Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
Dated as of October 15, 1997
among
CHELSEA GCA REALTY, INC.,
CHELSEA GCA REALTY PARTNERSHIP, L.P.
and
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
as Initial Purchaser
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and entered
into as of October 15, 1997 among CHELSEA GCA REALTY, INC., a Maryland
corporation (the "COMPANY"), CHELSEA GCA REALTY PARTNERSHIP, L.P., a Delaware
limited partnership (the "OPERATING PARTNERSHIP") and XXXXXXX LYNCH, PIERCE,
XXXXXX & XXXXX INCORPORATED (the "INITIAL PURCHASER").
This Agreement is made pursuant to the Purchase Agreement, dated October 7,
1997 (the "PURCHASE AGREEMENT"), among the Company, as issuer of the 8 3/8%
Series A Cumulative Redeemable Preferred Stock (the "SECURITIES"), the Operating
Partnership and the Initial Purchaser, which provides for, among other things,
the sale by the Company to the Initial Purchaser of 1,000,000 Securities. In
order to induce the Initial Purchaser to enter into the Purchase Agreement, the
Company has agreed to provide to the Initial Purchaser and their direct and
indirect transferees the registration rights set forth in this Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"ADVICE" shall have the meaning set forth in the last paragraph of Section
3 hereof.
"AFFILIATE" has the same meaning as given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"BUSINESS DAY" means any day other than a Saturday, a Sunday, or a day on
which banking institutions in The City of New York are authorized or required by
law or executive order to remain closed.
"CLOSING TIME" shall mean the Closing Time as defined in the Purchase
Agreement.
"COMPANY" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section 2(a)
hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"HOLDER" shall mean the Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its respective successors, assigns and
direct and indirect transferees who become registered owners of Registrable
Securities.
"INITIAL PURCHASER" shall have the meaning set forth in the preamble to
this Agreement.
"INSPECTORS" shall have the meaning set forth in Section 3(m) hereof.
"ISSUE DATE" shall mean October 15, 1997, the date of original issuance of
the Securities.
"LIQUIDATED DAMAGES" shall have the meaning set forth in Section 2(d)
hereof.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the aggregate
liquidation preference of outstanding Securities.
"PERSON" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof.
"PROSPECTUS" shall mean the prospectus included in a Shelf Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all documents incorporated by reference
therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the preamble to
this Agreement.
"RECORDS" shall have the meaning set forth in Section 3(m) hereof.
"REGISTRABLE SECURITIES" shall mean the Securities; PROVIDED, HOWEVER, that
Securities shall cease to be Registrable Securities when (i) a Shelf
Registration Statement with respect to such Securities for the resale thereof
shall have been declared effective under the Securities Act and such Securities
shall have been disposed of pursuant to such Shelf Registration Statement, (ii)
such Securities shall have been sold to the public pursuant to Rule 144(k) (or
any similar provision then in force, but not Rule 144A) under the Securities Act
or are eligible to be sold without restriction as contemplated by Rule 144(k) or
(iii) such Securities shall have ceased to be outstanding.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC 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) all rating agency fees and (v) any fees
and disbursements of counsel or accountants required by or incident to the
performance of and compliance with this Agreement.
"RULE 144(K) PERIOD" shall mean the period of two years (or such shorter
period as may hereafter be referred to in Rule 144(k) under the Securities Act
(or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES" shall have the meaning set forth in the preamble to this
Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended from
time to time.
"SHELF REGISTRATION" shall mean a registration effected pursuant to Section
2(a) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 2(a) hereof which covers
all of the Registrable Securities on an appropriate form under Rule 415 under
the Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all documents incorporated by reference
therein.
