Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of March 17, 1998 by and between PS BUSINESS PARKS, INC., a
California corporation (the "Company"), and ACQUIPORT TWO CORPORATION, a
Delaware corporation (the "Holder").
RECITALS
A. The Holder is currently the owner of 5,289,765 shares of common stock
in the Company (the "Holder's Shares"). Pursuant to certain documents executed
in connection with Holder's acquisition of Holder's Shares, Holder obtained
certain rights to acquire additional securities of the Company. Any such
additional securities of the Company acquired by Holder pursuant to such rights
are sometimes referred to herein as the "Additional Securities".
B. Company and Holder wish to provide in this Agreement for the rights,
duties and obligations of the parties with respect to the registration of the
Holder's Shares, any Additional Securities issued to the Holder and any
securities of the Company that may be issued or distributed with respect to, in
exchange or substitution for, or upon conversion of such Holder's Shares or
Additional Securities, or on account of such Holder's Shares or Additional
Securities as a result of any stock dividend, stock split, reverse split or
other distribution, merger, combination, consolidation, recapitalization or
reclassification or otherwise (collectively, "Registrable Shares").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Shelf Registration Statements.
Not later than the first anniversary of the date of this Agreement (or
forty-five (45) days prior to the first anniversary of the date of this
Agreement if the Company is then eligible to file Form S-3 or a successor form),
the Company shall cause to be filed with the Securities and Exchange Commission
(the "SEC") a registration statement, including a prospectus and related
materials (the "Shelf Registration Statement"), in compliance with applicable
SEC rules pursuant to which all Registrable Shares are registered under the
Securities Act of 1933, as amended (the "Securities Act") for offerings to be
made on a continuous, periodic or delayed basis, and, to the extent Holder is
deemed to be an "affiliate" of the Company, pursuant to which resales of such
Registrable Shares may be made. The Company shall use reasonable efforts to
cause the Shelf Registration Statement to be declared effective by the SEC by
the first anniversary of the date of this Agreement, and shall use reasonable
efforts to keep the Shelf Registration Statement effective, including, without
limitation, the preparation and filing of any amendments and supplements
necessary for that purpose.
2. Back-up Registration Rights.
If, despite the reasonable efforts of the Company, the Shelf
Registration Statement, any "Additional Registration Statement" (as hereinafter
defined), or any "New Registration Statement" (as hereinafter defined) ceases to
be effective for any reason, then the Company will cause to be filed with the
SEC as soon as reasonably practicable thereafter a new registration statement,
prospectus and related materials (a "New Registration Statement") that complies
with applicable SEC rules providing for the registration and, to the extent
Holder is deemed to be an "affiliate" of the Company, resale, by the Holder of
the Registrable Shares or Additional Securities, as applicable, on a continuous,
periodic or delayed basis. The Company shall use reasonable efforts to cause
each New Registration Statement to be declared effective by the SEC as soon as
practicable, and shall use reasonable efforts to keep each New Registration
Statement effective, including, without limitation, the preparation and filing
of any amendments and supplements necessary for that purpose.
3. Additional Registration Rights.
If Additional Securities are issued to the Holder, then the Company will
cause to be filed with the SEC, as soon as practicable after each issuance of
such Additional Securities, a registration statement, prospectus and related
materials (an "Additional Registration Statement") that complies with applicable
SEC rules pursuant to which the Additional Securities will be registered under
the Securities Act for offerings to be made on a continuous, periodic or delayed
basis and, to the extent Holder is deemed to be an affiliate of the Company,
resales of such Additional Securities may be made. The Company shall use
reasonable efforts to cause each such Additional Registration Statement to be
declared effective by the SEC as soon as practicable, and shall use reasonable
efforts to keep each Additional Registration Statement effective, including,
without limitation, the preparation and filing of any amendments and supplements
necessary for that purpose. The foregoing to the contrary notwithstanding, the
Company shall not be required to file any Additional Registration Statement
before the first anniversary of the date of this Agreement (or forty-five (45)
days prior to the first anniversary of the date of this Agreement if the Company
is then eligible to file Form S-3 or a successor form), or cause any Additional
Registration Statement to be declared effective prior to the first anniversary
of the date of this Agreement.
4. Certain Registration Procedures.
The following additional registration procedures shall apply with
respect to any Registration Statement required to be filed pursuant to Sections
1, 2 or 3 above. (As used in this Agreement, "Registration Statement" and
"Prospectus" refer to the Shelf Registration Statement and related prospectus,
any New Registration Statement and related prospectus [including any preliminary
prospectus] and any Additional Registration Statement and related prospectus,
including in each case any documents incorporated therein by reference.)
