Exhibit 4.10
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
$300,000,000
3.50% CONVERTIBLE SENIOR NOTES DUE 2023
REGISTRATION RIGHTS AGREEMENT
May 16, 0000
XXXX XX XXXXXXX SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
X.X. XXXXXX SECURITIES INC.
As Initial Purchasers
c/o Banc of America Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation (the
"COMPANY"), proposes to issue and sell to the several Initial Purchasers named
in Schedule 1 (the "INITIAL PURCHASERS"), upon the terms set forth in a purchase
agreement, dated as of May 9, 2003 (the "PURCHASE AGREEMENT"), $300,000,000 in
aggregate principal amount of its 3.50% Convertible Senior Notes due 2023
($360,000,000 in aggregate principal amount if the Initial Purchasers exercise
in full their option pursuant to the Purchase Agreement) (the "NOTES"). The
Notes will be convertible into Shares (the "SHARES"), each consisting of one
share of common stock of the Company and one Class B share of Starwood Hotels &
Resorts, a Maryland real estate investment trust (the "TRUST"), at the
conversion price set forth in the Offering Memorandum dated May 9, 2003 (the
"OFFERING MEMORANDUM"). The Notes will be issued pursuant to an Indenture, dated
as of May 16, 2003 (the "INDENTURE"), among the Company, Sheraton Holding
Corporation (the "GUARANTOR"), the Trust and U.S. Bank National Association, as
trustee (the "TRUSTEE"). As an inducement to the Initial Purchasers to enter
into the Purchase Agreement, the Company and the Guarantor agree with the
Initial Purchasers, (i) for the benefit of the Initial Purchasers and (ii) for
the benefit of the holders of the Notes and the Shares issuable upon conversion
of the Notes (collectively, the "SECURITIES" and, each a "SECURITY") from time
to time until such time as such Securities have been sold pursuant to a Shelf
Registration Statement (as defined below) (each of the foregoing a "HOLDER" and,
together, the "HOLDERS"), as follows:
1. Shelf Registration. The Company and the Guarantor, as applicable,
shall take the following actions:
(a) The Company, the Trust and the Guarantor shall use their
reasonable efforts to file with the Securities and Exchange Commission
(the "COMMISSION") not later than August 14, 2003, the date 90 days
after the earliest date of original issuance of any of the Notes, and
thereafter use their reasonable efforts to cause to be declared
effective as promptly as practicable but in no event later than
November 12, 2003, the date 180 days after the earliest date of
original issuance of any of the Notes (the "EFFECTIVENESS TARGET
DATE"), a shelf registration statement or statements or an amendment to
an existing shelf registration statement or statements (each a "SHELF
REGISTRATION STATEMENT") on such form or forms under the Securities Act
of 1933, as amended (the "SECURITIES ACT") as the Company, the Trust
and the Guarantor deem appropriate relating to the offer and sale of
the Transfer Restricted Securities (as defined herein) from time to
time in accordance with the methods of distribution set forth in the
Shelf Registration Statement and Rule 415 under the Securities Act
(hereinafter, the "SHELF REGISTRATION"); provided, however, that
no Holder (other than the Initial Purchasers) shall be entitled to have
the Securities held by it covered by such Shelf Registration Statement
unless such Holder agrees in writing to be bound by all the provisions
of this Agreement applicable to such Holder.
(b) Subject to Section 2(c) hereof, the Company, the Trust and
the Guarantor shall use their reasonable efforts to keep each Shelf
Registration Statement continuously effective in order to permit the
related prospectus to be lawfully delivered by the Holders of the
relevant Securities, until the earliest of the date one year (or for
such longer period if extended pursuant to Section 2(i) below) from the
last date of original issuance of any of the Notes and the date when
all the Transfer Restricted Securities covered by such Shelf
Registration Statement and owned by Holders that complete and deliver
in a timely manner the Notice and Questionnaire (as defined herein)
have been sold pursuant to such Shelf Registration Statement (in any
case, such period being called the "SHELF REGISTRATION PERIOD").
