FORM OF REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is
entered into as of the __ day of _________, 2007, by and among Affinity Media
International Corp., a Delaware corporation (the “Company”)
and
the stockholders (the “Stockholders”)
of
Hotels at Home, Inc. ( “Hotels”)
whose
names appear on Schedule
A
annexed
hereto.
WHEREAS,
the Company, Affinity Acquisition Subsidiary Corp. ( “Merger
Subsidiary”)
and Hotels have entered into a certain Agreement and Plan of Merger, dated
as of
July 24, 2007 (the “Merger Agreement”),
pursuant to which Hotels will merge with and into Merger Subsidiary, a
wholly-owned subsidiary of the Company, and the Stockholders will receive cash
and shares of the Company’s common stock; and
WHEREAS,
pursuant to the terms of the Merger Agreement, the Company agreed to grant
the
Stockholders certain registration rights in connection with the shares of common
stock of the Company they will acquire as a result of the Merger Agreement
and
the transactions contemplated thereby.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS.
Capitalized
terms used and not otherwise defined herein shall have the meanings given such
terms in the Merger Agreement. As used in this Agreement, the following terms
shall have the following meanings:
“Advice”
is
defined in Section
6.2.
“Agreement”
means
this Agreement, as amended, restated, supplemented, or otherwise modified from
time to time.
“Commission”
means
the Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.
“Common
Stock”
means
the common stock, par value $0.001 per share, of the Company.
“Company”
is
defined in the preamble to this Agreement.
“Effective
Date”
shall
mean, with respect to the Registration Statement, the date on which the
Registration Statement shall have been declared effective by the
Commission.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect
at
the time.
“Holder”
or
“Holders”
means
the Stockholders or any of its affiliates or permitted transferees to the
extent
any of them are permitted to hold Registrable Securities, other than those
purchasing Registrable Securities in a market transaction.
“Hotels
Indemnified Party”
is
defined in Section
5.1.
“Indemnified
Party”
is
defined in Section
5.3.
“Indemnifying
Party”
is
defined in Section
5.3.
“Notices”
is
defined in Section
6.5.
“Participating
Stockholders”
is
defined in Section
2.3(b).
“Principal
Market”
is
defined in Section
3.4.
“Proceeding”
is
defined in Section
3.3(a).
“Prospectus”
means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 424(b) 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 the 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.
“Register,”
“Registered”
and
“Registration”
mean
a
registration effected by preparing and filing a registration statement or
similar document in compliance with the requirements of the Securities Act,
and
the applicable rules and regulations promulgated thereunder, and such
registration statement becoming effective.
“Registration
Request”
is
defined in Section
2.2.
“Registrable
Securities”
shall
mean the shares of common stock of the Company held by the Stockholders as
a
result of the transactions contemplated by the Merger Agreement. Registrable
Securities shall also be deemed to include any warrants, shares of capital
stock
or other securities of the Company issued as a dividend or other distribution
with respect to or in exchange for or in replacement of such shares of Common
Stock
together
with any securities issued or issuable upon any stock split, dividend or other
distribution, adjustment, recapitalization or similar event with respect to
the
foregoing.
As to
any particular Registrable Securities, such securities shall cease to be
Registrable Securities when: (a) a Registration Statement with respect to the
sale of such securities shall have become effective under the Securities Act
and
such securities shall have been sold, transferred, disposed of or exchanged
in
accordance with such Registration Statement; (b) such securities shall have
been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration under
the
Securities Act; (c) such securities shall have ceased to be outstanding, or
(d)
in the opinion of counsel to the Company, the Registrable Securities are salable
under Rule 144(k).
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“Registration
Statement”
means
a
registration statement filed by the Company with the Commission in compliance
with the Securities Act and the rules and regulations promulgated thereunder
(other than a registration statement on Form S-4 or Form S-8, or their
successors, or any registration statement covering only securities proposed
to
be issued in exchange for securities or assets of another entity).
“Requesting
Stockholders”
is
defined in Section
2.3(a).
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
“Other
Shares”
is
defined in Section
2.4.
“Underwritten
Registration Cutback”
is
defined in Section
2.3(b).
“Underwriting
Request”
is
defined in Section
2.3(a).
2. REGISTRATION
RIGHTS.
2.1 Mandatory
Registration.
Within
ninety (90) days after the Closing Date, the Company shall cause to be prepared
and filed with the Commission a Registration Statement providing for the resale
of all Registrable Securities then outstanding for an offering to be made by
the
Holders on a continuous basis pursuant to Rule 415. Such Registration Statement
shall be on Form S-3 (except if the Company is not then eligible to register
for
resale the Registrable Securities on Form S-3, in which case such registration
shall be on Form SB-2, Form S-1 or another appropriate form in accordance
herewith). The Company shall cause such Registration Statement to be declared
effective under the Securities Act as promptly as possible after the filing
thereof. The Company shall keep such Registration Statement continuously
effective under the Securities Act until the date when all Registrable
Securities covered by such Registration Statement have been sold.
2.2 Demand
Registration.
