125,000,000 AGGREGATE PRINCIPAL AMOUNT FIRST POTOMAC REALTY INVESTMENT LIMITED PARTNERSHIP Registration Rights Agreement dated December 11, 2006
Exhibit 10.1
$125,000,000 AGGREGATE PRINCIPAL AMOUNT
FIRST POTOMAC REALTY INVESTMENT LIMITED PARTNERSHIP
4.0% EXCHANGEABLE SENIOR NOTES DUE 2011
dated December 11, 2006
REGISTRATION RIGHTS AGREEMENT, dated as of December 11, 2006, among First Potomac Realty
Investment Limited Partnership, a Delaware limited partnership (the “Operating Partnership”), First
Potomac Realty Trust, a Maryland real estate investment trust (the “Company”), Wachovia Capital
Markets, LLC as representative (the “Representative”) of the several initial purchasers (the
“Initial Purchasers”) under the Purchase Agreement (as defined below).
Pursuant to the Purchase Agreement, dated as of December 11, 2006, among the Operating
Partnership, the Company, the Representative and the Initial Purchasers (the “Purchase Agreement”),
relating to the initial placement (the “Initial Placement”) of the Notes (as defined below), the
Initial Purchasers have agreed to purchase from the Operating Partnership $125,000,000 (including
$15,000,000 pursuant to the Initial Purchasers’ exercise in full of their over-allotment option) in
aggregate principal amount of 4.0% Exchangeable Senior Notes due 2011 (the “Notes”). The Notes
will be exchangeable, subject to the terms thereof, into fully paid, nonassessable common shares of
beneficial interest, par value $0.001 per share, of the Company (the “Common Shares”). The Notes
will be fully and unconditionally guaranteed as to the payment of principal and interest by the
Company. The Company has agreed to provide the registration rights set forth in this Agreement
whereby the Company agrees with you for your benefit and the benefit of the holders from time to
time of the Notes (including the Initial Purchasers) (each a “Holder” and, collectively, the
“Holders”), as follows:
1. Definitions. Capitalized terms used herein without definition shall have their
respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder.
“Additional Interest” shall have the meaning set forth in Section 7 hereof.
“Affiliate” shall have the meaning specified in Rule 405 under the Act and the terms
“controlling” and “controlled” shall have meanings correlative thereto.
“Automatic Shelf Registration Statement” shall mean a Registration Statement filed by a
Well-Known Seasoned Issuer which shall become effective upon filing thereof pursuant to General
Instruction I.D for Form S-3.
“Broker-Dealer” shall mean any broker or dealer registered as such under the Exchange Act.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day
on which banking institutions or trust companies are authorized or obligated by law to close in New
York City.
“Closing Date” shall mean the date of the first issuance of the Notes.
“Commission” shall mean the Securities and Exchange Commission.
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“Note” shall have the meaning set forth in the preamble.
“Deferral Period” shall have the meaning indicated in Section 3(i) hereof.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.
“Exchange Price” shall have the meaning specified in the Indenture.
“Final Memorandum” shall mean the offering memorandum, dated December 5, 2006, relating to the
offering of the Notes, including any and all annexes thereto and any information incorporated by
reference therein as of such date.
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405 under
the Act.
“Holder” shall have the meaning set forth in the preamble hereto.
“Indenture” shall mean the Indenture relating to the Notes, dated as of December 11, 2006, by
and among the Operating Partnership, the Company, as guarantor, and ▇▇▇▇▇ Fargo Bank, National
Association, as trustee, as the same may be amended from time to time in accordance with the terms
thereof.
“Initial Placement” shall have the meaning set forth in the preamble hereto.
“Initial Purchasers” shall have the meaning set forth in the preamble hereto.
“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as defined in
Rule 433 under the Act.
“Losses” shall have the meaning set forth in Section 5(d) hereof.
“Majority Holders” shall mean, on any date, Holders of a majority of the Common Shares
registered under the Shelf Registration Statement.
“Managing Underwriters” shall mean the investment banker or investment bankers and manager or
managers that administer an underwritten offering, if any, conducted pursuant to Section 6 hereof.
“NASD Rules” shall mean the Conduct Rules and the By-Laws of the National Association of
Securities Dealers, Inc.
“Notice and Questionnaire” shall mean a written notice delivered to the Company substantially
in the form attached as Annex A to the Final Memorandum.
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“Notice Holder” shall mean any Holder of Registrable Securities that has delivered a Notice
and Questionnaire to the Company on or prior to the tenth day before the effectiveness of the Shelf
Registration Statement.
