Exhibit 4.2.1
REGISTRATION RIGHTS AGREEMENT
by and among
XXXXXXX PACIFIC PROPERTIES, INC.
XXXXXXXXX XXXXXXX HOLDINGS, L.L.C.
and
XXXXXXXXX XXXXXXX CO-HOLDINGS, L.L.C.
dated as of
December 31, 1997
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.................................................... 1
(a) "Agreement"....................................................... 1
(b) "Buyer"........................................................... 1
(c) "Company"......................................................... 1
(d) "Commission"...................................................... 1
(e) "Exchange Act".................................................... 1
(f) "Exercise Notice"................................................. 1
(g) "Existing Partners"............................................... 1
(h) "Existing Partners Agreement"..................................... 1
(i) "NASD"............................................................ 2
(j) "Registrable Securities".......................................... 2
(k) "Registration Expenses"........................................... 2
(l) "Registration Suspension Period".................................. 2
(m) "Securities Act".................................................. 2
(n) "Shelf Registration".............................................. 2
(o) "Stock Purchase Agreement"........................................ 2
(p) "Suspension Notice"............................................... 2
(q) "Tag-Along Notice"................................................ 2
(r) "Tag-Along Shares"................................................ 2
(s) "Tag-Along Transaction"........................................... 2
(t) "Third Party"..................................................... 3
(u) "Underwritten/Placed Offering".................................... 3
SECTION 2. SHELF REGISTRATION.............................................. 3
(a) Obligation to File and Maintain................................... 3
(b) Black-Out Periods of Buyer........................................ 3
(c) Black-Out Periods of the Company.................................. 4
(d) Notice............................................................ 5
SECTION 3. DEMAND REGISTRATION............................................ 5
(a) Buyer Right to Demand Registration................................ 5
(b) Special Demand Registration....................................... 5
(c) Black-Out Periods of Buyer........................................ 5
(d) Black-Out Periods of the Company.................................. 6
(e) Notice............................................................ 6
SECTION 4. INCIDENTAL REGISTRATIONS........................................ 7
i
(a) Notification and Inclusion........................................ 7
(b) Cut-back Provisions............................................... 7
(d) Duration of Effectiveness......................................... 8
SECTION 5. REGISTRATION PROCEDURES......................................... 8
SECTION 6. CERTAIN UNDERWRITTEN OFFERINGS.................................. 10
SECTION 7. PREPARATION; REASONABLE INVESTIGATION........................... 11
SECTION 8. TAG-ALONG RIGHTS................................................ 11
(a) Rights and Notice................................................. 11
(b) Number of Shares to be Included................................... 12
(c) Abandonment of Sale............................................... 12
(d) Terms of Sale..................................................... 12
(e) Timing of Sale.................................................... 12
SECTION 9. INDEMNIFICATION................................................. 12
(a) Indemnification by the Company.................................... 12
(b) Indemnification by Buyer.......................................... 13
(c) Notices of Claims, etc............................................ 14
(d) Indemnification Payments.......................................... 14
(e) Contribution...................................................... 14
SECTION 10. COVENANTS RELATING TO RULE 144................................. 15
SECTION 11. MISCELLANEOUS................................................. 15
(a) Expenses.......................................................... 15
(b) Counterparts...................................................... 15
(c) Governing Law..................................................... 15
(d) Entire Agreement.................................................. 16
(e) Notices........................................................... 16
(f) Successors and Assigns............................................ 17
(g) Headings.......................................................... 17
(h) Amendments and Waivers............................................ 17
(i) Interpretation: Absence of Presumption............................ 18
(j) Severability...................................................... 18
ii
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
December 31, 1997, by and among Xxxxxxx Pacific Properties, Inc., a Maryland
corporation (the "Company") and Xxxxxxxxx Xxxxxxx Holdings, L.L.C. and
Xxxxxxxxx Xxxxxxx Co-Holdings, L.L.C., each a Delaware limited liability
company (collectively hereinafter referred to as the "Buyer").
RECITALS:
WHEREAS, the Company and Buyer have entered into a Stock Purchase
Agreement, dated as of December 5, 1997 (the "Stock Purchase Agreement"),
that provides for the purchase by Buyer and sale by the Company to Buyer of
the Company Preferred Stock (as defined therein); and
WHEREAS, the Company has agreed to provide the registration rights
set forth herein as a condition to the Closing under the Stock Purchase
Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants
and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and intending to be legally bound hereby, the parties hereto hereby agree as
follows:
Section 1. Definitions. Capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Stock Purchase
Agreement. In addition, as used herein, the following terms shall have the
following meanings:
(a) "Agreement": shall have the meaning set forth in the first
paragraph hereof.
(b) "Buyer": shall have the meaning set forth in the first
paragraph hereof.
(c) "Company": shall have the meaning set forth in the first
paragraph hereof.
(d) "Commission": the Securities and Exchange Commission, and any
successor thereto.
(e) "Exchange Act": the Securities Exchange Act of 1934, as
amended, and any successor thereto, and the rules and regulations thereunder.
(f) "Exercise Notice": shall have the meaning set forth in Section
7(a).
(g) "Existing Partners": shall have the meaning set forth in the
Existing Partners Agreement.
(h) "Existing Partners Agreement": shall have the meaning set
forth in Section 3(a).