At any
time following the date that is 180 days following the Closing Date, if the
Company shall be requested (a “
Registration Request”)
by
Holders holding at least a majority of the then outstanding Registrable
Securities to effect the registration under the Securities Act of Registrable
Securities, then the Company shall (i) within ten (10) days of the receipt
of
such Registration Request, give written notice of such request to all Holders
describing the terms of such registration and, if applicable, the underwriting
and (ii) as soon as practicable cause to be prepared and filed with the
Commission a Registration Statement providing for the resale of all Registrable
Securities which Holders request to be registered. The Registration Statement
shall be on Form S-3 (except if the Company is not then eligible to register
for
resale the Registrable Securities on Form S-3, in which case such registration
shall be on Form SB-2, Form S-1 or another appropriate form in accordance
herewith). The Company shall cause the Registration Statement to be declared
effective under the Securities Act as promptly as possible after the filing
thereof. The Company shall keep the Registration Statement continuously
effective under the Securities Act until the date when all Registrable
Securities covered by such Registration Statement have been sold. The Company
shall not be obligated to file and cause to become effective more than two
(2)
Registration Statements pursuant to this Section
2.2.
A
Registration Statement shall not be counted for purposes of the foregoing until
such time as such Registration Statement has been declared effective by the
Commission and all of the Registrable Securities offered pursuant to such
Registration Statement are sold thereunder upon the price and terms
offered.
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2.3 Underwritten
Registration. (a)
At
the request (an “Underwriting
Request”)
of the
Holders of at least two-thirds of the then outstanding Registrable Securities
(the “Requesting
Stockholders”),
the
distribution of the Registrable Securities covered by a Registration Statement
filed or to be filed pursuant to Sections
2.1
or
2.2
hereof,
shall be effected by means of an underwriting.
(b) In
the
event of an Underwriting Request, the Company, together with all Holders
proposing to distribute their securities through such underwriting (the
“
Participating Stockholders”),
shall
enter into an underwriting agreement in customary form with the managing
underwriter(s) selected for such underwriting by the Requesting Stockholders,
which underwriter(s) shall be reasonably acceptable to the Company; provided,
however, that no Holder shall be required to make any representations or
warranties concerning the Company or its business, properties, prospects,
financial condition or related matters. Notwithstanding any other provision
of
this Section
2.3,
if the
managing underwriter(s) advises the Company and the Participating Stockholders
in writing that because the number of shares requested by the Participating
Stockholders to be included in the registration exceeds the number which can
be
sold in an orderly manner in such offering within a price range acceptable
to
the Requesting Stockholders or that marketing factors require a limitation
of
the number of shares to be underwritten on behalf of the Participating
Stockholders (the “Underwritten
Registration Cutback”),
and
such Underwritten Registration Cutback results in less than all of the
Registrable Securities of the Participating Stockholders that are requested
to
be included in such registration to actually be included in such registration,
then the Company will include in such registration, to the extent of the number
which the Company is so advised can be sold in (or during the time of) such
offering without such interference or affect on the price or sale, such number
of Registrable Securities shared pro rata among all of the Participating
Stockholders based on the total number of Registrable Securities held by each
such Participating Stockholder.
(c) In
the
event of an Underwriting Request, the Company shall:
(1) cooperate
with the Participating Stockholders, the underwriters participating in the
offering and their counsel in any due diligence investigation reasonably
requested by the Participating Stockholders or the underwriters in connection
therewith, and participate, to the extent reasonably requested by the
Participating Stockholders and the underwriter for the offering, in efforts
to
sell the Registrable Securities under the offering (including, without
limitation, participating in “roadshow” meetings with prospective investors)
that would be customary for underwritten primary offerings of a comparable
amount of equity securities by the Company;
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(2) cooperate,
to the extent reasonably requested, with each underwriter participating in
the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the Principal
Market;
(3) afford
the Requesting Stockholders with the opportunity to participate in the drafting
of the registration statement and the documentation relating
thereto;
(4) furnish,
on the date on which such Registrable Securities are sold to the underwriter,
(a) an opinion, dated such date, of the counsel representing the Company for
the
purposes of such registration, in form and substance as is customarily given
to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and (b) a “comfort” letter dated such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters
in
an underwritten public offering, addressed to the underwriters; and
(5) take
all other steps reasonably necessary to effect the registration of the
Registrable Securities contemplated hereby.
2.4 Piggy-Back
Registration.
If the
Company shall determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than on Form
S-4
or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection
with
any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the Company
shall send to the each Holder written notice of such determination and if,
within fifteen (15) days after receipt of such notice, any such Holder shall
so
request in writing, the Company shall include in such registration statement
all
or any part of such Registrable Securities such Holder requests to be
registered. Notwithstanding the foregoing, if the Company's proposed
registration of equity securities hereunder is, in whole or in part, an
underwritten public offering, and the managing underwriter of such proposed
registration determines and advises in writing that the inclusion of all
Registrable Securities proposed to be included in the underwritten public
offering, together with any other issued and outstanding shares of the Company's
common stock proposed to be included therein (such other shares hereinafter
collectively referred to as the “Other
Shares”),
would
interfere with the successful marketing of the Company's securities, then the
total number of such securities proposed to be included in such underwritten
public offering shall be reduced, (i) first by the shares requested to be
included in such registration by the holders of Other Shares, and (ii) second,
if necessary, (A) one-half (½) by the securities proposed to be issued by the
Company, and (B) one-half (½ ) by the Registrable Securities proposed to be
included in such registration by the Holders, on a pro rata basis, based upon
the number of Registrable Securities then held by each such Holder. The shares
of the Company's common stock that are excluded from the underwritten public
offering pursuant to the preceding sentence shall be withheld from the market
by
the holders thereof for a period, not to exceed 90 days from the closing of
such
underwritten public offering, that the managing underwriter reasonably
determines as necessary in order to effect such underwritten public
offering.