4.1 Suspension of Offering.
(a) The Company shall be entitled, from time to time, to require the
Holder not to sell under a Registration Statement if the negotiation or
consummation of a transaction by the Company or its subsidiaries is pending or
circumstances have arisen, which negotiation, consummation or circumstances
would require additional disclosure by the Company in such Registration
Statement of material information which the Company has a bona fide business
purpose for keeping confidential and the nondisclosure of which in the
Registration Statement might cause the Registration Statement to fail to comply
with applicable disclosure requirements; provided, however, that the Company may
not prohibit sales for such reason more than twice in any twelve (12) month
period, for more than thirty (30) days in one instance, or more than sixty (60)
days in the other instance, at any one time.
(b) Subject to the limitations as to frequency and duration set
forth in Section 4.1(a), upon receipt of any notice from the Company of the
happening of any event which is of a type specified in Section 4.1(a), the
Holder agrees that it will immediately discontinue offers and sales of
securities under the Registration Statement until the Holder receives copies of
a supplemented or amended Registration Statement which addresses the disclosure
issues referred to above, after which the Holder shall be free to resume
offering and selling activities. The Company agrees to promptly prepare any such
supplemented or amended Registration Statement and to use reasonable efforts to
cause such supplemented or amended Registration Statement to be declared
effective by the SEC as soon as practicable. If so directed by the Company, the
Holder will deliver to the Company all copies of any Prospectus in its
possession at the time of receipt of such notice.
4.2 Obligations of the Company with Respect to Registration
Statements. In connection with a Registration Statement and the securities to be
sold thereunder (the "Covered Securities"), the Company agrees to:
(a) furnish to the Holder such number of copies of the
Registration Statement, each amendment, post-effective amendment and supplement
thereto, the Prospectus included in the Registration Statement (including each
preliminary Prospectus) in compliance with the requirements of the Securities
Act, and such other documents as the Holder may reasonably request in order to
facilitate the disposition of the Covered Securities owned by the Holder; the
Company consents to the use of the Prospectus for the Registration Statement,
including each preliminary Prospectus, by the Holder in connection with the
offering and sale of Covered Securities;
(b) use reasonable efforts to register or qualify such Covered
Securities under such other securities or blue sky laws of such jurisdictions as
the Holder reasonably requests, and do any and all other acts and things which
may be reasonably necessary or advisable to enable the Holder to consummate the
disposition in such jurisdictions of the Covered Securities, provided that the
Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subparagraph, (ii) subject itself to taxation in any jurisdiction where it would
not otherwise be subject to taxation but for this subparagraph, or (iii) consent
to general service of process in any such jurisdiction where it would not
otherwise be subject to service of process but for this subparagraph (except as
may be required by the Securities Act);
(c) cause all such Covered Securities to be listed and qualified
for trading on each securities exchange on which similar securities issued by
the Company are then listed and qualified for trading;
(d) provide a transfer agent and registrar for all such Covered
Securities not later than the effective date of the Registration Statement
applicable thereto, and thereafter maintain such a transfer agent and registrar;
and otherwise cooperate with the sellers to facilitate the timely preparation
and delivery of certificates representing Covered Securities to be sold and not
bearing any Securities Act legends;
(e) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve (12) months beginning with the first day of the Company's first
full calendar quarter 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 thereunder;
(f) promptly notify the holder in writing of the issuance by the
SEC or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement, or any part thereof, or of any order
suspending or preventing the use of any related Prospectus or the initiation of
any proceedings for that purpose, or if the Company receives any notification
with respect to the suspension of the qualification of any Registrable
Securities for offer or sale in any jurisdiction or the initiation of any
proceedings for that purpose;
(g) in the event of the issuance of any stop order suspending
the effectiveness of any Registration Statement, or any part thereof, or of any
order suspending or preventing the use of any related Prospectus or suspending
the qualification of any Registrable Securities for sale in any jurisdiction,
the Company will use its best efforts to promptly obtain the withdrawal of such
order;
(h) use reasonable efforts to cause the Covered 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 to
enable the Holder to consummate the disposition of such Covered Securities;
(i) promptly notify the Holder, at any time when a Prospectus
relating to Covered Securities is required to be delivered under the Securities
Act, of the happening of any event as a result of which the Prospectus included
in the applicable Registration Statement (as then in effect) contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements therein (in the case of the Prospectus and any preliminary
Prospectus, in light of the circumstances under which they were made) not
misleading when such Prospectus was delivered; the Company will, as soon as
practicable, prepare and furnish to the Holder a supplement or amendment to such
Prospectus so that, as thereafter delivered to the purchasers of such Covered
Securities, such Prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(j) prepare and file with the SEC such amendments and
supplements to each Registration Statement and the Prospectus used in connection
with such Registration Statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of securities
covered by such Registration Statement; and
(k) to the extent permitted by the professional standards
governing the accounting profession at the time, obtain cold comfort letters and
updates thereof from the independent public accountants of the Company (and, if
necessary, any other independent certified public accountants of any subsidiary
of the Company or of any business acquired by the Company for which financial
statements and financial data are, or are requested to be, included in the
Registration Statement) addressed to the Holder in customary form and covering
such matters of the type customarily covered by cold comfort letters.