1
(i) "NASD": the National Association of Securities Dealers, Inc.
(j) "Registrable Securities": (i) any and all shares of Company
Stock and (ii) any securities issued or issuable with respect to any Company
Stock or other securities referred to in clause (i) by way of conversion,
exchange, stock dividend or stock split or in connection with a combination
of shares, recapitalization, merger, consolidation or other reorganization or
otherwise issued to Buyer pursuant to the Stock Purchase Agreement. As to
any particular Registrable Securities, once issued, such securities shall
cease to be Registrable Securities when (A) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, or (B) such securities shall have been sold
in accordance with Rule 144 (or any successor provision) under the Securities
Act.
(k) "Registration Expenses": (i) the fees and disbursements of
counsel and independent public accountants for the Company incurred in
connection with the Company's performance of or compliance with this
Agreement, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, and any
premiums and other costs of policies of insurance obtained by the Company
against liabilities arising out of the sale of any securities and (ii) all
registration, filing and stock exchange or NASD fees, all fees and expenses
of complying with securities or blue sky laws, all printing expenses,
messenger and delivery expenses, any fees and disbursements of any common
counsel retained by Buyer, and transfer taxes, if any.
(l) "Registration Suspension Period": shall have the meaning set
forth in Section 2(b).
(m) "Securities Act": the Securities Act of 1933, as amended, and
any successor thereto, and the rules and regulations thereunder.
(n) "Shelf Registration": shall have the meaning set forth in
Section2(a).
(o) "Stock Purchase Agreement": shall have the meaning set forth in
the first paragraph of the Recitals hereof.
(p) "Suspension Notice": shall have the meaning set forth in
Section 2(b).
(q) "Tag-Along Notice": shall have the meaning set forth in Section
8(a).
(r) "Tag-Along Shares": shall have the meaning set forth in Section
8(a).
(s) "Tag-Along Transaction": any non-public issuance of Company
Stock other than in a distribution registered under the Securities Act for
consideration all, or substantially all, of which consists of cash or cash
equivalents (as determined under GAAP).
(t) "Tag-Along Transaction Shares": shall have the meaning set
forth in Section 8(a).
2
(u) "Third Party": shall have the meaning set forth in Section 8(a).
(v) "Underwritten/Placed Offering": a sale of securities of the
Company to an underwriter or underwriters for reoffering to the public or on
behalf of a person other than the Company through an agent for sale to the
public.
Section 2. Shelf Registration. (a) Obligation to File and
Maintain. At any time and from time to time following the date on which the
Buyer holds in excess of 250,000 shares of Registrable Securities, promptly
upon the written request of Buyer, the Company will use its best efforts to
file with the Commission a registration statement under the Securities Act
for the offering on a continuous or delayed basis in the future of all of the
Registrable Securities (the "Shelf Registration"). The Shelf Registration
shall be on an appropriate form, and the Shelf Registration and any form of
prospectus included therein or prospectus supplement relating thereto, shall
reflect such plan of distribution or method of sale as Buyer may from time to
time notify the Company, including the sale of some or all of the Registrable
Securities in a public offering or, if requested by Buyer, subject to receipt
by the Company of such information (including information relating to
purchasers) as the Company reasonably may require, (i) in a transaction
constituting an offering outside the United States which is exempt from the
registration requirements of the Securities Act in which the Company
undertakes to effect registration of such shares as soon as possible after
the completion of such offering in order to permit such shares to be freely
tradable in the United States, (ii) in a transaction constituting a private
placement under Section 4(2) of the Securities Act in connection with which
the Company undertakes to register such shares after the conclusion of such
placement to permit such shares to be freely tradable by the purchasers
thereof, or (iii) in a transaction under Rule 144A of the Securities Act in
connection with which the Company undertakes to register such shares after
the conclusion of such transaction to permit such shares to be freely
tradable by the purchasers thereof. The Company shall use its best efforts
to keep the Shelf Registration continuously effective for the period
beginning on the date on which the Shelf Registration is declared effective
and ending on the first date that there are no Registrable Securities (Buyer
to promptly notify the Company of such). During the period during which the
Shelf Registration is effective, the Company shall supplement or make
amendments to the Shelf Registration, if required by the Securities Act, or
if reasonably requested by Buyer or an underwriter of Registrable Securities,
including to reflect any specific plan of distribution or method of sale, and
shall use its reasonable best efforts to have such supplements and amendments
declared effective, if required, as soon as practicable after filing.
Notwithstanding anything to the contrary provided herein, Buyer's rights
pursuant to this Section 2 shall be effective not earlier than one year
following the date hereof.
(b) Black-Out Periods of Buyer. Notwithstanding anything herein to
the contrary, (i) the Company shall have the right, exercisable on not more
than five occasions (including any Black-Out Period rights the Company may
have under Section 3(c) below, and not more than two in any 12 month period),
from time to time to require Buyer not to sell under the Shelf Registration,
as provided for in Section 2(a), or to suspend the effectiveness thereof
during the period starting with the date 20 days prior to the Company's good
faith estimate, as certified in writing by an executive officer of the
Company to Buyer, of the
3
proposed date of filing of a registration statement or a preliminary
prospectus supplement relating to an existing shelf registration statement,
in either case, pertaining to an underwritten public offering of equity
securities of the Company for the account of the Company, and ending on the
date 75 days following the effective date of such registration statement or
the date of filing of such prospectus supplement, and (ii) the Company shall
be entitled to postpone or suspend (but not for a period exceeding 90 days)
the filing or effectiveness of a registration statement otherwise required to
be prepared and filed by it pursuant to Section 2(a) if the Company
determines, in its good faith judgment, that such registration and offering
or continued effectiveness would interfere with any material financing,
acquisition, disposition, corporate reorganization or other material
transaction involving the Company or any of its subsidiaries or public
disclosure thereof would be required prior to the time such disclosure might
otherwise be required, or when the Company is in possession of material
information that it deems advisable not to disclose in a registration
statement.