2. REGISTRATION UNDER THE SECURITIES ACT.
(a) SHELF REGISTRATION. The Company shall use its best efforts to cause to
be filed, as promptly as practicable after the Issue Date, but in any event
within 150 days after the Issue Date, a Shelf Registration Statement providing
for the sale by the Holders of all of the Registrable Securities, and shall use
its best efforts to have such Shelf Registration Statement declared effective by
the SEC as promptly as practicable after filing thereof, but in any event within
180 days after the Issue Date. No Holder of Registrable Securities shall be
entitled to include any of its Registrable Securities in any Shelf Registration
pursuant to this Agreement unless and until such Holder agrees in writing to be
bound by all of the provisions of this Agreement applicable to such Holder and
furnishes to the Company in writing, within 15 days after receipt of a request
therefor, such information as the Company may, after conferring with counsel
with regard to information relating to Holders that would be required by the SEC
to be included in such Shelf Registration Statement or Prospectus included
therein, reasonably request for inclusion in any Shelf Registration Statement or
Prospectus included therein. Each Holder as to which any Shelf Registration is
being effected agrees to furnish to the Company all information with respect to
such Holder necessary to make the information previously furnished to the
Company by such Holder not materially misleading.
The Company agrees to use its best efforts to keep the Shelf Registration
Statement continuously effective and usable for resales for the Rule 144(k)
Period (subject to extension pursuant to the last paragraph of Section 3
hereof), or for such shorter period which will terminate when all of the
Securities covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement or cease to be Registrable Securities (the
"EFFECTIVENESS PERIOD"). The Company shall not permit any securities other than
(i) with respect to holders of the Company securities currently possessing
incidental registration rights and (ii) Registrable Securities to be included in
the Shelf Registration. The Company will, in the event a Shelf Registration
Statement is declared effective, provide to each Holder a reasonable number of
copies of the Prospectus which is a part of the Shelf Registration Statement,
notify each such Holder when the Shelf Registration Statement has become
effective and take such other actions as are required to permit certain
unrestricted resales of the Registrable Securities. The Company further agrees
to supplement or amend the Shelf Registration Statement if and as required by
the rules, regulations or instructions applicable to the registration form used
by the Company for such Shelf Registration Statement or by the Securities Act or
by any other rules and regulations thereunder for shelf registrations, and the
Company agrees to furnish to the Holders of Registrable Securities copies of any
such supplement or amendment promptly after its being used or filed with the
SEC.
(b) EXPENSES. The Company shall pay all Registration Expenses in connection
with any Shelf Registration Statement filed pursuant to Section 2(a) hereof and
will reimburse the Initial Purchaser for the fees and disbursements of any
single counsel designated in writing by the Majority Holders to act as counsel
for the Holders of the Registrable Securities in connection with a Shelf
Registration Statement, which counsel shall be reasonably satisfactory to the
Company; PROVIDED, HOWEVER, that the Initial Purchaser has agreed to reimburse
the Company for Registration Expenses and other out-of-pocket expenses arising
from the private, as opposed to public, offering of the Securities in the amount
of $100,000 upon the incurrence of such amount and the invoicing of such amount
delivered to the Initial Purchaser. Except as provided herein, each Holder shall
pay all expenses of its counsel, underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to the Shelf Registration Statement.
(c) EFFECTIVE SHELF REGISTRATION STATEMENT. A Shelf Registration Statement
will not be deemed to have become effective unless it has been declared
effective by the SEC; PROVIDED, HOWEVER, that if, after it has been declared
effective, the offering of Registrable Securities pursuant to such Shelf
Registration Statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court, such
Shelf Registration Statement will be deemed not to have been effective during
the period of such interference, until the offering of Registrable Securities
pursuant to such Shelf Registration Statement may legally resume. The Company
will be deemed not to have used its best efforts to cause a Shelf Registration
Statement to become, or to remain, effective during the requisite period if it
voluntarily takes any action that would result in any such Shelf Registration
Statement not being declared effective or that would result in the Holders of
Registrable Securities covered thereby not being able to offer and sell such
Registrable Securities during that period, unless such action is required by
applicable law.
