such registration.
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Each Selling Holder agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 2.5(e) hereof, such Selling Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Selling Holder's receipt of the
copies of the supplemented or amended prospectus contemplated by Section 2.5(e)
hereof, and, if so directed by the Company, such Selling Holder will deliver to
the Company all copies, other than permanent file copies then in such Selling
Holder's possession, of the most recent prospectus covering such Registrable
Securities at the time of receipt of such notice. Each Selling Holder of
Registrable Securities agrees that it will immediately notify the Company at any
time when a prospectus relating to the registration of such Registrable
Securities is required to be delivered under the Securities Act of the happening
of an event as a result of which information previously furnished by such
Selling Holder to the Company in writing for inclusion in such prospectus
contains an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances in which they were made. In the
event the Company shall give such notice, the Company shall extend the period
during which such registration statement shall be maintained effective
(including the period referred to in Section 2.5(a) hereof) by the number of
days during the period from and including the date of the giving of notice
pursuant to Section 2.5(e) hereof to the date when the Company shall make
available to the Selling Holders of Registrable Securities covered by such
registration statement a prospectus supplemented or amended to conform with the
requirements of Section 2.5(e) hereof.
SECTION 2.6. Registration Expenses. In connection with any
registration statement required to be filed hereunder, the Company shall pay the
following registration expenses incurred in connection with the registration
hereunder (the "Registration Expenses"): (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) printing expenses, (iv)
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), (v) the fees
and expenses incurred in connection with the listing of the Registrable
Securities, (vi) reasonable fees and disbursements of counsel for the Company
and customary fees and expenses for independent certified public accountants
retained by the Company (including the expenses of any comfort letters or costs
associated with the delivery by independent certified public accountants of a
comfort letter or comfort letters requested pursuant to Section 2.5(h) hereof),
and (vii) the reasonable fees and expenses of any special experts retained by
the Company in connection with such registration. The Company shall have no
obligation to pay any underwriting fees, discounts or commissions attributable
to the sale of Registrable Securities, or any out-of-pocket expenses of the
Holders (or the agents who manage their accounts) or any transfer taxes relating
to the registration or sale of the Registrable Securities.
SECTION 2.7. Indemnification by the Company. The Company
agrees to indemnify and hold harmless each Selling Holder of Registrable
Securities, its officers, directors and agents, and each Person, if any, who
controls such Selling Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus relating to the
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Registrable Securities (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Company by such Selling Holder or on
such Selling Holder's behalf expressly for inclusion therein. The Company also
agrees to indemnify any Underwriters of the Registrable Securities, their
officers and directors and each Person who controls such underwriters within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act on
substantially the same basis as that of the indemnification of the Selling
Holders provided in this Section 2.7, provided that the foregoing indemnity with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter of the Registrable Securities from whom the person asserting any
such losses, claims, damages or liabilities purchased the Registrable Securities
which are the subject thereof if such person did not receive a copy of the
prospectus (or the prospectus as supplemented) at or prior to the confirmation
of the sale of such Registrable Securities to such person in any case where such
delivery is required by the Securities Act and the untrue statement or omission
of a material fact contained in such preliminary prospectus was corrected in the
prospectus (or the prospectus as supplemented).
SECTION 2.8. Indemnification by Holders of Registrable
Securities. Each Selling Holder agrees, severally but not jointly, to indemnify
and hold harmless the Company, its officers, directors and agents and each
Person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Selling Holder, but only with
respect to information relating to such Selling Holder furnished in writing by
such Selling Holder or on such Selling Holder's behalf expressly for use in any
registration statement or prospectus relating to the Registrable Securities, or
any amendment or supplement thereto, or any preliminary prospectus. In case any
action or proceeding shall be brought against the Company or its officers,
directors or agents or any such controlling person, in respect of which
indemnity may be sought against such Selling Holder, such Selling Holder shall
have the rights and duties given to the Company, and the Company or its
officers, directors or agents or such controlling person shall have the rights
and duties given to such Selling Holder, by Section 2.7. Each Selling Holder
also agrees to indemnify and hold harmless Underwriters of the Registrable
Securities, their officers and directors and each Person who controls such
Underwriters within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act on substantially the same basis as that of the
indemnification of the Company provided in this Section 2.8.