(c) Notwithstanding any other provision of this Agreement to
the contrary, the Company, the Trust and the Guarantor shall cause each
Shelf Registration Statement and the related prospectus and any
amendment or supplement thereto, as of the effective date of such Shelf
Registration Statement, amendment or supplement, (i) to comply in all
material respects with the applicable requirements of the Securities
Act and the rules and regulations of the Commission and (ii) not to
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(d) The Company shall deliver a notice of registration
statement and selling securityholder notice and questionnaire, in
substantially the form attached as Annex A to the Offering Memorandum
(a "NOTICE AND QUESTIONNAIRE"), to each Holder to obtain certain
information regarding such Holder for use in connection with a Shelf
Registration Statement and the related prospectus. To be named as a
selling securityholder in a Shelf Registration Statement and the
related prospectus at the time of such Shelf Registration Statement's
effectiveness, Holders must complete and deliver to the Company the
completed Notice and Questionnaire at least three (3) Business Days
prior to the intended distribution of Transfer Restricted Securities
pursuant to such Shelf Registration Statement. Thereafter, any Holder
wishing to sell Transfer Restricted Securities pursuant to any Shelf
Registration Statement and the related prospectus shall deliver a
properly completed Notice and Questionnaire to the Company. From and
after the date a Shelf Registration Statement is declared effective,
the Company shall, as promptly as practicable but in any event within
five (5) Business Days of receipt of a properly completed Notice and
Questionnaire is delivered (i) if required by applicable law, file with
the Commission a post-effective amendment to such Shelf Registration
Statement or prepare and, if required by applicable law, file a
supplement to the related prospectus or a supplement or amendment to
any document incorporated therein by reference or file any other
document required under the Securities Act so that the Holder
delivering such Notice and Questionnaire is named as a selling
securityholder in such Shelf Registration Statement and the related
prospectus in such a manner as to permit such Holder to deliver such
prospectus to purchasers of the Transfer Restricted Securities in
accordance with applicable law and, if the Company, the Trust and the
Guarantor shall file a post-effective amendment to such Shelf
Registration Statement, use reasonable efforts to cause such
post-effective amendment to be declared effective under the Securities
Act as promptly as is practicable, but in any event by the date (the
"AMENDMENT EFFECTIVENESS DEADLINE DATE") that is thirty (30) days after
the date such post-effective amendment is required by this clause to be
filed and (ii) notify such Holder as promptly as practicable after the
effectiveness under the Securities Act of any post-effective amendment
filed pursuant to clause (i) above; provided, however, notwithstanding
the foregoing, if such Notice and Questionnaire is delivered during a
Deferral Period (as defined in Section 2(c)), the Company shall so
inform the Holder delivering such Notice and Questionnaire and shall
take the actions set forth in clauses (i) and (ii) above upon
expiration of the Deferral Period in accordance with Section 2(b). Each
Holder that delivers, at any time, a duly completed Notice and
Questionnaire together with such other information as may be reasonably
requested of such Holder pursuant to this Agreement, and that is named
as a selling
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securityholder in an effective Shelf Registration Statement or
post-effective amendment thereto, is hereafter referred to as a "NOTICE
HOLDER" with respect to such Shelf Registration Statement.
Notwithstanding anything contained herein to the contrary, (x) the
Company, the Trust and the Guarantor shall be under no obligation to
name any Holder as a selling securityholder in any Shelf Registration
Statement or related prospectus unless and until such Holder shall have
timely delivered a completed Notice and Questionnaire, together with
such other information regarding such Holder and the intended
distribution as may be reasonably requested by the Company and (y) the
Amendment Effectiveness Deadline Date shall be extended by up to ten
(10) days from the expiration of a Deferral Period (and the Company,
the Trust and the Guarantor shall incur no obligation to pay Additional
Interest during such extension) if such Deferral Period is in effect on
the Amendment Effectiveness Deadline Date; and provided further,
however, that the Company, the Trust and the Guarantor shall not be
obligated to file more than one (1) post-effective amendment or
supplement in any thirty (30) day period following the date the
applicable Shelf Registration Statement is declared effective for the
purpose of naming Holders as selling securityholders who were not named
in such Shelf Registration Statement at the time of effectiveness. Each
Holder of Transfer Restricted Securities agrees that if such Holder
wishes to sell Transfer Restricted Securities pursuant to any Shelf
Registration Statement and related prospectus, it will do so only in
accordance with this Section 1(d) and Section 2(c) hereof.
