REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of February 1,
1999, by and among Xxxxxx Lodging Company, an Ohio corporation (the
"Company"), and AEW Partners III, L.P., a Delaware limited partnership (the
"Holder").
This Agreement is made pursuant to that certain Stock Purchase Option
Agreement (the "Stock Purchase Option Agreement") dated as of the date hereof
by and among the Company, Xxxxxx Hotel Properties, L.P., an Ohio limited
partnership (the "Operating Partnership") and the Holder pursuant to which
(i) the Company has granted the Holder certain rights to purchase shares of
Preferred Stock (as defined below), in the amounts and on the terms set forth
in the Stock Purchase Option Agreement, including in certain circumstances
following the sale of assets by the Joint Venture (as defined below) and the
distribution of the proceeds resulting therefrom, (ii) the Company has issued
and sold to the Holder a warrant and agreed, upon the occurrence of certain
conditions, to issue and sell to the Holder a second warrant, in
substantially the same form, each such warrant granting the Holder the right
to purchase shares of Preferred Stock, in the amounts and on the terms set
forth in such warrants, (each, a "Warrant"), (iii) the Company and the Holder
have agreed that, in lieu of cash, the Holder may elect to receive shares of
Preferred Stock, or the Company may elect to issue shares of Preferred Stock
or Common Stock (as defined below), in the amounts and on the terms set forth
in the Stock Option Purchase Agreement, in the event that the Company
purchases all or substantially all of the Holder's interests in AEW/Xxxxxx
LLC (the "Joint Venture") in accordance with certain rights set forth in the
Limited Liability Company Agreement of the Joint Venture (the "Joint Venture
Agreement") or otherwise, and (iv) the Company has the right to issue and
deliver Common Stock in lieu of Preferred Stock in satisfaction of its
obligations in connection with any exercise by the Holder of any of its
foregoing rights to receive Preferred Stock, (all of such rights
collectively, the "Stock Rights"). In order to induce the Holder to enter
into the Stock Purchase Option Agreement, the Company has agreed to provide
the registration rights set forth in this Agreement. The execution of this
Agreement is a condition to the consummation of any issuance of Common Stock
and/or Preferred Stock pursuant to any of the Stock Rights.
In consideration of the foregoing, the parties hereby agree as follows:
SECTION 1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
"ADVICE" has the meaning set forth in Section 5.
"AFFILIATE" means, with respect to any specified Person, any other
Person who, directly or indirectly, controls, is controlled by, or is under
common control with such specified Person, PROVIDED that, for purposes of
this definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by agreement or
otherwise.
"AGREEMENT" has the meaning set forth in the introductory statement.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day on
which commercial banking institutions in Boston, Massachusetts, New York, New
York or Cleveland, Ohio are authorized by law to be closed. Any reference to
"days" (unless Business Days are specified) shall mean calendar days.
"COMMISSION" means the United States Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"COMMON STOCK" means the common stock, no par value, of the Company.
"COMPANY" has the meaning set forth in the introductory statement and
shall include the Company's successors by merger, acquisition, reorganization
or otherwise.
"CONTROLLING PERSONS" has the meaning set forth in Section 7(a).
"CAPITAL CONTRIBUTION CAP" has the meaning set forth in the Joint
Venture Agreement.
"CONVERSION MULTIPLE" has the meaning set forth in the Certificate of
Amendment relating to the creation of the Class A Cumulative Preferred Stock,
Series 1999-A, filed with the Secretary of State of Ohio on February 1, 1999,
subject to adjustment as provided from time to time following the date
hereof, as provided in Section 6.E. thereof.
"DAMAGES" has the meaning set forth in Section 7(a).
"DEPOSITARY SHARE" means a fractional interest of one one-hundredth
(1/100) of one share of Preferred Stock, as more fully described, and having
the rights and privileges and being subject to the limitations set forth, in
the Depositary Agreement dated February 1, 1999 between the Company and
National City Bank.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute, and the rules and regulations of
the Commission promulgated thereunder.
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"EXPANSION OPTION EXERCISE PRICE" has the meaning set forth in the Stock
Purchase Option Agreement, as adjusted from time to time pursuant to the
terms thereof.
"HOLDER" has the meaning set forth in the introductory statement and
shall include (i) the Holders' successor by merger, acquisition,
reorganization or otherwise; (ii) each Person to whom a Holder transfers
Securities if such Person acquires such Securities as Registrable Securities;
and (iii) each Person to whom a Holder transfers any of the Stock Rights or
any Warrant, subject to any transfer restriction set forth in Stock Purchase
Option Agreement.
"INSPECTORS" has the meaning set forth in Section 5(k).
"JOINT VENTURE" has the meaning set forth in the introductory sentence.
"MAXIMUM NUMBER" means such number of securities that may be included in
an underwritten public offering when the managing underwriters advise the
Company in writing that in their opinion the number of securities requested
to be included in such registration exceeds the maximum number which can be
included in such offering without adversely affecting the marketability of
the offering.
"NASD" has the meaning set forth in Section 5(m).
"NASDAQ" has the meaning set forth in Section 5(m).
"OPERATING PARTNERSHIP" has the meaning set forth in the introductory
statement and shall include the Operating Partnership's successors by merger,
acquisition, reorganization or otherwise.
"OPTION EXERCISE PRICE" has the meaning set forth in the Stock Purchase
Option Agreement, as adjusted from time to time pursuant to the terms thereof.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, limited liability company,
unincorporated organization or government or other agency or political
subdivision thereof.
"PIGGY-BACK REGISTRATION" has the meaning set forth in Section 4(a).
"PREFERRED STOCK" means the Class A Cumulative Preferred Stock, Series
1999-A, without par value, of the Company.
"PRIMARY REQUIRED FILING DATE" has the meaning set forth in Section 2(a).
"PRIMARY SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(a).
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"PRIMARY TARGET EFFECTIVE DATE" means the date 45 days after the earlier
of (i) the date on which the Primary Shelf Registration Statement is actually
filed with the Commission; or (ii) the fourteenth (14th) day preceding the
first anniversary of the date of the Stock Purchase Option Agreement.
"PROSPECTUS" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective
Registration Statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments
and supplements to the prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by
reference in such prospectus.
"RECORDS" has the meaning set forth in Section 5(k).