SECTION 2.9. Conduct of Indemnification Proceedings. In case
any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
Section 2.7 or 2.8, such person (an "Indemnified Party") shall promptly notify
the person against whom such indemnity may be sought (an "Indemnifying Party")
in writing and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Party, and shall assume the payment of all fees and expenses. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel
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shall be at the expense of such Indemnified Party unless (i) the Indemnifying
Party and the Indemnified Party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnified Party and the Indemnifying Party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the Indemnifying Party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys (in addition to any
local counsel) at any time for all such Indemnified Parties, and that all such
fees and expenses shall be reimbursed as they are incurred. In the case of any
such separate firm for the Indemnified Parties, such firm shall be designated in
writing by (i) in the case of Persons indemnified pursuant to Section 2.7
hereof, the Selling Holders which owned a majority of the Registrable Securities
sold under the applicable registration statement and (ii) in the case of Persons
indemnified pursuant to Section 2.8, the Company. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent, or if there be a final judgment for
the plaintiff, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an Indemnified Party shall have requested an
Indemnifying Party to reimburse the Indemnified Party for fees and expenses of
counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 Business Days after receipt by such Indemnifying Party
of the aforesaid request and (ii) such Indemnifying Party shall not have
reimbursed the Indemnified Party in accordance with such request prior to the
date of such settlement. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of with any Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such proceeding.
SECTION 2.10. Contribution. If the indemnification provided
for in Section 2.7 or 2.8 hereof is unavailable to an Indemnified Party or
insufficient in respect of any losses, claims, damages or liabilities referred
to herein, then each such Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (i)
as between the Company and the Selling Holders on the one hand and the
Underwriters on the other, in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Holders on the one
hand and the Underwriters on the other from the offering of the securities, or
if such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits but also the relative
fault of the Company and the Selling Holders on the one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations and (ii) between the Company on the one hand
and each Selling Holder on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of each Selling Holder in
connection with such statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Holders
11
on the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and the Selling Holders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the prospectus. The relative fault of the Company and the Selling
Holders on the one hand and of the Underwriters on the other shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company and the Selling
Holders or by the Underwriters. The relative fault of the Company on the one
hand and of each Selling Holder on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Selling Holders agree that it would not be
just and equitable if contribution pursuant to this Section 2.10 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 2.10, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the securities of such Selling Holder were offered to the
public exceeds the amount of any damages which such Selling Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Selling Holder's obligations to contribute pursuant to
this Section 2.10 are several in proportion to the proceeds of the offering
received by such Selling Holder bears to the total proceeds of the offering
received by all the Selling Holders and not joint.
SECTION 2.11. Participation in Underwritten Registrations. No
Person may participate in any underwritten registration hereunder unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
registration rights provided for in this Article II.
12
SECTION 2.12. Rule 144. The Company covenants that it will
file any reports required to be filed by it under the Securities Act and the
Exchange Act and that it will take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable
Holders to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
SECTION 2.13. Holdback Agreements.
(a) Restrictions on Public Sale by Holder of
Registrable Securities. To the extent not inconsistent with applicable law, each
Holder whose securities are included in a registration statement agrees not to
effect any sale or distribution of the issue being registered or a similar
security of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, including a sale pursuant to Rule 144 under the
Securities Act, during the 14 days prior to, and during the 90-day period
beginning on, the effective date of such registration statement (except as part
of such registration), if and to the extent requested in writing by the Company
in the case of a non-underwritten public offering or if and to the extent
requested in writing by the managing underwriter or Underwriters in the case of
an underwritten public offering.