“Prospectus” shall mean a prospectus included in the Shelf Registration Statement (including,
without limitation, a prospectus that discloses information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A or Rule 430B under
the Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Common Shares covered by the Shelf Registration Statement, and all
amendments and supplements thereto, including any and all exhibits thereto and any information
incorporated by reference therein.
“Purchase Agreement” shall have the meaning set forth in the preamble hereto.
“Registrable Securities” shall mean Common Shares initially issuable in exchange for the Notes
initially sold to the Initial Purchasers pursuant to the Purchase Agreement other than those that
have (i) been registered under the Shelf Registration Statement and disposed of in accordance
therewith, (ii) have become eligible to be sold without restriction as contemplated by Rule 144(k)
under the Act or any successor rule or regulation thereto that may be adopted by the Commission or
(iii) ceased to be outstanding.
“Registration Expenses” shall mean any and all expenses incident to performance of or
compliance by the Company and the Operating Partnership with this Agreement, including without
limitation: (i) all Commission or National Association of Securities Dealers, Inc. (the “NASD”)
registration and filing fees, including, if applicable, the fees and expenses of any “qualified
independent underwriter” (and its counsel) that is required to be retained by any Holder of
Registrable Securities in accordance with the rules and regulations of the NASD, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue sky laws (including
reasonable fees and disbursements of one counsel for all underwriters or Holders as a group in
connection with blue sky qualification of any of the Registrable Securities) and compliance with
the rules of the NASD, (iii) all expenses of any Persons in preparing or assisting in preparing,
word processing, printing and distributing any Shelf Registration Statement, any Prospectus and any
amendments or supplements thereto, and in preparing or assisting in preparing, printing and
distributing any underwriting agreements, securities sales agreements and other documents relating
to the performance of and compliance with this Agreement, (iv) the fees and disbursements of
counsel for the Company and the Operating Partnership and of the independent certified public
accountants of the Company and the Operating Partnership.
“Shelf Registration Period” shall have the meaning set forth in Section 2(c) hereof.
“Shelf Registration Statement” shall mean a “shelf’ registration statement of the Company
pursuant to the provisions of Section 2 hereof which covers some or all of the Common Shares on an
appropriate form under Rule 415 under the Act, or any similar rule that may be adopted by the
Commission, amendments and supplements to such registration
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statement, including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by reference therein.
“Underwriter” shall mean any underwriter of Common Shares in connection with an offering
thereof under the Shelf Registration Statement.
“Well-Known Seasoned Issuer” or “WKSI” shall have the meaning set forth in Rule 405 under the
Act.
2. Shelf Registration. (a) The Company shall as promptly as practicable (but in no
event later than May 1, 2007) file with the Commission a Shelf Registration Statement (which shall
be an Automatic Shelf Registration Statement if the Company is a WKSI on the date of such filing)
providing for the registration of, and the sale on a continuous or delayed basis by the Holders of,
all of the Registrable Securities, from time to time in accordance with the methods of distribution
elected by such Holders, pursuant to Rule 415 under the Act or any similar rule that may be adopted
by the Commission.
(b) If the Shelf Registration Statement is not an Automatic Shelf Registration Statement, the
Company shall use its reasonable efforts to cause the Shelf Registration Statement to become or be
declared effective under the Act as promptly as practicable but no later than 210 days after the
Closing Date.
(c) The Company shall use its reasonable efforts to keep the Shelf Registration Statement
continuously effective, supplemented and amended as required by the Act, in order to permit the
Prospectus forming part thereof to be usable by Holders for a period (the “Shelf Registration
Period”) from the date the Shelf Registration Statement is declared effective by the Commission (or
becomes effective in the case of an Automatic Shelf Registration Statement) until the earlier of
(i) two years after the 23rd trading day immediately following the maturity date of the Notes or
(ii) the date upon which there are no Notes or Registrable Securities outstanding. The Company
shall be deemed not to have used its reasonable efforts to keep the Shelf Registration Statement
effective during the Shelf Registration Period if it voluntarily takes any action that would result
in Holders of Registrable Securities not being able to offer and sell such Common Shares at any
time during the Shelf Registration Period, unless such action is (x) required by applicable law or
otherwise undertaken by the Company in good faith and for valid business reasons (not including
avoidance of the Company’s obligations hereunder), including the acquisition or divestiture of
assets, and (y) permitted by Section 3(i) hereof. None of the Company, the Operating Partnership or
any of their respective securityholders (other than Holders of Registrable Securities) shall have
the right to include any securities of the Company or the Operating Partnership in any Shelf
Registration Statement other than Registrable Securities.