(d) LIQUIDATED DAMAGES. In the event that:
(i) a Shelf Registration Statement is not filed
with the SEC on or prior to the 150th day after the Issue Date, then, commencing
on the 151st day after the Issue Date, liquidated damages ("Liquidated Damages")
shall accumulate on the liquidation preference of the Securities at a rate of
0.50% per annum;
(ii) a Shelf Registration Statement is not
declared effective by the SEC on or prior to the 180th day after the Issue Date,
then, commencing on the 181st day after the Issue Date, Liquidated Damages shall
accumulate on the liquidation preference of the Securities at a rate of 0.50%
per annum; or
(iii) a Shelf Registration Statement has been
declared effective and such Shelf Registration Statement ceases to be effective
or usable for resales at any time prior to the expiration of the Rule 144(k)
Period (other than after such time as all Securities have been disposed of
thereunder or otherwise cease to be Registered Securities), except as permitted
in Section 3(i) hereof with respect to suspensions of the use of the Prospectus,
then, commencing on the day such Shelf Registration Statement ceases to be
effective or usable for resales or on the 31st day in any three-month period or
46th day in any twelve month period following the day such Shelf Registration
Statement ceases to be effective or usable for resales, as the case may be,
Liquidated Damages shall accumulate on the liquidation preference of the
Securities at a rate of 0.50% per annum;
PROVIDED, HOWEVER, that the Liquidated Damages rate on the liquidation
preference of the Securities may not exceed in the aggregate 0.50% per annum;
PROVIDED, FURTHER, HOWEVER, that (1) upon the filing of a Shelf Registration
Statement (in the case of clause (i) above), (2) upon the effectiveness of a
Shelf Registration Statement (in the case of clause (ii) above), or (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 clause (iii) above), Liquidated Damages on the liquidation
preference of the Securities as a result thereof shall cease to accumulate.
Any amounts of Liquidated Damages due pursuant to Section 2(d)(i), (ii) or
(iii) above will be payable in cash on the next succeeding January 15, April 15,
July 15 and October 15, as the case may be, to Holders on the relevant record
dates for the payment of dividends.
(e) SPECIFIC ENFORCEMENT. Without limiting the remedies available to the
Holders, the Company acknowledges that any failure by it to comply with its
obligations under Section 2(a) hereof may result in material irreparable injury
to the Holders for which there is no adequate remedy at law, that it would not
be possible to measure damages for such injuries precisely and that, in the
event of any such failure, any Holder may obtain such relief as may be required
to specifically enforce the Company's obligations under Section 2(a) hereof.
3. REGISTRATION PROCEDURES. In connection with the obligations of the
Company with respect to the Shelf Registration Statement pursuant to Section
2(a) hereof, the Company shall use its best efforts to:
(a) prepare and file with the SEC a Shelf Registration
Statement as prescribed by Sections 2(a) hereof within the relevant
time period specified in Section 2(a) hereof on the appropriate form
under the Securities Act, which form shall (i) be selected by the
Company, (ii) be available for the sale of the Registrable Securities
by the selling Holders thereof, and (iii) comply as to form in all
material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed
therewith; and use its best efforts to cause such Shelf Registration
Statement to become effective and remain effective and, usable for
resales in accordance with Section 2 hereof; PROVIDED, HOWEVER, that,
before filing any Shelf Registration Statement or Prospectus or any
amendments or supplements thereto, the Company shall furnish to and
afford the Holders of the Registrable Securities covered by such Shelf
Registration Statement, their counsel and the managing underwriters, if
any, a reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed. The Company
shall not file any Shelf Registration Statement or Prospectus or any
amendments or supplements thereto in respect of which the Holders must
be afforded an opportunity to review prior to the filing of such
document if the Majority Holders, their counsel or the managing
underwriters, if any, shall reasonably object in a timely manner;
(b) prepare and file with the SEC such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep such Shelf Registration Statement effective for the
Effectiveness Period; and cause each Prospectus to be supplemented, if
so determined by the Company or requested by the SEC, by any required
prospectus supplement and as so supplemented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the Securities
Act, and comply with the provisions of the Securities Act, the Exchange
Act and the rules and regulations promulgated thereunder applicable to
it with respect to the disposition of all securities covered by a Shelf
