Document:

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                                                                    Exhibit 10.3

                            ADMINISTRATION AGREEMENT

      ADMINISTRATION AGREEMENT, dated as of December 16, 2005 (this
"Administration Agreement"), is by and between CENTERPOINT ENERGY TRANSITION
BOND COMPANY II, LLC, a Delaware limited liability company, as Issuer (the
"Issuer"), and CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a Texas limited
liability company ("CenterPoint Houston"), as Administrator (in such capacity,
the "Administrator"). Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to such terms in Appendix A to the Indenture
more fully described below.

                              W I T N E S S E T H:

      WHEREAS, the Issuer is issuing Transition Bonds pursuant to the Indenture,
dated as of the date hereof and a First Supplemental Indenture thereto, also
dated as of the date hereof (the "First Supplement") (as amended, supplemented
or otherwise modified and in effect from time to time, the "Indenture"), between
the Issuer and Wilmington Trust Company, as the Trustee, and Deutsche Bank Trust
Company Americas, as Securities Intermediary;

      WHEREAS, the Issuer has entered into certain agreements in connection with
the issuance of the Transition Bonds, including (i) the Indenture and the First
Supplement, (ii) the Transition Property Servicing Agreement, dated as of the
date hereof (the "Servicing Agreement"), between the Issuer and CenterPoint
Energy Houston Electric, LLC, as Servicer, (iii) the Transition Property Sale
Agreement, dated as of the date hereof (the "Sale Agreement"), between the
Issuer and CenterPoint Energy Houston Electric, LLC, as Seller, and (iv) the
Letter of Representations, dated as of December 13, 2005 (the "Depository
Agreement"), among the Issuer, the Trustee and The Depository Trust Company
relating to the Transition Bonds (the Indenture, the First Supplement, the
Servicing Agreement, the Sale Agreement and the Depository Agreement, as such
agreements may be amended and supplemented from time to time, being referred to
hereinafter collectively as the "Initial Related Agreements");

      WHEREAS, pursuant to the Initial Related Agreements, the Issuer is
required to perform certain duties in connection with the Initial Related
Agreements, the Transition Bonds and the Trust Estate pledged to the Trustee
pursuant to the Indenture;

      WHEREAS, the Issuer may from time to time enter into and be required to
perform certain duties under additional agreements similar to the Initial
Related Agreements in connection with the issuance of one or more additional
series of Transition Bonds (together with the Initial Related Agreements, the
"Related Agreements");

      WHEREAS, the Issuer has no employees, other than its officers, and does
not intend to hire any employees, and consequently desires to have the
Administrator perform certain of the duties of the Issuer referred to in the
preceding clauses and to provide such additional services consistent with the
terms of this Administration Agreement and the Related Agreements as the Issuer
may from time to time request; and

      WHEREAS, the Administrator has the capacity to provide the services and
the facilities required thereby and is willing to perform such services and
provide such facilities for the Issuer on the terms set forth herein;

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      NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:

            1. Duties of the Administrator: Management Services. The
      Administrator hereby agrees to provide the following corporate management
      services to the Issuer and to cause third parties to provide professional
      services required for or contemplated by such services in accordance with
      the provisions of this Administration Agreement:

            (i) furnish the Issuer with ordinary clerical, bookkeeping and other
      corporate administrative services necessary and appropriate for the
      Issuer, including, without limitation, the following services:

                  (A) maintain at the Premises (as defined below) general
            accounting records of the Issuer (the "Account Records"), subject to
            year-end audit, in accordance with generally accepted accounting
            principles, separate and apart from its own accounting records,
            prepare or cause to be prepared such quarterly and annual financial
            statements as may be necessary or appropriate and arrange for
            year-end audits of the Issuer's financial statements by the Issuer's
            independent accountants;

                  (B) prepare and, after execution by the Issuer, file with the
            Securities and Exchange Commission (the "Commission") and any
            applicable state agencies documents required to be filed with the
            Commission and any applicable state agencies, including, without
            limitation, periodic reports required to be filed under the
            Securities Exchange Act of 1934, as amended;

                  (C) prepare for execution by the Issuer and cause to be filed
            such income, franchise or other tax returns of the Issuer as shall
            be required to be filed by applicable law (the "Tax Returns") and
            cause to be paid on behalf of the Issuer from the Issuer's funds any
            taxes required to be paid by the Issuer under applicable law;

                  (D) prepare or cause to be prepared for execution by the
            Issuer's Managers minutes of the meetings of the Issuer's Managers
            and such other documents deemed appropriate by the Issuer to
            maintain the separate limited liability company existence and good
            standing of the Issuer (the "Company Minutes") or otherwise required
            under the Related Agreements (together with the Account Records, the
            Tax Returns, the Company Minutes, the Issuer LLC Agreement, and the
            Issuer Certificate of Formation, the "Issuer Documents"); and any
            other documents deliverable by the Issuer thereunder or in
            connection therewith; and

                  (E) hold, maintain and preserve at the Premises (or such other
            place as shall be required by any of the Related Agreements)
            executed copies (to the extent applicable) of the Issuer Documents
            and other documents executed by the Issuer thereunder or in
            connection therewith;

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            (ii) take such actions on behalf of the Issuer, as are necessary or
      desirable for the Issuer to keep in full effect its existence, rights and
      franchises as a limited liability company under the laws of the state of
      Delaware and obtain and preserve its qualification to do business in each
      jurisdiction in which it becomes necessary to be so qualified;

            (iii) provide for the issuance and delivery of one or more series of
      Transition Bonds;

            (iv) provide for the performance by the Issuer of its obligations
      under each of the Related Agreements, and prepare, or cause to be
      prepared, all documents, reports, filings, instruments, notices,
      certificates and opinions that it shall be the duty of the Issuer to
      prepare, file or deliver pursuant to the Related Agreements;

            (v) enforce each of the rights of the Issuer under the Related
      Agreements, at the direction of the Trustee;

            (vi) provide for the defense, at the direction of the Issuer's
      Managers, of any action, suit or proceeding brought against the Issuer or
      affecting the Issuer or any of its assets;

            (vii) provide office space (the "Premises") for the Issuer and such
      reasonable ancillary services as are necessary to carry out the
      obligations of the Administrator hereunder, including telecopying,
      duplicating and word processing services;

            (viii) obtaining, maintaining or facilitating one or more letters of
      credit or obtaining, maintaining or facilitating other credit support for
      the obligations of the Issuer contemplated by any Related Agreement;

            (ix) undertake such other administrative services as may be
      appropriate, necessary or requested by the Issuer; and

            (x) provide such other services as are incidental to the foregoing
      or as the Issuer and the Administrator may agree.

      In providing the services under this Section 1 and as otherwise provided
under this Administration Agreement, the Administrator will not knowingly take
any actions on behalf of the Issuer which (i) the Issuer is prohibited from
taking under the Related Agreements, or (ii) would cause the Issuer to be in
violation of any federal, state or local law or the Issuer LLC Agreement.

      2. Compensation. As compensation for the performance of the
Administrator's obligations under this Administration Agreement (including the
compensation of Persons serving as Managers, other than the independent
managers, and officers of the Issuer, but, for the avoidance of doubt, excluding
the performance by CenterPoint Houston of its obligations in its capacity as
Servicer), the Administrator shall be entitled to $100,000 annually (the
"Administration Fee"), payable by the Issuer in arrears proportionately on each
Payment Date. In addition, the Administrator shall be entitled to be reimbursed
by the Issuer for all costs and expenses of services performed by unaffiliated
third parties and actually incurred by the

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Administrator in connection with the performance of its obligations under this
Administration Agreement in accordance with Section 3 (but, for the avoidance of
doubt, excluding any such costs and expenses incurred by CenterPoint Houston in
its capacity as Servicer), to the extent that such costs and expenses are
supported by invoices or other customary documentation and reasonably allocated
to the Issuer ("Reimbursable Expenses"). The Administration Fee shall be
modified, and this Section 2 shall be deemed to have been amended, without
further act or deed by any Person to reflect any such modification or amendment,
to the extent provided in any financing order issued by the PUCT providing for
the issuance of an additional series of Transition Bonds.