"REGISTRABLE SECURITIES" means the Securities; PROVIDED, HOWEVER, that
any Securities shall cease to be Registrable Securities when (i) issued to a
Holder pursuant to a Primary Shelf Registration Statement so long as that
Holder is not an Affiliate of the Company, (ii) a Registration Statement
covering such Securities has been declared effective and such Registrable
Securities have been disposed of by the holder thereof pursuant to such
effective Registration Statement or any other effective registration
statement, (iii) such Securities are transferred by the holder thereof to any
Person (other than a Holder) in compliance with Rule 144 (but not Rule 144A)
under the Securities Act, including a sale pursuant to the provisions of Rule
144(k), or (iv) such Securities shall have ceased to be outstanding.
"REGISTRATION EXPENSES" has the meaning set forth in Section 6.
"REGISTRATION STATEMENT" means any registration statement of the Company
that covers any of the Registrable Securities pursuant to the provisions of
this Agreement and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus, all exhibits, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
"RESALE REQUIRED FILING DATE" has the meaning set forth in Section 3(a).
"RESALE SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 3(a).
"RESALE TARGET EFFECTIVE DATE" means the date 45 days after the earlier
of (i) a Resale Required Filing Date or (ii) the date on which the Resale
Shelf Registration Statement is actually filed with the Commission.
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"RULE 144" means Rule 144 promulgated by the Commission under the
Securities Act, as amended from time to time, and any successor rule or
regulation or similar provision then in effect.
"RULE 144A" means Rule 144A promulgated by the Commission under the
Securities Act, as amended from time to time, and any successor rule or
regulation or similar provision then in effect.
"SECURITIES" means (i) all shares of Common Stock or Preferred Stock
issued or issuable to Holders upon exercise of any of the Stock Rights, (ii)
all shares of Common Stock issuable upon conversion of any such shares of
Preferred Stock and (iii) any other securities directly or indirectly issued
or issuable in respect of the foregoing shares of Common Stock or Preferred
Stock by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation, or other
reorganization.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
"SHELF REGISTRATION STATEMENT" means, as applicable, the Primary Shelf
Registration Statement and/or the Resale Shelf Registration Statement.
"STOCK PURCHASE OPTION AGREEMENT" has the meaning set forth in the
introductory statement.
"STOCK RIGHTS" has the meaning set forth in the introductory statement
and shall refer to any or all of such rights of the Holder to receive
Preferred Stock or Common Stock pursuant to the Stock Purchase Option
Agreement or the Warrants, or the right to receive Common Stock upon
conversion of any shares of Preferred Stock issuable thereunder, as the
context may require.
"SUSPENSION EVENT" has the meaning set forth in Section 5.
"SUSPENSION NOTICE" has the meaning set forth in Section 5.
"SUSPENSION PERIOD" has the meaning set forth in Section 5.
"TARGET EFFECTIVE PERIOD" means the period of time between the date on
which a Shelf Registration Statement is actually declared effective and the
later of (i) the date which is 24 months following the latest date that any
shares of Common Stock or Preferred Stock covered by such Registration
Statement were issued, and (ii) the date which is three months following the
date on which all Holders have ceased to be Affiliates of the Company,
provided the Company first provides the Holder with an opinion of counsel to
such effect.
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"WARRANT" has the meaning set forth in the introductory statement and
shall include any new Warrant issued following the transfer or exercise of a
Warrant, the division, combination or substitution of any existing Warrant or
similar event.
SECTION 2. PRIMARY SHELF REGISTRATION.
(a) FILING; EFFECTIVENESS. Within the fourteen (14) day period
preceding the first anniversary of the date of the Stock Purchase Option
Agreement, the Company shall prepare and file with the Commission a "primary
shelf" registration statement (the "PRIMARY SHELF REGISTRATION STATEMENT") on
the appropriate form for an offering to be made on a continuous basis
pursuant to Rule 415 under the Securities Act (or any successor rule or
similar provision then in effect) covering the issuance to the Holders of the
Registrable Securities. The initial Primary Shelf Registration Statement
prepared pursuant hereto shall register for issuance to the Holder a good
faith estimate of the maximum number of Registrable Securities that may from
time to time be issuable pursuant to any of the Stock Rights, which shall not
be less than (i) that number of shares of Common Stock equal to the product
of (x) three (3) and (y) the quotient obtained by dividing (A) $50,000,000 by
(B) the Option Exercise Price; and (ii) that number of shares of Preferred
Stock determined by dividing (x) the number of shares of Common Stock being
registered pursuant to clause (i) of this sentence, by (y) the Conversion
Multiple. The Company shall use commercially reasonable efforts to have the
Primary Shelf Registration Statement declared effective on or before the
Primary Target Effective Date and to keep such Primary Shelf Registration
Statement (or in the event such initial Primary Shelf Registration Statement
is withdrawn or terminated for any reason, to keep a successor Primary Shelf
Registration Statement) continuously effective until such time as all of the
Stock Rights have terminated and the Holders have no further right to receive
any shares of Common Stock and/or Preferred Stock under the terms of any of
the Stock Rights.
(b) SUPPLEMENTS; AMENDMENTS. The Company agrees, if necessary, to
supplement or amend from time to time the Primary Shelf Registration
Statement, as required by the rules, regulations or instructions applicable
to the registration form used by the Company for such Primary Shelf
Registration Statement or by the Securities Act, including as necessary to
reflect any change in the number or nature of Securities issuable upon
exercise of the Stock Rights as a result of adjustments to the Stock Rights,
changes in the estimated value of the Joint Venture (determined in good
faith), additional capital contributions to the Joint Venture, adjustments to
the conversion rights of the Preferred Stock or otherwise. Without
limitation of the foregoing, in the event that an increase to the Capital
Contribution Cap has been approved by the Operating Partnership pursuant to
Section 3.7(a) of the Joint Venture Agreement, the Company agrees to increase
the number of shares covered by the Primary Shelf Registration Statement by
at least (i) that number of shares of Common Stock equal to the product of
(x) three (3) and (y) the quotient obtained by dividing (A) the amount of the
Holders' share of such increase to the Capital Contribution Cap by (B) the
Expansion Option Exercise Price; and (ii) that number of shares of Preferred
Stock determined by dividing (x) the number of shares of Common Stock being
registered pursuant to clause (i) of this sentence, by (y) the Conversion
Multiple.
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(c) EFFECTIVE REGISTRATION. A registration will not be deemed to
have been effected as a Primary Shelf Registration Statement unless the
Primary Shelf Registration Statement with respect thereto has been declared
effective by the Commission and the Company has complied in all material
respects with its obligations under this Agreement with respect thereto;
PROVIDED, HOWEVER, that if after the Primary Shelf Registration Statement has
been declared effective, the offering of Registrable Securities pursuant to
such Primary Shelf Registration Statement is interfered with by any stop
order, injunction or other order or requirement of the Commission or any
other governmental agency or court, such Primary Shelf Registration Statement
will be deemed not to have become effective during the period of such
interference until the offering of Registrable Securities pursuant to such
Primary Shelf Registration Statement may legally resume. If a registration
required pursuant to this Section 2 is deemed not to have been effected, then
the Company shall continue to be obligated to effect a registration pursuant
to this Section 2.