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2.5 Item
507 and 508 Information.
Each
Holder will furnish to the Company in writing the information specified in
Item
507 and/or 508 of Regulation S-K, as applicable, of the Securities Act for
use
in connection with any Registration Statement or prospectus or preliminary
prospectus included therein. Each Holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
2.6 Notice
of Effective Registration Statement.
The
Company shall notify each Holder in writing promptly (and in any event within
three business days) after receiving notification from the Commission that
a
Registration Statement has been declared effective.
2.7 Plan
of Distribution.
Any
Registration Statement required hereunder shall contain (except if otherwise
directed by the Holders of at least two-thirds of the Registrable Securities
included in such Registration Statement) the “Plan of Distribution” attached
hereto as Annex
A
.
3. REGISTRATION
PROCEDURES.
3.1 Drafts
of Filings. In
connection with the Company's registration obligations hereunder, the Company
shall
furnish
to the holders of Registrable Securities included in such Registration Statement
and to the legal counsel for any such holders, copies of the Registration
Statement or prospectus or any amendment or supplement thereto, including
documents incorporated by reference and all such other documents proposed to
be
filed sufficiently in advance of filing to provide such holders and legal
counsel with a reasonable opportunity to review such documents and comment
thereon, and the Company shall not file any Registration Statement or prospectus
or amendment or supplement thereto, including documents incorporated by
reference, to which such holders or their legal counsel shall object.
3.2
Amendments
and Supplements.
(a)
The
Company shall (1) prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective as to the
Registrable Securities until the date when all Registrable Securities covered
by
such Registration Statement have been sold; (2) cause the related Prospectus
to
be amended or supplemented by any required Prospectus supplement, and as so
supplemented or amended to be filed pursuant to Rule 424; and (3) respond as
promptly as reasonably possible to any comments received from the Commission
with respect to the Registration Statement or any amendment thereto and as
promptly as reasonably possible provide each Holder copies of all correspondence
from and to the Commission relating to the Registration Statement.
(b)
In
the event the Company (1) receives from the Commission any notice, comment
or
correspondence, as described below in Section
3.3(a)
or
otherwise, which requires as a response any amendment or supplement to such
Registration Statement or any Prospectus relating thereto or (2) obtains
additional information or of knowledge of the occurrence of an event requiring
the preparation of a supplement or amendment to such Prospectus so that, as
thereafter delivered to the purchasers of the securities covered by such
Registration Statement, such Prospectus will not contain an 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 not misleading, the Company shall
promptly make available to the holders of Registrable Securities included in
such Registration Statement any such supplement or amendment.
6
3.3 Notification.
(a)
As
promptly as reasonably possible, and in no event more than one (1) business
day
after such filing, notify the holders of Registrable Securities included in
such
Registration Statement of such filing, and shall further notify such holders
promptly and confirm such advice in writing in all events within one (1)
business day of the occurrence of any of the following: (i) the Commission
notifies the Company whether there will be a “review” of the Registration
Statement; (ii) the Commission comments in writing on the Registration Statement
(in which case the Company shall deliver to each Holder a copy of such comments
and of all written responses thereto); (iii) the Commission or any other Federal
or state governmental authority in writing requests any amendment or supplement
to the Registration Statement or Prospectus or requests additional information
related thereto; (iv) such Registration Statement is declared or becomes
effective; (iv) when any post-effective amendment to such Registration Statement
becomes effective; (v) the issuance or threatened issuance by the Commission
of
any stop order suspending the effectiveness of the Registration Statement or
the
initiation of any action, claim, suit, investigation or proceeding (a
“Proceeding”)
(and
the Company shall take all actions required to prevent any such Proceeding
or
the entry of such stop order or to remove it if entered); (vi) the Company
receives notice in writing of any suspension of the qualification or exemption
from qualification of any Registrable Securities for sale in any jurisdiction,
or the initiation or threat of any Proceeding for such purpose; or (vii) the
financial statements included in the Registration Statement become ineligible
for inclusion therein or any statement made in the Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein
by
reference is untrue in any material respect or any revision to the Registration
Statement, Prospectus or other document is required so that it 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.
(b) Use
its
reasonable best efforts to avoid the issuance of or, if issued, obtain the
withdrawal of: (i) any order suspending the effectiveness of the Registration
Statement or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
(c) Promptly
deliver to each Holder, without charge, such reasonable number of copies of
the
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Holder may reasonably request. The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by the Holders in connection with the offering and sale
of
the Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.
7
(d)
Use
its best efforts to (i) register or qualify the Registrable Securities covered
by the Registration Statement under such securities or “blue sky” laws of such
jurisdictions in the United States as the holders of Registrable Securities
included in such Registration Statement (in light of their intended plan of
distribution) may request (ii) to keep each such registration or qualification
(or exemption therefrom) effective until the date when all Registrable
Securities covered by such Registration Statement have been sold and (ii) take
all such action necessary to cause such Registrable Securities covered by the
Registration Statement to be registered with or approved by such other
Governmental Authorities as may be necessary by virtue of the business and
operations of the Company and do any and all other acts and things that may
be
necessary or advisable to enable the holders of Registrable Securities included
in such Registration Statement to consummate the disposition of such Registrable
Securities in such jurisdictions; provided, however, that the Company shall
not
be required to qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph or subject
itself to taxation in any such jurisdiction.