      3. Third Party Services. Any services or fees required for or contemplated
by the performance of the above-referenced services by the Administrator to be
provided by unaffiliated third parties (including independent auditors' fees and
counsel fees) may, if provided for or otherwise contemplated by any related
financing order issued by the PUCT and if the Issuer deems it necessary or
desirable, be arranged by the Issuer or by the Administrator at the direction
(which may be general or specific) of the Issuer. Costs and expenses associated
with the contracting for such third-party services may be paid directly by the
Issuer or paid by the Administrator and reimbursed by the Issuer in accordance
with Section 2, or otherwise as the Administrator and the Issuer may mutually
arrange.

      4. Additional Information to be Furnished to the Issuer. The Administrator
shall furnish to the Issuer from time to time such additional information
regarding the Trust Estate as the Issuer shall reasonably request.

      5. Independence of the Administrator. For all purposes of this
Administration Agreement, the Administrator shall be an independent contractor
and shall not be subject to the supervision of the Issuer with respect to the
manner in which it accomplishes the performance of its obligations hereunder.
Unless expressly authorized by the Issuer, the Administrator shall have no
authority, and shall not hold itself out as having the authority, to act for or
represent the Issuer in any way and shall not otherwise be deemed an agent of
the Issuer.

      6. No Joint Venture. Nothing contained in this Administration Agreement
(a) shall constitute the Administrator and the Issuer as partners or co-members
of any partnership, joint venture, association, syndicate, unincorporated
business or other separate entity, (b) shall be construed to impose any
liability as such on either of them or (c) shall be deemed to confer on either
of them any express, implied or apparent authority to incur any obligation or
liability on behalf of the other.

      7. Other Activities of Administrator. Nothing herein shall prevent the
Administrator or any of its members, managers, officers, employees, subsidiaries
or affiliates from engaging in other businesses or, in its sole discretion, from
acting in a similar capacity as an Administrator for any other person or entity
even though such person or entity may engage in business activities similar to
those of the Issuer.

      8. Term of Agreement; Resignation and Removal of Administrator. (a) This
Administration Agreement shall continue in force until the payment in full of
the Transition

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Bonds and any other amount which may become due and payable under the Indenture,
upon which event this Administration Agreement shall automatically terminate.

      (b) Subject to Sections 8(e) and 8(f), the Administrator may resign its
duties hereunder by providing the Issuer with at least sixty (60) days' prior
written notice.

      (c) Subject to Sections 8(e) and 8(f), the Issuer may remove the
Administrator without cause by providing the Administrator with at least sixty
(60) days' prior written notice.

      (d) Subject to Sections 8(e) and 8(f), at the sole option of the Issuer,
the Administrator may be removed immediately upon written notice of termination
from the Issuer to the Administrator if any of the following events shall occur:

            (i) The Administrator shall default in the performance of any of its
      duties under this Administration Agreement and, after notice of such
      default, shall fail to cure such default within ten (10) days (or, if such
      default cannot be cured in such time, shall (A) fail to give within ten
      (10) days such assurance of cure as shall be reasonably satisfactory to
      the Issuer and (B) fail to cure such default within 30 days thereafter);

            (ii) a court of competent jurisdiction shall enter a decree or order
      for relief, and such decree or order shall not have been vacated within
      sixty (60) days, in respect of the Administrator in any involuntary case
      under any applicable bankruptcy, insolvency or other similar law now or
      hereafter in effect, or such court shall appoint a receiver, liquidator,
      assignee, custodian, Trustee, sequestrator or similar official for the
      Administrator or any substantial part of its property or order the
      winding-up or liquidation of its affairs; or

            (iii) the Administrator shall commence a voluntary case under any
      applicable bankruptcy, insolvency or other similar law now or hereafter in
      effect, shall consent to the entry of an order for relief in an
      involuntary case under any such law, shall consent to the appointment of a
      receiver, liquidator, assignee, Trustee, custodian, sequestrator or
      similar official for the Administrator or any substantial part of its
      property, shall consent to the taking of possession by any such official
      of any substantial part of its property, shall make any general assignment
      for the benefit of creditors or shall fail generally to pay its debts as
      they become due.

The Administrator agrees that if any of the events specified in clauses (ii) or
(iii) of this Section 8(d) shall occur, it shall give written notice thereof to
the Issuer and the Trustee as soon as practicable but in any event within seven
(7) days after the happening of such event.

      (e) No resignation or removal of the Administrator pursuant to this
Section shall be effective until a successor Administrator has been appointed by
the Issuer, and such successor Administrator has agreed in writing to be bound
by the terms of this Administration Agreement in the same manner as the
Administrator is bound hereunder.

      (f) The appointment of any successor Administrator shall be effective only
after satisfaction of the Rating Agency Condition with respect to the proposed
appointment.

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      9. Action upon Termination, Resignation or Removal. Promptly upon the
effective date of termination of this Administration Agreement pursuant to
Section 8(a), the resignation of the Administrator pursuant to Section 8(b) or
the removal of the Administrator pursuant to Section 8(c) or 8(d), the
Administrator shall be entitled to be paid a pro-rated portion of the annual fee
described in Section 2 hereof through the date of termination and all
Reimbursable Expenses incurred by it through the date of such termination,
resignation or removal. The Administrator shall forthwith upon such termination
pursuant to Section 8(a) deliver to the Issuer all property and documents of or
relating to the Trust Estate then in the custody of the Administrator. In the
event of the resignation of the Administrator pursuant to Section 8(b) or the
removal of the Administrator pursuant to Section 8(c) or 8(d), the Administrator
shall cooperate with the Issuer and take all reasonable steps requested to
assist the Issuer in making an orderly transfer of the duties of the
Administrator.

      10. Administrator's Liability. Except as otherwise provided herein, the
Administrator assumes no liability other than to render or stand ready to render
the services called for herein, and neither the Administrator nor any of its
members, managers, officers, employees, subsidiaries or affiliates shall be
responsible for any action of the Issuer or any of the members, managers,
officers, employees, subsidiaries or affiliates of the Issuer (other than the
Administrator itself). The Administrator shall not be liable for nor shall it
have any obligation with regard to any of the liabilities, whether direct or
indirect, absolute or contingent of the Issuer or any of the members, managers,
officers, employees, subsidiaries or affiliates of the Issuer (other than the
Administrator itself).

      11. INDEMNITY.

            (a) SUBJECT TO THE PRIORITY OF PAYMENTS SET FORTH IN THE INDENTURE,
THE ISSUER SHALL INDEMNIFY THE ADMINISTRATOR, ITS MEMBERS, MANAGERS, OFFICERS,
EMPLOYEES AND AFFILIATES AGAINST ALL LOSSES, CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES
OF LITIGATION OR PREPARATION THEREFOR WHETHER OR NOT THE ADMINISTRATOR IS A
PARTY THERETO) WHICH ANY OF THEM MAY PAY OR INCUR ARISING OUT OF OR RELATING TO
THIS ADMINISTRATION AGREEMENT AND THE SERVICES CALLED FOR HEREIN; PROVIDED,
HOWEVER, THAT SUCH INDEMNITY SHALL NOT APPLY TO ANY SUCH LOSS, CLAIM, DAMAGE,
PENALTY, JUDGMENT, LIABILITY OR EXPENSE RESULTING FROM THE ADMINISTRATOR'S
NEGLIGENCE OR WILLFUL MISCONDUCT IN THE PERFORMANCE OF ITS OBLIGATIONS
HEREUNDER.