Once any registration statement filed pursuant to Section 2(a), or
as set forth below in Section 3 has been declared effective, any period
during which the Company fails to keep such registration statement effective
and usable for resale of Registrable Securities shall be referred to as a
"Registration Suspension Period", which term shall not include any failure
solely attributable to the exercise of the Company's rights under this
Section 2(b). A Registration Suspension Period shall commence on and include
the date that the Company gives written notice to Buyer of its determination
that such registration statement is no longer effective or usable for resale
of Registrable Securities (the "Suspension Notice") to and including the date
when the Company notifies Buyer that the use of the prospectus included in
such registration statement may be resumed for the disposition of Registrable
Securities.
(c) Black-Out Periods of the Company. Subject to the conditions of
this Section 2(c), Buyer shall have the right, exercisable on not more than
five occasions (including any Black-Out Period rights Buyer may have in
Section 3(d) below, and not more than two in any 12 month period), to require
the Company not to sell any common equity securities of the Company or any
securities convertible into common equity securities of the Company under any
registration statement or prospectus supplement, relating to an existing
shelf registration statement or to suspend the effectiveness thereof, during
the period starting with the date 20 days prior to Buyer's good faith
estimate, as certified in writing by an executive officer of Buyer to the
Company, of the proposed date of filing of a preliminary prospectus
supplement relating to a Shelf Registration filed pursuant to Section 2(a),
pertaining to an underwritten public offering of Registrable Securities, and
ending on the date 75 days following the date of filing of the final
prospectus supplement, but in no event on a date later than 90 days following
the date of filing of the preliminary prospectus supplement. The Company's
obligations under this Section 2(c) are subject to the continuing
satisfaction of the following conditions: (i) no black-out period pursuant to
Section 2(b)(i) shall be in effect at the time of Buyer's exercise of its
rights under this Section 2(c); (ii) the Company shall not have suspended
sales of Registrable Securities pursuant to Section 2(b)(ii); and (iii) the
Company shall not have delivered to Buyer a written notice to the effect that
the Board of Directors has determined in good faith that compliance with this
Section 2(c) would reasonably be expected to have a material adverse effect
on the Company. In no event may the Company include in any
4
preliminary prospectus supplement under which Buyer is offering Registrable
Securities covered by this Section 2(c) any equity securities of the Company
or any securities convertible into equity securities of the Company.
(d) Notice. The Company shall give Buyer prompt notice in the
event that the Company has suspended sales of Registrable Securities under
Section 2(b).
Section 3. Demand Registration. (a) Buyer Right to Demand
Registration. At any time that a shelf registration statement is not filed
and maintained as set forth in Section 2(a) or there shall have occurred a
Registration Suspension Period in excess of 60 days, if the Company shall
receive a written request from the Buyer that the Company file a registration
statement or similar document under the Securities Act with respect to the
Registrable Securities, then the Company shall promptly cause such
registration statement or similar document to be filed with the Commission
and shall use its best efforts to cause all Registrable Securities that the
Buyer has requested to be registered under the Securities Act to be so
registered within 120 days of such request and maintain the effectiveness of
such registration statement until the earlier of (i) the sale of all of the
Registrable Securities registered pursuant thereto (Buyer to promptly notify
the Company of such) and (ii) 180 days following the effective date of such
registration. The Buyer may exercise its rights under this Section 3(a)
twice during any twelve month period, provided, that its second such right
shall be conditioned upon the Existing Partners (as such term is defined in
the Registration Rights Agreement, dated as of December __, 1997, by and
among the Company and each of the Existing Partners listed on Exhibit A-1
thereto (the "Existing Partners Agreement")) not having exercised their
second right to demand registration under Section 3(a) of the Existing
Partners Agreement with the Company, dated as of the date hereof, during such
twelve month period. Notwithstanding anything to the contrary provided
herein, Buyer's rights pursuant to this Section 3 shall be effective not
earlier than one year following the date hereof.
(b) Special Demand Registration. Buyer may demand in writing that
the Company register and list, not earlier than one year following the date
hereof, the Company Preferred Stock on the principal exchange on which the
Company's securities are then listed, if so permitted by applicable law and
the regulations of such exchange. If the Company shall receive a written
request from the Buyer that the Company file a registration statement or
similar document under the Securities Act pursuant to this Section 3(b), then
the Company shall promptly cause such registration statement or similar
document to be filed with the Commission and shall use its best efforts to
cause all Registrable Securities that the Buyer has requested to be
registered under the Securities Act to be so registered within 120 days of
such request and maintain the effectiveness of such registration until the
earlier of (i) the sale of all of the Registrable Securities registered
pursuant thereto (Buyer to promptly notify the Company of such) and (ii) 180
days following the effective date of such registration.