2. Registration Procedures. In connection with any Shelf Registration
required by Section 1 hereof, the following provisions shall apply:
(a) The Company, the Trust and the Guarantor shall furnish to
the Initial Purchasers, prior to the filing thereof with the
Commission, a copy of each Shelf Registration Statement and each
amendment thereof and each supplement, if any, to the prospectus
included therein, and in the event that the Initial Purchasers (with
respect to any portion of an unsold allotment from the original
offering) are participating in any Shelf Registration Statement, the
Company, the Trust and the Guarantor shall use their reasonable efforts
to reflect in each such document, when so filed with the Commission,
such comments as the Initial Purchasers reasonably may propose within a
reasonable period of time.
(b) Subject to Section 2(c), upon the occurrence of any change
or event, as a result of which any Shelf Registration Statement or
prospectus contained therein shall (i) 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 not
misleading or (ii) otherwise not be effective or usable for resale of
Transfer Restricted Securities during the period required by this
Agreement (a "MATERIAL EVENT"), the Company, the Trust and the
Guarantor shall file as promptly as practicable an appropriate
amendment to such Shelf Registration Statement or a supplement to the
related prospectus or any document incorporated therein by reference or
file any other required document that would be incorporated by
reference into such Shelf Registration Statement and prospectus curing
such defect and, in the case of an amendment to the Shelf Registration
Statement, use their reasonable efforts to cause such amendment to be
declared effective as soon as practicable.
(c) Upon (A) the issuance by the Commission of a stop order
suspending the effectiveness of any Shelf Registration Statement or the
initiation of proceedings with respect to any Shelf Registration
Statement under Section 8(d) or 8(c) of the Securities Act or (B) the
occurrence of a Material Event or a prospective Material Event and the
general counsel of the Company reasonably determines that the
disclosure of material non-public information pursuant to Section 2(b)
would have a material adverse effect on the Company and its
subsidiaries taken as a whole, the Company (on behalf of itself, the
Trust and the Guarantor) shall give notice to the Notice Holders that
the availability of such Shelf Registration Statement is suspended (a
"DEFERRAL NOTICE") and, upon receipt of any Deferral Notice, each
Notice Holder agrees not to sell any Transfer Restricted Securities
pursuant to such Shelf Registration Statement until such Notice Holder
is advised in writing by the Company and the Guarantor that the
prospectus may be used, and has received copies of the amended or
supplemented prospectus or of any additional or supplemental filings
that are incorporated or deemed incorporated by reference in such
prospectus.
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The Company , the Trust and the Guarantor will use reasonable efforts
to ensure that the use of the prospectus may be resumed (x) in the case
of clause (A) above, as promptly as is practicable or (y) in the case
of clause (B) above, as soon as, in the sole judgment of the general
counsel of the Company, public disclosure of such Material Event would
not be prejudicial to or contrary to the interests of the Company or,
if necessary to avoid unreasonable burden or expense, as soon as
practicable thereafter. The Company shall be entitled to exercise its
right under this Section 2(c) to suspend the availability of the Shelf
Registration Statement or any prospectus, without incurring or accruing
any obligation to pay Additional Interest pursuant to Section 6, for
one or more periods not to exceed 45 days (or 75 days if a previously
undisclosed proposed or pending material business transaction was
required to be disclosed and such disclosure would, in the good faith
judgment of the general counsel of the Company, impede the Company's
ability to consummate such transaction) in any 90-day period and not to
exceed, in the aggregate, 90 days in any 360-day period (such period,
during which the availability of any Shelf Registration Statement and
any prospectus is suspended being a "DEFERRAL PERIOD").
(d) The Company, the Trust and the Guarantor shall make every
reasonable effort to obtain the withdrawal at the earliest possible
time of any order suspending the effectiveness of any Shelf
Registration Statement.
(e) The Company (on behalf of itself, the Trust and the
Guarantor) shall furnish to each Notice Holder included within the
coverage of any Shelf Registration, upon request and without charge, at
least one copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules.