(d) HOLDER'S ADDITIONAL RIGHTS. In the event that (i) the Company
is unable to cause such Primary Shelf Registration Statement to be declared
effective by the Commission or is unable to keep such Primary Shelf
Registration Statement or successor Primary Shelf Registration Statements
effective until such time as all of the Stock Rights have been terminated and
the Holders have no further right to receive any shares of Common Stock
and/or Preferred Stock under the terms of any of the Stock Rights, (ii) the
Company for any reason issues any shares of Common Stock or Preferred Stock
pursuant to any of the Stock Rights in a transaction not covered by a Primary
Shelf Registration Statement, or (iii) a Holder is an Affiliate of the
Company, then the Holders shall have the rights set forth in Sections 3 and 4
below.
SECTION 3. RESALE SHELF REGISTRATION.
(a) FILING; EFFECTIVENESS. Prior to (i) the thirtieth (30th) day
following the determination that the Company is unable to cause the Primary
Shelf Registration Statement to be declared effective by the Commission or to
keep such Primary Shelf Registration Statement (or successor Primary Shelf
Registration Statements) effective until such time as all of the Stock Rights
have been terminated and the Holders have no further right to receive any
shares of Common Stock and/or Preferred Stock under the terms of any of the
Stock Rights, or (ii) the tenth (10th) day following the Company's issuance
of any shares of Common Stock or Preferred Stock pursuant to the Stock Rights
in a transaction not covered by a Primary Shelf Registration Statement or a
determination that a Holder is an Affiliate of the Company (but in no event
earlier than the fourteenth (14th) day preceding the first anniversary of the
date of the Stock Purchase Option Agreement) (each, a "RESALE REQUIRED FILING
DATE") the Company shall prepare and file with the Commission a "resale
shelf" registration statement (the "RESALE SHELF REGISTRATION STATEMENT") on
the appropriate form for an offering to be made on a continuous basis
pursuant to Rule 415 under the Securities Act (or any successor rule or
similar provision then in effect) covering the resale by the Holders of the
Registrable Securities. It is the parties' intent that pursuant to this
Section 3(a) the Holders of the Securities shall at all times until the
expiration of the Target Effective Period, subject to the Suspension Events,
have in effect a Registration Statement covering resales of any Registrable
Securities held by the Holders if and to the extent
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the resale of any such Registrable Securities would be limited by the volume
limitations under Rule 144 or otherwise. The initial Resale Shelf
Registration Statement prepared pursuant hereto shall register for resale by
the Holders a good faith estimate of the maximum number of Registrable
Securities that may from time to time be issuable pursuant to any of the
Stock Rights, which shall not be less than at least (i) that number of shares
of Common Stock equal to the product of (x) three (3) and (y) the quotient
obtained by dividing (A) $50,000,000 by (B) the Option Exercise Price; and
(ii) that number of shares of Preferred Stock determined by dividing (x) the
number of shares of Common Stock being registered pursuant to clause (i) of
this sentence, by (y) the Conversion Multiple. The Company shall use
commercially reasonable efforts to have the Resale Shelf Registration
Statement declared effective on or before the Resale Target Effective Date
and to keep such Resale Shelf Registration Statement (or in the event such
initial Resale Shelf Registration Statement is withdrawn or terminated for
any reason, to keep a successor Resale Shelf Registration Statement)
continuously effective for the Target Effective Period. Any Holder shall be
permitted to withdraw all or any part of the Registrable Securities from a
Resale Shelf Registration Statement at any time prior to the effective date
of such Shelf Registration Statement, but the Company shall be under no
further obligation to register such Securities pursuant to this Section 3.
(b) SUPPLEMENTS; AMENDMENTS. The Company agrees, if necessary, to
supplement or amend from time to time the Resale Shelf Registration
Statement, as required by the rules, regulations or instructions applicable
to the registration form used by the Company for such Resale Shelf
Registration Statement or by the Securities Act, including as necessary to
reflect any change in the number or nature of Securities issuable upon
exercise of the Stock Rights as a result of adjustments to the Stock Rights,
changes in the estimated value of the Joint Venture (determined in good
faith), additional capital contributions to the Joint Venture, adjustments to
the conversion rights of the Preferred Stock or otherwise, and the Company
agrees to furnish to the Holders, Holders' Counsel and any managing
underwriter copies of any such supplement or amendment prior to its being
used and/or filed with the Commission. Without limitation of the foregoing,
in the event that an increase to the Capital Contributions Cap has been
approved by the Operating Partnership pursuant to Section 3.7(a) of the Joint
Venture Agreement, the Company agrees to increase the number of shares
covered by the Resale Shelf Registration Statement by at least (i) that
number of shares of Common Stock equal to the product of (x) three (3) and
(y) the quotient obtained by dividing (A) the amount of the Holders' share of
such increase to the Capital Contribution Cap by (B) the Expansion Option
Exercise Price; and (ii) that number of shares of Preferred Stock determined
by dividing (x) the number of shares of Common Stock being registered
pursuant to clause (i) of this sentence, by (y) the Conversion Multiple.
(c) EFFECTIVE REGISTRATION. A registration will not be deemed to
have been effected as a Resale Shelf Registration Statement unless the Resale
Shelf Registration Statement with respect thereto has been declared effective
by the Commission and the Company has complied in all material respects with
its obligations under this Agreement with respect thereto; PROVIDED, HOWEVER,
that if after the Resale Shelf Registration Statement has been declared
effective, the offering of Registrable Securities pursuant to such Resale
Shelf Registration Statement is interfered with by any stop order, injunction
or other order or requirement of the
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Commission or any other governmental agency or court, the Target Effective
Period will be extended by the time period of such interference. If a
registration required pursuant to this Section 3 is deemed not to have been
effected, then the Company shall continue to be obligated to effect a
registration pursuant to this Section 3.
SECTION 4. PIGGY-BACK REGISTRATION.