3.4 Listing
Application. In
the
time and manner required by the American Stock Exchange, the New York Stock
Exchange, NASDAQ or any other market on which the Registrable Securities are
traded (the “
Principal Market”),
the
Company shall prepare and file with the Principal Market an listing application
covering all of the Registrable Securities and a notification form regarding
the
change in the number of the Company's outstanding Shares; (ii) take all steps
necessary to cause such Registrable Securities to be approved for listing on
the
Principal Market as soon as possible thereafter; (iii) provide to each Holder
notice of such listing; and (iv) maintain the listing of such Registrable
Securities on the Principal Market.
3.5
Effectiveness
of Registration Statement.
The
Company shall use its reasonable best efforts to avoid the issuance of or,
if
issued, obtain the withdrawal of: (i) any order suspending the effectiveness
of
the Registration Statement or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale
in
any jurisdiction, at the earliest practicable moment.
3.6 Copies.
The
Company shall promptly deliver to each Holder, without charge, such reasonable
number of copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Holder may
reasonably request. The Company hereby consents to the use of such Prospectus
and each amendment or supplement thereto by the Holders in connection with
the
offering and sale of the Registrable Securities covered by such Prospectus
and
any amendment or supplement thereto.
3.7 Agreements
for Disposition.
The
Company shall enter into customary agreements (including, if applicable, an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities. The representations, warranties and covenants of the
Company in any underwriting agreement which are made to or for the benefit
of
any Underwriters, to the extent applicable, shall also be made to and for the
benefit of the holders of Registrable Securities included in such registration
statement. No holder of Registrable Securities included in such registration
statement shall be required to make any representations or warranties in the
underwriting agreement except, if applicable, with respect to such holder’s
organization, good standing, authority, title to Registrable Securities, lack
of
conflict of such sale with such holder’s material agreements and organizational
documents, and with respect to written information relating to such holder
that
such holder has furnished in writing expressly for inclusion in such
Registration Statement.
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3.8
Cooperation.
The
principal executive officer of the Company, the principal financial officer
of
the Company, the principal accounting officer of the Company and all other
officers and members of the management of the Company shall cooperate fully
in
any offering of Registrable Securities hereunder, which cooperation shall
include, without limitation, the preparation of the Registration Statement
with
respect to such offering and all other offering materials and related documents,
and participation in meetings with Underwriters, attorneys, accountants and
potential investors.
3.9 Records.
The
Company shall make available for inspection by the holders of Registrable
Securities included in such Registration Statement, any Underwriter
participating in any disposition pursuant to such registration statement and
any
attorney, accountant or other professional retained by any holder of Registrable
Securities included in such Registration Statement or any Underwriter, all
financial and other records, pertinent corporate documents and properties of
the
Company, as shall be 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 of them in connection with such
Registration Statement.
3.10 Opinions
and Comfort Letters.
The
Company shall furnish to each holder of Registrable Securities included in
any
Registration Statement a signed counterpart, addressed to such holder, of (i)
any opinion of counsel to the Company delivered to any Underwriter and (ii)
any
comfort letter from the Company’s independent public accountants delivered to
any Underwriter. In the event no legal opinion is delivered to any Underwriter,
the Company shall furnish to each holder of Registrable Securities included
in
such Registration Statement, at any time that such holder elects to use a
prospectus, an opinion of counsel to the Company to the effect that the
Registration Statement containing such prospectus has been declared effective
and that no stop order is in effect.
3.11
Earnings
Statement.
The
Company shall comply with all applicable rules and regulations of the Commission
and the Securities Act, and make available to its stockholders, as soon as
practicable, an earnings statement covering a period of twelve (12) months,
beginning within three (3) months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder.
3.12
Obligation
to Suspend Distribution.
Upon
receipt of any notice from the Company of the happening of any event of the
kind
described in Section
3.3(a)(v)
or, in
the case of a resale registration on Form S-3 pursuant to Section
2.2
hereof,
upon any suspension by the Company, pursuant to a written xxxxxxx xxxxxxx
compliance program adopted by the Company’s Board of Directors, of the ability
of all “insiders” covered by such program to transact in the Company’s
securities because of the existence of material non-public information, each
holder of Registrable Securities included in any registration shall immediately
discontinue disposition of such Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such holder
receives the supplemented or amended prospectus contemplated by Section
3.2(b)
or the
restriction on the ability of “insiders” to transact in the Company’s securities
is removed, as applicable, and, if so directed by the Company, each such holder
will deliver to the Company all copies, other than permanent file copies then
in
such holder’s possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice.
9
3.13
Registration
Expenses.
The
Company shall bear all costs and expenses incurred in connection with any
Registration pursuant to this agreement and all expenses incurred in performing
or complying with its other obligations under this Agreement, whether or not
the
Registration Statement becomes effective, including, without limitation: (i)
all
registration and filing fees; (ii) fees and expenses of compliance with
securities or “blue sky” laws (including fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities); (iii)
printing expenses; (iv) the fees and expenses incurred in connection with the
listing of the Registrable Securities as required by Section
3.4;
(v)
National Association of Securities Dealers, Inc. filing fees; (vi) fees and
disbursements of counsel for the Company and fees and expenses for independent
certified public accountants retained by the Company (including the expenses
or
costs associated with the delivery of any opinions or comfort letters requested
pursuant to Section
3.10);
(vii)
the fees and expenses of any special experts retained by the Company in
connection with such registration; and (viii) the fees and expenses of one
legal
counsel selected by the holders of a majority-in-interest of the Registrable
Securities included in any Registration Statement. The Company shall have no
obligation to pay any underwriting discounts or selling commissions attributable
to the Registrable Securities being sold by the holders thereof, which
underwriting discounts or selling commissions shall be borne by such holders.