4.3 Obligations of Holder with Respect to Registration Statements.
The Holder agrees to provide promptly following any written request therefor,
any information reasonably requested by the Company in connection with the
preparation of and for inclusion in the Registration Statement (including,
without limitation, if applicable, information regarding the proposed
distribution by the Holder of the Covered Securities).
4.4 Review of Registration Statements. No Registration Statement,
Prospectus or related materials, and no supplement or amendment to any
Registration Statement, Prospectus or related materials shall be filed unless
and until all of the following conditions have been satisfied; provided,
however, that, by implementing the following conditions, the Holder shall not be
deemed to have made any representation or warranty of any kind or nature
whatsoever with respect to any matter set forth, contained or addressed in such
Registration Statement, Prospectus or related materials, including but not
limited to the accuracy, adequacy or completeness thereof:
(a) A complete and accurate copy of each Registration Statement,
Prospectus and all related material, and of each proposed supplement or
amendment to any Registration Statement, Prospectus or related materials (all
individually and collectively referred to herein as "Filing Material") shall be
provided to each person or entity designated herein to receive the original or
copies of notices directed to Holder (each a "Notice Party") sufficiently in
advance of that proposed Filing Material being filed with the SEC or any other
federal or state agency having jurisdiction over securities offerings (a
"Filing") so as to allow the Notice Parties a reasonable opportunity to review
and comment on such proposed Filing Material prior to Filing.
(b) Promptly upon receipt of any comments or requested revisions
to any Filing Material from the SEC or any other federal or state agency
(collectively "Agency Comments"), the Company shall provide a complete and
accurate copy of the Agency Comments to each Notice Party.
(c) Promptly upon making any addition, deletion or revision to
any Filing Material not previously provided to all Notice Parties, including but
not limited to any addition, deletion or revision in response to Agency
Comments, the Company shall provide each Notice Party with a complete and
accurate copy of the revised Filing Material, with the changes highlighted
therein, sufficiently in advance of Filing any such addition, deletion or
revision so as to allow the Notice Parties a reasonable opportunity to review
and comment thereon prior to Filing.
(d) Prior to each Filing the Company shall certify to Holder in
writing that the Company, both through the devotion of the necessary time and
attention of capable Company personnel and Company resources, and through the
engagement of and collaboration with qualified legal, accounting, underwriting,
appraisal, environmental and other experts, exercised good faith and due care in
the preparation of the Filing Materials, both as to form and content.
5. Underwritten Offerings.
5.1 Demand by Holder. On or after one (1) year after the date of
this Agreement, the Company shall, at the Holder's written request, assist in an
underwritten offering of Registrable Shares by the Holder; provided, however,
that the Company shall not be obligated to comply with any such request with
respect to an offering of Registrable Shares with a gross retail value of less
than $50,000,000 unless, pursuant to Section 5.5(a), Holder was prevented from
including in an underwritten offering the entire number of Registrable Shares
initially requested by Holder to be included in such offering, in which case the
limitation set forth in this proviso shall be decreased to the lesser of
$50,000,000 or the gross retail value of the Registrable Shares Holder was
prevented from including in such offering. In connection with any such
underwritten offering, the Company agrees to:
(a) enter into such customary agreements (including underwriting
agreements in customary form) and take all such actions as the Holder or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of Covered Securities, including without limitation:
(i) making such representation and warranties to the
underwriters in form, substance and scope reasonably satisfactory to the
managing underwriter, as are customarily made by issuers to underwriters in
primary underwritten offerings;
(ii) obtaining opinions and updates thereof of counsel which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriter, addressed to the underwriters covering
the matters customarily covered in opinions requested in underwritten offerings
and such other matters as may be reasonably requested by the managing
underwriter;
(iii) causing the underwriting agreement to set forth in
full the indemnification provisions and procedures of Section 7 (or such other
substantially similar provisions and procedures as the managing underwriter
shall reasonably request) with respect to all parties to be indemnified pursuant
to said Section; and
(iv) delivering such documents and certificates as may be
reasonably requested by the Holder to evidence compliance with the provisions of
this Section 5.1 and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company;
(b) upon receipt by the Company of reasonable confidentiality
agreements, make available for inspection by any underwriter participating in
any disposition pursuant to a Registration Statement and any attorney,
accountant or other agent retained by any such underwriter, all financial and
other records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees and independent accountants
to be available on a reasonable basis and cooperate with such parties' "due
diligence" and to supply all information reasonably requested by any such
underwriter, attorney, accountant or agent in connection with such Registration
Statement;
(c) make available appropriate management personnel of the
Company for participation in the preparation and drafting of Registration
Statements, for "due diligence" meetings, for "road shows", and for other
meetings and conference calls with investment bankers and their prospective
investors;
(d) provide written materials customarily made available to
underwriters in underwritten offerings; and
(e) to the extent permitted by the professional standards
governing the accounting profession at the time, obtain cold comfort letters and
updates thereof from the independent certified public accountants of the Company
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are requested to be, included in
any Registration Statement), addressed to the underwriter(s) and Holder, such
letters to be in customary form and covering matters of the type customarily
covered in cold comfort letters in connection with underwritten offerings.