            (b) THE ADMINISTRATOR SHALL INDEMNIFY THE ISSUER, ITS MEMBERS,
MANAGERS, OFFICERS AND EMPLOYEES AGAINST ALL LOSSES, CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES
OF LITIGATION OR PREPARATION THEREFOR WHETHER OR NOT THE ISSUER IS A PARTY
THERETO) WHICH ANY OF THEM MAY INCUR AS A RESULT OF THE ADMINISTRATOR'S
NEGLIGENCE OR WILLFUL MISCONDUCT IN THE PERFORMANCE OF ITS OBLIGATIONS
HEREUNDER.

      12. Notices. Any notice, report or other communication given hereunder
shall be in writing and addressed as follows:

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            (a)   if to the Issuer, to:

                  CenterPoint Energy Transition Bond Company II, LLC
                  1111 Louisiana Street, Suite 4655B
                  Houston, Texas 77002
                  Attention:  Manager

            (b)   if to the Administrator, to:

                  CenterPoint Energy Houston Electric, LLC
                  1111 Louisiana Street
                  Houston, Texas 77002
                  Attention:  Treasurer

or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above.

      13. Amendments. This Administration Agreement may be amended from time to
time by a written amendment duly executed and delivered by each of the Issuer
and the Administrator, provided that (i) the Rating Agency Condition has been
satisfied in connection therewith, (ii) the Trustee shall have consented and
(iii) in the case of any amendment that increases ongoing qualified costs as
defined in the applicable financing order of the PUCT relating to a series of
Transition Bonds, the PUCT shall have consented thereto or shall be conclusively
deemed to have consented thereto. With respect to the PUCT's consent to any
amendment to this Administration Agreement,

            (a) the Administrator may request the consent of the PUCT by
delivering to the PUCT's executive director and general counsel a written
request for such consent, which request shall contain:

                  (i) a reference to Docket No. 30485 or to the Docket No. of
      any proceeding related to the issuance of an additional series of
      Transition Bonds and a statement as to the possible effect of the
      amendment on ongoing qualified costs;

                  (ii) an Officer's Certificate stating that the proposed
      amendment has been approved by all parties to this Administration
      Agreement; and

                  (iii) a statement identifying the person to whom the PUCT or
      its staff is to address its consent to the proposed amendment or request
      additional time;

            (b) The PUCT shall, within 30 days of receiving the request for
consent complying with Section 13(a) above, either

                  (i) provide notice of its consent or lack of consent to the
      person specified in Section 13(a)(iii) above, or

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                  (ii) be conclusively deemed to have consented to the proposed
      amendment,

unless, within 30 days of receiving the request for consent complying with
Section 13(a) above, the PUCT or its staff delivers to the office of the person
specified in Section 13(a)(iii) above a written statement requesting an
additional amount of time not to exceed 30 days in which to consider whether to
consent to the proposed amendment. If the PUCT or its staff requests an
extension of time in the manner set forth in the preceding sentence, then the
PUCT shall either provide notice of its consent or lack of consent to the person
specified in Section 13(a)(iii) above no later than the last day of such
extension of time or be conclusively deemed to have consented to the proposed
amendment as of the last day of such extension of time. Following delivery of a
notice to the PUCT by the Administrator under Section 13(a) above, the
Administrator and Issuer may at any time withdraw from the PUCT further
consideration of any notification of a proposed amendment.

            (c) Any amendment requiring the consent of the PUCT as provided in
this Section 13 shall become effective on the later of (i) the date proposed by
the parties to such amendment and (ii) the first day after the expiration of the
30 day period provided for in Section 13(b), or, if such period has been
extended pursuant thereto, the first day after the expiration of such period as
so extended.

      14. Successors and Assigns. This Administration Agreement may not be
assigned by the Administrator unless such assignment is previously consented to
in writing by the Issuer and the Trustee and subject to the satisfaction of the
Rating Agency Condition in connection therewith. Any assignment with such
consent and satisfaction, if accepted by the assignee, shall bind the assignee
hereunder in the same manner as the Administrator is bound hereunder.
Notwithstanding the foregoing, this Administration Agreement may be assigned by
the Administrator without the consent of the Issuer or the Trustee to a
corporation or other organization that is a successor (by merger, consolidation
or purchase of assets) to the Administrator; provided that such successor
organization executes and delivers to the Issuer an Agreement in which such
corporation or other organization agrees to be bound hereunder by the terms of
said assignment in the same manner as the Administrator is bound hereunder.
Subject to the foregoing, this Administration Agreement shall bind any
successors or assigns of the parties hereto.

      15. Governing Law. This Administration Agreement shall be construed in
accordance with the laws of the State of Texas, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.

      16. Headings. The Section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Administration Agreement.

      17. Counterparts. This Administration Agreement may be executed in
counterparts, each of which when so executed shall be an original, but all of
which together shall constitute but one and the same Administration Agreement.

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      18. Severability. Any provision of this Administration Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

      19. Nonpetition Covenant. Notwithstanding any prior termination of this
Administration Agreement, the Administrator covenants that it shall not, prior
to the date which is one year and one day after payment in full of the
Transition Bonds, acquiesce, petition or otherwise invoke or cause the Issuer to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.

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      IN WITNESS WHEREOF, the parties have caused this Administration Agreement
to be duly executed and delivered as of the day and year first above written.

                                            CENTERPOINT ENERGY TRANSITION BOND
                                            COMPANY II, LLC,
                                                  as Issuer

                                            By: /s/ Marc Kilbride
                                                --------------------------------
                                                Marc Kilbride
                                                Manager

                                            CENTERPOINT ENERGY HOUSTON ELECTRIC,
                                            LLC,
                                                  as Administrator,

                                            By: /s/ Marc Kilbride
                                                --------------------------------
                                                Marc Kilbride
                                                Vice President and Treasurer

                                       10exv4w1

 

Exhibit 4.1

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of this 12
day of December, 2005, by and between PS Business Parks, Inc., a California corporation (the
“Company”), and GSEP 2005 Realty Corp., a Delaware corporation (“Holder”).

RECITALS

     A. In connection with the offering of 800,000 “7 1/8% Series N Cumulative Redeemable Preferred
Units” (the “Series N Preferred Units”), Holder will contribute to PS Business Parks, L.P. (the
“Operating Partnership”) cash in return for which the Operating Partnership will issue the Series N
Preferred Units to the Holder on terms and conditions set forth in the Contribution Agreement,
dated as of December 12, 2005 (the “Contribution Agreement”), by and among the Company, the
Operating Partnership, the Holder and Goldman Sachs 2005 Exchange Place Fund, L.P. All capitalized
terms used but not defined herein have the meanings given them in the Contribution Agreement.

     B. Each of the parties hereto agree that the rights, benefits and obligations under this
Agreement shall be fully assignable to any Person to whom the Holder transfers its Series N
Preferred Units pursuant to the terms and conditions of the Partnership Agreement;

     C. Pursuant to the Partnership Agreement, the Series N Preferred Units owned by the Holder
will be redeemable for cash or exchangeable for shares of the Company’s 7 1/8% Series N Cumulative
Redeemable Preferred Stock (the “Preferred Stock”) upon the terms and subject to the conditions
contained therein; and

     D. To induce the Holder and the Contributor to enter into the Contribution Agreement, the
Company has agreed to provide the registration rights set forth herein to the Holder, and any
subsequent holder or holders of the Series N Preferred Units, with respect to the Holder’s
Preferred Stock and any securities of the Company that may be issued or distributed with respect
to, in exchange or substitution for, or upon conversion of such Holder’s Preferred Stock, or on
account of such Holder’s Preferred Stock as a result of any stock dividend, stock split, reverse
split or other distribution, merger, combination, consolidation, recapitalization or
reclassification or otherwise (collectively, “Registrable Securities”).

