REGISTRATION RIGHTS AGREEMENT
Exhibit
4.1
THIS REGISTRATION RIGHTS AGREEMENT (the
“Agreement”) is dated as of June __, 2006, by and among CNL REAL ESTATE
GROUP, INC., a Florida corporation, FIVE ARROWS REALTY SECURITIES II L.L.C.,
a
Delaware limited liability company (“Five Arrows”), XXXXX X. XXXXXX, XX.,
XXXXXX X. XXXXXX, C. XXXXX XXXXXXXXXX, XXXXXX X. XXXXXXXXX III, XXXX X.
XXXXXXXX, XXXXX A. N. XXXXX and XXXXXX XXXXXXX (collectively, the
“Stockholders”), and CNL HOTELS & RESORTS, INC., a Maryland
corporation (the “Company”).
RECITALS
WHEREAS, pursuant to an Amended and Restated
Agreement and Plan of Merger among the Company, CNL Hotels & Resorts
Acquisition, LLC, a Florida limited liability company all of the membership
interests of which are owned by the Company (“CHPAC”), CNL Hospitality
Properties Acquisition Corp., a Florida corporation, CNL Hospitality Corp.,
a
Florida corporation (the “Advisor”), CNL Financial Group, Inc., a Florida
corporation, and the Stockholders, entered into as of April 3, 2006 (the
“Merger Agreement”), the Stockholders received 3,600,000 shares of Common
Stock (defined below) (the “Common Shares”), in exchange for all of the
outstanding shares of capital stock of the Advisor;
WHEREAS, in connection with the Merger
Agreement, the Stockholders, other than Five Arrows, have each entered
into a
Lock-Up Agreement (defined below) dated the date hereof with the Company
with
respect to the shares of Common Stock;
WHEREAS, the Company desires to grant
to the
Stockholders certain registration rights with respect to the Common Shares,
subject to the terms and conditions contained herein and in the Lock-Up
Agreement; and
WHEREAS, the Company and the Stockholders
desire to set forth the rights and obligations of the parties with respect
to
such registration rights.
NOW, THEREFORE, in consideration of the
premises and the mutual covenants and agreements herein contained and other
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
AGREEMENT
1.
Certain Definitions. As used in this Agreement,
the
following terms shall have the following meanings:
“Common Shares” shall
have the meaning set forth in the first paragraph of the Recitals.
“Common Stock” shall mean
common shares, $0.01 par value per share, of
the Company.
“Company” shall mean
CNL Hotels & Resorts, Inc., a <?xml:namespace
prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Maryland
corporation.
“Demand Registration
Request” shall have the meaning set forth in Section
4.1.
“Demand Registration
Rights” shall mean the rights of the Holders to
request registration of their Registrable Securities in accordance with
the
provisions of Section 4.
“Demanding Holders” shall have the meaning set
forth in Section
4.1.
“Exchange Act” shall mean the Securities
Exchange Act of 1934, as
amended.
“Filing Notice” shall have the meaning set
forth in Section 3.1.
“Holders” shall mean
the Stockholders or any Permitted Transferee of a
Stockholder, and, with respect to a Permitted Transferee, only if such
Stockholder has granted rights under this Agreement to such Permitted
Transferee; and “Holder” shall mean any one of them.
“Listing” means the
actual listing of the Company’s Common Shares on The
New York Stock Exchange, Inc., any other national securities exchange or
U.S.
inter-dealer quotation system.
“Lock-Up Agreement” means the
letter agreement, dated as of the date
hereof, by and between each of the Stockholders (other than FARS) and the
Company, substantially in the form attached hereto as Annex I, whereby
each of
the Stockholders (other than FARS) has agreed to certain restrictions on
the
sale and transfer of the shares of Common Stock.
“Merger” shall mean
the merger of the Advisor with and into CHPAC, with
CHPAC as the surviving entity in the merger, upon the terms and subject
to the
conditions of the Merger Agreement and in accordance with the Florida Business
Corporation Act and the Florida Limited Liability Company Act.
“Permitted Transferee” shall have the meaning set
forth in Section
2.
“Piggyback Registration
Rights” shall mean the rights of the Holders, in
accordance with the provisions of Section 3, to have their Registrable
Securities included in any Registration Statement filed by the Company
with
respect to the sale of Common Shares or filed by any other shareholders
of the
Company.
“Prospectus” means the
prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement with respect to
the
terms of the offering of any of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated
by
reference in such prospectus.
“Registrable Securities” means all
of the Common Shares and shall include
all shares of Common Stock received by the Holders with respect to the
Common
Shares pursuant to a stock split, stock dividend or distribution or other
recapitalization of the Company. For the purposes of this Agreement, such
shares of Common Stock shall cease to be Registrable Securities on the
Rule 144
Eligibility Date or, if earlier, on such date on which (a) a Registration
Statement covering such shares has been declared effective and such shares
have
been disposed of pursuant to such effective Registration Statement, or
(b) all
of the Registrable Securities are eligible for sale (other than pursuant
to Rule
904 of the Securities Act), in the opinion of counsel to the Company, in
a
single transaction or multiple transactions exempt from the registration
and
prospectus delivery requirements of the Securities Act, so that all transfer
restrictions with respect to such shares and all restrictive legends with
respect to the certificates evidencing such shares are or may be removed
upon
the consummation of such sale.
“Registration Period” shall mean
the period commencing on the date the
Merger is effective and ending at the earlier of (i) such time as no Holder
owns
any Registrable Securities or (ii) the Rule 144 Eligibility Date, provided
that
nothing herein shall affect the Stockholders’ obligations to comply with the
terms of the Lock-Up Agreement.
“Registration Statement” means any
registration statement filed by the
Company under the Securities Act that covers any of the Registrable Securities,
including the Prospectus, any amendments and supplements to such registration
statement, including post-effective amendments, and all exhibits thereto
and all
material incorporated by reference in such registration statement.