(d) The Company shall cause the Shelf Registration Statement and the related Prospectus and
any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement
or such amendment or supplement, (i) to comply in all material respects with the applicable
requirements of the Act; and (ii) not to contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary in
order to
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make the statements therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading.
(e) The Company shall issue a press release through Dow ▇▇▇▇▇ & Company, Inc. and Bloomberg
Business News announcing the anticipated filing date and effective date of the Shelf Registration
Statement as promptly as practicable prior to the anticipated effective date thereof. Each Holder
of Registrable Securities agrees to deliver to the Company a Notice and Questionnaire and such
other information as the Company may reasonably request in writing on or prior to the 10th Business
Day before the effective date of the Shelf Registration Statement. From and after the effective
date of the Shelf Registration Statement, the Company shall use reasonable efforts after the date a
Notice and Questionnaire is delivered to the Company by a Holder within 20 Business Days after such
date, (i) (A) if required by applicable law, to file with the Commission a post-effective amendment
or prospectus supplement to the Shelf; provided however that the Company shall not be required to
file more than one post-effective amendment or prospectus supplement in any 90-day period in
accordance with this Section 2(e)(i) or (B) to prepare and, if permitted or required by applicable
law, to file a supplement to the related Prospectus or an amendment or supplement to any document
incorporated therein by reference or file any other required document so that the Holder delivering
such Notice and Questionnaire is named as a selling securityholder in the Shelf Registration
Statement and the related Prospectus, and so that such Holder is permitted to deliver such
Prospectus to purchasers of the Registrable Securities in accordance with applicable law and, if
the Company shall file a post-effective amendment to the Shelf Registration Statement, use
reasonable efforts to cause such post-effective amendment to be declared effective under the Act as
promptly as is practicable; (ii) provide such Holder, upon request, copies of any documents filed
pursuant to Section 2(e)(i hereof; and (iii) notify such Holder as promptly as practicable after
the effectiveness under the Act of any post-effective amendment filed pursuant to Section 2(e)(i)
hereof; provided, that if such Notice and Questionnaire is delivered during a Deferral Period, the
Company shall so inform the Holder delivering such Notice and Questionnaire and shall take the
actions set forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in
accordance with Section 3(i) hereof. Notwithstanding anything contained herein to the contrary, the
Company shall be under no obligation to name any Holder that is not a Notice Holder as a selling
securityholder in the Shelf Registration Statement or related Prospectus; provided, however, that
any Holder that becomes a Notice Holder pursuant to the provisions of this Section 2(e) (whether or
not such Holder was a Notice Holder at the effective date of the Shelf Registration Statement)
shall be named as a selling securityholder in the Shelf Registration Statement or related
Prospectus in accordance with the requirements of this Section 2(e). Notwithstanding the foregoing,
if (A) the Notes are called for redemption and the then prevailing market price of the Common
Shares is above the Exchange Price or (B) the Notes are exchanged as provided for in Section 4.02
of the Indenture, then the Company shall file any post-effective amendment or supplement within
five Business Days of the redemption date or the end of the exchange period, as applicable.
3. Registration Procedures. The following provisions shall apply in connection with
the Shelf Registration Statement.
(a) The Company shall:
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(i) furnish to the Representative and to counsel for the Notice Holders, not
less than five Business Days prior to the filing thereof with the Commission, a copy
of the Shelf Registration Statement and each amendment thereto and each amendment or
supplement, if any, to the Prospectus included therein (including all documents
incorporated by reference therein after the initial filing) and shall use its
reasonable efforts to reflect in each such document, when so filed with the
Commission, such comments as the Representative reasonably proposes; and
(ii) include information regarding the Notice Holders and the methods of
distribution they have elected for their Registrable Securities provided to the
Company in Notices and Questionnaires as necessary to permit such distribution by
the methods specified therein.
(b) The Company shall ensure that:
(i) the Shelf Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any amendment or supplement thereto complies in
all material respects with the Act; and
(ii) the Shelf Registration Statement and any amendment thereto does not, when
it becomes effective, contain 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.
(c) The Company shall advise the Representative, the Notice Holders and any underwriter that
has provided in writing to the Company a telephone or facsimile number and address for notices, and
confirm such advice in writing, if requested (which notice pursuant to clauses (ii)-(v) of this
Section 3(c) shall be accompanied by an instruction to suspend the use of the Prospectus until the
Company shall have remedied the basis for such suspension):
(i) when the Shelf Registration Statement and any amendment thereto has been
filed with the Commission and when the Shelf Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the Commission for any amendment or supplement to the
Shelf Registration Statement or the Prospectus or for additional information;
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Shelf Registration Statement or the institution or threatening
of any proceeding for that purpose;
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Common Shares included therein for
sale in any jurisdiction or the institution or threatening of any proceeding
for such purpose; and
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(v) of the happening (without notice of the nature or details of such events)
of any event that requires any change in the Shelf Registration Statement or the
Prospectus so that, as of such date, they (A) do not contain any untrue statement of
a material fact and (B) do not omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the Prospectus,
in the light of the circumstances under which they were made) not misleading.