5.2 Selection of Underwriters by Holder. In the case of an
underwritten offering requested by Holder pursuant to Section 5.1, the Holder
shall have the right to approve the investment banker(s), and/or manager(s),
selected by the Company to administer the offering, including the brokerage
and/or selling commissions to be charged, which approval shall not be
unreasonably withheld or delayed. Attached hereto as Exhibit A is a list of
investment bankers and managers which shall be deemed approved by the Holder.
5.3 Limitations on Demands. The Company shall not be obligated to
assist with an underwritten offering requested by Holder pursuant to Section 5.1
more than once in any twelve (12) month period, or more than twice in total;
provided, however, that any underwritten offering in which Holder is prevented
by Section 5.5(a) from including in such offering the entire number of
Registrable Shares initially requested by Holder to be included in such offering
shall not be counted for purposes of this Section 5.3.
5.4 Holder Participation in Company Offering. If the Company
proposes to execute or participate in an underwritten offering of any of the
Company's stock or other securities, whether upon the Company's own initiative
or at the request or demand of any other person, the Company shall promptly give
Holder written notice of such proposed offering. Upon the written request of
Holder delivered to the Company within twenty (20) days from the date of the
Holder's receipt of the Company's notice, the Company shall, subject to the
provisions of Section 5.5, cause to be included in such underwritten offering
all or any portion of Holder's Registrable Shares that are identified in
Holder's written request.
5.5 Underwriting Requirements.
(a) In connection with any underwritten offering pursuant to
Section 5.1, the Company shall not be entitled to include in such underwriting
any securities not held by Holder; except that the Company shall be entitled to
include (i) some or all of the securities held by one or more of ABKB/LaSalle
Securities Limited Partnership, Xxxxx & Steers Capital Management, Inc., Xxxxxx
Xxxxxxx Asset Management, Fidelity Management and Research, Stanford University,
State of Michigan Retirement Systems (collectively, the "Equity Investors")
pursuant to that certain Term Sheet with AOPP dated December 3, 1997 attached
hereto (the "Term Sheet") and (ii) some or all of the securities held by the
parties listed on Exhibit B as a result of their contribution of assets to AOPP
(the "Sellers"), if such Equity Investors and/or Sellers accept the terms of the
underwriting agreement with the underwriters selected pursuant to Section 5.2,
and then only to the extent such securities are securities of the Company or
securities convertible into or exchangeable or exercisable for securities of the
Company and such securities were issued pursuant to the Term Sheet. If the total
amount of securities, including the Holder's Registrable Shares and such
securities of the Equity Investors and/or Sellers, to be included in such
offering exceeds the amount of securities that the underwriters determine in
their sole discretion is compatible with the success of the offering, then the
Company shall be entitled to include in the offering only that number of
securities of Holder, the Equity Investors and/or Sellers which the underwriters
determine in their sole discretion will not jeopardize the success of the
offering, with the securities so included to be apportioned pro rata among the
Holder, the Equity Investors and the Sellers in proportion to the total amount
of securities initially requested by each of them to be included in such
offering.
(b) In connection with any underwritten offering pursuant to
Section 5.4, the Company shall not be required to include any of the Holders'
Registrable Shares in such underwriting unless Holder accepts the terms of the
underwriting agreement between the Company and the underwriters selected by the
Company. If the total amount of securities, including the Holder's Registrable
Shares, to be included in such offering exceeds the amount of securities that
the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including the Holder's Registrable
Shares, which the underwriters determine in their sole discretion will not
jeopardize the success of the offering, with the securities so included to be
apportioned pro rata among the Company, the Holder and all other selling
stockholders in proportion to the total amount of securities initially requested
by each of them to be included in such offering.