“Rule 144 Eligibility
Date” means the three-month anniversary of the date
on which all Common Shares issued by the Company to the Stockholders in
the
Merger and the other Common Shares defined as Registrable Securities herein
first become permitted to be sold under Rule 144 of the Securities Act
by each
Holder within the volume limitations of Rule 144(e) of the Securities Act
or
without limitation pursuant to Rule 144(k) of the Securities Act.
“SEC” shall mean
the Securities and Exchange Commission.
“Securities Act” shall mean
the Securities Act of 1933, as amended.
“Selling Holder
Information” shall mean information either furnished in
writing by or on behalf of a Selling Holder for use in the Registration
Statement or Prospectus.
“Selling Holders” when used
with respect to a Registration Statement
shall mean those Holders whose Registrable Securities are included in a
Registration Statement pursuant to an exercise by such Holders of their
Piggyback Registration Rights or their Demand Registration Rights.
“Stockholders” shall have
the meaning set forth in the Preamble
hereof.
“Underwriter(s)” shall mean
any one or more investment banking or
brokerage firms to or through which the Holders or the Company, as the
case may
be, may offer and sell Registrable Securities pursuant to a transaction
requiring the filing of a Registration Statement under the Securities Act,
including one or more of such firms who shall manage such public offering
through such Underwriters and that are referred to herein as “Managing
Underwriter(s).”
2.
Permitted Transferees.
2.1 Subject to
Section 12.6, any
Stockholder may transfer any of the Registrable Securities held by such
Stockholder (i) to the spouse, siblings or issue or spouses of siblings
or issue
of such Stockholder, (ii) to a trust or custodial account for the sole
benefit
of such Stockholder or the spouse, siblings or issue or spouses of siblings
or
issue of such Stockholder, (iii) to a partnership, limited liability company
or
other entity, the majority and controlling equity owners of which are a
Stockholder or the spouse, siblings or issue or spouses of siblings or
issue of
such Stockholder or any trust referred to in clause (ii) above, (iv) to
the
personal representative of a Stockholder upon the death of such Stockholder
for
the purposes of administration of such Stockholder’s estate or upon the
incompetency of such Stockholder for the purposes of the protection and
management of such Stockholder’s assets, but such personal representative may
not transfer such Registrable Securities other than as permitted under
this
Agreement, (v) to a charitable foundation (subject to receipt by the Stockholder
of written approval from the Company, such approval not to be unreasonably
withheld), (vi) to the Company, or (vii) to any other Stockholder or to
any of
the transferees referred to in clause (i), (ii) or (iii) above for the
benefit
of such other Stockholder.
2.2 Five Arrows
shall be permitted to assign
or otherwise transfer any of the Registrable Securities held by it, and
any of
its rights hereunder with respect to such Registrable Securities, to one
or more
persons, provided that such assignments or transfers are made in accordance
with
all agreements to which both the Company and Five Arrows are parties and
the
applicable provisions of Section 12.6 of this Agreement.
2.3 Any person
to whom a transfer of
Registrable Securities is made pursuant to, or otherwise in accordance
with,
Section 2.1 or Section 2.2 of this Agreement shall be a “Permitted
Transferee.”
3.
Piggyback Registration Rights.
3.1.
If the Company proposes to file
a registration statement under the
Securities Act with respect to any proposed public offering of Common Stock
by
the Company or by any holders of Common Stock (i) prior to the Registration
Period, and the Company reasonably expects such registration statement
to be
declared effective during the Registration Period, or (ii) during the
Registration Period, the Company shall, not later than 30 days prior to
the
proposed date of filing of such registration statement with the SEC under
the
Securities Act, give written notice (a “Filing Notice”) of the proposed
filing to each Holder, which notice shall describe in reasonable detail
the
proposed registration and distribution (including those jurisdictions where
registration under the securities or blue sky laws is intended). During
the Registration Period, each Holder may elect, by written notice to the
Company
(which notice shall specify the aggregate number of Registrable Securities
proposed to be offered and sold by such Holder pursuant to such Registration
Statement, the identity of the proposed seller thereof, and a general
description of the manner in which such person intends to offer and sell
such
Registrable Securities) given within 15 days after receipt of the Filing
Notice
from the Company, to have any or all of the Registrable Securities owned
by such
Holder included in such Registration Statement, and the Company shall include
such Registrable Securities in such Registration Statement. If the
Managing Underwriter(s) or Underwriters (in the case of an underwritten
registration) or the Company (in the case of a non-underwritten registration
covering a primary offering by the Company) should reasonably object to
the
exercise of the Piggyback Registration Rights with respect to such Registration
Statement, then in the discretion of the Company, either:
(a)
the Registrable Securities of
the Selling Holders shall
nevertheless be included in such Registration Statement subject to the
condition
that the Selling Holders may not offer or sell their Registrable Securities
included therein for a period of up to 90 days after the initial effective
date
of such Registration Statement, whereupon the Company shall be obligated
to file
one or more post-effective amendments to such Registration Statement to
permit
the lawful offer and sale of such Registrable Securities for a reasonable
period
thereafter beginning at the end of such lock-up period and continuing for
such
period, not exceeding 120 days, as may be necessary for the Selling Holders,
Underwriters and selling agents to dispose of such Registrable Securities;
or
(b)
if the Managing Underwriter(s)
(in the case of an underwritten
registration) or the Company (in the case of a non-underwritten registration
covering a primary offering by the Company) should reasonably determine
that the
inclusion of such Registrable Securities, notwithstanding the provisions
of the
preceding clause (a), would adversely affect the offering contemplated
in such
Registration Statement, and based on such determination recommends including
in
such Registration Statement fewer or none of the Registrable Securities
of the
Holders, then (x) if the Managing Underwriter(s) or the Company, as applicable,
recommends the inclusion of fewer Registrable Securities, the number of
Registrable Securities of the Holders included in such Registration Statement
shall be reduced pro-rata among such Holders (based upon the number of
Registrable Securities requested to be included in the registration), or
(y) if
the Managing Underwriter(s) or the Company, as applicable, recommends the
inclusion of none of such Registrable Securities, none of the Registrable
Securities of the Holders shall be included in such Registration
Statement.