Registration Statement during the Effectiveness Period in accordance
with the intended method or methods of distribution by the selling
Holders thereof described in this Agreement;
(c) (i) notify each Holder of Registrable Securities included
in the Shelf Registration Statement, at least three Business Days prior
to filing, that a Shelf Registration Statement with respect to the
Registrable Securities is being filed and advising such Holder that the
distribution of Registrable Securities will be made in accordance with
the method selected by the Majority Holders; (ii) furnish to each
Holder of Registrable Securities included in the Shelf Registration
Statement and to each underwriter of an underwritten offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary prospectus, and any amendment or
supplement thereto, and such other documents as such Holder or
underwriter may reasonably request, in order to facilitate the public
sale or other disposition of the Registrable Securities; and (iii)
consent to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Registrable Securities
included in the Shelf Registration Statement in connection with the
offering and sale of the Registrable Securities covered by the
Prospectus or any amendment or supplement thereto;
(d) register or qualify the Registrable Securities under all
applicable state securities or "blue sky" laws of such jurisdictions by
the time the applicable Shelf Registration Statement is declared
effective by the SEC as any Holder of Registrable Securities covered by
a Shelf Registration Statement and each underwriter of an underwritten
offering of Registrable Securities shall reasonably request in writing
in advance of such date of effectiveness, and do any and all other acts
and things which may be reasonably necessary or advisable to enable
such Holder and underwriter to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder;
PROVIDED, HOWEVER, that the Company shall not be required to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but
for this Section 3(d), (ii) file any general consent to service of
process in any jurisdiction where it would not otherwise be subject to
such service of process or (iii) subject itself to taxation in any such
jurisdiction if it is not then so subject;
(e) promptly notify each Holder of Registrable Securities,
their counsel and the managing underwriters, if any, and promptly
confirm such notice in writing (i) when a Shelf Registration Statement
has become effective and when any post-effective amendments thereto
become effective, (ii) of any request by the SEC or any state
securities authority for amendments and supplements to a Shelf
Registration Statement or Prospectus or for additional information
after the Shelf Registration Statement has become effective, (iii) of
the issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of a Shelf Registration Statement or
the qualification of the Registrable Securities in any jurisdiction
described in Section 3(d) hereof or the initiation of any proceedings
for that purpose, (iv) if, between the effective date of a Shelf
Registration Statement and the closing of any sale of Registrable
Securities covered thereby, the representations and warranties of the
Company or the Operating Partnership contained in any purchase
agreement, securities sales agreement or other similar agreement cease
to be true and correct in all material respects, (v) of the happening
of any event or the failure of any event to occur or the discovery of
any facts, during the Effectiveness Period, which makes any statement
made in a Shelf Registration Statement or the related Prospectus untrue
in any material respect or which causes such Shelf Registration
Statement or Prospectus to omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and (vi) of the reasonable
determination of the Company that a post-effective amendment to the
Shelf Registration Statement would be appropriate;
(f) obtain the withdrawal of any order suspending the
effectiveness of the Shelf Registration Statement at the earliest
possible moment;
(g) furnish to each Holder of Registrable Securities included
within the coverage of a Shelf Registration Statement, without charge,
at least one conformed copy of the Shelf Registration Statement
relating to such Shelf Registration and any post-effective amendment
thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(h) cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not
bearing any restrictive legends and registered in such names as the
selling Holders or the underwriters may reasonably request at least two
Business Days prior to the closing of any sale of Registrable
Securities pursuant to the Shelf Registration Statement;
(i) promptly after the occurrence of any event specified in
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, prepare a
supplement or post-effective amendment to the Shelf Registration
Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities,