Additionally, in an underwritten offering, all selling stockholders and the
Company shall bear the expenses of the underwriter pro rata in proportion to
the
respective amount of shares each is selling in such offering.
3.14
Compliance
with Applicable Laws.
The
Company shall comply with all applicable rules and regulations of the Commission
and the Principal Market with respect to the Company's obligations
hereunder.
3.15
Information.
The
holders of Registrable Securities shall provide such information as may
reasonably be requested by the Company, or the managing underwriter, if any,
in
connection with the preparation of any Registration Statement, including
amendments and supplements thereto, in order to effect the registration of
any
Registrable Securities under the Securities Act pursuant to Section
2
and in
connection with the Company’s obligation to comply with federal and applicable
state securities laws. In the event a holder does not provide any material
requested information to the Company at least 24 hours prior to the filing
of
any Registration Statement, then the Company may remove such declining holder
from the Registration Statement without penalty or being deemed in violation
of
this Agreement.
4. REPORTS
UNDER TH EXCHANGE ACT.
4.1
Filing
of Reports.
With a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Securities Act and any other rule or regulation of the Commission
that
may at any time permit a Holder to sell securities of the Company to the public
without registration, the Company shall:
10
(a) make
and keep public information available, as those terms are understood and defined
in Rule 144, at all times after the date hereof and so long as the Company
is
subject to the periodic reporting requirements under Sections 13 or 15(d) of
the
Exchange Act;
(b) file
with the Commission in a timely manner all reports and other documents required
of the Company under the Securities Act and the Exchange Act; and
(c) furnish
to any Holder, so long as the Holder owns any Registrable Securities, forthwith
upon request (i) a written statement by the Company that it has complied with
the reporting requirements of Commission Rule 144, the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), or that it qualifies as a registrant whose securities may be
resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy
of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as
may
be reasonably requested in availing any Holder of any rule or regulation of
the
Commission which permits the selling of any such securities without registration
or pursuant to such form.
5. INDEMNIFICATION
AND CONTRIBUTION.
5.1 Indemnification
by the Company.
The
Company agrees to indemnify and hold harmless each holder of Registrable
Securities, (each, a “Hotels
Indemnified Party”),
from
and against any expenses, losses, judgments, claims, damages or liabilities,
whether joint or several, arising out of or based upon any untrue statement
(or
allegedly untrue statement) of a material fact contained in any Registration
Statement under which the sale of such Registrable Securities was registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment
or
supplement to such Registration Statement, or arising out of or based upon
any
omission (or alleged omission) to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
promulgated thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration;
and
the Company shall promptly reimburse the Indemnified Party for any legal and
any
other expenses reasonably incurred by such Indemnified Party in connection
with
investigating and defending any such expense, loss, judgment, claim, damage,
liability or action; provided, however, that the Company will not be liable
to
a
Hotels
Indemnified Party in any such case to the extent that any such expense, loss,
claim, damage or liability arises out of or is based upon any untrue statement
or allegedly untrue statement or omission or alleged omission made in such
Registration Statement, preliminary prospectus, final prospectus, or summary
prospectus, or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company, in writing, by a Hotels
Indemnified Party expressly for use therein. The Company also shall indemnify
any Underwriter of the Registrable Securities, their officers, affiliates,
directors, partners, members and agents and each person who controls such
Underwriter on substantially the same basis as that of the indemnification
provided above in this Section
5.1.
11
5.2 Indemnification
by Holders of Registrable Securities.
Each
selling holder of Registrable Securities will, in the event that any
registration is being effected under the Securities Act pursuant to this
Agreement of any Registrable Securities held by such selling holder, indemnify
and hold harmless the Company, each of its directors and officers and each
underwriter (if any), and each other selling holder and each other person,
if
any, who controls another selling holder or such underwriter within the meaning
of the Securities Act, against any losses, claims, judgments, damages or
liabilities, whether joint or several, insofar as such losses, claims,
judgments, damages or liabilities (or actions in respect thereof) arise out
of
or are based upon any untrue statement or allegedly untrue statement of a
material fact contained in any Registration Statement under which the sale
of
such Registrable Securities was registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained in
the
Registration Statement, or any amendment or supplement to the Registration
Statement, or arise out of or are based upon any omission or the alleged
omission to state a material fact required to be stated therein or necessary
to
make the statement therein not misleading, if the statement or omission was
made
in reliance upon and in conformity with information furnished in writing to
the
Company by such selling holder expressly for use therein, and shall reimburse
the Company, its directors and officers, and each other selling holder or
controlling person for any legal or other expenses reasonably incurred by any
of
them in connection with investigation or defending any such loss, claim, damage,
liability or action. Each selling holder’s indemnification obligations hereunder
shall be several and not joint and shall be limited to the amount of any net
proceeds actually received by such selling holder.
5.3 Conduct
of Indemnification Proceedings.