3.2.
Unless otherwise required by
law, rule or regulation, if
Registrable Securities owned by Holders who have made the election provided
in
Section 3.1 are included in such Registration Statement, the Company shall
bear
and pay all fees, costs, and expenses incident to such inclusion, including,
without limitation, registration fees, exchange listing fees and expenses,
legal
fees of Company counsel (including blue sky counsel), printing costs and
costs
of any regular audits or accounting fees. Each Selling Holder shall pay
all underwriting discounts and commissions with respect to its Registrable
Securities included in the Registration Statement, as well as fees or
disbursements of counsel, accountants or other advisors for the Selling
Holder
and all internal overhead and other expenses of the Selling Holder or transfer
taxes.
3.3.
The rights of the Holders under
this Section 3 are solely piggyback
in nature, and nothing in this Section 3 shall prevent the Company from
reversing a decision to file a Registration Statement or from withdrawing
any
such Registration Statement before it has become effective.
3.4.
The Holders shall have the right,
at any time during the
Registration Period, to exercise their Piggyback Registration Rights pursuant
to
the provisions of this Section 3 on any number of occasions that the Company
shall determine to file a registration statement under the Securities
Act.
3.5.
The Piggyback Registration Rights
granted pursuant to this Section
3 shall not apply to (a) a registration relating solely to employee stock
option, purchase or other employee plans, (b) a registration related solely
to a
dividend or distribution reinvestment plan or (c) a registration on Form
S-4 or
Form S-8 or any successor Forms thereto.
3.6.
In the event that there is a
reduction in the number of Registrable
Securities to be included in a Registration Statement to which Holders
have
exercised Piggyback Registration Rights, the Company shall so advise all
Holders
participating that the number of Registrable Securities that may be included
in
the registration shall be reduced pro rata among such Holders (based on
the
number of Registrable Securities requested to be included in the registration);
provided, however, that the percentage of the reduction of such
Registrable Securities shall be no greater than the percentage reduction
of
securities of other selling securityholders who also have exercised piggyback
registration rights pursuant to agreements other than this Agreement, as
such
percentage reductions shall be determined in the good faith judgment of
the
Company, which determination shall be based on the advice of the Managing
Underwriter of the offering to the extent the offering is an underwritten
offering. If Holders have exercised Piggyback Registration Rights with
respect to a Registration Statement which is being filed as a result of
the
exercise of demand registration rights by other securityholders, the
securityholders exercising their demand registration rights shall have
the
right, in the event of any reduction of securities covered by such Registration
Statement, to have all of their registrable securities included in such
Registration Statement before inclusion of any Registrable Securities of
Holders
exercising their Piggyback Registration Rights. Notwithstanding the
foregoing, prior to any reduction of the number of Registrable Securities
of
Holders exercising Piggyback Registration Rights hereunder, the Company
shall
first exclude securities held by persons not having any contractual registration
rights.
3.7.
The underwriter in any registration
referred to in this Section 3
shall be chosen by the Company in its sole discretion, except in the case
of any
registration made at the request of a third party holding demand registration
rights, in which case the underwriter will be selected as provided in any
agreement relating to such demand registration rights.
4.
Demand Registration Rights.
4.1.
In addition to, and not in lieu
of, the Piggyback Registration
Rights set forth under Section 3, at any time after the Effective Time
(as
defined in the Merger Agreement) and during the Registration Period, any
Holder
may deliver to the Company a written request (a “Demand Registration
Request”) that the Company register any or all of the Registrable Securities
owned by such Demanding Holders (as hereinafter defined) (provided that
the
aggregate offering price of all such Registrable Securities actually included
in
the Demand Registration equals $10.0 million or more), and any other Holders
that may elect to be included pursuant to Section 4.2, under the Securities
Act
and the state securities or blue sky laws of any jurisdiction designated
by such
Selling Holders (subject to Section 9), subject to the provisions of this
Section 4. The requisite Holders making such demand are sometimes referred
to herein as the “Demanding Holders.” The Company shall, as soon as
practicable following the Demand Registration Request, prepare and file
a
Registration Statement (on the then appropriate form or, if more than one
form
is available, on the appropriate form selected by the Company) with the
SEC
under the Securities Act, covering such number of the Registrable Securities
as
the Selling Holders request to be included in such Registration Statement
and to
take all necessary steps to have such Registrable Securities qualified
for sale
under state securities or blue sky laws. The Company shall use its
commercially reasonable best efforts to file such Registration Statement
no
later than 90 days following the Demand Registration Request. Further, the
Company shall use its commercially reasonable efforts to have such Registration
Statement declared effective (within the meaning of the Securities Act)
by the
SEC as soon as practicable thereafter and shall take all necessary action
(including, if required, the filing of any supplements or post-effective
amendments to such Registration Statement) to keep such Registration Statement
effective to permit the lawful sale of such Registrable Securities included
thereunder for the period set forth in Section 6, subject, however, to the
further terms and conditions hereof.
4.2.
No later than 10 days after
the receipt of the Demand Registration
Request, the Company shall notify all Holders who have not joined in such
request of the proposed filing, and such Holders may, if they desire to
sell any
Registrable Securities owned by them, by notice in writing to the Company
given
within 15 days after receipt of such notice from the Company, elect to
have all
or any portion of their Registrable Securities included in the Registration
Statement.
4.3.