 

 

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements
hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

     1. Underwritten Offerings.

          1.1 Demand by Holder.

               (a) At the request of Holder, the Company shall prepare and file a “shelf” registration
statement (the “Registration Statement”) with respect to the Registrable Securities covering the
resale thereof by the Holder on an appropriate form for an offering to be made on a continuous or
delayed basis pursuant to Rule 415 within 60 days after receipt of such request (provided that the
Registrable Securities subject to such request have been issued by the Company on or before the
date of such request) and shall use its best efforts to cause such Registration Statement to be
declared effective within 120 days after the date of such request. The Company shall use its best
efforts to keep the Registration Statement continuously effective until the earliest of (A) such
time as all of the Registrable Securities have been sold pursuant to the Registration Statement or
Rule 144 of the Securities Act, (B) the date on which all of the Registrable Securities may be sold
without volume restrictions in accordance with Rule 144 of the Securities Act and (C) 24 months
following the effective date of the Registration Statement. The Company’s registration obligations
under this Section 1.1 shall include, in addition to those set forth elsewhere in this Agreement,
an obligation to effect (A) appropriate qualification under applicable blue sky or other state
securities laws in those jurisdictions selected by the managing underwriter or underwriters
designated pursuant to Section 1.2 or, if no such managing underwriter or underwriters is
designated, in those jurisdictions reasonably selected by Holder, (B) appropriate compliance with
applicable federal and state laws, requirements and regulations, and (C) such steps as are
reasonably necessary to permit or facilitate the sale and distribution of all or such portion of
such Registrable Securities as are specified in such request.

               (b) At the request of Holder, Company shall effect an underwritten offering to cover such
amount of Registrable Securities as Holder elects; provided, however, Holder shall attempt to sell
in such underwritten offering at any one time at least an amount of Registrable Securities
representing in the aggregate the Registrable Securities issuable upon the exchange of 25% of the
originally issued Series N Preferred Units (the “Minimum Share Amount”), except in the event the
balance of unsold Registrable Securities is less than the Minimum Share Amount, in which case,
Holder shall be permitted to sell the entire remaining balance of the Registrable Securities in the
underwritten offering; provided further, however, the number of times which the Company must effect
such underwritten offerings is limited to 3 times.

               (c) In the event that all of the Series N Preferred Units have not been exchanged as of the
date of expiration of the Registration Statement filed pursuant to Section 1.1(a), the Company
shall prepare and file another Registration Statement (covering the remaining Registrable
Securities) subject to the same terms and conditions delineated in Section 1.1(a).

2

 

               (d) Notwithstanding anything to the contrary contained in this Agreement, the Holder shall not
have the right to request registration or inclusion in any registration pursuant to Section 1.1 of
this Agreement for the period during which all shares of Registrable Securities then held or
entitled to be held upon exchange of Series N Preferred Units by such Holder may immediately be
sold under Rule 144 of the Securities Act without regard to any volume limitation.

          1.2 Selection of Underwriters by Holder.

               (a) In the case of an underwritten offering requested by Holder pursuant to Section 1.1,
Holder shall have the right to approve the investment banker(s), and/or manager(s), selected by the
Company to administer the offering, which shall be a nationally recognized investment bank with
experience in underwriting securities of companies in the Company’s field. The approval by Holder
of the Company’s selection shall not unreasonably be withheld or delayed.

               (b) Such Holder(s) shall have the right to negotiate with the underwriters and to determine
the financial terms of the underwriting relating to the gross price and net price at which the
included Registrable Securities are to be sold. The Company shall (together with the Holders) enter
into an underwriting agreement in customary form with the underwriter or underwriters selected as
set forth above; provided that (i) if, in the opinion of an outside nationally recognized
independent counsel, Holder is deemed to be an underwriter, as such term is defined in the
Securities Act for purposes of a distribution effected pursuant to Section 1.1 of this Agreement,
all of the representations and warranties by the Company that are customarily made to and for the
underwriters shall also be made to and for the benefit of Holder, (ii) any or all of the conditions
precedent to the obligations of such underwriters under such underwriting agreement shall be
conditions precedent to the obligations of such Holders of Registrable Securities, and (iii) no
Holder shall be required to make any representations or warranties to or agreements with the
Company or the underwriters other than the representations, warranties or agreements regarding such
Holder, the Registrable Securities of such Holder and such Holder’s intended method of distribution
and any other representations required by law or reasonably required by the underwriter or
underwriters.

               (c) At its expense, the Company will enter into a written underwriting agreement in customary
form and substance reasonably satisfactory to the Company, the Holders and the managing underwriter
or underwriters of the public offering of such securities, if the offering is to be underwritten,
in whole or in part.

               (d) At its expense, the Company will use its commercially reasonable efforts to furnish, at
the request of any Holder requesting registration of Registrable Securities, if the method of
distribution is by means of an underwriting, on the date that the shares of Registrable Securities
are delivered to the underwriters for sale pursuant to such registration, or if such Registrable
Securities are not being sold through underwriters, on the date that the Registration Statement
becomes effective, (i) a signed opinion, dated as of such date, of the independent legal counsel
representing the Company for the purpose of such registration, addressed to the underwriters, if
any, and if such Registrable Securities are not being sold through underwriters, then to the
Holders making such request, as to such matters as such

3

 

underwriters or the Holders holding a majority of the Registrable Securities included in such
registration, as the case may be, may reasonably request and as would be customary in such a
transaction; and (ii) letters dated such date and the date the offering is completed from the
independent certified public accountants of the Company, addressed to the underwriters, if any, and
if such Registrable Securities are not being sold through underwriters, then to the Holders making
such request and, if such accountants refuse to deliver such letters to such Holders, then to the
Company (A) stating that they are independent certified public accountants within the meaning of
the Securities Act and that, in the opinion of such accountants, the financial statements and other
financial data of the Company included in the Registration Statement or the prospectus related to
the Registration Statement (the “Prospectus”), or any amendment or supplement thereto, comply as to
form in all material respects with the applicable accounting requirements of the Securities Act and
(B) covering such other financial matters (including information as to the most recently ended
calendar quarter prior to the date of such letters) with respect to the registration in respect of
which letter is being given as such underwriters or the Holders holding a majority of the
Registrable Securities included in such registration, as the case may be, may reasonably request
and as would be customary in such a transaction.

          1.3 Transfer of Registration Rights. The rights to cause the Company to register
Registrable Securities granted to Holder by the Company under Section 1.1 hereof may be assigned,
in whole or in part, by a Holder to a transferee of such Holder’s Series N Preferred Units in
accordance with the provisions of the Partnership Agreement or to a transferee of Registrable
Securities held by such Holder. Any such assignment shall be conditioned upon the transferee’s
agreeing to be bound by the provisions of this Agreement. Any such transferee shall be deemed to
be a “Holder” under this Agreement and shall be entitled to all of the rights afforded to a Holder
herein, and shall assume all obligations for which a Holder is responsible herein.

     2. Certain Registration Procedures. The following additional registration procedures
shall apply with respect to the Registration Statement or Prospectus required to be filed pursuant
to Section 1 above:

     At its expense, the Company will use its best effort to keep such registration, and any
qualification under state securities laws which the Company determines to obtain, effective through
the time provided in Section 1.1(a) above.

          2.1 Suspension of Offering.

               (a) The Company shall be entitled, from time to time, to require the Holder not to sell under
the Registration Statement if the negotiation or consummation of a transaction by the Company or
its subsidiaries is pending or circumstances have arisen, which negotiation, consummation or
circumstances would require additional disclosure by the Company in the Registration Statement of
material information which the Company has a bona fide business purpose for keeping
confidential and the nondisclosure of which in the Registration Statement might cause the
Registration Statement to fail to comply with applicable disclosure requirements; provided,
 however, that the Company may not prohibit sales for more than 120 days during any twelve
(12) month period; provided further, however, that the Company’s obligation under Section 1.1(a) or
1.1(c) to keep the Registration Statement continuously

4

 

effective for the 24-month period set forth in the second sentence of Section 1.1(a) shall be
extended by an equivalent amount of time.