(a) REQUEST FOR REGISTRATION. Each time the Company proposes to
file a registration statement under the Securities Act with respect to an
offering by the Company for its own account or for the account of any of its
security holders of any class of equity security (other than (i) a
registration statement on Form S-4 or S-8 (or any substitute form that is
adopted by the Commission) or (ii) a registration statement filed in
connection with an exchange offer or the offering of securities solely to the
Company's existing security holders), then the Company shall give written
notice of such proposed filing to the Holders as soon as practicable (but in
no event less than 20 days before the anticipated filing date), and such
notice shall offer the Holders the opportunity to register such number of
shares of Registrable Securities as each Holder may request (which request
must be made in writing and shall specify the Registrable Securities intended
to be disposed of by such Holder and the intended method of distribution
thereof) (a "PIGGY-BACK REGISTRATION"); PROVIDED, HOWEVER, that the Company
shall not be required to include Registrable Securities in the securities to
be registered pursuant to a registration statement on any form which limits
the amounts of securities which may be registered by the issuer and/or
selling security holders if, and to the extent that, such inclusion would
make the use of such form unavailable. The Company shall permit, or, if the
offering relating to a Piggy-Back Registration is an underwritten offering,
shall use commercially reasonable efforts to cause the managing underwriter
or underwriters of such proposed underwritten offering to permit, the
Registrable Securities requested to be included in such Piggy-Back
Registration to be included on the same terms and conditions as any similar
securities of the Company or any other security holder included therein and
shall permit, or use commercially reasonable efforts to cause such managing
underwriter or underwriters to permit, the sale or other disposition of such
Registrable Securities in accordance with such Holder's intended method of
distribution thereof. Any Holder shall have the right to withdraw its
request for inclusion of its Registrable Securities in any registration
statement pursuant to this Section 4 by giving written notice to the Company
of such withdrawal at any time before the marketing of the offering has
begun. The Company may withdraw such registration statement at any time
prior to the time it becomes effective, provided that the Company shall give
immediate notice of such withdrawal to the Holders who requested Registrable
Securities to be included in such Piggy-Back Registration, and shall
reimburse such Holders for all reasonable out-of-pocket fees and expenses
incurred prior to such withdrawal.
(b) PRIORITY ON PRIMARY REGISTRATIONS. In the event a Piggy-Back
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of shares requested to be included in such registration
exceeds the Maximum Number, the Company will limit the number of shares included
in such registration to the Maximum Number, and the shares registered shall be
selected in the following order of priority: (i) first, securities the Company
proposes to sell, and
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(ii) second, Registrable Securities covered by Piggy-Back Registration
requests and all other securities requested to be included in such
registration, pro rata among the holders thereof on the basis of the number
of shares requested to be included in such registration.
(c) PRIORITY ON SECONDARY REGISTRATIONS. In the event a
Piggy-Back Registration is an underwritten secondary registration on behalf
of holders of the Company's securities, and the managing underwriters advise
the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the Maximum Number, the
Company will include in such registration the shares requested to be included
therein by the holders requesting such registration and the Registrable
Securities covered by Piggy-Back Registration requests and any other
securities requested to be included in such registration, pro rata among the
holders thereof on the basis of the number of shares requested to be included
in such registration; PROVIDED, HOWEVER, that if the holders requesting
registration are doing so pursuant to demand registration rights of such
holders, such holders' shares shall take priority over any Registrable
Securities and any other securities requested to be included, which shall be
included on a pro rata basis.
(d) CONTINUING OBLIGATIONS OF THE COMPANY. Although the specific
shares of Common Stock and/or Preferred Stock disposed of pursuant to a
Piggy-Back Registration will cease to be Registrable Securities, the mere
registration of Registrable Securities under this Section 4 shall not relieve
the Company of its obligation to effect or maintain a Shelf Registration
Statement pursuant to Section 2 or 3. No failure by the Holders to elect a
Piggy-Back Registration under this Section 4 or to complete the sale of
Registrable Securities pursuant to the registration statement effected in
connection therewith, and no withdrawal of Registrable Securities from a
Piggy-Back Registration, shall relieve the Company of any other obligation
under this Agreement, including without limitation, the Company's obligations
under Sections 2, 3, 5 and 6.
SECTION 5. REGISTRATION PROCEDURES.
In connection with the obligations of the Company to effect or cause the
registration of any Registrable Securities pursuant to the terms and
conditions of this Agreement, the Company shall use commercially reasonable
efforts to effect the registration and sale of such Registrable Securities in
accordance with the intended method of distribution thereof as quickly as
practicable, and in connection therewith:
(a) When and as required pursuant to this Agreement, the Company
shall prepare and file with the Commission a Registration Statement on the
appropriate form under the Securities Act, which Registration Statement shall
comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the Commission
to be filed therewith, and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with the
provisions of this Agreement; PROVIDED, HOWEVER, that, at least three (3)
Business Days prior to filing a Registration Statement or Prospectus relating to
any registration of Registrable Securities to be effected pursuant to Section 3
or 4 hereof or any amendments or supplements thereto, including documents
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incorporated by reference after the initial filing of such Registration
Statement, the Company shall furnish to the Holders of the Registrable
Securities covered by such Registration Statement, Holders' Counsel and the
underwriters, if any, draft copies of all such documents proposed to be filed
(other than exhibits to Forms 8-K, 10-K or 10-Q unless reasonably requested
by a Holder), which documents will be subject to the review of Holders'
Counsel and the underwriters, if any.
(b) The Company shall (i) prepare and file with the Commission
such amendments to the Registration Statement as may be necessary to keep
such Registration Statement effective for the applicable period; (ii) cause
the Prospectus to be amended or supplemented as required and to be filed as
required by Rule 424 or any similar rule that may be adopted under the
Securities Act; (iii) respond as promptly as practicable to any comments
received from the Commission with respect to the Registration Statement or
any amendment thereto; and (iv) comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the Holder covered thereby.
(c) In connection with any registration of Registrable Securities
effected pursuant to Section 3 or 4 hereof, the Company shall promptly
furnish to any Holder and the underwriters, if any, without charge, such
number of conformed copies of such Registration Statement and any
post-effective amendment thereto and such number of copies of the Prospectus
(including each preliminary Prospectus) and any amendments or supplements
thereto, any documents incorporated by reference therein and such other
documents as any such Holder or underwriter may reasonably request in order
to facilitate the public sale or other disposition of the Registrable
Securities being sold by such Holder.
