EXHIBIT 10.2
FORM OF
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of _________, 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 _________, 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.
2
"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.
"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
3
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 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)(1)(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
4
"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 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
5
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 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
6
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 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.
7
(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.
(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,
8
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.
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
9
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 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
10
"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 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
11
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 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
12
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.
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
13
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 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
14
consequent upon any breach thereof shall constitute waiver of any such breach or
any other covenant, duty, agreement or condition.
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
15
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.
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:
------------------------------
Xxxxxx Xxxxx
CHIEF FINANCIAL OFFICER
OPERATING PARTNERSHIP
XXXXXXX PROPERTIES L.P., a Maryland
limited partnership
By: Xxxxxxx, Inc.
General Partner
By:
--------------------------
Xxxxxx Xxxxx
CHIEF FINANCIAL OFFICER
UNIT HOLDERS
XXXXXX X. XXXXXXX III
----------------------------------
XXXXXXX PARTNERS, INC.,
a California corporation
By:
------------------------------
Xxxxxx X. Xxxxxxx III
Title:
S-1
XXXXXXX PARTNERS SCS, INC.,
a California corporation
By:
------------------------------
Xxxxxx X. Xxxxxxx III
Title:
XXXXXXX PARTNERS BGHS, LLC,
a California limited liability company
By:
------------------------------
Xxxxxx X. Xxxxxxx III
Title:
XXXXXXX PARTNERS PASADENA GEN-PAR, INC.,
a Delaware corporation
By:
------------------------------
Xxxxxx X. Xxxxxxx III
Title:
XXXXXXX PARTNERS DEVELOPMENT, LTD.,
a California limited partnership
By:
------------------------------
Xxxxxx X. Xxxxxxx III
Title:
XXXXXXX PARTNERS - WFC HOLDINGS, LLC,
a Delaware limited liability company
By:
------------------------------
Xxxxxx X. Xxxxxxx III
Title:
S-2
XXXXXXX/XXXXXX PARTNERS INVESTMENTS, a
California limited partnership (which
intends to convert to Xxxxxxx Partners -
Investments, LLC, a California limited
liability company prior to or
contemporaneously with the Closing)
By:
------------------------------
Xxxxxx X. Xxxxxxx III
Title:
XXXXXXX PARTNERS - MASTER INVESTMENTS, LLC,
a California limited liability company
(formerly known as XXXXXXX PARTNERS -
MASTER INVESTMENTS)
By: Xxxxxxx Partners, Inc.,
a California corporation
Its: Managing Member
By:
--------------------------
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:
-------------------------
Xxxxx X. Xxxxxx
Title: President
S-3
XXXXXXX XXXXXX XXXXX
------------------------------
XXXXXX X. XXXXXXX
------------------------------
XXXXXXX X. XXXXXX
------------------------------
S-4
