Exhibit 10.41
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is dated as of March
11, 1999, by and among CNL AMERICAN PROPERTIES FUND, INC., A MARYLAND
CORPORATION (THE "COMPANY"), AND FIVE ARROWS REALTY SECURITIES L.L.C., A
DELAWARE LIMITED LIABILITY COMPANY ("FIVE ARROWS"), XXXXX X. XXXXXX, XX., XXXXXX
X. XXXXXX, XXXXXX X. XXXXXXXXXX AND CNL GROUP, INC., A FLORIDA CORPORATION,
(COLLECTIVELY WITH FIVE ARROWS, THE "SHAREHOLDERS").
RECITALS
WHEREAS, pursuant to an Agreement and Plan of Merger among the Company, CFC
Acquisition Corp., a Maryland corporation and wholly-owned subsidiary of the
Company, CFS Acquisition Corp. a Maryland corporation and wholly-owned
subsidiary of APF, CNL Financial Corp., a Florida corporation ("CNL Financial"),
CNL Financial Services, Inc., a Florida corporation ("CNL Services" and,
together with CNL Financial, the "Merging Entities"), and the Shareholders.,
dated as of March 11, 1999 (the "Merger"), the Shareholders received
2,089,581 shares of the Company's common stock, $.01 par value (the "Common
Stock"), in exchange for their outstanding shares of capital stock of the
Merging Entities;
WHEREAS, the Shareholders have been granted certain registration rights
with respect to the shares of Common Stock received in connection with the
Merger; and
WHEREAS, the Company and the Shareholders desire to set forth the rights
and obligations of the parties with respect to such registration rights.
AGREEMENT
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:
Section 1. Certain Definitions. As used in this Agreement, the following
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terms shall have the following meanings:
"Common Stock" shall have the meaning set forth in Paragraph one of the
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Recitals.
"Company" shall mean CNL American Properties Fund, Inc., a Maryland
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corporation.
"Demand Registration Request" shall have the meaning set forth in Section
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4.1 hereof.
"Demand Registration Rights" shall mean the rights of the Holders to have a
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Registration Statement filed by the Company with respect to the Registrable
Securities held by the Holders in accordance with the provisions of Section 4
hereof.
"Demanding Holders" shall have the meaning set forth in Section 4.1 hereof.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
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"Filing Notice" shall have the meaning set forth in Section 3.1 hereof.
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"Holders" shall mean the Shareholders or any Permitted Transferee of a
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Shareholder, and, with respect to a Permitted Transferee, only if such
Shareholder has granted rights under this Agreement to such Permitted
Transferee; and "Holder" shall mean any one of them.
"Merger" shall have the meaning set forth in Paragraph one of the Recitals.
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"Merging Entities" shall have the meaning set forth in Paragraph one of the
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Recitals.
"Permitted Transferee" shall have the meaning set forth in Section 2
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hereof.
"Piggyback Registration Rights" shall mean the rights of the Holders, in
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accordance with the provisions of Section 3 hereof, to have their Registrable
Securities included in any Registration Statement filed by the Company with
respect to the sale of Common Stock or filed by any other shareholders of the
Company.
"Prospectus" means the prospectus included in any Registration Statement,
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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 the aggregate number of shares of Common
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Stock issued by, or to be issued by, the Company to the Shareholders in
connection with the Merger and shall include all shares of Common Stock received
by the Holders pursuant to a stock split, stock dividend 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 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, with respect to Demand Registration
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Rights, the period (X) commencing 180 days from the later of (i) the date that
the date the Merger is effective or (ii) the Company's shares of Common Stock
are listed on a national exchange or quoted on an automated quotation system and
(Y) ending at the earlier of (i) such time as no Holder owns any Registrable
Securities or (ii) the Rule 144 Eligibility Date. "Registration Period" shall
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mean, with respect to Piggyback Registration Rights, the period (X) commencing
on the date the Company's shares of Common Stock are listed on a national
exchange or quoted on an automated quotation system and (Y) ending at the
earlier of (i) such time as no Holder owns any Registrable Securities or (ii)
the Rule 144 Eligibility Date.
"Registration Statement" means any registration statement filed by the
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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 date on which all shares of Common
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Stock issued by the Company to the Shareholders in the Merger and the other
shares of Common Stock defined as Registrable Securities herein may be sold
under Rule 144 of the Securities Act by each holder within three months of such
date within the volume limitations of Rule 144(e).
"SEC" shall mean the Securities and Exchange Commission.