(d) The Company shall use its reasonable efforts to prevent the issuance of any order
suspending the effectiveness of the Shelf Registration Statement or the qualification of the
securities therein for sale in any jurisdiction and, if issued, to obtain as soon as possible the
withdrawal thereof. The Company shall undertake additional actions as required to permit
unrestricted resales of the Common Shares in accordance with the terms and conditions of this
Agreement.
(e) Upon request, the Company shall furnish to each Notice Holder, without charge, at least
one copy of the Shelf Registration Statement and any post-effective amendment thereto, including
all material incorporated therein by reference, and, if a Notice Holder so requests, all exhibits
thereto (including exhibits incorporated by reference therein).
(f) During the Shelf Registration Period, if required by applicable law, the Company shall
promptly deliver to each Initial Purchaser, each Notice Holder, and any sales or placement agents
or underwriters acting on their behalf, without charge, as many copies of the Prospectus (including
the preliminary Prospectus, if any) included in the Shelf Registration Statement and any amendment
or supplement thereto as any such person may reasonably request. The Company consents to the use
of the Prospectus or any amendment or supplement thereto by each of the foregoing in connection
with the offering and sale of the Common Shares.
(g) Prior to any offering of Common Shares pursuant to the Shelf Registration Statement, the
Company shall arrange for the qualification of the Common Shares for sale under the laws of such
jurisdictions as any Notice Holder shall reasonably request and shall maintain such qualification
in effect so long as required; provided that in no event shall the Company be obligated to qualify
to do business in any jurisdiction where it is not then so qualified or to take any action that
would subject it to service of process in suits, other than those arising out of the Initial
Placement or any offering pursuant to the Shelf Registration Statement, in any jurisdiction where
it is not then so subject.
(h) Upon the occurrence of any event contemplated by subsections (c)(ii) through (v) above,
the Company shall promptly (or within the time period provided for by Section 3(i) hereof, if
applicable) prepare a post-effective amendment to the Shelf Registration Statement or an amendment
or supplement to the related Prospectus or file any other required document so that, as thereafter
delivered to Initial Purchasers of the securities included therein, the Prospectus will not include
an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
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(i) Upon the occurrence or existence of any pending corporate development, public filings with
the Commission or any other material event that, in the reasonable judgment of the Company, makes
it appropriate to suspend the availability of the Shelf Registration Statement and the related
Prospectus, the Company shall give notice (without notice of the nature or details of such events)
to the Notice Holders that the availability of the Shelf Registration Statement is suspended and,
upon actual receipt of any such notice, each Notice Holder agrees not to sell any Registrable
Securities pursuant to the Shelf Registration Statement until such Notice Holder’s receipt of
copies of the supplemented or amended Prospectus provided for in Section 3(h) hereof, or until it
is advised in writing by the Company that the Prospectus may be used, and has received copies of
any additional or supplemental filings that are incorporated or deemed incorporated by reference in
such Prospectus. The period during which the availability of the Shelf Registration Statement and
any Prospectus is suspended (the “Deferral Period”) shall not exceed 45 days in any 90-day period
or 135 days in any 360-day period.
(j) The Company shall comply with all applicable rules and regulations of the Commission and
shall make generally available to its securityholders an earnings statement satisfying the
provisions of Section 11(a) of the Act as soon as practicable after the effective date of the Shelf
Registration Statement and in any event no later than 45 days after the end of a 12-month period
(or 90 days, if such period is a fiscal year) beginning with the first month of the Company’s first
fiscal quarter commencing after the effective date of the Shelf Registration Statement.
(k) Subject to Section 6 hereof, the Company shall enter into customary agreements (including,
if requested, an underwriting agreement in customary form) and take all other appropriate actions
in order to expedite or facilitate the registration or the disposition of the Common Shares, and in
connection therewith, if an underwriting agreement is entered into, cause the same to contain
customary indemnification provisions and procedures.
(l) The Company shall use its reasonable efforts to take all other steps necessary to effect
the registration of the Common Shares covered by the Shelf Registration Statement.