(c) Black-Out Periods of Buyer. Notwithstanding anything herein to
the contrary, (i) the Company shall have the right, exercisable on not more
than five occasions (including any Black-Out Period rights the Company may
have in Section 2(b) above, and not more than two in any 12 month period),
from time to time to require Buyer not to sell
5
pursuant to a registration statement or similar document under the Securities
Act filed pursuant to Section 3(a) or (b) or to suspend the effectiveness
thereof during the period starting with the date 20 days prior to the
Company's good faith estimate, as certified in writing by an executive
officer of the Company to Buyer, of the proposed date of filing of a
registration statement or a preliminary prospectus supplement relating to an
existing registration statement, in either case, pertaining to an
underwritten public offering of equity securities of the Company for the
account of the Company, and ending on the date 75 days following the
effective date of such registration statement or the date of filing of such
prospectus supplement, and (ii) the Company shall be entitled to postpone or
suspend (but not for a period exceeding 90 days) the filing or effectiveness
of a registration statement otherwise required to be prepared and filed by it
pursuant to Section 3(a) or (b) if the Company determines, in its good faith
judgment, that such registration and offering or continued effectiveness
would interfere with any material financing, acquisition, disposition,
corporate reorganization or other material transaction involving the Company
or any of its subsidiaries or public disclosure thereof would be required
prior to the time such disclosure might otherwise be required, or when the
Company is in possession of material information that it deems advisable not
to disclose in a registration statement.
(d) Black-Out Periods of the Company. Subject to the conditions of
this Section 3(d), Buyer shall have the right, exercisable on not more than
five occasions (including any Black-Out Period rights Buyer may have in
Section 2(c) above, and not more than two in any 12 month period), to require
the Company not to sell any common equity securities of the Company or any
securities convertible into common equity securities of the Company under any
registration statement or prospectus supplement relating to an existing
registration statement or to suspend the effectiveness thereof, during the
period starting with the date 20 days prior to Buyer's good faith estimate,
as certified in writing by an executive officer of Buyer to the Company, of
the proposed date of filing of a preliminary prospectus supplement relating
to a registration statement or similar document under the Securities Act
filed pursuant to Section 3(a) or (b), pertaining to an underwritten public
offering of Registrable Securities, and ending on the date 75 days following
the date of filing of the final prospectus supplement, but in no event on a
date later than 90 days following the date of filing of the preliminary
prospectus supplement. The Company's obligations under this Section 3(d) are
subject to the continuing satisfaction of the following conditions: (i) no
black-out period pursuant to Section 3(c)(i) shall be in effect at the time
of Buyer's exercise of its rights under this Section 3(d); (ii) the Company
shall not have suspended sales of Registrable Securities pursuant to Section
3(c)(ii); and (iii) the Company shall not have delivered to Buyer a written
notice to the effect that the Board of Directors has determined in good faith
that compliance with this Section 3(d) would reasonably be expected to have a
material adverse effect on the Company. In no event may the Company include
in any preliminary prospectus supplement under which Buyer is offering
Registrable Securities covered by this Section 3(d) any equity securities of
the Company or any securities convertible into equity securities of the
Company.
(e) Notice. The Company shall give Buyer prompt notice in the
event that the Company has suspended sales of Registrable Securities under
Section 3(c).
6
Section 4. Incidental Registrations. (a) Notification and
Inclusion. If the Company proposes to register for its own account any
common equity securities of the Company or any securities convertible into
common equity securities of the Company under the Securities Act (other than
a registration relating solely to the sale of securities to participants in a
dividend reinvestment plan, a registration on Form S-4 (or successor form)
relating to a business combination or similar transaction permitted to be
registered on such Form S-4 (or successor form), a registration on Form S-8
(or successor form) relating to the sale of securities to participants in a
stock or employee benefit plan, or a registration permitted under Rule 462
under the Securities Act registering additional securities of the same class
as were included in an earlier registration statement for the same offering
and declared effective), the Company shall, at each such time, promptly give
written notice of such registration to Buyer. Upon the written request of
Buyer given within 10 days (but in the case of a retail "spot" offering, two
Business Days so long as the Company has advised Buyer that it is considering
effecting such an offering, and the material terms thereof, as promptly as is
practical for the Company to do so and in any event not less than 10 days
prior to the beginning of such two Business Day period) after receipt of such
notice by Buyer, the Company shall seek to include in such proposed
registration such Registrable Securities of the same class as is then being
registered by the Company as Buyer shall request be so included and shall use
its best efforts to cause a registration statement covering all of the
Registrable Securities that Buyer has requested to be registered to become
effective under the Securities Act. The Company shall be under no obligation
to complete any offering of securities it proposes to make under this Section
4 and shall incur no liability to Buyer for its failure to do so. If, at any
time after giving written notice of its intention to register any securities
and prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such securities, the Company may,
at its election, give written notice of such determination to Buyer and,
thereupon, (i) in the case of a determination not to register, the Company
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses incurred in connection therewith) and (ii) in the case
of a determination to delay registering, the Company shall be permitted to
delay registering any Registrable Securities for the same period as the delay
in registering such other securities. Notwithstanding anything to the
contrary provided herein, Buyer's rights pursuant to this Section 4 shall be
effective not earlier than one year following the date hereof.