(d) The Company shall, on or prior to the date on which any Resale
Shelf Registration Statement or any Registration Statement relating to a
Piggy-Back Registration is declared effective, (i) use its best efforts to
register or qualify the Registrable Securities covered by such Registration
Statement under the securities or "blue sky" laws of each of the 00 xxxxxx xx
xxx Xxxxxx Xxxxxx (xx xxxx Xxxxxx Xxxxxx jurisdictions as any Holder,
Holders' counsel or underwriter may request) or obtain appropriate exemptions
therefrom; (ii) do any and all other acts and things which may be necessary
or advisable to enable the Holders of Registrable Securities included in the
Registration Statement to consummate the disposition of such Registrable
Securities in accordance with their intended method of distribution thereof;
(iii) use its best efforts to keep each such state securities or "blue sky"
registration or qualification (or exemption therefrom) effective during the
period in which the Company is required to keep the Registration Statement
effective; and (iv) do any and all other acts or things which may be
necessary or advisable to enable the Holders of Registrable Securities
included in the Registration Statement to complete the disposition in such
jurisdictions of such Registrable Securities in accordance with their
intended method of distribution thereof; PROVIDED, HOWEVER, that the Company
shall not be required (A) to qualify to do business in any jurisdiction where
it would not otherwise be required to so qualify but for this Section 5(d),
(B) to file any general consent to service of process or (C) subject itself
to taxation in any such jurisdiction where it is not otherwise subject to
taxation.
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(e) In connection with any registration of Registrable Securities
effected pursuant to Section 3 or 4 hereof, the Company shall promptly notify
each Holder, Holders' Counsel and any underwriter and (if requested by any
such Person) confirm such notice in writing, (i) when a Registration
Statement or a Prospectus or any post-effective amendment or any Prospectus
supplement has been filed and, with respect to a Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of any
request by the Commission or any state securities authority for amendments
and supplements to a Registration Statement and Prospectus or for additional
information after the Registration Statement has become effective, (iii) of
the issuance by the Commission of any stop order suspending the effectiveness
of a Registration Statement or the initiation or threatening of any
proceedings for that purpose, (iv) of the issuance by any state securities
commission or other regulatory authority of any order suspending the
registration or qualification or exemption from registration or qualification
of any of the Registrable Securities under state securities or "blue sky"
laws or the initiation or threatening of any proceedings for that purpose,
(v) if, between the effective date of a Registration Statement and the
closing of any sale of Registrable Securities covered thereby, the
representations and warranties of the Company contained in any underwriting
agreement, securities sales agreement or other similar agreement, if any,
relating to the offering of such Registrable Securities cease to be true and
correct in all material respects, and (vi) of the happening of any event
which makes any statement of a material fact made in a Registration Statement
or related Prospectus untrue or which requires the making of any changes in
such Registration Statement or Prospectus so that such Registration Statement
or Prospectus will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; and, as promptly as practicable thereafter,
prepare and file an amendment to such Registration Statement with the
Commission and furnish to the Holders and any underwriter a supplement or
amendment to such Prospectus so that, as thereafter deliverable to the
purchasers of such Registrable Securities, such Prospectus will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(f) The Company shall make generally available to its security
holders an earnings statement satisfying the provisions of Section 11(a) of
the Securities Act as soon as practicable after the effective date of a
Registration Statement, which requirement will be deemed to be satisfied if
the Company timely files complete and accurate information on Forms 10-Q,
10-K and 8-K under the Exchange Act and otherwise complies with Rule 158
under the Securities Act.
(g) The Company shall promptly use its best efforts to prevent the
issuance of any order suspending the effectiveness of a Registration
Statement, and, if any such order suspending the effectiveness of a
Registration Statement is issued, shall promptly use its best efforts to
obtain the withdrawal of such order at the earliest possible moment.
12
(h) In connection with any registration of Registrable Securities
effected pursuant to Section 3 or 4 hereof, the Company shall, if reasonably
requested by the managing underwriter or underwriters, if any, Holders'
Counsel, or any Holder promptly incorporate in a Prospectus supplement or
post-effective amendment such information as such managing underwriter or
underwriters or Holder or Holders' Counsel requests to be included therein,
including, without limitation, with respect to the Registrable Securities
being sold by such Holder to such underwriter or underwriters, the purchase
price being paid therefor by such underwriter or underwriters and any other
terms of an underwritten offering of the Registrable Securities to be sold in
such offering, and the Company shall promptly make all required filings of
such Prospectus supplement or post-effective amendment.
(i) In connection with any registration of Registrable Securities
effected pursuant to Section 3 or 4 hereof, the Company shall cooperate with
the Holders and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates (which shall
not bear any restrictive legends unless required under applicable law)
representing Registrable Securities sold under a Registration Statement to
the purchasers thereof, and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriter or
underwriters, if any, or such Holders may request and keep available and make
available to the Company's transfer agent prior to the effectiveness of such
Registration Statement a supply of such certificates.
(j) In connection with any registration of Registrable Securities
effected pursuant to Section 3 or 4 hereof, the Company shall enter into such
customary agreements (including, if applicable, an underwriting agreement in
customary form) and take such other actions as the Holders or the
underwriters retained by the Holders participating in an underwritten public
offering, if any, may request in order to expedite or facilitate the
disposition of Registrable Securities.
(k) In connection with any registration of Registrable Securities
effected pursuant to Section 3 or 4 hereof, the Company shall promptly make
available to each Holder, any underwriter participating in any disposition of
Registrable Securities pursuant to a Registration Statement, and any
attorney, accountant or other agent or representative retained by any such
Holder or underwriter (collectively, the "INSPECTORS"), all financial and
other records, pertinent corporate documents and properties of the Company
(collectively, the "RECORDS"), as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information requested by any
such Inspector in connection with such Registration Statement.
(l) In connection with any registration of Registrable Securities
effected pursuant to Section 3 or 4 hereof, the Company shall furnish to each
Holder of Registrable Securities included in such offering and to each
underwriter, if any, a signed counterpart, addressed to such Holder or
underwriter, of (i) an opinion or opinions of counsel to the Company, and (ii) a
comfort letter or comfort letters from the Company's independent public
accountants,
13
each in customary form and covering matters of the type customarily covered
by opinions or comfort letters, as the case may be.
(m) The Company shall use commercially reasonable efforts to cause
all shares of Common Stock included in a Registration Statement (if the
Company and the Registrable Securities so qualify) (i) to be listed on each
national securities exchange, if any, on which similar securities issued by
the Company are then listed, or (ii) if similar securities of the Company are
not then listed, to be authorized for quotation or listing, as applicable, on
the New York Stock Exchange or the National Association of Securities
Dealers, Inc.'s ("NASD") Nasdaq Stock Market ("NASDAQ").
(n) The Company shall provide a CUSIP number for all Registrable
Securities covered by a Registration Statement not later than the effective
date of such Registration Statement.
(o) The Company shall cooperate with each Holder and each
underwriter participating in the disposition of Registrable Securities and
their respective counsel in connection with any filings required to be made
with the NASD.