4. Registration Expenses. The Company shall pay all Registration Expenses in
connection with any Shelf Registration Statement filed pursuant to Section 2(a) hereof (including
the fees and disbursements of no more than one firm of counsel for the Holders of the Registrable
Securities in connection with the review of any Shelf Registration Statement, Prospectus or
amendment or supplement thereto in accordance with the provisions of Section 3(a) hereof). Except
as provided herein, each Holder shall pay all commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf Registration
Statement.
5. Indemnification and Contribution.
(a) The Company and the Operating Partnership agree jointly and severally to indemnify and
hold harmless each Holder of Registrable Securities (including each Initial Purchaser), its
directors, officers, employees and agents, and each person, if any, who controls
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any Holder within
the meaning of the Securities Act or the Exchange Act (each, an “Indemnified Holder”), against any
loss, claim, damage, liability or expense, as incurred, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or expense relating to resales
of the Registrable Securities) (collectively, “Losses”), to which such Indemnified Holder may
become subject, insofar as any such Loss arises out of or is based upon:
(i) any untrue statement or alleged untrue statement of a material fact
contained in (A) the Shelf Registration Statement as originally filed or in any
amendment thereof, or (B) any blue sky application or other document or any
amendment or supplement thereto prepared or executed by the Company (or based upon
written information furnished by or on behalf of the Company expressly for use in
such blue sky application or other document or amendment or supplement) filed in any
jurisdiction specifically for the purpose of qualifying any or all of the
Registrable Securities under the securities law of any state or other jurisdiction
(such application or document being hereinafter called a “Blue Sky Application”),
or, in each case, the omission or alleged omission to state therein any material
fact required to be stated therein or necessary to make the statements therein not
misleading; or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Issuer Free Writing Prospectus, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact, in each case, necessary in order to make the
statements therein, in the light of the circumstances under which they were made,
not misleading,
and to reimburse each Indemnified Holder for any and all expenses including the reasonable fees and
disbursements of counsel as such expenses are reasonably incurred by such Indemnified Holder in
connection with investigating, defending, settling, compromising or paying any such Loss; provided,
however, that the foregoing indemnity agreement shall not apply to any Loss to the extent, but only
to the extent, arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Holder (or its related Indemnified Holder)
expressly for use therein. The indemnity agreement set forth in this Section 6(a) shall be in
addition to any liabilities that the Company may otherwise have.
The Company and the Operating Partnership jointly and severally also agree to indemnify as provided
in this Section 6(a) or contribute as provided in Section 6(e) hereof to Losses of each
underwriter, if any, of Registrable Securities registered under a Shelf Registration Statement,
their directors, officers, employees or agents and each person who controls such underwriter on
substantially the same basis as that of the indemnification of the Initial Purchasers and the
selling Holders provided in this Section 6(a) and shall, if requested by any Holder, enter into an
underwriting agreement reflecting such agreement.
(b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company
and the Operating Partnership, each of its trustees, each of its officers who sign the Shelf
Registration Statement and each person, if any, who controls the Company or
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the Operating
Partnership within the meaning of the Securities Act or the Exchange Act (i) to the same extent as
the foregoing indemnity from the Company and the Operating Partnership to each such Holder, but
only with reference to written information relating to such Holder furnished to the Company by or
on behalf of such Holder specifically for inclusion in the documents referred to in the foregoing
indemnity and (ii) against any Loss, joint or several, including, but not limited to, any Loss
relating to resales of the Registrable Securities, to which such person may become subject, insofar
as any such Loss arises out of, or is based upon any Free Writing Prospectus used by such Holder
without the prior consent of the Issuer, and in connection with any underwritten offering, the
underwriters, provided that the indemnification obligation in this clause (ii) shall be several,
not joint and several, among the Holders who used such Free Writing Prospectus. This indemnity
agreement set forth in this Section shall be in addition to any liabilities which any such Holder
may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 6 of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 6, notify the indemnifying party in writing
of the commencement thereof, but the failure to notify the indemnifying party (i) will not relieve
it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise
learn of such action and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel satisfactory to such indemnified party in its reasonable
discretion; provided, however, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably concluded that a
conflict may arise between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses available to it
and/or other indemnified parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of such indemnifying party’s election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party will not be liable
to such indemnified party under this Section 6 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel (other than local counsel),
reasonably approved by the indemnifying party, representing the indemnified parties who are parties
to such action) or (ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party in its reasonable discretion to represent the indemnified party within a
reasonable time after notice of commencement of the action, in each of which cases the reasonable
fees and expenses of counsel shall be at the expense of the indemnifying party.