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"Securities Act" shall mean the Securities Act of 1933, as amended.
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"Selling Holder Information" shall mean information furnished in writing
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either 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
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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.
"Shareholders" shall mean Five Arrows Realty Securities L.L.C., a Delaware
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limited liability company, Xxxxx X. Xxxxxx, Xx., Xxxxxx X. Xxxxxx, Xxxxxx X.
XxXxxxxxxx and CNL Group, Inc., a Florida corporation.
"Underwriter(s)" shall mean any one or more investment banking or brokerage
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firms to or through whom 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)."
Section 2. Permitted Transferees.
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Any Shareholder may transfer any of the Registrable Securities held by such
Shareholder, (i) to the spouse, siblings or issue or spouses of siblings or
issue of such Shareholder; (ii) to a trust or custodial account for the sole
benefit of such Shareholder or the spouse, siblings or issue or spouses of
siblings or issue of such Shareholder, (iii) to a partnership, limited
liability company or other entity, the majority and controlling equity owners of
which are such Shareholder or the spouse, siblings or issue or spouses of
siblings or issue of such Shareholder or any trust referred to in clause (ii)
above; (iv) to the personal representative of a Shareholder upon the death of
such Shareholder for the purposes of administration of such Shareholder's estate
or upon the incompetency of such Shareholder for the purposes of the protection
and management of such Shareholder'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 Shareholder
of written approval from the Company, such approval not to be unreasonably
withheld); (vi) to a financial institution reasonably acceptable to the Company
in connection with a bona fide pledge of securities as collateral under a loan;
or (vii) to the Company (a "Permitted Transferee").
Section 3. Piggyback Registration Rights.
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3.1. If the Company proposes to file a registration statement under the
Securities Act with respect to any proposed public offering by the Company or by
any holders of any class of securities of the Company (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 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 nonunderwritten 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:
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(i) 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 90 day 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
(ii) if the Managing Underwriter(s) (in the case of an
underwritten registration) or the Company (in the case of a
nonunderwritten 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 (i), would materially adversely affect the offering
contemplated in such 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) 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), as provided in Section 3.6, 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 special 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.
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.
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 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 securities 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
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Registrable Securities shall be no greater than the percentage reduction of
securities of other selling securityholders other than (i) selling
securityholders who have exercised
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demand registration rights pursuant to agreements other than this Agreement or
(ii) selling securityholders who the Company is contractually obligated to
register such securityholders' shares pursuant to agreements which are not
registration rights agreements, 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. 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.
Section 4. Demand Registration Rights.
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4.1. In addition to, and not in lieu of, the Piggyback Registration
Rights set forth under Section 3, at any time 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 $5 million or more) and any other Holders that
may elect to be included pursuant to Section 4.2 hereof 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 best efforts
to file such Registration Statement no later than 30 days following the Demand
Registration Request. Further, the Company shall use its best efforts to have
such Registration Statement declared effective by the SEC (within the meaning of
the Securities Act) 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 hereof, subject,
however, to the further terms and conditions set forth in Sections 4.3, 4.4,
4.5, 4.6, and 4.7 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. In connection
with any Demand Registration Request, 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 pursuant to Section 7 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.
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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 applicable, shall
govern:
(i) 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.
(ii) 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 hereof (including, without limitation,
registration fees, blue sky qualification fees, exchange listing fees and
expenses, legal fees of Company counsel (including blue sky counsel), printing
costs, costs of any special audits and accounting fees). Each Selling Holder
shall pay fees or disbursements of counsel, accountants or 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.
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; provided,
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however, any decision to withdraw a Demand Notice shall be made unanimously by
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the Demanding Holders.
4.8. In the event that there is a limitation on the number of securities
which may be covered by such Registration Statement as a result of the exercise
by any other securityholder of his or its Piggyback Registration Rights, 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 any other securityholder
exercising piggyback registration rights.
4.9. The Selling Holders 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 any such underwriter, provided such underwriter is satisfactory to the
Company, which consent will not be unreasonably withheld.
Section 5. Information to be Furnished. In the event any of the
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Registrable Securities are to be included in a Registration Statement under
Section 3 or 4, the Selling Holders and the Company shall furnish the following
information and documents:
5.1. The Selling Holders will 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, will furnish copies of such documents to legal counsel
selected by the Selling Holders. In addition, the
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Company will 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 nonpublicly 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 will promptly notify each Selling Holder 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 the Prospectus so that it does not
contain any material misstatements or omissions and deliver the number of copies
of such amendments to each Selling Holder as each Selling Holder may require.