The Holders, in the aggregate,
may only exercise the Demand
Registration Rights granted pursuant to this Section 4 two times. The
Company shall only be required to file one Registration Statement (as
distinguished from supplements or pre-effective or post-effective amendments
thereto) in response to the exercise by the Demanding Holders of their
Demand
Registration Rights pursuant to the provisions of this Section 4.
4.4.
In the event that preparation
of a Registration Statement is
commenced by the Company in response to the exercise by the Demanding Holders
of
the Demand Registration Right, but such Registration Statement is not filed
with
the SEC, either at the request of the Company or at the request of the
Demanding
Holders, for any reason, the Demanding Holders shall not be deemed to have
exercised a Demand Registration Right pursuant to this Section 4, except
that,
if such Registration Statement is not filed after the commencement of
preparation thereof at the request of the Demanding Holders, then the Selling
Holders whose Registrable Securities were proposed to be included therein
shall
be required to bear the fees, expenses and costs incurred in connection
with the
preparation thereof.
4.5.
In the event that any Registration
Statement filed by the Company
with the SEC pursuant to the provisions of this Section 4 is withdrawn
prior to
the completion of the sale or other disposition of the Registrable Securities
included thereunder, then the following provisions, whichever are applicable,
shall govern:
(a)
If such withdrawal is effected
at the request of the Company for
any reason other than the failure of all the Selling Holders to comply
with
their obligations hereunder with respect to such registration, then the
filing
thereof by the Company shall be excluded in determining whether the Holders
have
exercised their Demand Registration Rights hereunder with respect to the
filing
of such Registration Statement.
(b)
If such withdrawal is effected
at the request of the Selling
Holders, then the filing thereof by the Company shall be deemed an exercise
of a
Demand Registration Right with respect to the filing of such Registration
Statement.
4.6.
The Company shall bear and pay
all fees, costs and expenses
incident to such Registration Statement and incident to keeping it effective
and
in compliance with all federal and state securities laws, rules, and regulations
for the period set forth in Section 6 (including, without limitation,
registration fees, blue sky qualification fees (subject to Section 9),
exchange
listing fees and expenses, legal fees of Company counsel (including blue
sky
counsel), printing costs, costs of any regular audits and accounting
fees). Each Selling Holder shall pay fees and disbursements of counsel,
accountants and other advisors for the Selling Holder and any underwriting
discounts and commissions with respect to its Registrable Securities and
any
internal, overhead and other expenses of the Selling Holders and transfer
taxes.
4.7.
Whenever a decision or election
is required to be made hereunder by
the Demanding Holders or the Selling Holders, such decision or election
shall be
made by a vote of holders of a majority of the Registrable Securities owned
by
such Demanding Holders or Selling Holders, as the case may be.
4.8.
(a) If the Managing
Underwriter(s) in the case of an underwritten registration should reasonably
determine that the inclusion of all Registrable Securities requested to
be
included in any Registration Statement would materially and adversely affect
the
offering contemplated in a Registration Statement, and based on such
determination recommends inclusion in such Registration Statement of fewer
or
none of the Registrable Securities of the Holders, then (x) if the Managing
Underwriter(s) recommends the inclusion of fewer Registrable Securities,
the
number of Registrable Securities of the Holders included in such Registration
Statement shall be reduced pro-rata among such Holders (based upon the
number of
Registrable Securities requested to be included in the registration), or
(y) if
the Managing Underwriter(s) recommends the inclusion of none of such Registrable
Securities, none of the Registrable Securities of the Holders shall be
included
in such Registration Statement (and the request for registration shall
not count
for purposes of Section 4.3).
(b)
In the event that there is a
reduction in the number of Registrable
Securities to be included in a Registration Statement to which Holders
have
exercised Demand Registration Rights, the Company shall so advise all Holders
participating that the number of Registrable Securities that may be included
in
the registration shall be reduced pro rata among such Holders (based on
the
number of Registrable Securities requested to be included in the registration);
provided, however, that the percentage of the reduction of such
Registrable Securities shall be no greater than the percentage reduction
of
securities of other selling securityholders who also have exercised demand
registration rights pursuant to agreements other than this Agreement, as
such
percentage reductions shall be determined in the good faith judgment of
the
Company based on the advice of the Managing Underwriter of the offering
in the
case of any underwritten offering.
(c)
In the event that there is a
limitation on the number of securities
which may be covered by such Registration Statement, the Selling Holders
shall
have the right, with respect to any such Registration Statement filed as
a
result of their Demand Registration Request, to include their Registrable
Securities prior to the inclusion of the Company (in the case of any inclusion
of shares of Common Stock for sale for its own account) and any other
securityholder exercising piggyback registration rights.
4.9 The
Company shall have the right, with respect to any Registration Statement
to be
filed as a result of a Demand Registration Request, to determine whether
such
registration shall be underwritten or not and to select, subject to the
consent
of the Selling Holders (which consent shall not be unreasonably withheld),
any
such underwriter.
5.
Information to be Furnished. In the event any of
the
Registrable Securities are to be included in a Registration Statement under
Sections 3 or 4, the Selling Holders and the Company shall furnish the
following
information and documents:
5.1.
The Selling Holders shall furnish
to the Company all information
required by the Securities Act to be furnished by sellers of securities
for
inclusion in the Registration Statement, together with all such other
information which the Selling Holders have or can reasonably obtain and
which
may reasonably be required by the Company in order to have such Registration
Statement become effective and such Registrable Securities qualified for
sale
under applicable state securities laws.
5.2.