such Prospectus will not include any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and to notify each Holder to suspend use of the
Prospectus as promptly as practicable after the occurrence of such an
event, and each Holder hereby agrees to suspend use of the Prospectus
until the Company has amended or supplemented the Prospectus to correct
such misstatement or omission PROVIDED, HOWEVER, the Company will be
permitted to suspend the use of the Prospectus for a period not to
exceed 30 days in any three-month period or two periods not to exceed
an aggregate of 45 days (whether or not consecutive) in any
twelve-month period under circumstances relating to pending corporate
developments, public filings with the SEC and similar events;
(j) a reasonable time prior to the filing of any document
which is to be incorporated by reference into a Shelf Registration
Statement or a Prospectus after the initial filing of a Shelf
Registration Statement, provide a reasonable number of copies of such
document to the Holders; and make such of the representatives of the
Company as shall be reasonably requested by the Holders of Registrable
Securities or the Initial Purchaser on behalf of such Holders available
for discussion of such document;
(k) enter into such agreements (including underwriting
agreements) as are customary in underwritten offerings and take all
such other appropriate actions in connection therewith as are
reasonably requested by the Holders of at least 25% in aggregate
liquidation preference of the Registrable Securities in order to
expedite or facilitate the registration or the disposition or the
Registrable Securities;
(l) whether or not an underwriting agreement is entered into
and whether or not the registration is an underwritten registration, if
requested by (x) the Initial Purchaser, in the case where the Initial
Purchaser holds Securities acquired by it as part of its initial
placement and (y) Holders of at least 25% in aggregate liquidation
preference of the Registrable Securities covered thereby: (i) make such
representations and warranties to Holders of such Registrable
Securities and the underwriters (if any), with respect to the business
of the Company, the Operating Partnership and their subsidiaries as
then conducted and with respect to the Shelf Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily
made by issuers to underwriters in underwritten offerings, and confirm
the same if and when requested; (ii) furnish customary closing
documentation in form and substance reasonably requested and reasonably
satisfactory to the managing underwriters (if any) and the Holders of a
majority in amount of the Regi:trable Securities being sold: and (iii)
if an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those
set forth in Section 4 hereof (or such other provisions and procedures
acceptable to Holders of a majority in aggregate liquidation preference
of Registrable Securities covered by such Shelf Registration Statement
and the managing underwriters) customary for such agreements with
respect to all parties to be indemnified pursuant to said Section
(including, without limitation, such underwriters and selling Holders);
and in the case of an underwritten registration, the above requirements
shall be satisfied at each closing under the related underwriting
agreement or as and to the extent required thereunder;
(m) make reasonably available for inspection by any selling
Holder of Registrable Securities who certifies to the Company that it
has a current intention to sell Registrable Securities pursuant to the
Shelf Registration, any underwriter participating in any such
disposition of Registrable Securities, if any, and any attorney,
accountant or other agent retained by any such selling Holder or
underwriter (collectively, the "INSPECTORS"), at the offices where
normally kept, during the Company's normal business hours, all
financial and other records, pertinent corporate and partnership
documents and properties of the Company, the Operating Partnership and
their subsidiaries (collectively, the "RECORDS") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the Company, the Operating Partnership and
their subsidiaries to supply all relevant information in each case
reasonably requested by any such Inspector in connection with such
Shelf Registration Statement; records and information which the Company
or the Operating Partnership determines, in good faith, to be
confidential and any Records and information which it notifies the
Inspectors are confidential shall not be disclosed to any Inspector
except where (i) the disclosure of such Records or information is
necessary to avoid or correct a material misstatement or omission in
such Shelf Registration Statement, (ii) the release of such Records or
information is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction or is necessary in connection with any
action, suit or proceeding or (iii) such Records or information
previously has been made generally available to the public; each
selling Holder of such Registrable Securities will be required to agree