(f) The Company (on behalf of itself, the Trust and the
Guarantor) shall, during the Shelf Registration Period, deliver to each
Notice Holder included within the coverage of any Shelf Registration,
without charge, as many copies of the prospectus (including each
preliminary prospectus) included in such Shelf Registration Statement
and any amendment or supplement thereto as such person may reasonably
request. Subject to the provisions of this Agreement, the Company, the
Trust and the Guarantor consent to the use of the prospectus or any
amendment or supplement thereto by each Notice Holder of the Transfer
Restricted Securities in connection with the offering and sale of the
Transfer Restricted Securities covered by the prospectus, or any
amendment or supplement thereto, included in any Shelf Registration
Statement.
(g) Prior to any public offering of the Transfer Restricted
Securities pursuant to any Shelf Registration Statement, the Company,
the Trust and the Guarantor shall register or qualify or cooperate with
the Notice Holders and their respective counsel in connection with the
registration or qualification of the Transfer Restricted Securities for
offer and sale under the securities or "blue sky" laws of such states
of the United States as any Notice Holder reasonably requests in
writing and do any and all other acts or things necessary or advisable
to enable the offer and sale in such jurisdictions of the Transfer
Restricted Securities covered by any Shelf Registration Statement;
provided, however, that the Company, the Trust and the Guarantor shall
not be required to (i) qualify generally to do business in any
jurisdiction where they are not then so qualified or (ii) take any
action which would subject them to general service of process or to
taxation in any jurisdiction where they are not then so subject.
(h) In connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, the Company, the Trust and the Guarantor shall
cooperate with the Notice Holders to facilitate the timely preparation
and delivery of certificates representing the Transfer Restricted
Securities to be sold pursuant to any Shelf Registration Statement free
of any restrictive legends and in such denominations and registered in
such names as the Notice Holders may request in writing a reasonable
period of time prior to sales of the Transfer Restricted Securities
pursuant to such Shelf Registration Statement.
(i) If the Company (on behalf of itself, the Trust and the
Guarantor) delivers a Deferral Notice, then the Initial Purchasers and
the Notice Holders shall suspend use of the applicable
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prospectus, and the period of effectiveness of any Shelf Registration
Statement provided for in Section 1(b) above shall be extended by the
number of days from and including the date of the giving of such notice
to and including the date when the Initial Purchasers and the Notice
Holders shall have received an amended or supplemented prospectus
pursuant to Section 2(f).
(j) Not later than the effective date of any Shelf
Registration Statement, the Company and the Guarantor will provide a
CUSIP number for the Transfer Restricted Securities registered under
such Shelf Registration Statement, and provide the trustee with printed
certificates for such Transfer Restricted Securities, in a form
eligible for deposit with The Depository Trust Company.
(k) The Company, the Trust and the Guarantor will use their
reasonable best efforts to comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to any
Shelf Registration and will make generally available to its security
holders with respect to any Shelf Registration Statement, as soon as
practicable, a consolidated earnings statement meeting the requirements
of Rule 158 (which need not be audited) covering a twelve-month period
beginning after the effective date of such Shelf Registration
Statement; provided, that if the information required by this Section
3(k) is filed with the Commission and is publicly available, it shall
be deemed to have satisfied its obligation to furnish such information
to its securityholders pursuant to this Section 3(k).
(l) The Company, the Trust and the Guarantor shall cause the
Indenture to be qualified under the Trust Indenture Act of 1939, as
amended, in a timely manner and, in connection therewith, shall
cooperate with the Trustee and Holders to effect such changes, if any,
as shall be necessary for such qualification. In the event that such
qualification would require the appointment of a new trustee under the
Indenture, the Company and the Guarantor shall appoint a new trustee
thereunder pursuant to the applicable provisions of the Indenture.
(m) The Company, the Trust and the Guarantor may require each
Holder that proposes to sell Transfer Restricted Securities pursuant to
any Shelf Registration Statement to furnish to the Company and the
Guarantor a properly completed Notice and Questionnaire together with
such information regarding the Holder and the distribution of the
Transfer Restricted Securities as the Company and the Guarantor may
from time to time reasonably require for inclusion in such Shelf
Registration Statement, and the Company and the Guarantor may exclude
from such Shelf Registration Statement the Transfer Restricted
Securities of any Holder that fails to furnish such information within
a reasonable time after receiving such request.