The Company, before filing a
Registration Statement, amendment or
supplement thereto (including all exhibits), will furnish copies of such
documents to legal counsel selected by the Selling Holders. In addition,
the Company shall make available for inspection by any Selling Holder or
by any
Underwriter, attorney or other agent of any Selling Holder or Underwriter
all
information reasonably requested by such persons. All non-publicly
available information provided to any Selling Holder, Underwriter or any
attorney or agent of any Selling Holder or Underwriter shall be kept strictly
confidential by such Selling Holder, Underwriter or attorney or agent of
such
Selling Holder or Underwriter so long as such information remains
nonpublic.
5.3.
The Company shall promptly notify
each Selling Holder and each
Selling Holder shall promptly notify the Company, upon discovery by the
Company
or such Selling Holder, as the case may be, of the occurrence of any event
which
renders any Prospectus then being circulated among prospective purchasers
misleading because such Prospectus contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
made, in
light of the circumstances in which they were made, not misleading, and
the
Company will amend or supplement the Prospectus so that it does not contain
any
material misstatements or omissions and deliver the number of copies of
such
amendments or supplements to each Selling Holder as each Selling Holder
may
reasonably request. Until such time as such Prospectus is so amended or
supplemented, each Selling Holder shall cease use thereof.
6.
Registration to Be Kept
Effective. In connection with
any registration of Registrable Securities pursuant to this Agreement,
the
Company shall, at its expense, keep effective and maintain such registration
and
any related qualification of Registrable Securities under state securities
laws
for such period not exceeding 120 days or such shorter period as may be
necessary for the Selling Holders, Underwriters and selling agents to dispose
of
such Registrable Securities, from time to time to amend or supplement the
Prospectus used in connection therewith to the extent necessary to comply
with
applicable laws, and to furnish to such Selling Holders such number of
copies of
the Registration Statement, the Prospectus constituting a part thereof,
and any
amendment or supplement thereto as such Selling Holders may reasonably
request
in order to facilitate the disposition of the registered Registrable
Securities.
7.
Conditions to Company’s Obligations. The obligations
of the Company to cause the Registrable Securities owned by the Holders
to be
registered under the Securities Act are subject to each of the following
limitations, conditions and qualifications:
(a)
The Company shall not be required
to fulfill any registration
obligations under this Agreement, including any obligation with respect
to the
Stockholders’ Piggyback Registration Rights or the Demand Registration Rights,
until one hundred eighty (180) days after such time as there has been a
Listing.
(b)
The Company shall be entitled
to postpone for a reasonable period
of time not to exceed four (4) months the filing of any Registration Statement
otherwise required to be prepared and filed by it pursuant to Section 4,
if, in
the good faith opinion of the Company’s Board of Directors, the Company
determines that such registration and offering would materially interfere
with
any proposal or plan to engage in any financing, acquisition, corporate
reorganization or other material transaction involving the Company or any
of its
subsidiaries, and the Company promptly gives the Holders written notice
including a general explanation of such determination; provided that the
Company
shall not delay such action pursuant to this sentence more that once in
any
12-month period. If the Company shall so postpone the filing of a
Registration Statement, the Selling Holders shall have the right to withdraw
the
Demand Registration Request by giving written notice to the Company within
30
days after receipt of the notice of postponement (and, in the event of
such
withdrawal, such Demand Registration Request shall not be counted for purposes
of the Demand Registration Requests to which the Holders are entitled pursuant
to Section 4.3).
(c)
The Company shall not be required
to file any Registration
Statement pursuant to this Agreement in connection with a Demand Registration
Request made less than 90 days after the effective date of any Registration
Statement filed by the Company (other than a registration filed on Form
S-8 or
any successor form thereto.
(d)
The Company may require, as
a condition to fulfilling its
obligations to register the Registrable Securities under Sections 3 or
4, that
the Selling Holders execute reasonable and customary indemnification agreements
for the benefit of the Underwriters of the registration; provided,
however, a Selling Holder shall not be required to indemnify the
Underwriters except with respect to Selling Holder information.
(e)
The Company shall not be required
to fulfill any registration
obligations under this Agreement, if the Company provides the Holders with
an
opinion of counsel reasonably acceptable to such Holders stating that the
Holders are free to sell in the manner proposed by them all of the Registrable
Securities that they desired to register without registering such Registrable
Securities or such Registrable Securities can be sold under Rule 144 of
the
Securities Act, or otherwise without registration in the open market in
compliance with the Securities Act.
(f)
The Company shall not be obligated
to file any Registration
Statement pursuant to this Agreement in connection with a Demand Registration
Request at any time if the Company would be required to include financial
statements audited as of any date other than the end of its fiscal year,
unless
the Selling Holder(s) agree to pay the cost of any such additional
audit.
8.
Exchange Listing. In the event any Registrable
Securities are included in a Registration Statement under Sections 3 or
4, the
Company will exercise commercially reasonable efforts to cause all such
Registrable Securities to be listed on the New York Stock Exchange or listed
on
any other exchange(s) on which the shares of Common Stock are then listed
or
quoted in any U.S. inter-dealer quotation system in which the shares of
Common
Stock are then quoted.
9.
Registration Under State
Securities Laws. The Company
shall use its commercially reasonable efforts to register or qualify any
Registrable Securities included in a Registration Statement pursuant to
Sections
3 or 4 under state “blue sky” or similar securities laws in such jurisdictions
as the Selling Holders reasonably request and to take such other action
as may
be reasonably necessary to enable the Selling Holders to sell their shares
of
Registrable Securities in the jurisdictions where such registration or
qualification was made, provided that the Company shall not be required
to
qualify to do business in any jurisdiction in which it is not so qualified
or to
execute a general consent to service of process in any jurisdiction in
which it
has not executed such a consent.
10.
Indemnification.