               (b) Subject to the limitations as to frequency and duration set forth in Section 2.1(a), upon
receipt of any notice from the Company of the happening of any event which is of a type specified
in Section 2.1(a), Holder agrees that it will immediately discontinue offers and sales of
securities under the Registration Statement until Holder receives copies of a supplemented or
amended Registration Statement which addresses the disclosure issues referred to above, after which
the Holder shall be free to resume offering and selling activities. The Company agrees to promptly
prepare any such supplemented or amended Registration Statement and to use best efforts to cause
such supplemented or amended Registration Statement to be declared effective by the Commission as
soon as practicable. If so directed by the Company, Holder will deliver to the Company all copies
of any Prospectus in its possession at the time of receipt of such notice.

          2.2 Obligations of the Company with Respect to Registration Statements. In connection
with the Registration Statement and the Registrable Securities to be sold thereunder (the “Covered
Securities”), the Company agrees to:

               (a) furnish to Holder such number of copies of the Registration Statement, each amendment,
post-effective amendment and supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein), the Prospectus included in the Registration Statement
(including each preliminary Prospectus) in compliance with the requirements of the Securities Act,
and such other documents as Holder may reasonably request in order to facilitate the disposition of
the Covered Securities owned by Holder; the Company consents to the use of the Prospectus for the
Registration Statement, including each preliminary Prospectus, by Holder in connection with the
offering and sale of Covered Securities;

               (b) use commercially reasonable efforts to register or qualify, or obtain exemption from
registration or qualification for, such Covered Securities under such other securities or blue sky
laws of such jurisdictions as Holder reasonably requests, keep each such registration or
qualification or exemption effective during the period the Registration Statement is required to be
kept effective, and do any and all other acts and things which may be reasonably necessary or
advisable to enable Holder to consummate the disposition in such jurisdictions of the Covered
Securities, provided that the Company will not be required to (i) qualify generally to do business
in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph,
(ii) subject itself to taxation in any jurisdiction where it would not otherwise be subject to
taxation but for this subparagraph, or (iii) consent to general service of process in any such
jurisdiction where it would not otherwise be subject to service of process but for this
subparagraph (except as may be required by the Securities Act);

               (c) cause all such Covered Securities to be listed and qualified for trading on each
securities exchange, or qualified for quotation on each automatic quotation system, on which
similar securities issued by the Company are then listed and qualified for trading or quotation;

5

 

               (d) provide a transfer agent and registrar for all such Covered Securities not later than the
effective date of the Registration Statement applicable thereto, and thereafter maintain such a
transfer agent and registrar; and otherwise cooperate with the sellers to facilitate the timely
preparation and delivery of certificates representing Covered Securities to be sold and not bearing
any Securities Act legends;

               (e) otherwise use its best efforts to comply with the Securities Act and all applicable rules
and regulations of the Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least twelve (12) months
beginning with the first day of the Company’s first full calendar quarter after the effective date
of the Registration Statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder;

               (f) promptly notify Holder in writing (i) of the effectiveness of the Registration Statement
and of any amendments or supplements to the Registration Statement, (ii) of the issuance by the
Commission or any state securities authority of any stop order suspending the effectiveness of the
Registration Statement, or any part thereof, or of any order suspending or preventing the use of
any related Prospectus or the initiation of any proceedings for that purpose, or (iii) if the
Company receives any notification with respect to the suspension of the qualification of any
Registrable Securities for offer or sale in any jurisdiction or the initiation of any proceedings
for that purpose; in the event the Company shall give notice as to the occurrence of any event
described in this Section 2.2(f) (ii) and 2.2 (f)(iii), the Company shall extend the period during
which such Registration Statement shall be maintained effective by the number of days during the
period from and including the date of the giving of such notice to the date the Company delivers
notice that disposition may be made;

               (g) in the event of the issuance of any stop order suspending the effectiveness of the
Registration Statement, or any part thereof, or of any order suspending or preventing the use of
any related Prospectus or suspending the qualification of any Registrable Securities for sale in
any jurisdiction, the Company will use its best efforts to promptly obtain the withdrawal of such
order;

               (h) use commercially reasonable efforts to cause the Covered Securities to be registered with
or approved by such other governmental agencies or authorities, including the National Association
of Securities Dealers, as may be necessary by virtue of the business and operations of the Company
to enable the Holder to consummate the disposition of such Covered Securities;

               (i) promptly notify Holder, at any time when a Prospectus relating to Covered Securities is
required to be delivered under the Securities Act, of the happening of any event as a result of
which the Prospectus included in the Registration Statement (as then in effect) contains any untrue
statement of a material fact or omits to state a material fact necessary to make the statements
therein (in the case of the Prospectus and any preliminary Prospectus, in light of the
circumstances under which they were made) not misleading when such Prospectus was delivered; the
Company will, as soon as practicable, prepare and furnish to Holder a supplement or amendment to
such Prospectus so that, as thereafter delivered to the purchasers of such Covered Securities, such
Prospectus will not contain an untrue statement of a material fact

6

 

or omit to state any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; in the event the Company shall give
notice as to the occurrence of any event described in this Section 2.2(i) the Company shall extend
the period during which such Registration Statement shall be maintained effective by the number of
days during the period from and including the date of the giving of such notice to the date the
Company delivers notice that disposition may be made;

               (j) prepare and file with the Commission such amendments and supplements to the Registration
Statement and the Prospectus used in connection with the Registration Statement as may be necessary
to comply with the provisions of the Securities Act with respect to the disposition of securities
covered by the Registration Statement;

               (k) to the extent permitted by the professional standards governing the accounting profession
at the time, obtain cold comfort letters and updates thereof from the independent public
accountants of the Company (and, if necessary, any other independent certified public accountants
of any subsidiary of the Company or of any business acquired by the Company for which financial
statements and financial data are, or are requested to be, included in the Registration Statement)
who have certified the Company’s financial statements included or incorporated by reference in the
Registration Statement addressed to the Holder in customary form and covering such matters of the
type customarily covered by cold comfort letters;

               (l) make available for inspection by any Holder of such Registrable Securities, any
underwriter participating in any disposition pursuant to the Registration Statement and any
attorney, accountant or other professional retained by any such Holder or underwriter
(collectively, the “Inspectors”), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the “Records”) as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the Company’s officers,
directors and employees to supply all information reasonably requested by any Inspector in
connection with the Registration Statement. Records which the Company determines, in good faith,
to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by
the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in the Registration Statement, (ii) the release of such records is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction, or (iii) such Records
have been generally made available to the public. Each Holder agrees that information obtained by
it as a result of such inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Company or its affiliates or otherwise
disclosed by it unless and until such is made generally available to the public. Each Holder
further agrees that it will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company, if legally permitted to do so, and allow the
Company, at its sole expense, to undertake appropriate action to prevent disclosure of the Records
that are deemed confidential, provided the same shall not subject Holder to civil or criminal
liability or penalty; and

               (m) use its best efforts to obtain CUSIP numbers for the Preferred Stock not later than the
effective date of the Registration Statement.

7

 

          2.3 Obligations of Holder with Respect to Registration Statement. Holder agrees to
provide promptly following any written request therefor, any information reasonably requested by
the Company in connection with the preparation of and for inclusion in the Registration Statement
(including, without limitation, if applicable, information regarding the proposed distribution by
Holder of the Covered Securities).