in writing that Records and 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 the Operating Partnership unless and until such is made
generally available to the public through no fault of an Inspector or a
selling Holder and each selling Holder of such Registrable Securities
will be required to further agree in writing that it will, upon
learning that disclosure of such Records or information is sought in a
court of competent jurisdiction, or in connection with any action, suit
or proceeding, give notice to the Company and allow the Company or the
Operating Partnership at its expense to undertake appropriate action to
prevent disclosure of the Records and information deemed confidential;
(n) comply with all applicable rules and regulations of the
SEC so long as any provision of this Agreement shall be applicable and
make generally available to its securityholders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company after the effective date of a Shelf
Registration Statement, which statements shall cover said 12-month
periods, provided that the obligations under this Section 3(n) shall be
satisfied by the timely filing of quarterly and annual reports on Forms
10-Q and 10-K under the Exchange Act;
(o) cooperate with each seller of Registrable Securities
covered by a Shelf Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be
made with the NASD;
(p) take all other steps necessary to effect the registration
of the Registrable Securities covered by a Shelf Registration Statement
contemplated hereby; and
(q) the Company may require each seller of Registrable
Securities as to which any registration is being effected to furnish to
it such information regarding such seller as may be required by the
staff of the SEC to be included in a Shelf Registration Statement; the
Company may exclude from such registration the Registrable Securities
of any seller who unreasonably fails to furnish such information within
a reasonable time after receiving such request; and the Company shall
have no obligation to register under the Securities Act the Registrable
Securities of a seller who so fails to furnish such information.
Each Holder agrees that, upon receipt of any notice from the Company of the
occurrence of any event specified in Section 3(e)(ii), 3(e)(iii), 3(e)(v) or
3(e)(vi) hereof, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to a Shelf Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) hereof or until it is advised in writing (the
"ADVICE") by the Company that the use of the applicable Prospectus may be
resumed, and, if so directed by the Company, such Holder will deliver to the
Company (at the Company's expense) all copies in such Holder's possession, other
than permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice. If the Company shall give any such notice to suspend the disposition of
Registrable Securities pursuant to a Shelf Registration Statement, the Company
shall use its best efforts to file and have declared effective (if an amendment)
as soon as practicable after the resolution of the related matters an amendment
or supplement to the Shelf Registration Statement and related Prospectus and
shall extend the period during which such Shelf Registration Statement is
required to be maintained effective and usable for resales pursuant to this
Agreement by the number of days in the period from and including the date of the
giving of such notice to and including the date when the Company shall have made
available to the Holders (x) copies of the supplemented or amended Prospectus
necessary to resume such dispositions or (y) the Advice.
4. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and the Operating
Partnership, jointly and severally, hereby agree to indemnify and hold harmless
the Initial Purchaser, each Holder, each underwriter who participates in an
offering of the Registrable Securities, each Person, if any, who controls any of
such parties within the meaning of Section 15 of the Securities Act and each of
their respective directors, officers, employees and agents, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in a Shelf
Registration Statement (or any amendment thereto) or Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact required to be stated therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the prior written consent of the Company
and the Operating Partnership; and
(iii) against any and all expenses whatsoever (including the
fees and disbursements of counsel chosen by the Initial Purchaser or
such Holder), as reasonably incurred, in investigating, preparing or
defending against any litigation, or any investigation or proceedings
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (i) or (ii) of this Section
4(a);
PROVIDED, HOWEVER, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished in writing to the Company by the
Initial Purchaser or such Holder for use in the Shelf Registration Statement (or
any amendment thereto) or any Prospectus (or the related amendment or supplement
thereto).