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(d) The indemnifying party under this Section 6 shall not be liable for any settlement of any
proceeding effected without its written consent, which shall not be withheld unreasonably, but if
settled with such consent or if there is a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party against any Loss by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for reasonable fees and expenses
of counsel as contemplated by Section 6(c) hereof, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect
of which any indemnified party is or could have been a party and indemnity was or could have been
sought hereunder by such indemnified party, unless such settlement, compromise or consent includes
an unconditional release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding.
(e) If the indemnification provided for in Section 6 is for any reason unavailable to or
otherwise insufficient to hold harmless an indemnified party in respect of any Loss referred to
therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party, as incurred, as a result of any Loss referred to therein:
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Operating Partnership, on the one hand, and the
Holders, on the other hand, from the offering and sale of the Registrable
Securities, on the one hand, and a Holder with respect to the sale by such Holder of
the Registrable Securities, on the other hand, or
(ii) if the allocation provided by Section (6)(e)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in Section 6(e)(i) above but also the relative fault
of the Company and the Operating Partnership, on the one hand, and the Holders, on
the other hand, in connection with the statements or omissions or alleged statements
or omissions that resulted in such Loss, as well as any other relevant equitable
considerations.
The relative benefits received by the Company and the Operating Partnership, on the one hand, and
the Holders, on the other hand, in connection with such offering and such sale of the Registrable
Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as
the total net proceeds from the offering of the Notes purchased under the Purchase Agreement
(before deducting expenses) received by the Company and the Operating Partnership and the total
proceeds received by the Holders with respect to their sale of Registrable Securities. The relative
fault of the Company and the Operating Partnership, on the one hand, and the Holders, on the other
hand, shall be determined by reference to, among other things, whether any such untrue or alleged
untrue statement of a material fact or omission or alleged omission to state
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a material fact
relates to information supplied by the Company and the Operating Partnership, on the one hand, or
the Holders, on the other hand, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company, the Operating
Partnership and the Holders agree that it would not be just and equitable if contribution pursuant
to this Section 6(e) were determined by pro rata allocation (even if the Holders were treated as
one entity for such purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in this Section 6(e).
The amount paid or payable by a party as a result of the Loss referred to above shall be deemed to
include, subject to the limitations set forth in Section 6(c), any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending any action or
claim.
Notwithstanding the provisions of this Section 6, in no event will (i) any Holder be required to
undertake liability to any person under this Section 6 for any amounts in excess of the dollar
amount of the proceeds to be received by such Holder from the sale of such Holder’s Registrable
Securities (after deducting any fees, discounts and commissions applicable thereto) pursuant to any
Shelf Registration Statement under which such Registrable Securities are to be registered under the
Securities Act and (ii) any underwriter be required to undertake liability to any person hereunder
for any amounts in excess of the discount or commission payable to such underwriter with respect to
the Registrable Securities underwritten by it and distributed to the public. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
The Holders’ obligations to contribute as provided in this Section 6(e) are several and not joint.
(f) The provisions of this Section 6 shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Holder or the Company, the Operating Partnership or any
of the officers, directors, employees, agents or controlling persons referred to in Section 6
hereof, and will survive the sale by a Holder of Registrable Securities.
6. Underwritten Registrations. (a) In no event will the method of distribution of
Registrable Securities take the form of an underwritten offering without the prior written consent
of the Company.
(b) If any Common Shares covered by the Shelf Registration Statement are to be sold in an
underwritten offering, the Managing Underwriters shall be selected by the Company, subject to the
prior written consent of the Majority Holders.
(c) No person may participate in any underwritten offering pursuant to the Shelf Registration
Statement unless such person (i) agrees to sell such person’s Common Shares on the basis reasonably
provided in any underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements; and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required under the terms of
such underwriting arrangements.