(b) Cut-back Provisions. If a registration pursuant to this
Section 4 involves an Underwritten/Placed Offering of the securities so being
registered, whether or not solely for sale for the account of the Company,
which securities are to be distributed by or through one or more underwriters
of recognized standing under underwriting terms customary for such
transaction, and the underwriter or the managing underwriter, as the case may
be, of such Underwritten/Placed Offering shall inform the Company of its
belief that the amount of securities requested to be included in such
registration or offering exceeds the amount which can be sold in (or during
the time of) such offering without delaying or jeopardizing the success of
the offering (including the price per share of the securities to be sold),
then the Company will include in such registration (i) first, all the
securities of the Company which the
7
Company proposes to sell for its own account and (ii) second, to the extent
of the amount which the Company is so advised can be sold in (or during the
time of) such offering, Registrable Securities and other securities requested
to be included in such registration, pro rata among Buyer and others
exercising incidental registration rights on the basis of the number of
securities requested to be included by all such persons.
(c) Duration of Effectiveness. At the request of Buyer, the
Company shall, subject to Section 2(b), use its best efforts to keep any
registration statement for which Registrable Securities are included under
this Section 4 effective and usable for up to 90 days (subject to extension
for the length of any Registration Suspension Period), unless the
distribution of securities registered thereunder has been earlier completed;
provided, however, that in no event will the Company be required to prepare
or file audited financial statements with respect to any fiscal year by a
date prior to the date on which the Company would be so required to prepare
and file such audited financial statements if such registration statement
were no longer effective and usable.
Section 5. Registration Procedures. (a) In connection with each
request by Buyer to file a registration statement as provided in Sections 2
or 3, the Company shall use its best efforts to, as expeditiously as
reasonably practicable:
(i) prepare and file with the Commission the requisite registration
statement (including a prospectus therein) to effect such registration and
use its best efforts to cause such registration statement to become
effective, provided that before filing such registration statement or any
amendments or supplements thereto, the Company will furnish to the counsel
selected by Buyer, copies of all such documents proposed to be filed, which
documents will be subject to the review of such counsel before any such
filing is made, and the Company will comply with any reasonable request
made by such counsel to make changes in any information contained in such
documents relating to Buyer;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to maintain the effectiveness of
such registration and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement during the period which such registration statement
is required to be kept effective;
(iii) furnish to Buyer such number of conformed copies of such
registration statement and of each such amendment and supplement thereto
(in each case including all exhibits other than those which are being
incorporated into such registration statement by reference), such number of
copies of the prospectus contained in such registration statements
(including each complete prospectus and any summary prospectus) and any
other prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents, including documents incorporated by reference, as Buyer may
reasonably request;
8
(iv) register or qualify all Registrable Securities under such other
securities or blue sky laws of such jurisdictions as Buyer shall reasonably
request, to keep such registration or qualification in effect for so long
as such registration statement remains in effect, and take any other action
which may be reasonably necessary or advisable to enable Buyer to
consummate the disposition in such jurisdictions of the securities owned by
Buyer, except that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation or register as
a broker or dealer in any jurisdiction wherein it would not but for the
requirements of this paragraph be obligated to be so qualified or
registered, or to consent to general service of process in any such
jurisdiction, or to subject the Company to any material tax in any such
jurisdiction where it is not then so subject;
(v) furnish to Buyer a signed counterpart, addressed to among others,
the underwriters, if any, of
(A) an opinion of counsel for the Company, dated the effective
date of such registration statement (and, if such registration
includes an underwritten public offering, dated the date of the
closing under the underwriting agreement), reasonably satisfactory in
form and substance to Buyer, and
(B) to the extent permitted by then applicable rules of
professional conduct, a "comfort" letter, dated the effective date of
such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), signed by the independent public accountants
who have certified the Company's financial statements included in such
registration statement; covering such matters with respect to such
registration statement and with respect to events subsequent to the
date of such financial statements,
all as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to the underwriters in underwritten public
offerings of securities;
(vi) immediately notify Buyer at any time when the Company becomes
aware that a prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made, and at the request of Buyer promptly prepare and
furnish to Buyer a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus as so
amended or supplemented shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made;
9
(vii) comply or continue to comply in all material respects with
the Securities Act and the Exchange Act and with all applicable rules and
regulations of the Commission, and not file any amendment or supplement to
such registration statement or prospectus to which Buyer shall have
reasonably objected on the grounds that such amendment or supplement does
not comply in all material respects with the requirements of the Securities
Act, having been furnished with a copy thereof at least five Business Days
prior to the filing thereof;
(viii) make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at
least 12 months, but not more than 18 months, beginning with the first full
calendar month after the effective date of such registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act;
(ix) provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the
effective date of such registration statement;
(x) list all Company Stock covered by such registration statement on
any securities exchange on which any of the Company Stock is then listed;
(b) In connection with the filing of any registration statement
covering Registrable Securities, Buyer shall furnish in writing to the
Company such information regarding Buyer (and any of its affiliates), the
Registrable Securities to be sold, the intended method of distribution of
such Registrable Securities, and such other information requested by the
Company as is necessary or advisable for inclusion in the registration
statement relating to such offering pursuant to the Securities Act and the
rules of the Commission thereunder. Such writing shall expressly state that
it is being furnished to the Company for use in the preparation of a
registration statement, preliminary prospectus, supplementary prospectus,
final prospectus or amendment or supplement thereto, as the case may be.