(p) The Company shall, during the period when the Prospectus is
required to be delivered under the Securities Act, promptly file all
documents required to be filed with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act.
(q) The Company shall appoint or maintain a transfer agent and
registrar for all Registrable Securities covered by a Registration Statement
not later than the effective date of such Registration Statement.
(r) If the Registrable Securities are of a class of securities
that is listed on a national securities exchange, the Company shall file
copies of any Prospectus with such exchange in compliance with Rule 153 under
the Securities Act so that the Holders shall benefit from the prospectus
delivery procedures described therein.
In the case of a Resale Shelf Registration Statement, each Holder, upon
receipt of any notice (a "SUSPENSION NOTICE") from the Company of the
happening of any Suspension Event, shall forthwith discontinue marketing or
disposition, as applicable, of the Registrable Securities pursuant to the
Resale Shelf Registration Statement covering such Registrable Securities
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 5(e) or until such Holder is advised in
writing (the "ADVICE") by the Company that the use of the Prospectus may be
resumed, and such Holder has received copies of any additional or
supplemental filings which are incorporated by reference in the Prospectus,
and, if so directed by the Company, such Holder will, or will request the
managing underwriter or underwriters, if any, to, deliver to the Company (at
the Company's expense) all copies, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such Suspension Notice. In
addition, the Company shall have the
14
right to deliver a Suspension Notice to the Holder(s) prior to or following
any exercise of the Stock Rights during the happening of a Suspension Event,
which notice will (i) inform Holder(s) of the happening of a Suspension Event
and the anticipated duration thereof, and (ii) offer Holder(s) the option of
delaying the issuance of shares of Common Stock and/or Preferred Stock
pursuant to their exercise of the Stock Rights or receiving such shares in a
private placement exempt from the registration requirements of Section 5 of
the Securities Act. If the Holders elect to receive such shares in a private
placement, then the Company shall, as promptly as practicable following such
Suspension Event, file a Resale Registration Statement covering the resale of
such shares pursuant to Section 3 hereof and perform all of its other
obligations under this Agreement in connection therewith. Notwithstanding
anything in the Agreement to the contrary, the Company shall not give more
than two Suspension Notices during any period of 12 consecutive months or
which cover an aggregate of more than 90 days during any twelve-month period
that a Suspension Notice is in effect (the "Suspension Period"). In the
event that the Company shall give any Suspension Notice, the Company shall
use commercially reasonable efforts and take such actions as are reasonably
necessary to render the Advice and end the period that a Suspension Notice is
in effect as promptly as practicable.
A "Suspension Event" is any event (including without limitation (i) an
underwritten primary offering by the Company if the Company is advised by the
underwriters that sale of Registrable Securities under the Resale Shelf
Registration Statement would have a material adverse effect on the primary
offering (it being understood that the effect of a sale of Registrable
Securities to the Holders under a Primary Shelf Registration Statement is not
sufficient to constitute a Suspension Event) or (ii) pending negotiations
relating to, or consummation of, a transaction or the occurrence of an event
that would require additional disclosure of material information by the
Company in the Shelf Registration Statement or such filing, as to which the
Company has a bona fide business purpose for preserving confidentiality or
which renders the Company unable to comply with Commission's requirements)
that would make it impractical or inadvisable to cause the Shelf Registration
Statement to become effective or to issue and/or sell Registrable Securities
pursuant to a Shelf Registration Statement, but such suspension shall
continue only for so long as such event or its effect is continuing.
Each Holder agrees, in connection with any underwritten primary public
offering by the Company, to cooperate with all reasonable and customary
requests made by the managing underwriter.
If any Registration Statement refers to any Holder by name or otherwise
as the holder of any securities of the Company, then such Holder shall have
the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the
holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such
Holder will assist in meeting any future financial requirements of the
Company, or (ii) in the event that the reference to such Holder by name or
otherwise is not required by the Securities Act or any similar federal or
state securities or "blue sky" statute and the rules and regulations
thereunder then in force, the deletion of the reference to such Holder.
15
SECTION 6. REGISTRATION EXPENSES. Any and all expenses incident to
the Company's performance of or compliance with this Agreement, including
without limitation, all Commission and securities exchange, Nasdaq or NASD
registration, listing and filing fees, all fees and expenses incurred in
connection with compliance with state securities or "blue sky" laws
(including reasonable fees and disbursements of counsel for any underwriters
or Holder in connection with the state securities or "blue sky"
qualifications of the Registrable Securities), printing expenses, messenger
and delivery expenses, internal expenses (including, without limitation, all
salaries and expenses of the Company's officers and employees performing
legal or accounting duties), all expenses for word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements
and other documents relating to the performance of and compliance with this
Agreement, the fees and expenses incurred in connection with the listing of
the Registrable Securities, the fees and disbursements of counsel for the
Company and of the independent certified public accountants of the Company
(including the expenses of any comfort letters or costs associated with the
delivery by independent certified public accountants of a comfort letter or
comfort letter requested pursuant to Section 5(l), Securities Act liability
insurance (if the Company elects to obtain such insurance), and the
reasonable fees and expenses of any special experts or other Persons retained
by the Company in connection with any registration (all such expenses being
herein called "REGISTRATION EXPENSES"), will be borne by the Company whether
or not the Shelf Registration Statement or Piggy-Back Registration to which
such expenses relate becomes effective; PROVIDED, HOWEVER, that the Holder(s)
agree to reimburse the Company for fifty percent (50%) of the filing fee paid
to the Commission with respect to the Registrable Securities in connection
with the filing of a Primary Shelf Registration Statement or a Resale Shelf
Registration Statement and that each Holder shall be solely responsible for
any fees and disbursements of such Holder's legal counsel in connection with
the filing of any Shelf Registration Statement hereunder and any offering or
sale of Registrable Securities thereunder.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
16
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless, each Holder, its partners, officers, directors,
trustees, stockholders, employees, agents and investment advisers, and each
Person who controls such Holder within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, or is under common
control with, or is controlled by, such Holder, together with the partners,
officers, directors, trustees, stockholders, employees, agents and investment
advisors of such controlling Person (collectively, the "CONTROLLING
PERSONS"), from and against all losses, claims, damages, liabilities and
expenses (including, without limitation, any legal or other fees and expenses
incurred by any Holder or any such Controlling Person in connection with
defending or investigating any action or claim in respect thereof)
(collectively, the "DAMAGES") to which such Holder, its partners, officers,
directors, trustees, stockholders, employees, agents and investment advisers,
and any such Controlling Person, may become subject under the Securities Act
or otherwise, insofar as such Damages (or proceedings in respect thereof)
arise out of or are based upon any untrue or alleged untrue statement of
material fact contained in any Registration Statement (or any amendment
thereto) effected pursuant to Section 3 or 4 hereof and pursuant to which
Registrable Securities were registered under the Securities Act, including
all documents incorporated therein by reference, or are caused by any
omission or alleged omission to state therein a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, or arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) relating to any registration of
Registrable Securities effected pursuant to Section 3 or 4 hereof or are
caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; PROVIDED, HOWEVER, that the Company
shall not be liable for Damages to any Holder or Controlling Person under
this Section 7(a) to the extent that any such Damages (i) arise out of or are
based upon any such untrue statement or omission which is based upon
information relating to such Holder furnished in writing to the Company by
such Holder for use in any such Registration Statement (or any amendment
thereto) or Prospectus (or amendment or supplement thereto) relating to a
registration of Registrable Securities effected pursuant to Section 3 or 4
hereof; or (ii) were caused by the fact that such Holder sold Securities to a
Person as to whom it shall be established that there was not sent or given,
or deemed sent or given pursuant to Rule 153 under the Securities Act, at the
time of or prior to the written confirmation of such sale, a copy of the
applicable Prospectus as then amended or supplemented if, and only if, (a)
the Company has previously furnished copies of such amended or supplemented
Prospectus to such Holder and (b) such Damages were caused by any untrue
statement or omission or alleged untrue statement or omission contained in
the Prospectus so delivered which was corrected in such amended or
supplemented Prospectus.