10.1. The Company shall indemnify
and hold each Selling Holder, its partners,
officers, directors and agents (including sales agents and Underwriters)
and
each person, if any, who controls (within the meaning of the Securities
Act or
the Exchange Act) the Selling Holder or any of the foregoing, harmless
to the
maximum extent permitted by law, from and against any loss, claim, liability,
damage or expense (including reasonably documented attorneys’ fees and
disbursements of only one firm of counsel selected by the Selling Holders)
resulting from a claim that any Registration Statement, Prospectus or amendment
thereof or supplement thereto, which includes Registrable Securities to
be sold
by such Selling Holder, contains an untrue statement of a material fact
or omits
to state a material fact necessary in order to make the statements made,
in
light of the circumstances under which they were made, not misleading,
unless
such claim is based upon Selling Holder Information or resulting from the
Selling Holder’s failure to deliver a current Prospectus as required under the
Securities Act; and each such Selling Holder will indemnify and hold harmless
the Company, its directors, officers and agents and each person, if any,
who
controls (within the meaning of the Securities Act or the Exchange Act)
the
Company against any loss, claim, liability, damage or expense (including
reasonably documented attorneys’ fees and disbursements) resulting from any such
claim relating to Selling Holder Information.
10.2. Promptly after receipt by an
indemnified party under this Section 10 of
notice of the commencement of any action, such indemnified party shall,
if a
claim in respect thereof is to be made against the indemnifying party under
this
Section 10, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not
relieve
it from any liability which it may have to any indemnified party under
this
Section 10 or otherwise to the extent such omission did not actually and
materially prejudice the indemnifying party. In case any such action is
brought against any indemnified party, and it notifies the indemnifying
party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered
to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there exists a conflict of interest between the indemnifying party
and any
indemnified party or that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to, and
inconsistent or in conflict with, those available to the indemnifying party,
the
indemnified party or parties shall have the right to select separate counsel
to
assert such legal defenses and to otherwise participate in the defense
of such
action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election
so
to assume the defense of such action and approval by the indemnified party
of
counsel, the indemnifying party will not be liable to such indemnified
party
under this Section 10 for any legal or other expenses subsequently incurred
by
such indemnified party in connection with the defense thereof unless (i)
the
indemnified party shall have employed separate counsel in accordance with
the
proviso to the preceding sentence, (ii) the indemnifying party shall not
have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement
of
action, or (iii) the indemnifying party has authorized the employment of
counsel
for the indemnified party at the expense of the indemnifying party; and
except
that, if clause (i) or (iii) is applicable, such liability shall be only
in
respect of the counsel referred to in such clause (i) or (iii). No
settlement of an action against any party under this Section 10 shall bind
the
other party unless such other party agrees in writing to the terms of such
settlement (which agreement will not be unreasonably withheld).
10.3. The obligation of the indemnifying
party to indemnify the indemnified
party under this Section 10 shall, in each case, be in addition to any
liability
which the indemnifying party may otherwise have hereunder or otherwise
at law or
in equity.
10.4. If the indemnification provided
for in this Section 10 from the
indemnifying party is applicable in accordance with its terms but for any
reasons is held to be unavailable to an indemnified party hereunder in
respect
of any losses, claims, damages, liabilities or expenses referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party
as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative faults of the indemnifying
party and indemnified party in connection with the actions which resulted
in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative faults of such
indemnifying party and indemnified party shall be determined by reference
to,
among other things, whether any 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,
such indemnifying party or indemnified party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent
such
action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed
to
include, subject to the limitations set forth in Sections 10.1 and 10.2,
any
legal or other fees or expenses reasonably incurred by such party in connection
with any investigation or proceeding
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 10.4 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 the immediately preceding paragraph. 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.
11.
Rule 144. The Company covenants that it shall use its reasonable
best efforts to file any reports required to be filed by it under the Exchange
Act and the rules and regulations adopted by the SEC thereunder, and that
it
shall take such further action as any Holder of Registrable Securities
may
reasonably request, all to the extent required from time to time to enable
such
Holder to sell the Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a)
Rule 144
under the Securities Act, as such rule may be amended from time to time,
or (b)
any similar rule or regulation adopted by the SEC. The Company shall, upon
the request of any holder of Registrable Securities, deliver to such Holder
a
written statement as to whether it has complied with such
requirements.
12.
Miscellaneous.
12.1. Amendments and Waivers. Subject to Section 12.2,
this
Agreement may be modified or amended only by a writing signed by the Company
and
each of the Stockholders, and, to the extent a permitted transfer has occurred
pursuant to Section 2, its Permitted Transferee.
12.2. Third Party Beneficiaries. Subject to the next
sentence of
this Section 12.2, there shall be no third party beneficiaries of the rights
and
benefits of this Agreement, which rights and benefits shall accrue only
to the
benefit of the parties hereto. Any Permitted Transferee shall be a third
party beneficiary or intended beneficiary to the agreement made hereunder
by a
Stockholder so long as such transfer of rights under this Agreement to
the
Permitted Transferee is made in compliance with Section 12.6.
12.3. No Waiver. No failure to exercise
and no delay in
exercising, on the Company’s or the Holders’ part, of any right, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single
or
partial exercise of any right, power or privilege hereunder preclude any
other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
12.4. Survival of Agreements. All agreements, representations
and
warranties contained herein or made in writing by or on behalf of the Company
in
connection with the transactions contemplated hereby shall survive the
execution
and delivery of this Agreement.
12.5. Limitation of Registration
Rights. Nothing contained in this
Agreement shall create any obligation on behalf of the Company to register
under
the Securities Act any securities which are not shares of Common
Stock.
12.6. Binding Effect and Benefits. This Agreement shall
be binding
upon and shall inure to the benefit of the Company and the Holders and
their
respective successors and permitted assigns. Without limiting the
generality of the foregoing, each Holder’s registration rights granted hereunder
shall be transferable to and exercised by any Permitted Transferee of
Registrable Securities; provided, however, that no Holder may
transfer or assign this Agreement or any of its rights hereunder unless
(a) such
transfer or assignment is effected in accordance with applicable securities
laws, (b) such transferee or assignee (other than the Company) agrees in
writing
to be bound by this Agreement and the Lock-Up Agreement (other than, with
respect to the Lock-Up Agreement, Permitted Transferees of Five Arrows),
and (c)
the Company is given prior written notice by such Holder of such transfer
or
assignment, stating the name and address of the transferee or assignee,
and
identifying the Registrable Securities with respect to which such rights
are
being transferred or assigned.