          2.4 Review of Registration Statements. No Registration Statement, Prospectus or
related materials, and no supplement or amendment to any Registration Statement, Prospectus or
related materials shall be filed unless and until all of the following conditions have been
satisfied; provided, however, that, by implementing the following conditions, Holder shall not be
deemed to have made any representation or warranty of any kind or nature whatsoever with respect to
any matter set forth, contained or addressed in the Registration Statement, Prospectus or related
materials, including but not limited to the accuracy, adequacy or completeness thereof:

               (a) A complete and accurate copy of the Registration Statement, Prospectus and all related
material, and of each proposed supplement or amendment to the Registration Statement, Prospectus or
related materials (all individually and collectively referred to herein as “Filing Material”) shall
be provided to each person or entity designated herein to receive the original or copies of notices
directed to Holder (each a “Notice Party”) sufficiently in advance of that proposed Filing Material
being filed with the Commission or any other federal or state agency having jurisdiction over
securities offerings (a “Filing”) so as to allow the Notice Parties a reasonable opportunity to
review and comment on such proposed Filing Material prior to Filing.

               (b) Promptly upon receipt of any comments or requested revisions or amendments to any Filing
Material from the Commission or any other federal or state agency (collectively “Agency Comments”),
the Company shall provide a complete and accurate copy of the Agency Comments to each Notice Party.

               (c) Promptly upon making any addition, deletion or revision to any Filing Material not
previously provided to all Notice Parties, including but not limited to any addition, deletion or
revision in response to Agency Comments, the Company shall provide each Notice Party with a
complete and accurate copy of the revised Filing Material, with the changes highlighted therein,
sufficiently in advance of Filing any such addition, deletion or revision so as to allow the Notice
Parties a reasonable opportunity to review and comment thereon prior to Filing.

               (d) Prior to each Filing the Company shall certify to Holder in writing that the Company, both
through the devotion of the necessary time and attention of capable Company personnel and Company
resources, and through the engagement of and collaboration with qualified legal, accounting,
underwriting, appraisal, environmental and other experts, exercised good faith and due care in the
preparation of the Filing Materials, both as to form and content.

8

 

     3. Term of Agreement. The Company shall be relieved of its duties under Sections 1
and 2 on the date contemplated in the second sentence of Section 1.1(a) hereof, as such date may be
extended pursuant to the terms hereof.

     4. Indemnification; Contribution.

          4.1 Indemnification by the Company. The Company agrees to indemnify, defend and hold
harmless the Holder (and each nominee or assignee of the Holder permitted pursuant to Section
6.5), any underwriter of Registrable Securities under the Registration Statement, each of their
respective officers, directors, employees and agents, and each Person, if any, who controls the
Holder or any such underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as follows:

               (a) against any and all loss, liability, claim, damage and expense whatsoever (including fees
and disbursements of counsel), arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any amendment or
supplement thereto) pursuant to which securities held by Holder were registered under the
Securities Act, including all documents incorporated therein by reference, or the omission or
alleged omission therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading, or arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus (or any amendment or
supplement thereto), including all documents incorporated therein by reference, or the omission or
alleged omission therefrom of a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading (collectively a “Material
Misstatement”);

               (b) against any and all loss, liability, claim, damage and expense whatsoever (including fees
and disbursements of counsel) to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever arising out of or based upon any Material Misstatements or
alleged Material Misstatement, if such settlement is effected with the written consent of the
Company; and

               (c) against any and all loss, liability, claim, damage and expense whatsoever (including fees
and disbursements of counsel), incurred in investigating, preparing or defending against any
litigation, investigation or proceeding by any governmental agency or body, commenced or
threatened, in each case whether or not a party, or of any claim whatsoever arising out of or based
upon any Material Misstatement or alleged Material Misstatement, to the extent that any such loss,
liability, claim, damage or expense is not paid under subparagraph (a) or (b) above;

provided, however, that the indemnity provided pursuant to this Section 4.1 shall
not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by Holder expressly for use in the
Registration

9

 

Statement (or any amendment thereto) or the Prospectus (or any amendment or supplement thereto).

          4.2 Indemnification by Holder. Holder agrees to indemnify, defend and hold harmless
the Company, severally and not jointly, and each of its directors, officers, employees and agents,
and each Person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the indemnity contained in
Section 4.1 hereof (except that any settlement described in Section 4.1(b) shall be effected with
the written consent of Holder), but only insofar as such loss, liability, claim, damage or expense
arises out of or is based upon any untrue statement or omission, or alleged untrue statement or
omission, of a material fact made in reliance upon and in conformity with written information
furnished to the Company by Holder expressly for use in any Registration Statement (or any
amendment or supplement thereto) or the Prospectus (or any amendment or supplement thereto)
pursuant to which securities held by Holder (or permitted assignees) were registered under the
Securities Act. In no event shall the liability of Holder hereunder (or other indemnifying party
under this Section 4.2) be greater in amount than the gross dollar amount of the proceeds received
by Holder upon the sale of the Registerable Shares giving rise to such indemnification obligation.

          4.3 Conduct of Indemnification Proceedings. The indemnified party under any indemnity
contained in this Agreement shall give reasonably prompt notice to the indemnifying party of any
action or proceeding commenced against it in respect of which indemnity may be sought hereunder,
but failure to so notify the indemnifying party (a) shall not relieve it from any liability which
it may have under the indemnity agreements provided in this Agreement, unless and to the extent it
did not otherwise learn of such action and the lack of notice by the indemnified party results in
the forfeiture by the indemnifying party of substantial rights and defenses, and (b) shall not, in
any event, relieve the indemnifying party from any obligations to the indemnified party other than
the indemnification obligations provided under this Agreement. If the indemnifying party so elects
within a reasonable time after receipt of such notice, the indemnifying party may assume the
defense of such action or proceeding with counsel chosen by the indemnifying party and approved by
the indemnified party, which approval shall not be unreasonably withheld; provided,
however, that the indemnifying party will not settle any such action or proceeding without
the written consent of the indemnified party unless, as a condition to such settlement, the
indemnifying party secures the unconditional release of the indemnified party; and provided
further, that if the defendants in any such action or proceeding include both the
indemnified party and the indemnifying party and the indemnified party reasonably determines, upon
advice of counsel, that a conflict of interest exists or that there may be legal defenses available
to it or other indemnified parties that are different from or in addition to those available to the
indemnifying party, then the indemnified party shall be entitled to one separate counsel, the
reasonable fees and expenses of which shall be paid by the indemnifying party. If the indemnifying
party does not assume the defense of such action or proceeding, after having received the notice
referred to in the first sentence of this Section 4.3, the indemnifying party will pay the
reasonable fees and expenses of counsel (which shall be limited to a single law firm) for the
indemnified party. In such event, however, the indemnifying party will not be liable for any
settlement effected without the written consent of the indemnifying party. If an indemnifying
party is entitled to assume, and assumes, the defense of such action or proceeding in accordance
with this Section, the indemnifying party shall not be

10

 

liable for any fees and expenses of counsel for the indemnified party incurred thereafter in
connection with such action or proceeding except as set forth in the second proviso in the second
sentence of this Section 4.3.

          4.4 Contribution.

               (a) In order to provide for just and equitable contribution in circumstances in which the
indemnity agreements provided for in this Agreement are for any reason held to be unenforceable by
the indemnified party in accordance with its terms, the Company and Holder shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Company and Holder, (a) in such proportion as is appropriate to
reflect the relative fault of the Company on the one hand and Holder on the other, in connection
with the statements or omissions which resulted in such losses, claims, damages, liabilities or
expenses, or (b) if the allocation provided by clause (a) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative fault of but also the
relative benefits to the Company on the one hand and Holder on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative benefits to the indemnifying
party and indemnified party shall be determined by reference to, among other things, the total
proceeds received by the indemnifying party and indemnified party in connection with the offering
to which such losses, claims, damages, liabilities or expenses relate. The relative fault of the
indemnifying party and indemnified party shall be determined by reference to, among other things,
whether the action in question, including any untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact, has been made by, or relates to
information supplied by, the indemnifying party or the indemnified party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such action.