Promptly after receipt by any person of any notice of any loss, claim, damage
or
liability or any action in respect of which indemnity may be sought pursuant
to
Sections
5.1
or
5.2,
such
person (the “Indemnified
Party”)
shall,
if a claim in respect thereof is to be made against any other person for
indemnification hereunder, notify such other person (the “Indemnifying
Party”)
in
writing of the loss, claim, judgment, damage, liability or action; provided,
however, that the failure by the Indemnified Party to notify the Indemnifying
Party shall not relieve the Indemnifying Party from any liability which the
Indemnifying Party may have to such Indemnified Party hereunder, except and
solely to the extent the Indemnifying Party is actually prejudiced by such
failure. If the Indemnified Party is seeking indemnification with respect to
any
claim or action brought against the Indemnified Party, then the Indemnifying
Party shall be entitled to participate in such claim or action, and, to the
extent that it wishes, jointly with all other Indemnifying Parties, to assume
control of the defense thereof with counsel satisfactory to the Indemnified
Party. After notice from the Indemnifying Party to the Indemnified Party of
its
election to assume control of the defense of such claim or action, the
Indemnifying Party shall not be liable to the Indemnified Party for any legal
or
other expenses subsequently incurred by the Indemnified Party in connection
with
the defense thereof other than reasonable costs of investigation; provided,
however, that in any action in which both the Indemnified Party and the
Indemnifying Party are named as defendants, the Indemnified Party shall have
the
right to employ separate counsel (but no more than one such separate counsel)
to
represent the Indemnified Party and its controlling persons who may be subject
to liability arising out of any claim in respect of which indemnity may be
sought by the Indemnified Party against the Indemnifying Party, with the fees
and expenses of such counsel to be paid by such Indemnifying Party if, based
upon the written opinion of counsel of such Indemnified Party, representation
of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, consent to entry of judgment
or effect any settlement of any claim or pending or threatened proceeding in
respect of which the Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such judgment or settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such claim or
proceeding.
12
5.4 Contribution.
(a)
If
the indemnification provided for in the foregoing Sections
5.1,
5.2
and
5.3
is
unavailable to any Indemnified Party in respect of any loss, claim, damage,
liability or action referred to herein, then each such 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 loss, claim, damage,
liability or action in such proportion as is appropriate to reflect the relative
fault of the Indemnified Parties and the Indemnifying Parties in connection
with
the actions or omissions which resulted in such loss, claim, damage, liability
or action, as well as any other relevant equitable considerations. The relative
fault of any Indemnified Party and any Indemnifying Party shall be determined
by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material
fact
relates to information supplied by such Indemnified Party or such Indemnifying
Party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(b)
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section
5.5
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 Section. 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.
(c) The
amount paid or payable by an Indemnified Party as a result of any loss, claim,
damage, liability or action referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section
5.4,
no
holder of Registrable Securities shall be required to contribute any amount
in
excess of the dollar amount of the net proceeds (after payment of any
underwriting fees, discounts, commissions or taxes) actually received by such
holder from the sale of Registrable Securities which gave rise to such
contribution obligation.
6. MISCELLANEOUS.
6.1 Other
Registration Rights.
Except
with respect to those securities issued or issuable in connection with the
Company’s initial public offering in June 2006, or as otherwise disclosed in the
Company’s IPO prospectus, the Company represents and warrants that no person,
other than a holder of the Registrable Securities, has any right to require
the
Company to register any shares of the Company’s capital stock for sale or to
include shares of the Company’s capital stock in any registration filed by the
Company for the sale of shares of capital stock for its own account or for
the
account of any other person.
13
6.2 Dispositions.
Each
Holder agrees that it will comply with the prospectus delivery requirements
of
the Securities Act as applicable to it in connection with sales of Registrable
Securities pursuant to the Registration Statement. Each Holder further agrees
that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Section
3.3(a),
such
Holder will discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder's receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement contemplated
by
Section
3.2(b),
or until
it is advised in writing (the “Advice”)
by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.
6.3 Mergers.
The
Company shall not, directly or indirectly, enter into any merger, consolidation
or reorganization in which the Company shall not be the surviving corporation
unless the proposed surviving corporation shall, prior to such merger,
consolidation or reorganization, agree in writing to assume the obligations
of
the Company under this Agreement, and for that purpose references hereunder
to
“Registrable Securities” shall be deemed to be references to the securities
which the Holders would be entitled to receive in exchange for Registrable
Securities under any such merger, consolidation or reorganization, provided,
however, that the provisions of this Agreement shall not apply in the event
of
any merger, consolidation or reorganization in which the Company is not the
surviving corporation if the Holders are entitled to receive in exchange
therefor (i) cash or (ii) securities of the acquiring corporation which may
be
immediately sold to the public pursuant to an effective registration statement
under the Securities Act or pursuant to an exemption therefrom which permits
sales without limitation as to volume or the manner of sale on a nationally
recognized exchange in the United States or on the Principal
Market.
6.4 Assignment;
No Third Party Beneficiaries.
This
Agreement and the rights, duties and obligations of the Company hereunder may
not be assigned or delegated by the Company in whole or in part. This Agreement
and the rights, duties and obligations of the holders of Registrable Securities
hereunder may be freely assigned or delegated by such holder of Registrable
Securities in conjunction with and to the extent of any transfer of Registrable
Securities by any such holder. This Agreement and the provisions hereof shall
be
binding upon and shall inure to the benefit of each of the parties and their
successors and the permitted assigns of the holders of Registrable Securities
or
of any assignee of a holder of Registrable Securities. This Agreement is not
intended to confer any rights or benefits on any persons that are not party
hereto other than as expressly set forth herein.