(b) Restrictions on Public Sale by the Company
and Others. The Company agrees that any agreement entered into after the date of
this Agreement pursuant to which the Company issues or agrees to issue any
privately placed securities shall contain a provision under which holders of
such securities agree not to effect any sale or distribution of any securities
similar to those being registered in accordance with Section 2.2 or Section 2.3
hereof, or any securities convertible into or exchangeable or exercisable for
such securities, during the 14 days prior to, and during the 90-day period
beginning on, the effective date of any registration statement (except as part
of such registration statement where the Holders of a majority of the
Registrable Securities to be included in such registration statement consent or
as part of registration statements filed as set forth in Section 2.3(i) or
(iii)), if and to the extent requested in writing by the Company in the case of
a non-underwritten public offering or if and to the extent requested in writing
by the managing Underwriter or Underwriters in the case of an underwritten
public offering, in each case including a sale pursuant to Rule 144 under the
Securities Act (except as part of any such registration, if permitted);
provided, however, that the provisions of this paragraph (b) shall not prevent
the conversion or exchange of any securities pursuant to their terms into or for
other securities.
(c) If the Company determines in its good faith
judgment that the filing of the Shelf Registration Statement under Section 2.1
or a Demand Registration under Section 2.2 hereof or the use of any related
prospectus would require the disclosure of material information that the Company
has a bona fide business purpose for preserving as confidential or the
disclosure of which would impede the Company's ability to consummate a
significant transaction, and that the Company is not otherwise required by
applicable securities laws or regulations to disclose, upon written notice of
such determination by the Company, the rights of the Holders to offer, sell or
distribute any Registrable Securities pursuant to the Shelf
13
Registration Statement or a Demand Registration or to require the Company to
take action with respect to the registration or sale of any Registrable
Securities pursuant to the Shelf Registration Statement or a Demand Registration
shall be suspended until the earlier of (i) the date upon which the Company
notifies the Holders in writing that suspension of such rights for the grounds
set forth in this Section 2.12(c) is no longer necessary and (ii) 180 days. The
Company agrees to give such notice as promptly as practicable following the date
that such suspension of rights is no longer necessary.
(d) If all reports required to be filed by the
Company pursuant to the Exchange Act have not been filed by the required date
without regard to any extension, or if the consummation of any business
combination by the Company has occurred or is probable for purposes of Rule 3-05
or Article 11 of Regulation S-X under the Act, upon written notice thereof by
the Company to the Holders, the rights of the Holders to offer, sell or
distribute any Registrable Securities pursuant to the Shelf Registration
Statement or a Demand Registration or to require the Company to take action with
respect to the registration or sale of any Registrable Securities pursuant to
the Shelf Registration Statement or a Demand Registration shall be suspended
until the date on which the Company has filed such reports or obtained and filed
the financial information required by Rule 3-05 or Article 11 of Regulation S-X
to be included or incorporated by reference, as applicable, in the Shelf
Registration Statement, and the Company shall notify the Holders as promptly as
practicable when such suspension is no longer required.
ARTICLE III
MISCELLANEOUS
SECTION 3.1. New York Stock Exchange Listing. In the event
that the Company shall issue any Common Stock in exchange for OP Units pursuant
to Section 8.6 of the Partnership Agreement, then in any such case the Company
agrees to cause any such shares of Common Stock to be listed on the New York
Stock Exchange prior to or concurrently with the issuance thereof by the
Company.
SECTION 3.2. Remedies. In addition to being entitled to
exercise all rights provided herein and granted by law, including recovery of
damages, the Xxxxxxx Persons shall be entitled to specific performance of the
rights under this Agreement. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
SECTION 3.3. Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, in each case without the written consent of
the Company and the Holders of a majority of the Registrable Securities. No
failure or delay by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon any breach thereof shall constitute waiver of
any such breach or any other covenant, duty, agreement or condition.
14
SECTION 3.4. Notices. All notices and other communications in
connection with this Agreement shall be made in writing by hand delivery,
registered first-class mail, telex, telecopier, or air courier guaranteeing
overnight delivery:
(1) if to any Xxxxxxx Person, initially c/o the Operating
Partnership initially at 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000 (Attention: President), or to such other address and to such
other Persons as any Xxxxxxx Person may hereafter specify in writing; and
(2) if to the Company, initially at 000 Xxxx Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (Attention: President), or to
such other address as the Company may hereafter specify in writing.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; when
received if deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; when receipt acknowledged, if telecopied; and on the next
business day, if timely delivered to an air courier guaranteeing overnight
delivery.
SECTION 3.5. Successors and Assigns. Except as expressly
provided in this Agreement the rights and obligations of the Xxxxxxx Persons
under this Agreement shall not be assignable by any Xxxxxxx Person to any Person
that is not a Xxxxxxx Person. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns.