(b) INDEMNIFICATION BY THE HOLDER. Each Holder agrees, severally and
not jointly, to indemnify and hold harmless the Company, its directors and
officers and each Person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against all Damages to the same extent as the foregoing indemnity from the
Company to such Holder, but only to the extent such Damages arise out of or are
based upon any untrue statement of a material fact contained in any Registration
17
Statement (or any amendment thereto) or Prospectus (or any amendment or
supplement thereto) relating to a registration of Registrable Securities
effected pursuant to Section 3 or 4 hereof or are caused by any omission to
state therein a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, which
untrue statement or omission is based upon information relating to such
Holder furnished in writing to the Company by such Holder expressly for use
in any such Registration Statement (or any amendment thereto) or any such
Prospectus (or any amendment or supplement thereto) relating to a
registration of Registrable Securities effected pursuant to Section 3 or 4
hereof; PROVIDED, HOWEVER, that such Holder shall not be obligated to provide
such indemnity to the extent that such Damages result from the failure of the
Company to promptly amend or take action to correct or supplement any such
Registration Statement or Prospectus relating to a registration of
Registrable Securities effected pursuant to Section 3 or 4 hereof on the
basis of corrected or supplemental information furnished in writing to the
Company by such Holder expressly for such purpose. In no event shall the
liability of any Holder of Registrable Securities hereunder be greater in
amount than the amount of the proceeds received by such Holder upon the sale
of the Registrable Securities giving rise to such indemnification obligation.
(c) INDEMNIFICATION PROCEDURES. In case any proceeding (including
any governmental investigation) shall be instituted involving any Person in
respect of which indemnity may be sought pursuant to either paragraph (a) or
(b) above, such Person (the "indemnified party") shall promptly notify the
Person against whom such indemnity may be sought (the "indemnifying party")
in writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceedings and shall pay the fees and disbursements of
such counsel relating to such proceeding. The failure of an indemnified
party to notify the indemnifying party with respect to a particular
proceeding shall not relieve the indemnifying party from any obligation or
liability (i) which it may have pursuant to this Agreement if the
indemnifying party is not substantially prejudiced by such failure to so
notify it or (ii) which it may have otherwise than pursuant to this
Agreement. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention
of such counsel, or (ii) the indemnifying party fails promptly to assume the
defense of such proceeding or fails to employ counsel reasonably satisfactory
to such indemnified party, or (iii) (A) the named parties to any such
proceeding (including any impleaded parties) include both such indemnified
party or an Affiliate of such indemnified party and any indemnifying party or
an Affiliate of such indemnifying party, (B) there may be one or more
defenses available to such indemnified party or any Affiliate of such
indemnified party that are different from or additional to those available to
any indemnifying party or any Affiliate of any indemnifying party and (C)
such indemnified party shall have been advised by such counsel that there may
exist a conflict of interest between or among such indemnified party or any
Affiliate of such indemnified party and such indemnifying party or any
Affiliate of such indemnifying party, in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ
separate counsel of its choice at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the
18
defense thereof and such counsel shall be at the expense of the indemnifying
party, it being understood, however, that unless there exists a conflict
among indemnified parties, the indemnifying parties shall not, in connection
with any one such proceeding or separate but substantially similar or related
proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (together with appropriate local counsel)
at any time for such indemnified parties. The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent but, if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify each indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of
each indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which such indemnified party is a party, and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party
from all liability on all claims that are the subject matter of such
proceeding with no payment by such indemnified party of consideration in
connection with such settlement.
(d) CONTRIBUTION. If the indemnification from the indemnifying
party provided for in this Section 7 is found, pursuant to a final judicial
determination not subject to appeal, to be unavailable to an indemnified
party hereunder or insufficient in respect of any Damages incurred by such
indemnified party, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the Damages paid or payable by such
indemnified party in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified parties in
connection with the actions or omissions that resulted in such Damages, as
well as any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any action or omission in question,
including any untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact, has been made by, or
relates to information supplied by, such indemnifying party or indemnified
parties, 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 Damages referred to above shall be
deemed to include, subject to the limitations set forth in Section 7(c), any
legal or other expenses reasonably incurred by such party in connection with
any investigation or proceeding.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 7(d), no
underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities
underwritten by it and distributed to the public were offered to the public
(less any underwriting discounts or commissions) exceeds the amount of any
damages which such underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission,
and no selling Holder shall be required to contribute any amount in excess of
the amount by which the total net proceeds received by such selling
19
Holder with respect to Registrable Securities sold by such selling Holder
exceeds the amount of any damages which such selling Holder has otherwise
been required to pay by reason of such untrue statement or alleged untrue
statement or omission or alleged omission. Each Holder's obligation to
contribute pursuant to this Section 7(d) is several and not joint and shall
be determined by reference to the proportion that the proceeds of the
offering received by such Holder bears to the total proceeds of the offering
received by all the Holders. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 7
are not exclusive and shall not limit any rights or remedies that may
otherwise be available to any indemnified party at law or in equity.