               (b) The parties hereto agree that it would not be just or equitable if contribution pursuant
to this Section 4.4 were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in subparagraph (a) above.
Notwithstanding the provisions of this Section 4.4, Holder shall not be required to contribute any
amount in excess of the amount by which the total price at which the securities of such Holder were
offered to the public exceeds the amount of any damages which such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.

               (c) Notwithstanding subparagraphs (a) and (b) above, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 4.4, each Person, if any, who controls Holder within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as
Holder, and each director of the Company, each officer of the Company who signed a Registration
Statement and each Person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the
Company.

11

 

          4.5 Rule 144 Reporting. With a view to making available to the Holders the benefits
of certain rules and regulations of the Commission which may permit the sale of Registrable
Securities to the public without registration, the Company agrees to:

               (a) make and keep adequate current public information available, as those terms are understood
and defined in Rule 144 of the Securities Act; and

               (b) use its best efforts to file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act; and

               (c) furnish to any Holder, so long as such Holder owns any Registrable Securities, forthwith
upon written request a written statement by the Company that it has complied with the reporting
requirements of said Rule 144, the Securities Act and the Exchange Act (at any time after it has
become subject to such reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by the Company as such Holder
may reasonably request in availing itself of any rule or regulation of the Commission permitting
Holder to sell any such securities without registration; and

               (d) take all such further actions as any Holder may reasonably request to satisfy the
requirements imposed by Rule 144, or any successor rule, on the Company from time to time to enable
resales under said Rule 144 or successor rule.

     5. Holdback Agreements.

          5.1 Holder Holdback Agreement. Upon receipt of 17-day prior written notice, Holder
shall not effect any sale or distribution of Registrable Securities or any securities convertible
into or exchangeable or exercisable for Registrable Securities, including a sale pursuant to Rule
144 of the Securities Act (or any similar provision then in force) under the Securities Act, if and
to the extent required by the managing underwriter of an underwritten offering being undertaken by
the Company; provided, however, that such restriction on sales or distributions shall not apply (a)
for a period exceeding the fourteen (14) days prior to, and the ninety (90) day period beginning
on, the effective date of the Registration Statement filed in connection with such underwritten
offering; (b) to any sale as a part of or in conjunction with such underwritten offering; or (c)
unless all officers, directors and other Persons with registration rights with respect to
securities of the Company enter into or are restricted by similar holdback agreements; and,
provided, further, however, that such restrictions shall not apply more than once in any twelve
month period; and provided, further however that the Company’s obligation under Section 1.1(a) or
1.1(c) to keep the Registration Statement continuously effective for the 24-month period set forth
in the second sentence of Section 1.1(a) shall be extended by an equivalent amount of time.

          5.2 Company Holdback Agreement. Company shall not effect any sale or distribution of
(other than in connection with Company employee, Company consultant or Company director stock
options), or assist in an underwritten offering by any other Person of, any securities of the
Company or securities convertible into or exchangeable or exercisable for

12

 

securities of the Company, if and to the extent required by the managing underwriter of the
underwritten offering contemplated herein; provided, however, that such restriction on public sales
or distributions shall not apply for a period exceeding the fourteen (14) days prior to, and the
one hundred eighty (180) day period beginning on, the effective date of the Registration Statement
filed in connection with such underwritten offering.

     6. Miscellaneous.

          6.1 Expenses of Registration. All reasonable expenses (the “Registration Expenses”)
incurred in connection with any registration, qualification or compliance obligations set forth in
Sections 1 and 2 hereof, including, without limitation, (i) all stock exchange, Commission and
state securities registration, listing and filing fees, (ii) all expenses incurred in connection
with the preparation, printing and distributing of any Registration Statement and Prospectus (and
any supplement or amendment thereto), (iii) fees and disbursements of counsel for the Company and
of the independent public accountants of the Company, and (iv) legal fees and disbursements for one
counsel for the Holders shall be borne by the Company. Notwithstanding anything to the contrary
herein, Holder shall select 3 law firms, the names of which Holder shall provide to Company,
Company, together with Holder, shall consult with the Holder’s choices of law firms and Company
shall select the law firm to be used by Holder as counsel for the Holders. Holder shall be
responsible for the payment of any underwriters’ discounts and/or commissions.

          6.2 Authorization; No Conflicts. Each party to this Agreement represents and warrants
to the other parties to this Agreement that the execution and delivery of this Agreement by such
party and the performance by such party of its covenants and agreements under this Agreement have
been, or at the time of such performance will have been, duly authorized by all necessary corporate
action on the part of such party, and all required consents to the transactions contemplated hereby
have been obtained by such party, or at the time of such performance will have been received by
such party. The execution, delivery and performance by such party of this Agreement, the
fulfillment of and compliance with the terms and provisions hereof, and the consummation by such
party of the transactions contemplated hereby, do not and will not: (a) conflict with, or violate
any provisions of, the Articles of Incorporation, Bylaws or other governing documents of such
party; (b) conflict with, or violate any provision of, any statute, law, ordinance, regulation,
rule, order, writ or injunction having applicability to such party or any of its assets; (c) result
in a breach or acceleration of the maturity of any loan or credit agreement to which such party is
a party or by which any of its assets may be affected; or (d) conflict with, result in any breach
of, or constitute a default under any agreement to which such party is a party or by which it or
any of its assets are bound.

          6.3 Integration; Amendment. This Agreement, together with its exhibits and the other
agreements referred to herein, constitutes the entire agreement among the parties hereto with
respect to the matters relating to registration rights set forth herein and supersedes and renders
of no force and effect all prior oral or written agreements, commitments and understandings among
the parties with respect to the matters relating to registration rights set forth herein. Except
as otherwise expressly provided in this Agreement, no amendment, modification or discharge of this
Agreement shall be valid or binding unless set forth in writing and duly executed by each of the
parties hereto. The parties hereto agree to amend this

13

 

Agreement as necessary to provide the parties with substantially similar (and in no event no
less favorable) rights in the event of the enactment by the SEC of changes to the rules and
regulations promulgated under the Securities Act and the Exchange Act to the extent such change
modifies the current existing registration scheme; provided that such amendment does not impose
upon the Company any burdens, duties or liabilities that are materially more substantial than those
contemplated under this Agreement.

          6.4 Waivers. No waiver by a party hereto shall be effective unless made in a written
instrument duly executed by the party against whom such waiver is sought to be enforced, and only
to the extent set forth in such instrument. Neither the waiver by any of the parties hereto of a
breach or a default under any of the provisions of this Agreement, nor the failure of any of the
parties, on one or more occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder shall thereafter be construed as a waiver of any
subsequent breach or default of a similar nature, or as a waiver of any such provisions, rights or
privileges hereunder.

          6.5 Assignment; Successors and Assigns. Holder may elect to have a nominee take title
to any or all of the Registrable Securities, in which event the benefits of this Agreement shall
run directly to such nominee. This Agreement shall be binding upon and inure to the benefit of the
Company and its successors by merger. Except as provided in this Section and as provided in
Section 1.3, no party hereto shall assign its rights and/or obligations under this Agreement, in
whole or in part, whether by operation of law or otherwise.

          6.6 Burden and Benefit. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, executors, personal and legal representatives,
successors and, subject to Section 6.5 above, assigns.

          6.7 Notices. All notices and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given if personally delivered,
delivered by nationally recognized overnight courier with proof of delivery thereof, sent by United
States registered or certified mail (postage prepaid, return recipe requested) addressed as
hereinafter provided or via telephonic facsimile transmission with proof of delivery in the form of
a telecopier’s confirmation report. Notice shall be sent and deemed given (a) if personally
delivered or via nationally recognized overnight courier, then one business day following receipt
by the receiving party, or (b) if mailed, then three (3) business days after being postmarked, or
(c) if sent via telephonic facsimile transmission, then one business day following the date of
confirmed receipt set forth in the telecopier’s transmission confirmation report.