(b) The Initial Purchaser and each Holder or underwriter agrees, severally
and not jointly, to indemnify and hold harmless the Company, its directors and
officers (including each officer of the Company who signed the Shelf
Registration Statement), the Operating Partnership and each Person, if any, who
controls the Company within or the Operating Partnership the meaning of Section
15 of the Securities Act against any and all loss, liability, claim, damage and
expense whatsoever described in the indemnity contained in Section 4(a) hereof,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Shelf Registration Statement (or any
amendment thereto) or the related Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Holder expressly for use in such Shelf Registration
Statement (or any amendment thereto) or such Prospectus (or any amendment or
supplement thereto); PROVIDED, HOWEVER, that no Holder shall be liable for any
claims hereunder in excess of the amount of net proceeds received by such Holder
from the sale of Registrable Securities.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. In the
case of parties indemnified pursuant to Section 4(a) or (b) above, counsel to
the indemnified parties shall be selected by such parties. An indemnifying party
may participate at its own expense in the defense of such action. If it so
elects within a reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving such notice, may
assume the defense of such action with counsel chosen by it and approved by the
indemnified parties defendant in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there may be legal
defenses available to them which are different from or in addition to those
available to such indemnifying party. If an indemnifying party assumes the
defense of such action, the indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred thereafter in
connection with such action. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one counsel (in addition to local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement set forth in this Section 4 is
for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company, the Operating Partnership,
and the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company, the Operating Partnership, and the Holders, as
incurred; PROVIDED, HOWEVER, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any Person that was not guilty of such fraudulent
misrepresentation. As between the Company and the Operating Partnership, on the
one hand, and the Holders, on the other hand, such parties shall contribute to
such aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion as shall be
appropriate to reflect the relative fault of the Company and Operating
Partnership, on the one hand, and the Holders, on the other hand, with respect
to the statements or omissions which resulted in such loss, liability, claim,
damage or expense, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault of the Company and the Operating
Partnership, on the one hand, and of the Holders, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Operating
Partnership, on the one hand, or by or on behalf of the Holders, on the other,
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 of the Registrable Securities agree that
it would not be just and equitable if contribution pursuant to this Section 4
were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the relevant equitable
considerations. For purposes of this Section 4, each Affiliate of a Holder, and
each director, officer and employee and Person, if any, who controls a Holder or
such Affiliate within the meaning of Section 15 of the Securities Act shall have
the same rights to contribution as such Holder, and each director of the Company
and each Person, if any, who controls the Company within the meaning of Section
15 of the Securities Act shall have the same rights to contribution as each of
the Company or the Operating Partnership.
5. PARTICIPATION IN AN UNDERWRITTEN REGISTRATION. No Holder may participate
in an underwritten registration hereunder unless such Holder (a) agrees to sell
such Holder's Registrable Securities on the basis provided in the underwriting
arrangement approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents reasonably required under the terms of such underwriting
arrangements.
6. SELECTION OF UNDERWRITERS. The Holders of Registrable Securities covered
by the Shelf Registration Statement who desire to do so may sell the Securities
covered by such Shelf Registration in an underwritten offering, subject to the
provisions of Section 3(1) hereof. In any such underwritten offering, the
underwriter or underwriters and manager or managers that will administer the
offering will be selected by the Holders of a majority in aggregate liquidation
preference of the Registrable Securities included in such offering; PROVIDED,
HOWEVER, that such underwriters and managers must be reasonably satisfactory to
the Company.