6. Term of Agreement.
(a) The Company shall be relieved of its duties under Sections 1, 2,
and 3 of this Agreement upon the earlier to occur of (a) the date on which the
Holder no longer holds any Registrable Shares or any rights to acquire
Registrable Shares, pursuant to any preemptive rights, rights of first refusal,
rights of first offer or otherwise; and (b) the date on which all of the
following conditions are satisfied: (i) Holder's "fully diluted" (as hereinafter
defined) ownership interest in the Company and all other entities in which the
Company owns any direct or indirect interest is less than five percent (5%);
(ii) Holder no longer has the right under that certain Agreement Among
Shareholders and Company to require PSA to vote for the director designated by
Acquiport Two Corporation; and (iii) the Company delivers to Holder its
certificate, and counsel to the Company reasonably acceptable to Holder issues
to Holder an unqualified, unconditional legal opinion, that (A) Holder is not
and has not been an "affiliate" (as defined in Rule 144 under the Securities
Act) of the Company for the preceding three (3) months; (B) at least two (2)
years has elapsed since the date the Holder's Registrable Securities were
acquired by Holder from the Company (applying the rules of paragraph (d) of said
Rule 144); and (C) the Holder's Registrable Shares may then be freely sold,
resold, traded, offered or distributed, whether under Rule 144(k) under the
Securities Act or otherwise, to the same extent as would be permitted had the
Registration Statement and Prospectus remained on file and in full force and
effect. As used herein, "fully diluted" shall mean, with respect to Holder's
ownership interest in the Company, and all other entities in which the Company
owns any direct or indirect interest, a fraction, expressed as a percentage if
so indicated, the numerator of which is the number of shares of common stock in
the Company which Holder would hold if all securities convertible into or
exercisable or exchangeable for common stock in the Company held by Holder were
converted into or exercised or exchanged for common stock in the Company, and
the denominator of which is the total number of shares of common stock in the
Company which would be outstanding if all securities convertible into or
exercisable or exchangeable for common stock in the Company were converted into
or exercised or exchanged for common stock in the Company.
(b) The Company shall be relieved of its duties under Section 5.4 of
this Agreement when the gross retail value of Registrable Shares held by Holder
is less than Twenty Five Million Dollars ($25,000,000).
7. Indemnification; Contribution.
7.1 Indemnification by the Company. The Company agrees to indemnify,
defend and hold harmless the Holder (and each nominee or assignee of the Holder
permitted pursuant to Section 8.5) and each person, if any, who controls the
Holder within the meaning of Section 15 of the Securities Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
follows:
(a) against any and all loss, liability, claim, damage and
expense whatsoever (including fees and disbursements of counsel), arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement (or any amendment thereto) pursuant
to which securities held by the Holder were registered under the Securities Act,
including all documents incorporated therein by reference, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto), including
all documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (collectively a "Material Misstatement"):
(b) against any and all loss, liability, claim, damage and
expense whatsoever (including fees and disbursements of counsel) to the extent
of the aggregate amount paid in settlement of any litigation, or investigation
or proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever arising out of or based upon any Material Misstatements or
alleged Material Misstatement, if such settlement is effected with the written
consent of the Company; and
(c) against any and all loss, liability, claim, damage and
expense whatsoever (including fees and disbursements of counsel), incurred in
investigating, preparing or defending against any litigation, investigation or
proceeding by any governmental agency or body, commenced or threatened, in each
case whether or not a party, or of any claim whatsoever arising out of or based
upon any Material Misstatement or alleged Material Misstatement, to the extent
that any such loss, liability, claim, damage or expense is not paid under
subparagraph (a) or (b) above;
provided, however, that the indemnity provided pursuant to this Section 7.1
shall not apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written information
furnished to the Company by the Holder expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto).
7.2 Indemnification by Holder. Holder agrees to indemnify, defend
and hold harmless the Company, and each of its directors and officers, and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the
indemnity contained in Section 7.1 hereof (except that any settlement described
in Section 7.1(b) shall be effected with the written consent of the Holder), but
only insofar as such loss, liability, claim, damage or expense arises out of or
is based upon any untrue statement or omission, or alleged untrue statement or
omission, of a material fact made in reliance upon and in conformity with
written information furnished to the Company by the Holder expressly for use in
any Registration Statement (or any amendment or supplement thereto) or the
Prospectus (or any amendment or supplement thereto) pursuant to which securities
held by the Holder (or permitted assignees) were registered under the Securities
Act. In no event shall the liability of Holder hereunder be greater in amount
than the gross dollar amount of the proceeds received by Holder upon the sale of
the Registrable Shares giving rise to such indemnification obligation.