Section 6. Registration to Be Kept Effective. In connection with any
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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 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.
Section 7. Conditions to Company's Obligations. The obligations of the
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Company to cause the Registrable Securities owned by the Holders to be
registered under the Act are subject to each of the following limitations,
conditions and qualifications:
(a) The Company shall be entitled to postpone for a reasonable
period of time up to three (3) months the filing of any Registration
Statement otherwise required to be prepared and filed by it pursuant to
Section 4 hereof, if the Company determines, in its reasonable judgment,
that such registration and offering would materially interfere with any
financing, acquisition, corporate reorganization or other material
transaction involving the Company, and the Company promptly gives the
Holders written notice including an explanation of such determination. 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 hereof).
(b) 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 registrations
statements filed on Form X-0, Xxxx X-0, or any successor forms thereto) if
(i) the Managing Underwriter(s) associated with such prior Registration
Statement reasonably objects to such Demand Registration Request or has
otherwise precluded the Company from filing a registration statement within
such 90-day period and (ii) the Selling Holders filing such Demand
Registration Request were able to include in such prior Registration
Statement pursuant to their Piggyback Registration Rights at least one-
third of the amount of the Registrable Securities that they had notified
the Company they desired to have been included in such prior Registration
Statement.
(c) The Company may require, as a condition to fulfilling its
obligations to register the Registrable Securities under Sections 3 or 4
hereof, 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
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with respect to Selling Holder information and then only to the extent of
the proceeds received by such Selling Holder pursuant to such Registration
Statement.
(d) 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 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, without regard to volume
restrictions.
(e) 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.
Section 8. Exchange Listing. In the event any Registrable Securities are
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included in a Registration Statement under Section 3 or 4 hereof, the Company
will exercise reasonable efforts to cause all such Registrable Securities to be
listed on the New York Stock Exchange or any other exchange(s) or automated
quotation system on which the Common Stock is then listed.
Section 9. Registration Under State Securities Laws. The Company shall
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use its best efforts to register or qualify any Registrable Securities included
in a Registration Statement pursuant to Section 3 or 4 hereof 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 will 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.
Section 10. Indemnification.
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10.1. The Company will 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 attorneys' fees) 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 a material misstatement or omission, 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 attorneys' fees) 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 will, 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 will 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 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
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include both the indemnified party and the
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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
the 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 Section 10.1 and 10.2 hereof,
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.
10.5 Notwithstanding any provision hereof to the contrary, no Selling
Holder shall be required to indemnify the Company or be liable for contribution
in an amount greater than the actual proceeds received by such Selling Holder
pursuant to a Registration Statement.
Section 11. Rule 144. The Company covenants that it shall 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
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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.
Section 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 Shareholders. No modification or amendment to this Agreement shall require
the consent of any Permitted Transferee.
12.2. Third Party Beneficiaries. Any Permitted Transferee shall be a
-------------------------
third party beneficiary or intended beneficiary to the agreement made hereunder
by a Shareholder so long as such Shareholder has granted rights under this
Agreement to Permitted Transferee, and any such third party beneficiary shall
have the right to enforce such Agreement directly to the extent it deems such
enforcement necessary or advisable. No person other than a Permitted Transferee
shall be a third party beneficiary to the agreements made hereunder.
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 Registrable Securities.
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 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.
12.7. Entire Agreement. This Agreement constitutes the full and entire
----------------
understanding and agreement between the parties with regard to the subjects
hereof.
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 party
in a written notice given in accordance with this Section.
If to the Company: CNL American Properties Fund, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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Attn.: Xxxxxx X. XxXxxxxxxx
If to the Holders: To the respective addresses set
forth in the records of the Company
Any notice or other communication so addressed and so mailed shall be deemed to
have been given when duly delivered or sent.
12.10. Construction. This Agreement shall be governed by and construed
------------
in accordance with the laws of the State of Delaware, 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 be an original, but all of which
together shall constitute a single original instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
CNL AMERICAN PROPERTIES FUND, INC.
By: _________________________________
Its: _________________________________
SHAREHOLDERS:
FIVE ARROWS REALTY SECURITIES L.L.C.]:
By: _________________________________
Its: _________________________________
______________________________________
Xxxxx X. Xxxxxx, Xx.
______________________________________
Xxxxxx X. Xxxxxx
______________________________________
Xxxxxx X. XxXxxxxxxx
CNL GROUP, INC.
By: __________________________________
Its: _________________________________
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