7. MISCELLANEOUS.
(a) RULE 144 AND RULE 144A. For so long as the Company is subject to the
reporting requirements of Section 13 or 15 of the Exchange Act and any
Registrable Securities remain outstanding, the Company will file the reports
required to be filed by it under the Securities Act and Section 13(a) or 15(d)
of the Exchange Act and the rules and regulations adopted by the SEC thereunder;
PROVIDED, HOWEVER, that if the Company ceases to be so required to file such
reports, it will, upon the request of any Holder of Registrable Securities (a)
make publicly available such information as is necessary to permit sales of its
securities pursuant to Rule 144 under the Securities Act, (b) deliver such
information to a prospective purchaser as is necessary to permit sales of its
securities pursuant to Rule 144A under the Securities Act, and (c) take such
further action that is reasonable in the circumstances, in each case, to the
extent required from time to time to enable such Holder to sell its Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (i) Rule 144 under the Securities Act, as such
rule may be amended from time to time, (ii) Rule 144A under the Securities Act,
as such rule may be amended from time to time, or (iii) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
(b) NO INCONSISTENT AGREEMENTS. Neither the Company nor the Operating
Partnership has entered into, or will enter into, any agreement which is
inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's or the
Operating Partnership's other issued and outstanding securities under any such
agreements.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of Holders of a majority in
aggregate liquidation preference of the outstanding Registrable Securities
affected by such amendment, modification, supplement, waiver or departure;
PROVIDED that no amendment, modification or supplement or waiver or consent to
the departure with respect to the provisions of Section 4 hereof shall be
effective as against any Holder of Registrable Securities unless consented to in
writing by such Holder of Registrable Securities. Notwithstanding the foregoing
sentence, (i) this Agreement may be amended, without the consent of any Holder
of Registrable Securities, by written agreement signed by the Company, the
Operating Partnership and the Initial Purchaser, to cure any ambiguity, correct
or supplement any provision of this Agreement that may be inconsistent with any
other provision of this Agreement or to make any other provisions with respect
to matters or questions arising under this Agreement which shall not be
inconsistent with other provisions of this Agreement, (ii) this Agreement may be
amended, modified or supplemented, and waivers and consents to departures from
the provisions hereof may be given, by written agreement signed by the Company,
the Operating Partnership and the Initial Purchaser to the extent that any such
amendment, modification, supplement, waiver or consent is, in their reasonable
judgment, necessary or appropriate to comply with applicable law (including any
interpretation of the Staff of the SEC) or any change therein and (iii) to the
extent any provision of this Agreement relates to the Initial Purchaser, such
provision may be amended, modified or supplemented, and waivers or consents to
departures from such provisions may be given, by written agreement signed by the
Initial Purchaser, the Company and the Operating Partnership.
Notwithstanding the foregoing, in the event that the SEC changes its
position to allow exchange offers of noninvestment grade preferred stock, this
Agreement may be amended without the consent of any Holder of Registrable
Securities in a form mutually acceptable to the Company, the Operating
Partnership and the Initial Purchaser.
(d) NOTICES. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if
to a Holder, at the most current address given by such Holder to the Company by
means of a notice given in accordance with the provisions of this Section 7(d),
which address initially is, with respect to the Initial Purchaser, the address
set forth in the Purchase Agreement; and (ii) if to the Company or the Operating
Partnership, initially at the Company's address set forth in the Purchase
Agreement and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of the Initial
Purchaser, including, without limitation and without the need for an express
assignment, subsequent Holders; PROVIDED, HOWEVER, that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement or amended
charter of the Company. If any transferee of any Holder shall acquire
Registrable Securities, in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) THIRD PARTY BENEFICIARIES. Each Holder shall be a third party
beneficiary of the agreements made hereunder among the Company, the Operating
Partnership and the Initial Purchaser, and the Initial Purchaser 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.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE
STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE
TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY
PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE PARTIES HERETO AGREES TO
SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF
THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF
PERSONAL JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH
OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(j) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) SECURITIES HELD BY THE COMPANY, THE OPERATING PARTNERSHIP OR ITS
AFFILIATES. Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company, the Operating Partnership or any Affiliates
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
Very truly yours,
CHELSEA GCA REALTY, INC.
By:/S/
Name:
Title:
CHELSEA GCA REALTY PARTNERSHIP, L.P.
By: Chelsea GCA Realty, Inc.
(its general partner)
By:/S/
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:/S/
Authorized Signatory