7.3 Conduct of Indemnification Proceedings. The indemnified party
under any indemnity contained in this Agreement shall give reasonably prompt
notice to the indemnifying party of any action or proceeding commenced against
it in respect of which indemnity may be sought hereunder, but failure to so
notify the indemnifying party (a) shall not relieve it from any liability which
it may have under the indemnity agreements provided in this Agreement, unless
and to the extent it did not otherwise learn of such action and the lack of
notice by the indemnified party results in the forfeiture by the indemnifying
party of substantial rights and defenses, and (b) shall not, in any event,
relieve the indemnifying party from any obligations to the indemnified party
other than the indemnification obligations provided under this Agreement. If the
indemnifying party so elects within a reasonable time after receipt of such
notice, the indemnifying party may assume the defense of such action or
proceeding with counsel chosen by the indemnifying party and approved by the
indemnified party, which approval shall not be unreasonably withheld; provided,
however, that the indemnifying party will not settle any such action or
proceeding without the written consent of the indemnified party unless, as a
condition to such settlement, the indemnifying party secures the unconditional
release of the indemnified party; and provided further, that if the defendants
in any such action or proceeding include both the indemnified party and the
indemnifying party and the indemnified party reasonably determines, upon advice
of counsel, that a conflict of interest exists or that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, then the indemnified
party shall be entitled to one separate counsel, the reasonable fees and
expenses of which shall be paid by the indemnifying party. If the indemnifying
party does not assume the defense of such action or proceeding, after having
received the notice referred to in the first sentence of this Section 7.3, the
indemnifying party will pay the reasonable fees and expenses of counsel (which
shall be limited to a single law firm) for the indemnified party. In such event,
however, the indemnifying party will not be liable for any settlement effected
without the written consent of the indemnifying party. If an indemnifying party
is entitled to assume, and assumes, the defense of such action or proceeding in
accordance with this Section, the indemnifying party shall not be liable for any
fees and expenses of counsel for the indemnified party incurred thereafter in
connection with such action or proceeding except as set forth in the second
proviso in the second sentence of this Section 7.3.
7.4 Contribution.
(a) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreements provided for in this Agreement
are for any reason held to be unenforceable by the indemnified party in
accordance with its terms, the Company and the Holder shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Company and the Holder,
(a) in such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and the Holder on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, or (b) if the allocation provided by clause (a) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative fault of but also the relative benefits to the
Company on the one hand and the Holder on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits to the indemnifying party and indemnified party shall be
determined by reference to, among other things, the total proceeds received by
the indemnifying party and indemnified party in connection with the offering to
which such losses, claims, damages, liabilities or expenses relate. The relative
fault of the indemnifying party and indemnified party shall be determined by
reference to, among other things, whether the action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, the indemnifying party or the indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action.
(b) The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section 7.4 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in subparagraph (a) above.
Notwithstanding the provisions of this Section 7.4, the Holder shall not be
required to contribute any amount in excess of the amount of the total proceeds
to the Holder from sales of Covered Securities of the Holder under the
Registration Statement.
(c) Notwithstanding subparagraphs (a) and (b) above, 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. For purposes of this Section
7.4, each person, if any, who controls the Holder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Holder, and each director of the Company, each
officer of the Company who signed a Registration Statement and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as the Company.
8. Holdback Agreements.
8.1 Holder Holdback Agreement. Holder shall not effect any sale or
distribution of Registrable Shares or any securities convertible into or
exchangeable or exercisable for Registrable Shares, including a sale pursuant to
Rule 144 (or any similar provision then in force) under the Securities Act, if
and to the extent required by the managing underwriter of an underwritten
offering being undertaken by the Company; provided, however, that such
restriction on public sales or distributions shall not apply (a) for a period
exceeding the fourteen (14) days prior to, and the one hundred eighty (180) day
period beginning on, the effective date of the registration statement filed in
connection with such underwritten offering; (b) to any sale as a part of or in
conjunction with such underwritten offering; or (c) unless all officers,
directors and other persons with registration rights with respect to securities
of the Company enter into or are restricted by similar holdback agreements.
8.2 Company Holdback Agreement. Company shall not effect any sale or
distribution of (other than in connection with Company employee, Company
consultant or Company director stock options), or assist in an underwritten
offering by any other person of, any securities of the Company or securities
convertible into or exchangeable or exercisable for securities of the Company,
if and to the extent required by the managing underwriter of an underwritten
offering being undertaken pursuant to Section 5.1, above; provided, however,
that such restriction on public sales or distributions shall not apply (a) for a
period exceeding the fourteen (14) days prior to, and the one hundred eighty
(180) day period beginning on, the effective date of the registration statement
filed in connection with such underwritten offering in; or (b) to any sale as a
part of or in conjunction with an underwritten offering in compliance with
Section 5.5(a). The foregoing restrictions shall not apply to issuances by the
Company of its securities upon the exercise of employee, consultant or director
stock options to the extent permitted by the managing underwriter.
9. Miscellaneous.
9.1 Expenses. The Company shall pay all expenses incurred in
connection with any Registration Statement, Prospectus and related materials
with respect to all registrations made pursuant to Sections 1, 2 and 3, and any
underwritten offering requested by Holder pursuant to Section 5.1 or undertaken
by the Company pursuant to Section 5.4, and the performance by it of any and all
of its other obligations under this Agreement, including (a) all stock exchange,
SEC and state securities registration, listing and filing fees, (b) all expenses
incurred in connection with the preparation, printing and distributing of
Registration Statements and Prospectuses, (c) accounting fees, costs of
appraisals, and the costs of environmental and other reports, (d) fees and
disbursements of counsel for the Company, and (e) except as set forth in the
following sentence, underwriting discounts, brokerage and selling commissions
and transfer taxes. The Holder shall be responsible for the payment of any
underwriting discounts, brokerage and selling commissions and transfer taxes
relating to the sale or disposition of securities held by the Holder, and the
fees and disbursements of the Holder's counsel. Notwithstanding the foregoing,
in the event any attempt to file a registration statement with the SEC pursuant
to Sections 1, 2 or 3 fails solely due to the fault or error of Holder, Holder
will reimburse the Company for the Company's reasonable costs and expenses
incurred in attempting to accomplish such registration.