Buyer agrees by acquisition of the Registrable Securities that upon
receipt of any notice from the Company of the happening of any event of the
kind described in paragraph (a)(vi) of this Section 5, Buyer will forthwith
discontinue its disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until Buyer's
receipt of the copies of the supplemented or amended prospectus contemplated
by paragraph (a)(vi) of this Section 5.
Section 6. Certain Underwritten Offerings. If requested by the
underwriters for any underwritten offerings by Buyer, under a registration
requested pursuant to Section 2(a), the Company will enter into a customary
underwriting agreement with such underwriters for such offering, to contain
such representations and warranties by the Company and such other terms as
are customarily contained in agreements of this type, including indemnities
to the effect and to the extent provided in Section 9. Buyer shall be a party
to such underwriting agreement and may, at its option, require that any or
all of the conditions precedent to
10
the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of Buyer. Buyer shall not be
required to make any representations or warranties to or agreement with the
Company or the underwriters other than representations, warranties or
agreements regarding Buyer and Buyer's intended method of distribution and
any other representation or warranty required by law. Other than Xxxxxx
Xxxxxxx Xxxx Xxxxxx Discover, Xxxxxxxxx, Lufkin & Xxxxxxxx and Xxxxxx
Brothers, which firms are now designated by the Company as agreeable to it,
the Company may decline (but not more than three times) to retain an
underwriter of Buyer's choice. Buyer shall only propose underwriters of
mutually recognized standing.
Section 7. Preparation; Reasonable Investigation. In connection
with the preparation and filing of the registration statement under the
Securities Act, the Company will give Buyer, its underwriters, if any, and
their respective counsel, the opportunity to participate in the preparation
of such registration statement, each prospectus included therein or filed
with the Commission, and each amendment thereof or supplement thereto, and
will give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers, its
counsel and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of Buyer's and
such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
Section 8. Tag-Along Rights. Buyer shall be entitled to the rights
set forth in this Section 8.
(a) Rights and Notice. The Company shall not directly or
indirectly sell or otherwise dispose of shares of Company Stock to any person
(a "Third Party") in connection with a Tag-Along Transaction, unless the
terms and conditions of such sale or other disposition shall include an offer
to Buyer to include, at the option of Buyer, in such sale or other
disposition the Registrable Securities of the same class as those securities
to be so sold or disposed of by the Company owned as of the Exercise Notice
(as defined below) by Buyer at the time of such sale or other disposition
determined in accordance with Section 8(b) (the "Tag-Along Shares"). The
Company shall send a written notice (the "Tag-Along Notice") to Buyer setting
forth the number of shares of Company Stock proposed to be sold or otherwise
disposed of in the Tag-Along Transaction (the "Tag-Along Transaction
Shares"), and the price at which such shares are proposed to be sold (or the
method by which such price is proposed to be determined). At any time within
15 Business Days (but in the case of a retail "spot" offering, two Business
Days so long as the Company has advised Buyer that it is considering
effecting such an offering, and the material terms thereof, as promptly as is
practical for the Company to do so and in any event not less than 15 days
prior to the beginning of such two Business Day period) after its receipt of
the Tag-Along Notice, Buyer may exercise its option to sell the Tag-Along
Shares by furnishing written notice of such exercise (the "Exercise Notice")
to the Company. Notwithstanding anything to the contrary provided herein,
Buyer's rights pursuant to this Section 8 shall be effective not earlier than
one year following the date hereof.
11
(b) Number of Shares to be Included. If the proposed sale or other
disposition by the Company in connection with a Tag-Along Transaction is
consummated, Buyer shall have the right to sell to the Third Party as part of
such proposed sale or other disposition such number of Registrable Securities
owned by Buyer equal to the Pro Rata Share of Buyer (as determined pursuant
to Section 6.4(b) of the Stock Purchase Agreement) of the number of shares in
the completed offering. All calculations pursuant to this paragraph shall
exclude and ignore any unissued shares of Company Stock issuable pursuant to
stock options, warrants and other rights to acquire shares of Company Stock
and pursuant to convertible or exchangeable securities; provided, further,
that the provisions of this Section 8 shall not apply to (i) any shares of
any class of the Company Stock or convertible securities, issuable upon the
redemption or conversion of the Purchased Shares; (ii) or any shares of
Company Stock issued to employees, consultants or directors as compensation
or incentives for services rendered to the Company, or the Operating
Partnership, whether under the Company's amended Stock Option and Incentive
Plan or any successor thereto; or (iii) any issuance or sale of not more than
$120 million of Company Common Stock as contemplated in clause (X) of the
parenthetical of Section 5(e)(v) of the Articles Supplementary.
(c) Abandonment of Sale. Each of the Company and the Third Party
shall have the right, in its sole discretion, at all times prior to
consummation of the proposed sale or other disposition giving rise to the
tag-along right granted by this Section 8 to abandon, rescind, annul,
withdraw or otherwise terminate such sale or other disposition, whereupon all
tag-along rights in respect of such sale or other disposition pursuant to
this Section 8 shall become null and void, and neither the Company nor the
Third Party shall have any liability or obligation to Buyer with respect
thereto by virtue of such abandonment, rescission, annulment, withdrawal or
termination.