12.7. Entire Agreement. This Agreement, together
with the Lock-Up
Agreement, constitute the full and entire understanding and agreement between
the parties with regard to the subjects hereof and thereof and supersedes
any
prior understandings, agreements or representations by or among the parties,
written or oral, to the extent they relate in any way to such subject
matter.
12.8. Separability of Provisions. In case any provision
of this
Agreement shall be invalid, illegal or unenforceable, the validity, legality
and
enforceability of the remaining provisions shall not in any way be affected
or
impaired thereby.
12.9. Notices. All notices, requests,
consents and other
communications hereunder shall be in writing and shall be by telecopy,
facsimile
transmission (confirmed by U.S. mail), telegraph, hand delivery or mailed
by certified or registered mail postage prepaid, returned receipt requested,
to
the addresses set forth below or to such other address as any party may
advise
the other parties in a written notice given in accordance with this
Section.
If to the
Company: CNL Hotels & Resorts,
Inc.
CNL Center II at City Commons
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn.: Xxxxxx X. Xxxxxxxxx
III
With
a
copy (which shall not constitute notice pursuant to this Section 12.9)
to:
Xxxxxxxxx Traurig, LLP
The MetLifeBuilding
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx,
Esq.
Facsimile: (000) 000-0000
Xxxxx & Xxxxxxx
L.L.P.
000 Xxxxxxxxxx Xxxxxx,
X.
X.
Xxxxxxxxxx, D. C.
20004
Attn: J. Xxxxxx
Xxxxxxx, Xx., Esq.
Facsimile: (000)
000-0000
If to the
Holders: To the
respective addresses set forth in the records of the Company
Any notice, request
or
other communication so addressed and so mailed shall be deemed to have
been
given when duly delivered or sent.
12.10. Governing Law;
Construction. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect
to the
conflict of laws provisions thereof. The descriptive headings of the
several sections and subsections hereof are for convenience only and shall
not
control or affect the meaning of construction of any of the provisions
hereof.
12.11. Counterparts. This Agreement may be
executed in any number
of counterparts, each of which shall be deemed to be an original, but all
of
which together shall constitute a single original instrument.
IN WITNESS WHEREOF,
each
of the parties hereto has duly executed and delivered this Registration
Rights
Agreement as of the day and year first above written.
THE COMPANY:
CNL HOTELS & RESORTS, INC.
By: Xxxxxxxx X.
XxXxxxxx
Title: Senior Vice President, General Counsel and Corporate Secretary
Title: Senior Vice President, General Counsel and Corporate Secretary
STOCKHOLDERS:
CNL REAL ESTATE GROUP, INC.
By: Xxxxx X. Xxxxxx,
Xx.
Title: Chief Executive Officer
Title: Chief Executive Officer
FIVE ARROWS REALTY SECURITIES II
L.L.C.
By: Xxxxxxx X.
Xxxxxx
Title: Manager
Title: Manager
Xxxxx X. Xxxxxx,
Xx.
XXXXX X. XXXXXX, XX.
XXXXX X. XXXXXX, XX.
Xxxxxx X.
Xxxxxx
XXXXXX X. XXXXXX
XXXXXX X. XXXXXX
C. Xxxxx
Xxxxxxxxx
C. XXXXX XXXXXXXXXX
C. XXXXX XXXXXXXXXX
Xxxxxx X. Xxxxxxxxx
III
XXXXXX X. XXXXXXXXX III
XXXXXX X. XXXXXXXXX III
Xxxx X.
Xxxxxxxx
XXXX X. XXXXXXXX
XXXX X. XXXXXXXX
Xxxxx A. N.
Xxxxx
XXXXX A. N. XXXXX
XXXXX A. N. XXXXX
Xxxxxx
Verbaas
XXXXXX XXXXXXX
XXXXXX XXXXXXX
ANNEX I
FORM
OF LOCKUP LETTER
CNL HOTELS & RESORTS, INC.
Common Stock
[Name
of
Stockholder]
_____________________
_____________________
_____________________
_____________________
_____________________
_____________________
_____________________
_____________________
___________,
2006
Dear
:
This Lock‑Up Letter Agreement is being
delivered to you pursuant to that certain Registration Rights Agreement (the
“Registration Rights Agreement”) by and among CNL Real Estate Group,
Inc., a Florida corporation, Five Arrows Realty Securities II L.L.C., a Delaware
limited liability company, and Xxxxx X. Xxxxxx, Xx., Xxxxxx X. Xxxxxx, C.
Xxxxx
Xxxxxxxxxx, Xxxxxx X. Xxxxxxxxx III, Xxxx X. Xxxxxxxx, Xxxxx A. N. Xxxxx
and
Xxxxxx Xxxxxxx (collectively, the “Stockholders”), and CNL Hotels &
Resorts, Inc., a Maryland corporation (the “Company”). Capitalized
terms used in this letter but not defined have the meanings assigned to such
terms in the Registration Rights Agreement.
1.