9.2 Authorization; No Conflicts. Each party to this Agreement
represents and warrants to the other parties to this Agreement that the
execution and deliver of this Agreement by such party and the performance by
such party of its covenants and agreements under this Agreement have been, or at
the time of such performance will have been, duly authorized by all necessary
corporate action on the part of such party, and all required consents to the
transactions contemplated hereby have been obtained by such party, or at the
time of such performance will have been received by such party. The execution,
delivery and performance by such party of this Agreement, the fulfillment of and
compliance with the terms and provisions hereof, and the consummation by such
party of the transactions contemplated hereby, do not and will not: (a) conflict
with, or violate any provisions of, the Articles of Incorporation, Bylaws or
other governing documents of such party; (b) conflict with, or violate any
provision of, any statute, law, ordinance, regulation, rule, order, writ or
injunction having applicability to such party or any of its assets; (c) result
in a breach or acceleration of the maturity of any loan or credit agreement to
which such party is a party or by which any of its assets may be affected; or
(d) conflict with, result in any breach of, or constitute a default under any
agreement to which such party is a party or by which it or any of its assets are
bound.
9.3 Integration; Amendment. This Agreement, together with its
exhibits and the other agreements referred to herein, constitutes the entire
agreement among the parties hereto with respect to the matters relating to
registration rights set forth herein and supersedes and renders of no force and
effect all prior oral or written agreements, commitments and understandings
among the parties with respect to the matters relating to registration rights
set forth herein. Except as otherwise expressly provided in this Agreement, no
amendment, modification or discharge of this Agreement shall be valid or binding
unless set forth in writing and duly executed by each of the parties hereto.
9.4 Waivers. No waiver by a party hereto shall be effective unless
made in a written instrument duly executed by the party against whom such waiver
is sought to be enforced, and only to the extent set forth in such instrument.
Neither the waiver by any of the parties hereto of a breach or a default under
any of the provisions of this Agreement, nor the failure of any of the parties,
on one or more occasions, to enforce any of the provisions of this Agreement or
to exercise any right or privilege hereunder shall thereafter be construed as a
waiver of any subsequent breach or default of a similar nature, or as a waiver
of any such provisions, rights or privileges hereunder.
9.5 Assignment; Successors and Assigns. The Holder may elect to have
a nominee take title to any or all of the Registrable Shares, in which went the
benefits of this Agreement shall run directly to such nominee. The Holder may
assign its rights and obligations under this Agreement to the New York State
Common Retirement Fund ("CRF") or to any entity wholly owned, directly or
indirectly, by CRF and to which all of the Registrable Shares have been
transferred. This Agreement shall be binding upon and inure to the benefit of
the Company and its successors by merger. Except as provided in this Section, no
party hereto shall assign its rights and/or obligations under this Agreement, in
whole or in part, whether by operation of law or otherwise.
9.6 Burden and Benefit. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, personal and legal representatives, successors and, subject to
Section 8.5 above, assigns.
9.7 Notices. Any notice, consent or approval required or permitted
to be given under this Agreement shall be in writing and shall be deemed to have
been given (i) upon hand delivery to the recipient; (ii) by facsimile
transmission, upon receipt by the sender of confirmation of such transmission,
(iii) one (1) business day after being deposited with Federal Express or another
reliable overnight courier service for next day delivery; or (iv) if deposited
in the United States mail, registered or certified mail, postage prepaid, return
receipt required, on the date of receipt or refusal to accept delivery; and
addressed or telecopied as follows:
If to Company:
PS Business Parks, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxx, Xx.
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
And a copy to:
Xxxx and Xxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Holder:
Office of the State Comptroller
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Chief Real Estate Investment
Officer - Equity Program
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
And a copy to:
Office of the State Comptroller
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxxx Xxxxx, Esq.
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
And a copy to:
Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx X. Xxxxx, Esq.
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
And a copy to:
Heitman Capital Management Corporation
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxx
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
or such other address or telephone number as any party may from time to time
specify in writing to the others; provided, however, that the foregoing
addresses and numbers shall remain in effect unless and until notice of and
change is deemed to have been given in the manner required by this Section.
9.8 Specific Performance. The parties hereto acknowledge that the
obligations undertaken by them hereunder are unique and that there would be no
adequate remedy at law if any party fails to perform any of its obligations
hereunder, and accordingly agree that each party, in addition to any other
remedy to which it may be entitled at law or in equity, shall be entitled to (a)
compel specific performance of the obligations, covenants and agreements of any
other party under this Agreement in accordance with the terms and conditions of
this Agreement; and (b) obtain preliminary injunctive relief to secure specific
performance and to prevent a breach or contemplated breach of this Agreement.