(d) Terms of Sale. The purchase from Buyer pursuant to this
Section 8 shall be on the same terms and conditions, including the per share
price and the date of sale or other disposition, as are applicable to the
Company, and which shall be consistent with the relevant Tag-Along Notice.
(e) Timing of Sale. If, with respect to any Tag-Along Notice,
Buyer fails to deliver an Exercise Notice within the requisite time period,
the Company shall have 120 days after the expiration of the time in which the
Exercise Notice is required to be delivered in which to sell or otherwise
dispose of not more than the number of shares of Company Stock described in
the Tag-Along Notice on terms not more favorable to the Company than were set
forth in the Tag-Along Notice. If, at the end of 120 days following the
receipt of the Tag-Along Notice, the Company has not completed the sale or
other disposition of Company Stock in accordance with the terms described in
the Tag-Along Notice, the Company shall again be obligated to comply with the
provisions of this Section 8 with respect to, and provide Buyer with the
opportunity to participate in, any proposed sale or other disposition of
shares of Company Stock in connection with a Tag-Along Transaction.
Section 9. Indemnification. (a) Indemnification by the Company. In
the event of any registration of any Registrable Securities of the Company
under the Securities Act, the
12
Company will, and hereby does, indemnify and hold harmless Buyer, each other
person who participates as an underwriter in the offering or sale of such
securities and each other person who controls any such underwriter within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which Buyer or any such underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such
Registrable Securities were registered and sold under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a 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 the Company will reimburse Buyer
and each such underwriter and controlling person for any reasonable legal or
any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceedings; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by Buyer or any other person who participates as an underwriter in
the offering or sale of such securities, in either case, specifically stating
that it is for use in the preparation thereof, and provided, further, that
the Company shall not be liable to Buyer or any person who participates as an
underwriter in the offering or sale of Registrable Securities or any other
person, if any, who controls such underwriter within the meaning of the
Securities Act in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense
arises out of such person's failure to send or give a copy of the final
prospectus or supplement to the persons asserting an untrue statement or
alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of Registrable Securities to such person if
such statement or omission was corrected in such final prospectus or
supplement. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of Buyer or any such underwriter or
controlling person and shall survive the transfer of such securities by Buyer.
(b) Indemnification by Buyer. The Company may require, as a
condition to including any Registrable Securities in any registration
statement pursuant to Section 2 or Section 3, that the Company shall have
received an undertaking satisfactory to it from Buyer to indemnify and hold
harmless (in the same manner and to the same extent as set forth in paragraph
(a) of this Section 8) the Company, each director of the Company, each
officer of the Company and each other person, if any, who controls the
Company within the meaning of the Securities Act, and each other person who
participates as an underwriter in the offering or sale of such securities and
each other person who controls any such underwriter within the meaning of the
Securities Act, with respect to any untrue statement or alleged untrue
statement of a material fact in or omission or alleged omission to state a
material fact from such
13
registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto,
if such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by Buyer specifically stating that it is for use in
the preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of the Company or any such director, officer, or controlling
person and shall survive the transfer of such securities by Buyer.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding paragraphs of this Section 8,
such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 8, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying
party shall be entitled to assume the defense thereof, for itself, if
applicable, together with any other indemnified party similarly notified to
the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to the indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof.
(d) Indemnification Payments. To the extent that the indemnifying
party does not assume any defense in an action brought against an indemnified
party as provided in Section 8(c), the indemnified party (or parties if there
is more than one) shall be entitled to the reasonable legal expenses of
common counsel for the indemnified party (or parties). In such event,
however, the indemnifying party will not be liable for any settlement
effected without the written consent of such indemnifying party. The
indemnification required by this Section 8 shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, as
and when bills are received or expense, loss, damage or liability is incurred.
(e) Contribution. If, for any reason, the foregoing indemnity is
unavailable, or is insufficient to hold harmless an indemnified party, then
the indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of the expense, loss, damage or liability, (i)
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on the other
(determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission relates to
information supplied by the indemnifying party or the indemnified party and
the parties' relative intent, knowledge, access to information and
opportunity to
14
correct or prevent such untrue statement or omission), or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law or
provides a lesser sum to the indemnified party than the amount hereinafter
calculated, in the proportion as is appropriate to reflect not only the
relative fault of the indemnifying party and the indemnified party, but also
the relative benefits received by the indemnifying party on the one hand and
the indemnified party on the other, as well as any other relevant equitable
considerations. No indemnified party guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any indemnifying party who was not guilty of such
fraudulent misrepresentation.
Section 10. Covenants Relating to Rule 144. The Company will file
in a timely manner, information, documents and reports in compliance with the
Exchange Act and will, at its expense, forthwith upon the request of Buyer,
deliver to Buyer a certificate, signed by the Company's principal financial
officer, stating (a) the Company's name, address and telephone number
(including area code), (b) the Company's Internal Revenue Service
identification number, (c) the Company's Commission file number, (d) the
number of shares of Company Common Stock and the number of shares of Company
Preferred Stock outstanding as shown by the most recent report or statement
published by the Company, and (e) whether the Company has filed the reports
required to be filed under the Exchange Act for a period of at least 90 days
prior to the date of such certificate and in addition has filed the most
recent annual report required to be filed thereunder. If at any time the
Company is not required to file reports in compliance with either Section 13
or Section 15(d) of the Exchange Act, the Company will, at its expense,
forthwith upon the written request of Buyer, make available adequate current
public information with respect to the Company within the meaning of
paragraph (c)(2) of Rule 144 of the General Rules and Regulations promulgated
under the Securities Act.