          Any part listed below may change its address hereunder by notice to the other party listed
below. Until further notice, notice and other communications hereunder shall be addressed to the
parties listed below as follows:

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	 	If to Holder:
	 	GSEP 2005 Realty Corp.
	 

	 	 	 	c/o Goldman Sachs 2005 Exchange Place Fund, L.P.
	 

	 	 	 	85 Broad Street
	 

	 	 	 	New York, New York 10004
	 

	 	 	 	Attention: Mr. Eric S. Lane
	 

	 	 	 	Fax: (212) 357-9429
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Fried, Frank, Harris, Shriver & Jacobson LLP
	 

	 	 	 	One New York Plaza
	 

	 	 	 	New York, New York 10004
	 

	 	 	 	Attention: Lawrence N. Barshay, Esq.
	 

	 	 	 	Fax: (212) 859-8586
	 
	 	 	 	 
	 

	 	If to Company:
	 	c/o PS Business Parks, Inc.
	 

	 	 	 	701 Western Avenue
	 

	 	 	 	Glendale, California 91201
	 

	 	 	 	Attention: Mr. Edward A. Stokx
	 

	 	 	 	Fax: (818) 242-0566
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Wilmer Cutler Pickering Hale and Dorr LLP
	 

	 	 	 	1455 Pennsylvania Avenue, N.W.
	 

	 	 	 	Washington, D.C. 20004
	 

	 	 	 	Attention: Steven S. Snider, Esq.
	 

	 	 	 	Fax: (202) 942-8484

or such other address or telephone number as any party may from time to time specify in writing to
the others; provided, however, that the foregoing addresses and numbers shall remain in effect
unless and until notice of and change is deemed to have been given in the manner required by this
Section.

          6.8 Specific Performance. The parties hereto acknowledge that the obligations
undertaken by them hereunder are unique and that there would be no adequate remedy at law if any
party fails to perform any of its obligations hereunder, and accordingly agree that each party, in
addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to
(a) compel specific performance of the obligations, covenants and agreements of any other party
under this Agreement in accordance with the terms and conditions of this Agreement; and (b) obtain
preliminary injunctive relief to secure specific performance and to prevent a breach or
contemplated breach of this Agreement. Each party waives the requirement of the posting of any
bond or security in connection with any proceedings or any injunction issued in connection with
this Section.

          6.9 Governing Law. Notwithstanding that California law, with respect to choice of
law, or the Constitution, laws or treaties of the United States of America, may dictate that this
Agreement should be governed by or construed in accordance with the laws of another jurisdiction,
this Agreement, and all documents and instruments executed and delivered in connection herewith
shall be governed by and construed in accordance with the laws of the State of California.

15

 

          6.10 Enforcement. If any party hereto institutes any action or proceeding to
interpret or enforce any provision of this Agreement or for an alleged breach of any provision of
this Agreement, the prevailing party shall be entitled to recover its actual attorneys’ fees and
all fees, costs and expenses incurred in connection with such action or proceeding. Such attorneys’
fees, fees, costs and expenses shall include post judgment attorneys’ fees, fees, costs and
expenses incurred on appeal or in collection of any judgment. This provision is separate and
several and shall survive the merger of this provision into any judgment on this Agreement. No
person or entity other than the parties hereto is or shall be entitled to bring any action to
enforce any provision of this Agreement against any of the parties hereto, and the covenants and
agreements set forth in this Agreement shall be solely for the benefit of, and shall be enforceable
only by, the parties hereto or their respective successors and assigns as permitted hereunder.

          6.11 Headings. Section and subsection headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for
any purpose, and shall not in any way define or affect the meaning, construction or scope of any of
the provisions hereof.

          6.12 Pronouns. All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine, neuter, singular or plural, as the identity of the person or entity may
require.

          6.13 Execution in Counterparts. To facilitate execution, this Agreement may be
executed in as many counterparts as may be required. It shall not be necessary that the signature
of or on behalf of each party appears on each counterpart, but it shall be sufficient that the
signature of or on behalf of each party appears on one or more of the counterparts. All
counterparts shall collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of counterparts containing the
respective signatures of or on behalf of all of the parties.

          6.14 Severability. If fulfillment of any provision of this Agreement, at the time
such fulfillment shall be due, shall transcend the limit of validity prescribed by law, then the
obligation to be fulfilled shall be reduced to the limit of such validity; and if any clause or
provision contained in this Agreement operates or would operate to invalidate this Agreement, in
whole or in part, then such clause or provision only shall be held ineffective, as though not
herein contained, and the remainder of this Agreement shall remain operative and in full force and
effect.

          6.15 Time of the Essence. Time is of the essence in the performance of this
Agreement.

          6.16 [Intentionally Left Blank]

          6.17 Further Assurances. Each party agrees to cooperate fully with the other parties
and to prepare, execute, and deliver such further instruments of conveyance, contribution,
assignment, or transfer and shall take or cause to be taken such other or further action as either
party shall reasonably request at any time or from time to time in order to consummate the terms
and provisions and to carry into effect the intents and purposes of this Agreement.

16

 

          6.18 Legal Representation and Construction. Each party hereto has been represented by
legal counsel in connection with the negotiation and drafting of this Agreement. The parties
acknowledge that each party and its counsel have reviewed and revised this Agreement, and that the
normal rule of construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

          6.19 Piggyback on Shelf Registrations. As of the date hereof, neither the Company nor
any securityholder of the Company (other than the Holder) has any right to include any securities
of the Company in any registration effected pursuant to Sections 1.1(a) or 1.1(c) hereunder. In
the event that a registration pursuant to Sections 1.1(a) or 1.1(c) involves an underwritten
offering and the managing underwriter advises the Company and the Holders in writing that, in its
opinion, the inclusion in the registration statement of some or all of the Registrable Securities
sought to be registered by such Holders creates a substantial risk that the price per share that
such Holders will derive from such registration will be materially and adversely affected or that
the offering would otherwise be materially and adversely affected, then the Company will include in
such registration statement such number of Registrable Securities as the Company and such Holders
are so advised can be sold in such offering without such an effect (the “Demand Maximum
Number”), as follows and in the following order of priority: (i) first, the Registrable
Securities of GSEP 2005 Realty Corp., and (ii) second, if and to the extent that the number of
Registrable Securities to be registered under clause (i) is less than the Demand Maximum Number,
the other securities sought to be registered by any other Holders (other than GSEP 2005 Realty
Corp., pro rata in proportion to the number sought to be registered by each such
Holder (other than GSEP 2005 Realty Corp.) relative to the number sought to be registered by all
the Holders (other than GSEP 2005 Realty Corp.); provided, however, that the Company shall be
permitted to grant to any securityholder of the Company “piggyback” registration rights with
respect to any registration other than the registrations effected pursuant to Sections 1.1(a) and
1.1(c).

17

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Registration Rights Agreement
to be duly executed on its behalf as of the date first hereinabove set forth.

	 	 	 	 	 
	 	COMPANY:

PS BUSINESS PARKS, INC.,

a California corporation

 	 
	 	By:  	/s/ Edward A. Stokx
 	 
	 	 	Edward A. Stokx, Executive Vice 	 
	 	 	President and Chief Financial Officer
	 
	 	  	(Print Name and Title) 
	 

Signature Page to Series N Registration Rights Agreement

18

 

	 	 	 	 	 
	 	HOLDER: 

GSEP 2005 REALTY CORP.,

a Delaware corporation

 	 
	 	By:  	                  /s/ Joseph M. Verderami
 	 
	 	 	Joseph M. Verderami, Vice President 	 
	 	  	(Print Name and Title) 
	 

Signature Page to Series N Registration Rights Agreement

19

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