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7. Registration Defaults. If any of the following events shall occur, then the
Operating Partnership shall pay liquidated damages (the “Additional Interest”) to the Holders as
follows:
(a) if the Shelf Registration Statement (which shall be an Automatic Shelf Registration
Statement if the Company is then a WKSI on the date of such filing) is not filed with the
Commission on or prior to May 1, 2007 then, commencing on May 2, 2007, Additional Interest shall
accrue on the aggregate outstanding principal amount of the Notes at a rate of 0.25% per annum for
the first 90 days from and including April 16, 2007 and 0.50% per annum thereafter; or
(b) if the Shelf Registration Statement is not declared effective by the Commission (or has
not become effective in the case of an Automatic Shelf Registration Statement) on or prior to the
210th day following the Closing Date, then commencing on the 211st day after the Closing Date,
Additional Interest shall accrue on the aggregate outstanding principal amount of the Notes at a
rate of 0.25% per annum for the first 90 days from and including such 211st day and 0.50% per annum
thereafter; or
(c) if the Shelf Registration Statement has been declared or become effective but ceases to be
effective or usable for the offer and sale of the Registrable Securities, other than in connection
with (A) a Deferral Period or (B) as a result of a requirement to file a post-effective amendment
or supplement to the Prospectus to make changes to the information regarding selling
securityholders or the plan of distribution provided for therein, at any time during the Shelf
Registration Period and the Company does not cure the lapse of effectiveness or usability within
ten Business Days by a post-effective amendment, prospectus supplement or report filed under the
Exchange Act (or, if a Deferral Period is then in effect and subject to the 20 Business Day filing
requirement and the proviso regarding the filing of post-effective amendments in Section 2(e) with
respect to any Notice and Questionnaire received during such period, within ten Business Days
following the expiration of such Deferral Period or period permitted pursuant to Section 2(e)) then
Additional Interest shall accrue on the aggregate outstanding principal amount of the Notes at a
rate of 0.25% per annum for the first 90 days from and including the day following such tenth
Business Day and 0.50% per annum thereafter; or
(d) if the Company through its omission fails to name as a selling securityholder any Holder
that had timely complied with its obligations hereunder in a manner to
entitle such Holder to be so named in (i) the Shelf Registration Statement at the time it
first became effective or (ii) any post-effective amendment to the Shelf Registration Statement or
any Prospectus at the later of time of filing thereof or the time the Shelf Registration Statement
of which the Prospectus forms a part becomes effective then Additional Interest shall accrue, on
the aggregate outstanding principal amount of the Notes held by such Holder, at a rate of 0.25% per
annum for the first 90 days from and including the day following the effective date of such Shelf
Registration Statement or post-effective amendment or the time of filing of such Prospectus, as the
case may be, and 0.50% per annum thereafter; or
(e) if the aggregate duration of Deferral Periods in any period exceeds the number of days
permitted in respect of such period pursuant to Section 3(i) hereof, then commencing on the day the
aggregate duration of Deferral Periods in any period exceeds the
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number of days permitted in
respect of such period, Additional Interest shall accrue on the aggregate outstanding principal
amount of the Notes at a rate of 0.25% per annum for the first 90 days from and including such
date, and 0.50% per annum thereafter;
provided, however, that (1) upon the filing of the Shelf Registration Statement (in
the case of paragraph (a) above), (2) upon the effectiveness of the Shelf Registration Statement
(in the case of paragraph (b) above), (3) upon such time as the Shelf Registration Statement which
had ceased to remain effective or usable for resales again becomes effective and usable for resales
(in the case of paragraph (c) above), (4) upon the time such Holder is permitted to sell its
Registrable Securities pursuant to any Shelf Registration Statement and Prospectus in accordance
with applicable law (in the case of paragraph (d) above) (5) upon the termination of the Deferral
Period that caused the limit on the aggregate duration of Deferral Periods in a period set forth in
Section 3(i) to be exceeded (in the case of paragraph (e) above) or (6) upon the date the Shelf
Registration Statement is no longer required to be kept effective, the Additional Interest shall
cease to accrue.
Any amounts of Additional Interest due pursuant to this Section 7 will be payable in cash on
the next succeeding interest payment date to Holders entitled to receive such Additional Interest
on the relevant record dates for the payment of interest. If any Note ceases to be outstanding
during any period for which Additional Interest are accruing, the Company will prorate the
Additional Interest payable with respect to such Note.
The Additional Interest rate on the Notes shall not exceed 0.50% per annum in the aggregate.
Notwithstanding any provision in this Agreement, in no event shall Additional Interest accrue to
holders of Common Shares issued upon exchange of Notes. In lieu thereof, the Company shall
increase the Conversion Rate (as defined in the Indenture) by 3% for each $1,000 principal amount
of Notes exchanged at a time when such Registration Default has occurred and is continuing.
8. No Inconsistent Agreements. Neither the Company nor the Operating Partnership has
entered into, and each agrees not to enter into, any agreement with respect to its securities that
is inconsistent with the registration rights granted to the Holders herein.