Section 11. Miscellaneous.
(a) Expenses. All Registration Expenses incurred in connection
with any Shelf Registration or other registration which may be requested
under Sections 2, 3 or 4 (including all Registration Expenses incurred in
connection with any registration of any securities other than those of the
Buyer as referred to in the first sentence of Section 4(a)) shall be borne by
the Company.
(b) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party. Copies of executed
counterparts transmitted by telecopy, telefax or other electronic
transmission service shall be considered original executed counterparts for
purposes of this Section 10, provided receipt of copies of such counterparts
is confirmed.
(c) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF.
15
(d) Entire Agreement. This Agreement (including agreements
incorporated herein) contains the entire agreement between the parties with
respect to the subject matter hereof and there are no agreements or
understandings between the parties other than those set forth or referred to
herein. This Agreement is not intended to confer upon any person not a party
hereto (and their successors and assigns) any rights or remedies hereunder.
(e) Notices. All notices and other communications hereunder shall
be sufficiently given for all purposes hereunder if in writing and delivered
personally, sent by documented overnight delivery service or, to the extent
receipt is confirmed, telecopy, telefax or other electronic transmission
service to the appropriate address or number as set forth below. Notices to
the Company shall be addressed to:
Xxxxxxx Pacific Properties, Inc.
000 Xxxx Xxx Xxxxxx
Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Attention: Xxxxx Xxxxx
Telecopy Number:
with a copy to:
Loeb & Loeb LLP
0000 Xxxxxxxx Xxxx.
Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxx, Esq.
Telecopy Number: (000) 000-0000
Loeb & Loeb LLP
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxxxxxx Xxxxx, Esq.
Telecopy Number: (000) 000-0000
Xxxxxxx, Xxxxxxx & Xxxx LLP
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxx, Esq.
Telecopy Number: (000) 000-0000
or at such other address and to the attention of such other person as the
Company may designate by written notice to Buyer. Notices to Buyer shall be
addressed to:
16
Xxxxxxxxx Xxxxxxx Holdings, L.L.C. and
Xxxxxxxxx Xxxxxxx Co-Holdings, L.L.C.
00000 Xxxxx Xxxxxx Xxxx.
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxx
Telecopy Number: (000) 000-0000
with a copy to:
Xxxxxxxxx Partners, L.L.C.
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxx, Esq.
Telecopy Number: (000) 000-0000, (000) 000-0000
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx Xxxxx, Esq.
Telecopy Number: (000) 000-0000
(f) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors. Each party hereto shall be permitted to assign any of its rights
hereunder to any third party, provided that (i) Buyer shall remain the agent
for all third party assignees with respect to the registration and other
rights as set forth herein, (ii) such transfer is effected in accordance with
applicable federal and state securities laws, (iii) such assignee becomes a
party to this Agreement or agrees in writing to be subject to the terms
hereof, and (iv) the Company is given written notice by the Buyer of said
transfer stating the name and address of said assignee and identifying the
securities with respect to which such registration rights are being assigned.
(g) Headings. The Section and other headings contained in this
Agreement are inserted for convenience of reference only and will not affect
the meaning or interpretation of this Agreement. All references to Sections
or other headings contained herein mean Sections or other headings of this
Agreement unless otherwise stated.
(h) Amendments and Waivers. This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought.
Either party hereto may, only by an instrument in writing, waive compliance
by the other party hereto with any term or provision hereof on the part of
such other party hereto to be performed or complied with. The waiver by any
party hereto of a breach of any term or provision hereof shall not be
construed as a waiver of any subsequent breach.
17
(i) Interpretation: Absence of Presumption. For the purposes
hereof, (i) words in the singular shall be held to include the plural and
vice versa and words of one gender shall be held to include the other gender
as the context requires, (ii) the terms "hereof", "herein", and "herewith"
and words of similar import shall, unless otherwise stated, be construed to
refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section, paragraph or other references are to the
Sections, paragraphs, or other references to this Agreement unless otherwise
specified, (iii) the word "including" and words of similar import when used
in this Agreement shall mean "including, without limitation," unless the
context otherwise requires or unless otherwise specified, (iv) the word "or"
shall not be exclusive, and (v) provisions shall apply, when appropriate, to
successive events and transactions.
This Agreement shall be construed without regard to any presumption
or rule requiring construction or interpretation against the party drafting
or causing any instrument to be drafted.
(j) Severability. Any provision hereof which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions
hereof.
[SIGNATURE PAGE FOLLOWS]
18
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf
of each of the parties hereto as of the day first above written.
XXXXXXX PACIFIC PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
XXXXXXXXX XXXXXXX CO-HOLDINGS,
L.L.C.
By: /s/ Xxxxx Xxxx
------------------------------
Authorized Signatory
XXXXXXXXX XXXXXXX HOLDINGS, L.L.C.
By: /s/ Xxxxx Xxxx
------------------------------
Authorized Signatory
19