6.5 Notices.
All
notices, demands, requests, consents, approvals or other communications
(collectively, “Notices”)
required or permitted to be given hereunder or which are given with respect
to
this Agreement shall be in writing and shall be personally served, delivered
by
reputable air courier service with charges prepaid, or transmitted by hand
delivery, telegram, telex or facsimile, addressed as set forth below, or to
such
other address as such party shall have specified most recently by written
notice. Notice shall be deemed given on the date of service or transmission
if
personally served or transmitted by telegram, telex or facsimile; provided,
that
if such service or transmission is not on a business day or is after normal
business hours, then such notice shall be deemed given on the next business
day.
Notice otherwise sent as provided herein shall be deemed given on the next
business day following timely delivery of such notice to a reputable air courier
service with an order for next-day delivery.
14
To
the
Company:
Affinity
Media International, Inc.
0000
Xxxxxxxx Xxxx., Xxxxx 000
Xxx
Xxxxxxx, XX 00000
Attention:
Xxxxx Xxxxx
Facsimile
No:
with
a
copy to:
Ellenoff
Xxxxxxxx & Schole LLP
Attention:
Xxxxx X. Xxxxxxxx, Esq.
000
Xxxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx
Xxxx, XX 00000
Facsimile
No: 000-000-0000
To
Hotels:
Hotels
at
Home, Inc.
0
Xxxxxx
Xxxx Xxxx
Xxxxxxxxx,
XX 00000
Facsimile
No: 973-882-8437
Attention:
Xxxxx Xxxx
with
a
copy to:
DLA
Piper
US LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxx X. Xxxxx
Facsimile
No:
000-000-0000
6.6 Severability.
This
Agreement shall be deemed severable, and the invalidity or unenforceability
of
any term or provision hereof shall not affect the validity or enforceability
of
this Agreement or of any other term or provision hereof. Furthermore, in lieu
of
any such invalid or unenforceable term or provision, the parties hereto intend
that there shall be added as a part of this Agreement a provision as similar
in
terms to such invalid or unenforceable provision as may be possible that is
valid and enforceable.
6.7 Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which taken together shall constitute one and
the
same instrument.
15
6.8 Entire
Agreement.
This
Agreement (including all agreements entered into pursuant hereto and all
certificates and instruments delivered pursuant hereto and thereto) constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements, representations,
understandings, negotiations and discussions between the parties, whether oral
or written.
6.9 Successors
and Assigns.
The
provisions hereof shall inure to the benefit of, and be binding upon, the
successors and assigns of the parties hereto.
6.10 Modifications
and Amendments.
No
amendment, modification or termination of this Agreement shall be binding upon
any party unless executed in writing by such party.
6.11 Titles
and Headings.
Titles
and headings of sections of this Agreement are for convenience only and shall
not affect the construction of any provision of this Agreement.
6.12 Waivers
and Extensions.
Any
party to this Agreement may waive any right, breach or default which such party
has the right to waive, provided that such waiver will not be effective against
the waiving party unless it is in writing, is signed by such party, and
specifically refers to this Agreement. Waivers may be made in advance or after
the right waived has arisen or the breach or default waived has occurred. Any
waiver may be conditional. No waiver of any breach of any agreement or provision
herein contained shall be deemed a waiver of any preceding or succeeding breach
thereof nor of any other agreement or provision herein contained. No waiver
or
extension of time for performance of any obligations or acts shall be deemed
a
waiver or extension of the time for performance of any other obligations or
acts.
6.13 Remedies
Cumulative.
In the
event that the Company fails to observe or perform any covenant or agreement
to
be observed or performed under this Agreement, any Holder may proceed to protect
and enforce its rights by suit in equity or action at law, whether for specific
performance of any term contained in this Agreement or for an injunction against
the breach of any such term or in aid of the exercise of any power granted
in
this Agreement or to enforce any other legal or equitable right, or to take
any
one or more of such actions, without being required to post a bond. None of
the
rights, powers or remedies conferred under this Agreement shall be mutually
exclusive, and each such right, power or remedy shall be cumulative and in
addition to any other right, power or remedy, whether conferred by this
Agreement or now or hereafter available at law, in equity, by statute or
otherwise.
6.14 Independent
Nature of Holders' Obligations and Rights.
The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible
in
any way for the performance of the obligations of any other Holder hereunder.
Nothing contained herein or in any other agreement or document delivered at
any
closing, and no action taken by any Holder pursuant hereto or thereto, shall
be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holders
are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder shall be entitled
to
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Holder to
be
joined as an additional party in any proceeding for such purpose.
16
6.15
Titles and Subtitles. The
titles of the sections and subsections of this Agreement are for convenience
of
reference only and are not to be considered in construing this
Agreement.
6.16 Governing
Law.
This
Agreement shall be governed by, interpreted under, and construed in accordance
with the internal laws of the State of New York applicable to agreements made
and to be performed within the State of New York, without giving effect to
any
choice-of-law provisions thereof that would compel the application of the
substantive laws of any other jurisdiction.
6.17 Rule
144.
The
Company covenants that it shall file any reports required to be filed by it
under the Securities Act and the Exchange Act and shall take such further action
as the holders of Registrable Securities may reasonably request, all to the
extent required from time to time to enable such holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such Rules
may be amended from time to time, or any similar Rule or regulation hereafter
adopted by the Commission.