Notwithstanding the foregoing, if indemnification is available under
paragraph (a) or (b) of this Section 7, the indemnifying parties shall
indemnify each indemnified party to the full extent provided in such
paragraphs without regard to the relative fault of said indemnifying party or
indemnified party or any other equitable consideration provided for in this
Section 7(d).
(e) COVENANTS OF THE HOLDERS. In connection with any registration
of Registrable Securities effected pursuant to Section 3 or 4 hereof, each
Holder hereby agrees (a) to cooperate with the Company and to furnish to the
Company all such information concerning its plan of distribution and
ownership interests with respect to its Registrable Securities in connection
with the preparation of the Registration Statement and any filing with any
state securities commissions as the Company may reasonably request and (b) to
deliver or cause delivery of the Prospectus contained in the Registration
Statement to any purchaser of the Registrable Securities covered by the
Registration Statement from the Holder.
SECTION 8. RULE 144. The Company covenants that it will file any
reports required to be filed by it under the Securities Act and the Exchange
Act, (or, if the Company is not required to file such reports, it will, upon
the request of any Holder, make publicly available other information so long
as necessary to permit sales of the Registrable Securities under Rule 144),
and it will take such further action as any Holder may request, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144, or (b) any successor
rule or similar provision or regulation hereafter adopted by the Commission.
Upon the request of any Holder at any time when the Company is not required
to file reports under the Securities Act or the Exchange Act, the Company
will deliver to such Holder a written statement as to whether it has complied
with such requirements.
SECTION 9. RULE 144A. The Company covenants that it will file all
reports required to be filed by it under the Securities Act and the Exchange
Act, and the rules and regulations adopted by the Commission thereunder (or if
the Company is not required to file such reports, it will, upon the request of
any Holder, make available other information so long as necessary to permit
sales of the Registrable Securities pursuant to Rule 144A under the Securities
Act), and it will take such further action as any Holder may request, all to the
extent required from time to
20
time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144A, as such rule may be amended from time to time, or
(b) any successor rule or similar provision or regulation hereafter adopted
by the Commission.
SECTION 10. MISCELLANEOUS.
(a) USE OF DEPOSITARY SHARES. In the event that the Company
issues, or intends to issue, Depositary Shares to any Holder in connection
with an exercise of any of the Stock Rights, references to Preferred Stock in
this Agreement shall be deemed amended to refer to Depositary Shares, in each
case at a ratio of 100 Depositary Shares for each share of Preferred Stock,
and this Agreement shall be deemed simultaneously amended in all respects
necessary to adjust the rights, terms and provisions hereunder as appropriate
to reflect such issuance. Each Depositary Share will have, proportionately,
the same rights, privileges, duties and limitations as the share of Preferred
Stock in which that Depositary Share evidences an interest.
(b) NO INCONSISTENT AGREEMENTS. The Company has not entered into
nor will the Company while this Agreement is in effect enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given unless the Company has obtained the written consent
of Holders of at least a majority in interest of the outstanding Registrable
Securities affected by such amendment, modification, supplement, waiver or
consent; PROVIDED, HOWEVER, that no amendment, modification, supplement,
waiver or consent to any departure from the provisions of Section 5 hereof
(other than any immaterial amendment, modification, supplement, waiver or
consent) shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder.
(d) NOTICES. Except as otherwise provided in this Agreement,
notices and other communications under this Agreement shall be in writing and
shall be delivered, or mailed by registered or certified mail, return receipt
requested, or by a nationally recognized overnight courier, postage prepaid,
addressed, (a) if to the Holder, at the address set forth on the signature
page hereto or such other address as the Holder shall have furnished to the
Company in writing, or (b) if to any other holder of any Securities, at such
address as such other holder shall have furnished to the Company in writing,
or, until any such other holder so furnishes to the Company an address, then
to and at the address of the last holder of such Securities who has furnished
an address to the Company, or (c) if to the Company, at its address set forth
on the signature page hereto, or at such other address the Company shall have
furnished to the Holder and each such other holder in writing. This
Agreement and all documents entered into on the date hereof in conjunction
with the transactions contemplated by the Stock Purchase Option Agreement and
the Warrants and any such other documents delivered in connection herewith or
therewith embody
21
the entire agreement and understanding between the Holder and the Company and
supersede all prior agreements and understandings relating to the subject
matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; by
confirmed receipt of transmission, if telecopied; and on the next Business
Day if timely delivered to a courier guaranteeing overnight delivery.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of
each of the parties, including, without limitation and without the need for
an express assignment, subsequent Holders. If any transferee of the Holder
shall acquire Registrable Securities in any manner, whether by operation of
law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities such person shall be conclusively deemed to have agreed to be
bound by and to perform all of the terms and provisions of this Agreement and
such person shall be entitled to receive the benefits hereof.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(g) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio without regard to
principles or rules of conflicts of law.
(i) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances,
is held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any
way impaired thereby, it being intended that all of the rights and privileges
of the Holders shall be enforceable to the fullest extent permitted by law.
(j) ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provision of this Agreement or where any provision hereof is
validly asserted as a defense, the successful party shall, to the extent
permitted by applicable law, be entitled to recover reasonable attorneys'
fees in addition to any other available remedy.
22
(k) FURTHER ASSURANCES. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out
the provisions and purposes of this Agreement and the transactions
contemplated hereby.
(l) REMEDIES. In the event of a breach or a threatened breach by
any party to this Agreement of its obligations under this Agreement, any
party injured or to be injured by such breach will be entitled to specific
performance of its rights under this Agreement or to injunctive relief, in
addition to being entitled to exercise all rights provided in this Agreement
and granted by law. The parties agree that the provisions of this Agreement
shall be specifically enforceable, it being agreed by the parties that
remedies at law for violations hereof, including monetary damages, are
inadequate and that the right to object in any action for specific
performance or injunctive relief hereunder on the basis that a remedy at law
would be adequate is waived.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
XXXXXX LODGING COMPANY, an Ohio corporation
By: /s/ Xxxx X. X'Xxxx
-------------------------------------------
Name: Xxxx X. X'Xxxx
Title: Chief Financial Officer and Treasure
Notice Information:
Xxxxxx Lodging Company
Guildhall Building
00 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Chief Executive
Officer
Telecopier:
with a copy to:
Xxxxx & Xxxxxxxxx LLP
3200 National City Center
0000 X. 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopier:
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AEW PARTNERS III, L.P., a Delaware limited
partnership
By: AEW III, L.L.C., its General Partner
By: AEW Partners III, Inc., its
Managing-Member
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Notice Information:
c/o AEW Capital Management, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: J. Xxxxx Xxxxxxx, Esq,
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, P.C.
Telecopier: (000) 000-0000
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