SECTION 3.6. Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Each party
shall become bound by this Agreement immediately upon affixing its signature
hereto.
SECTION 3.7. Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of California
without regard to the choice of law provisions thereof.
SECTION 3.8. Severability. In the event that any one or more
of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
SECTION 3.9. Entire Agreement. This Agreement is intended by
the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein with respect to the registration rights granted by the
Company with respect to the Registrable Securities. This Agreement supersedes
all prior agreements and understandings between the parties with respect to such
subject matter.
15
SECTION 3.10. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
SECTION 3.11. No Third Party Beneficiaries. Nothing express or
implied herein is intended or shall be construed to confer upon any person or
entity, other than the parties hereto and their respective successors and
assigns, any rights, remedies or other benefits under or by reason of this
Agreement.
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
COMPANY
XXXXXXX PROPERTIES, INC.,
a Maryland corporation
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Xxxxxx X. Xxxxx
Executive Vice President and
Chief Financial Officer
OPERATING PARTNERSHIP
XXXXXXX PROPERTIES L.P.,
a Maryland limited partnership
By: Xxxxxxx Properties, Inc.
General Partner
By: /s/ Xxxxxx X. Xxxxx
------------------------
Xxxxxx X. Xxxxx
Executive Vice President
and Chief Financial
Officer
UNIT HOLDERS
XXXXXX X. XXXXXXX III
/s/ Xxxxxx X. Xxxxxxx III
-----------------------------
XXXXXXX PARTNERS, INC.,
a California corporation
By: /s/ Xxxxxx X. Xxxxxxx III
-----------------------------
Xxxxxx X. Xxxxxxx III
Title:
Signature Page to Registration Rights Agreement
X-x
XXXXXXX PARTNERS SCS, INC.,
a California corporation
By: /s/ Xxxxxx X. Xxxxxxx III
-----------------------------
Xxxxxx X. Xxxxxxx III
Title:
XXXXXXX PARTNERS BGHS, LLC,
a California limited liability
company
By: /s/ Xxxxxx X. Xxxxxxx III
-----------------------------
Xxxxxx X. Xxxxxxx III
Title:
XXXXXXX PARTNERS PASADENA GEN-PAR,
INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx III
-----------------------------
Xxxxxx X. Xxxxxxx III
Title:
XXXXXXX PARTNERS DEVELOPMENT, LTD.,
a California limited partnership
By: /s/ Xxxxxx X. Xxxxxxx III
-----------------------------
Xxxxxx X. Xxxxxxx III
Title:
XXXXXXX PARTNERS - WFC HOLDINGS,
LLC,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxxxx III
-----------------------------
Xxxxxx X. Xxxxxxx III
Title:
Signature Page to Registration Rights Agreement
S-2
XXXXXXX PARTNERS - INVESTMENTS, LLC
a California limited liability
company
By: /s/ Xxxxxx X. Xxxxxxx III
-----------------------------
Xxxxxx X. Xxxxxxx III
XXXXXXX PARTNERS - MASTER
INVESTMENTS, LLC,
a California limited liability company
By: Xxxxxxx Partners, Inc.,
a California corporation
Its: Managing Member
By: /s/ Xxxxxx X. Xxxxxxx III
-----------------------------
Xxxxxx X. Xxxxxxx III
Title:
PHILADELPHIA PLAZA - PHASE II,
a Pennsylvania general partnership
By: Xxxxxxx Xxxxxx Partners-Commerce
Square II, Ltd.,
a California limited partnership
Its: Partner
By: Xxxxxx Partners Inc.,
a California corporation
Its: General Partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Xxxxx X. Xxxxxx
Title: President
Signature Page to Registration Rights Agreement
S-3
XXXXXXX XXXXXX XXXXX
/s/ XXXXXXX XXXXXX XXXXX
------------------------
XXXXXX X. XXXXXXX
/s/ XXXXXX X. XXXXXXX
---------------------
XXXXXXX X. XXXXXX
/s/ XXXXXXX X. XXXXXX
---------------------
Signature Page to Registration Rights Agreement
S-4