Lock-Up and Transfer Limitation. The undersigned
Stockholder shall not directly or indirectly Transfer (as defined in paragraph
3
of this letter agreement), contract or agree to Transfer or publicly announce
any intention to Transfer any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for shares of Common Stock
or
warrants, options or other rights to purchase or otherwise acquire shares
of
Common Stock it may now or later own of record or beneficially (collectively,
“Stockholder Shares”) at any time prior to the six (6) month anniversary
of the date of the Registration Rights Agreement. In addition, the
undersigned Stockholder shall not directly or indirectly Transfer, contract
or
agree to Transfer or publicly announce any intention to Transfer any Stockholder
Shares in excess of 50% of the total number of its Common Shares received
under
the Merger Agreement between such six (6) month anniversary and the one (1)
year
anniversary of the date of the Registration Rights Agreement. The lock-up
and transfer limitations described in this paragraph 1 are in addition to
any
other restrictions on transfer of the Stockholder Shares that may apply under
the Registration Rights Agreement, the Pledge and Security Agreement entered
into as of _________, 2006 between certain Stockholders, the Company and
CNL
Hotels & Resorts Acquisition, LLC (the “Pledge Agreement”), or this
Lock-Up Letter Agreement.
2.
General Holdback. In addition to and not
in lieu of
the restrictions on Transfer of the Stockholder Shares set forth in paragraph
1
above, the undersigned Stockholder shall not, for a period of 14 days prior
to
and 90 days after the date of any final prospectus relating to an effective
registration statement filed by the Company with the SEC (or such longer
periods
as the applicable underwriter or the Company may reasonably request)
(collectively, the “Holdback Period”), directly or indirectly Transfer,
contract or agree to Transfer or publicly announce any intention to Transfer
any
Stockholder Shares, any securities convertible into or exercisable or
exchangeable for shares of Common Stock and any warrants or other rights
to
purchase or otherwise acquire shares of Common Stock. The foregoing
sentence shall not apply to (a) the registration of or sale of any Common
Stock pursuant to a Registration Statement filed in accordance with the
Registration Rights Agreement, (b) bona fide gifts of such securities,
provided that the recipient thereof agrees in writing with the
underwriters or the Company, as applicable, to be bound by the terms of this
letter agreement or (c) dispositions to any trust for the direct or
indirect benefit of the undersigned Stockholder and/or the immediate family
of
the undersigned Stockholder, provided that the trustee agrees in writing
with the Company to be bound by the terms of this letter agreement and otherwise
if a permitted transferee of the subject securities. If (i) the Company
issues an earnings release or material news, or a material event relating
to the
Company occurs, during the last 17 days of the Holdback Period, or (ii) prior
to
the expiration of the Holdback Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day
of
the Holdback Period, the restrictions imposed by this paragraph 2 shall continue
to apply until the expiration of the 18-day period beginning on the issuance
of
the earnings release or the occurrence of the material news or material event;
provided, however, that this sentence shall not apply if any
research published or distributed by any underwriter of the Company would
be
compliant under Rule 139 of the Securities Act and the Company’s securities are
actively traded as defined in Rule 101(c)(1) of Regulation M of the Exchange
Act. The Stockholders hereby authorize the Company during the term of this
letter agreement to cause any transfer agent for the Stockholder Shares to
decline to transfer, and to note stop transfer restrictions on the stock
register and other records relating to, the Stockholder Shares for which
the
Stockholders are the record holders and, in the case of the Stockholder Shares
for which the Stockholders are the beneficial but not the record holder,
agrees
during the term of this letter agreement to cause the record holder to cause
the
relevant transfer agent to decline to transfer, and to note stop transfer
restrictions on the stock register and other records relating to, such
Stockholder Shares, in each case if the Company reasonably determines in
good
faith that such Transfer would, if made, be inconsistent with paragraph 1
of
this letter agreement.
3.
Definition of Transfer. For all purposes of this
letter agreement, “Transfer” shall mean (i) any sale, offer to sell,
transfer, assignment, exchange, redemption, hypothecation, grant of an option
to
purchase or acquire and any other disposition of any securities; (ii)
establishing or increasing a put equivalent position or liquidating or
decreasing a call equivalent position within the meaning of Section 16 of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, with respect to any securities; and (iii) entering
into any swap, derivative or other transaction or arrangement that transfers
to
another, in whole or in part, any economic consequences of ownership of any
securities, whether any such transaction is to be settled by delivery of
such
securities or other securities, in cash or otherwise; provided,
however, that the term “Transfer” shall not mean any (a) Transfer
to a Permitted Transferee in accordance with the terms of the Registration
Rights Agreement or (b) bona fide pledge, assignment or grant of a security
interest in any of the Stockholder Shares or any other bona fide pledge,
assignment or grant of a security interest in any of the Stockholder
Shares.
4.
Authority. The Stockholders hereby
severally, but not
jointly, represent and warrant that they have full power and authority to
enter
into this Agreement and will execute any additional documents necessary in
connection with enforcement hereof.
5.
Term. This letter agreement
shall automatically
expire and be of no further force and effect one (1) year after the date
of the
Registration Rights Agreement.
6.
Counterparts. This letter agreement
may be executed in
any number of counterparts, each of which shall be deemed to be an original,
but
all of which together shall constitute a single original
instrument.
7.
Incorporation of Miscellaneous
Provisions of the Registration
Rights Agreement. The provisions of Sections 12.2, 12.3 and 12.6
through 12.10 of the Registration Rights Agreement are hereby incorporated
by
reference into this letter agreement as if set forth at length
herein.
[SIGNATURE
PAGE FOLLOWS]
If the terms of this Lock-Up Letter Agreement
reflect your understanding of our agreements with respect to its subject
matter,
please indicate your agreement and acceptance of the same by countersigning
this
letter agreement in the space below and returning the signed copy to the
Company.
Yours very truly,
CNL Hotels & Resorts, Inc.
CNL Hotels & Resorts, Inc.
By:
Name: Xxxxxxxx X. XxXxxxxx
Name: Xxxxxxxx X. XxXxxxxx
Title: Senior Vice
President, General Counsel and Corporate Secretary
Accepted and agreed as of the date
first written above:
first written above:
_________________________________
[Stockholder]