17
IN
WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to
be executed and delivered by their duly authorized representatives as of the
date first written above.
|
CORP.
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||
| |
|
|
| By: |
|
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|
|
||
|
Name:
|
||
|
Title:
|
||
| STOCK HOLDERS: | ||
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| Xxxxx Xxxx | ||
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Xxxxxxx
Xxxx
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| Xxxxxxx Xxxxxx | ||
Schedule
A
Xxxxx
Xxxx
Xxxxxxx
Xxxx
Xxxxxxx
Xxxxxx
Annex
A
Plan
of Distribution
The
shares covered by this prospectus may be offered and sold from time to time
by
the selling stockholders. The term “selling stockholder” includes pledgees,
donees, transferees or other successors in interest selling shares received
after the date of this prospectus from each selling stockholder as a pledge,
gift, partnership distribution or other non-sale related transfer. The number
of
shares beneficially owned by a selling stockholder will decrease as and when
it
effects any such transfers. The plan of distribution for the selling
stockholders' shares sold hereunder will otherwise remain unchanged, except
that
the transferees, pledgees, donees or other successors will be selling
stockholders hereunder. To the extent required, we may amend and supplement
this
prospectus from time to time to describe a specific plan of
distribution.
The
selling stockholders will act independently of us in making decisions with
respect to the timing, manner and size of each sale. The selling stockholders
may make these sales at prices and under terms then prevailing or at prices
related to the then current market price. The selling stockholders may also
make
sales in negotiated transactions. The selling stockholders may offer their
shares from time to time pursuant to one or more of the following
methods:
| · |
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
one
or more block trades in which the broker-dealer will attempt to
sell the
shares as agent but may position and resell a portion of the block
as
principal to facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer
for its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
public
or privately negotiated transactions;
|
|
·
|
through
the facilities of any national securities exchange or U.S. inter-dealer
quotation system of a registered national securities association,
on which
the shares are then listed, admitted to unlisted trading privileges
or
included for quotation);
|
|
·
|
through
underwriters, brokers or dealers (who may act as agents or principals)
or
directly to one or more purchasers;
|
|
·
|
a
combination of any such methods of sale;
and
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
In
connection with distributions of the shares or otherwise, the selling
stockholders may:
| · |
enter
into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the shares
in the
course of hedging the positions they
assume;
|
|
·
|
sell the shares short and redeliver the shares to close out such short positions; |
|
·
|
enter
into option or other transactions with broker-dealers or other
financial
institutions which require the delivery to them of shares offered
by this
prospectus, which they may in turn resell;
and
|
|
·
|
pledge
shares to a broker-dealer or other financial institution, which,
upon a
default, they may in turn
resell.
|
In
addition to the foregoing methods, the selling stockholders may offer their
shares from time to time in transactions involving principals or brokers not
otherwise contemplated above, in a combination of such methods or described
above or any other lawful methods. The selling stockholders may also transfer,
donate or assign their shares to lenders, family members and others and each
of
such persons will be deemed to be a selling stockholder for purposes of this
prospectus. The selling stockholders or their successors in interest may from
time to time pledge or grant a security interest in some or all of the shares
of
common stock, and if the selling stockholders default in the performance of
their secured obligations, the pledgees or secured parties may offer and sell
the shares of common stock from to time under this prospectus; provided however
in the event of a pledge or then default on a secured obligation by the selling
stockholder, in order for the shares to be sold under this registration
statement, unless permitted by law, we must distribute a prospectus supplement
and/or amendment to this registration statement amending the list of selling
stockholders to include the pledgee, secured party or other successors in
interest of the selling stockholder under this prospectus.
The
selling stockholders may also sell their shares pursuant to Rule 144 under
the
Securities Act, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things, the availability of certain current public information concerning
the issuer, the resale occurring following the required holding period under
Rule 144 and the number of shares being sold during any three-month period
not
exceeding certain limitations.
Sales
through brokers may be made by any method of trading authorized by any stock
exchange or market on which the shares may be listed or quoted, including block
trading in negotiated transactions. Without limiting the foregoing, such brokers
may act as dealers by purchasing any or all of the shares covered by this
prospectus, either as agents for others or as principals for their own accounts,
and reselling such shares pursuant to this prospectus. The selling stockholders
may effect such transactions directly, or indirectly through underwriters,
broker-dealers or agents acting on their behalf. In effecting sales,
broker-dealers or agents engaged by the selling stockholders may arrange for
other broker-dealers to participate. Broker-dealers or agents may receive
commissions, discounts or concessions from the selling stockholders, in amounts
to be negotiated immediately prior to the sale (which compensation as to a
particular broker-dealer might be in excess of customary commissions for routine
market transactions).
2
In
offering the shares covered by this prospectus, the selling stockholders, and
any broker-dealers and any other participating broker-dealers who execute sales
for the selling stockholders, may be deemed to be “underwriters” within the
meaning of the Securities Act in connection with these sales. Any profits
realized by the selling stockholders and the compensation of such broker-dealers
may be deemed to be underwriting discounts and commissions.
The
Company is required to pay all fees and expenses incident to the registration
of
the shares.
The
Company has agreed to indemnify the selling stockholders against certain losses,
claims, damages and liabilities, including liabilities under the Securities
Act.
3