Each party waives the requirement of the posting of any bond or security in
connection with any proceedings or any injunction issued in connection with this
Section.
9.9 Governing Law. Notwithstanding that California law, with respect
to choice of law, or the Constitution, laws or treaties of the United States of
America, may dictate that this Agreement should be governed by or construed in
accordance with the laws of another jurisdiction, this Agreement, and all
documents and instruments executed and delivered in connection herewith shall be
governed by and construed in accordance with the laws of the State of
California.
9.10 Enforcement. If any party hereto institutes any action or
proceeding to interpret or enforce any provision of this Agreement or for an
alleged breach of any provision of this Agreement, the prevailing party shall be
entitled to recover its actual attorneys' fees and all fees, costs and expenses
incurred in connection with such action or proceeding. Such attorneys' fees,
fees, costs and expenses shall include post judgment attorneys' fees, fees,
costs and expenses incurred on appeal or in collection of any judgment. This
provision is separate and several and shall survive the merger of this provision
into any judgment on this Agreement. No person or entity other than the parties
hereto is or shall be entitled to bring any action to enforce any provision of
this Agreement against any of the parties hereto, and the covenants and
agreements set forth in this Agreement shall be solely for the benefit of, and
shall be enforceable only by, the parties hereto or their respective successors
and assigns as permitted hereunder.
9.11 Jurisdiction and Venue. Any action initiated by any party under
this Agreement shall be brought and prosecuted in the United States District
Court for the Central District of California which the parties acknowledge and
agree is a convenient forum in which to litigate such action, and the parties
waive any right to commence or transfer such action in or to any other court.
Should said District Court find that it has no jurisdiction over such action,
then such action shall be brought and prosecuted in the Superior Court of the
County of Los Angeles, State of California. Each party hereto expressly consents
and submits to personal jurisdiction in the federal or state courts, as the case
may be, in the State of California, County of Los Angeles and to permanent and
exclusive venue in Los Angeles County, State of California. In addition, in any
action under this Agreement, each party hereto expressly consents to service of
process by any manner set forth in this Agreement for the giving of notice.
9.12 Headings. Section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
9.13 Pronouns. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person or entity may. require.
9.14 Execution in Counterparts. To facilitate execution, this
Agreement may be executed in as many counterparts as may be required. It shall
not be necessary that the signature of or on behalf of each party appears on
each counterpart, but it shall be sufficient that the signature of or on behalf
of each party appears on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of
counterparts containing the respective signatures of or on behalf of all of the
parties.
9.15 Severability. If fulfillment of any provision of this
Agreement, at the time such fulfillment shall be due, shall transcend the limit
of validity prescribed by law, then the obligation to be fulfilled shall be
reduced to the limit of such validity; and if any clause or provision contained
in this Agreement operates or would operate to invalidate this Agreement, in
whole or in part, then such clause or provision only shall be held ineffective,
as though not herein contained, and the remainder of this Agreement shall remain
operative and in full force and effect.
9.16 Exhibits. All exhibits attached hereto are incorporated herein
as though fully set forth herein.
9.17 Time of the Essence. Time is of the essence in the performance
of this Agreement.
9.18 Execution of Documents by Holder. Holder has informed Company,
and Company understands and agrees, that for administrative reasons Holder
requires up to five (5) business days to execute any document and an additional
one (1) business day to deliver such document. Therefore, all documents to be
executed by Holder shall be agreed to and prepared in final execution form and
received by Holder for execution not less than six (6) business days prior to
the scheduled delivery date.
9.19 Further Assurances. Each party agrees to cooperate fully with
the other parties and to prepare, execute, and deliver such further instruments
of conveyance, contribution, assignment, or transfer and shall take or cause to
be taken such other or further action as either party shall reasonably request
at any time or from time to time in order to consummate the terms and provisions
and to carry into effect the intents and purposes of this Agreement.
9.20 Legal Representation and Construction. Each party hereto has
been represented by legal counsel in connection with the negotiation and
drafting of this Agreement. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement, and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed on its behalf as of the date first hereinabove set forth.
COMPANY:
PS BUSINESS PARKS, INC., a
California corporation
By: /s/ XXXXXX X. XXXXXX, XX.
--------------------------------
Xxxxxx X. Xxxxxx, Xx.
President, CEO
(Print Name and Title)
HOLDER:
ACQUIPORT TWO CORPORATION, a
Delaware corporation
By: /S/ XXXXXX X. XXXXXXX
--------------------------------
Vice President
(Print Name and Title)
[Exhibit A to this Agreement has been omitted and will be furnished to
the Securities and Exchange Commission upon request]