9. Rule 144A and Rule 144. So long as any Registrable Securities remain outstanding,
the Company shall use its reasonable best efforts to file the reports required to be filed by it
under Rule 144A(d)(4) under the Act and the Exchange Act in a timely manner and, if at any time the
Company is not required to file such reports, it will, upon the written request of any Holder of
Registrable Securities, make publicly available other information so long as necessary to permit
sales of such Holder’s Registrable Securities pursuant to Rules 144 and 144A of the Act. The
Company covenants that it will take such further action as any Holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such Holder to sell
Registrable Securities without registration under the Act within the limitation of the exemptions
provided’ by Rules 144 and 144A (including, without limitation, the requirements of Rule
144A(d)(4)). Upon the written request of any Holder of Registrable Securities, the Company shall
deliver to such Holder a written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 9 shall
15
be deemed to require the Company or
the Operating Partnership to register any of its securities pursuant to the Exchange Act.
10. Listing. The Company shall use its reasonable efforts to obtain the approval of
the Common Shares for listing on the New York Stock Exchange.
11. Amendments and Waivers. The provisions of this Agreement may not be amended,
qualified, modified or supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained the written consent of the Majority
Holders; provided that, with respect to any matter that directly or indirectly affects the rights
of any Initial Purchaser hereunder, the Company shall obtain the written consent of each such
Initial Purchaser against which such amendment, qualification, supplement, waiver or consent is to
be effective; provided, further, that no amendment, qualification, supplement, waiver or consent
with respect to Section 7 hereof shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder; and provided, further, that the provisions of this
Article 11 may not be amended, qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Company has obtained the written
consent of the Initial Purchasers and each Holder.
12. Notices. All notices and other communications provided for or permitted hereunder
shall be made in writing by hand-delivery, first-class mail, telex, telecopier or air courier
guaranteeing overnight delivery:
(a) if to a Holder, at the most current address given by such holder to the Company in
accordance with the provisions of the Notice and Questionnaire;
(b) if to the Initial Purchasers or the Representative, initially at the address or addresses
set forth in the Purchase Agreement; and
(c) if to the Company or the Operating Partnership, initially at its address set forth in the
Purchase Agreement.
All such notices and communications shall be deemed to have been duly given when received.
The Initial Purchasers, the Company or the Operating Partnership by notice to the other
parties may designate additional or different addresses for subsequent notices or communications.
Notwithstanding the foregoing, notices given to Holders holding Notes in book-entry form may
be given through the facilities of DTC or any successor depositary.
13. Successors. This Agreement shall inure to the benefit of and be binding upon the
parties hereto, their respective successors and assigns, including, without the need for an express
assignment or any consent by the Company or the Operating Partnership thereto, subsequent Holders
of Common Shares, and the indemnified persons referred to in Section 5 hereof. The Company and the
Operating Partnership hereby agree to extend the benefits of this
16
Agreement to any Holder of Common
Shares, and any such Holder may specifically enforce the provisions of this Agreement as if an
original party hereto.
14. Third Party Beneficiaries. Each Holder shall be a third party beneficiary of the
agreements made hereunder between the Company and the Initial Purchasers, and the Initial
Purchasers shall have the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of Holders hereunder.
15. Counterparts. This Agreement may be signed in one or more counterparts, each of
which shall constitute an original and all of which together shall constitute one and the same
agreement.
16. Headings. The section headings used herein are for convenience only and shall not
affect the construction hereof.
17. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be performed in the
State of New
York. The parties hereto each hereby waive any right to trial by jury in any action,
proceeding or counterclaim arising out of or relating to this Agreement.
18. Severability. In the event that any one of more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable
in any respect for any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions hereof shall not be in any way impaired or
affected thereby, it being intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.
19. Common Shares Held by the Company, etc. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Common Shares is required hereunder,
Common Shares held by the Company or its Affiliates (other than subsequent Holders of Common Shares
if such subsequent Holders are deemed to be Affiliates solely by reason of their holdings of such
Common Shares) shall not be counted in determining whether such consent or approval was given by
the Holders of such required percentage.
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If the foregoing is in accordance with your understanding of our agreement, please sign and return
to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a
binding agreement by and among the Company, the Operating Partnership and the several Initial
Purchasers.
| Very truly yours, | ||||||
| FIRST POTOMAC REALTY TRUST | ||||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
|
|||||
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇ | ||||||
| Title: Executive Vice President and CFO | ||||||
| FIRST POTOMAC REALTY
INVESTMENT LIMITED PARTNERSHIP |
||||||
| By: First Potomac Realty Trust, its General Partner |
||||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
|
|||||
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇ | ||||||
| Title: Executive Vice President and CFO | ||||||
The foregoing Agreement is hereby confirmed and accepted as of the date first above written.
Acting on behalf of itself and as Representative of
the several Initial Purchasers
the several Initial Purchasers
WACHOVIA CAPITAL MARKETS, LLC
By: |
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||||
| Title: Vice President | ||||
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