(n) The Company, the Trust and the Guarantor shall enter into
such customary agreements (including, if requested, an underwriting
agreement in customary form) and take all such other action, if any, as
any Holder shall reasonably request in order to facilitate the
disposition of the Transfer Restricted Securities pursuant to any Shelf
Registration.
(o) The Company, the Trust and the Guarantor shall (i) make
reasonably available for inspection by the Holders, any underwriter
participating in any disposition pursuant to any Shelf Registration
Statement and any attorney, accountant or other agent retained by such
Holders or any such underwriter all relevant financial and other
records, pertinent corporate documents and properties of the Company
and the Guarantor and (ii) cause the Company's and the Guarantor's
officers, directors, employees, accountants and auditors to supply all
relevant information reasonably requested by the Holders or any such
underwriter, attorney, accountant or agent in connection with any Shelf
Registration Statement, in each case, as shall be reasonably necessary
to enable such persons, to conduct a reasonable investigation within
the meaning of Section 11 of the Securities Act; provided, however,
that the foregoing inspection and information gathering shall be
coordinated on behalf of the other parties, by one counsel designated
by and on behalf of such other parties as described in Section 3
hereof; provided, further, the Company and the Guarantor shall have no
obligation to provide any information to any person that has not
entered into an agreement, in form reasonably satisfactory to the
Company, providing that such person shall keep
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such information confidential and use such information only for the due
diligence purposes in connection with the applicable Shelf
Registration.
(p) The Company, the Trust and the Guarantor, if requested by
any Notice Holder covered by any Shelf Registration Statement, shall
cause (i) their counsel to deliver an opinion and updates thereof
relating to the Transfer Restricted Securities in customary form
addressed to such Notice Holders and the managing underwriters, if any,
thereof and dated, in the case of the initial opinion, the effective
date of such Shelf Registration Statement (it being agreed that the
matters to be covered by such opinion shall include, without
limitation, the due incorporation and good standing of the Company and
its subsidiaries; the qualification of the Company and its subsidiaries
to transact business as foreign corporations; the due authorization,
execution and delivery of the relevant agreement of the type referred
to in Section 2(n) hereof; the due authorization, execution,
authentication and issuance, and the validity and enforceability, of
the Transfer Restricted Securities; the absence, to such counsel's
knowledge, of material legal or governmental proceedings involving the
Company and its subsidiaries; the absence of governmental approvals
required to be obtained in connection with such Shelf Registration
Statement, the offering and sale of the Transfer Restricted Securities,
or any agreement of the type referred to in Section 2(n) hereof; the
compliance as to form of such Shelf Registration Statement and any
documents incorporated by reference therein and of the Indenture with
the requirements of the Securities Act and the Trust Indenture Act,
respectively; and, at the time the foregoing opinion is delivered, such
counsel shall additionally state that in the course of the preparation
of such Shelf Registration Statement, it has participated in
conferences with officers and other representatives of the Company, the
Trust and the Guarantor, including their other counsel and independent
public accountants, and your representatives, during the course of
which the contents of the Shelf Registration Statement and related
matters were discussed and, although it has not independently checked
the accuracy or completeness of, or otherwise verified, and is not
passing upon, and assumes no responsibility for, the accuracy,
completeness or fairness of the statements contained in such Shelf
Registration Statement, except to the extent specified therein, and
although it has relied as to facts necessary to the determination of
materiality, to a certain extent, upon the judgment of officers and
representatives of the Company, as a result of such consideration and
participation, nothing has come to its attention which causes it to
believe that, as of its date and the Closing Date, such Shelf
Registration Statement contained any untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such counsel need
express no opinion with respect to the financial statements, financial
data and supporting schedules included or incorporated by reference in
the Shelf Registration Statement); (ii) their officers to execute and
deliver all customary documents and certificates and updates thereof
reasonably requested by any underwriters of the Transfer Restricted
Securities and (iii) their independent public accountants and the
independent public accountants with respect to any other entity for
which financial information is provided in such Shelf Registration
Statement to provide to the Notice Holders and any underwriter therefor
a comfort letter in customary form and covering matters of the type
customarily covered in comfort letters in connection with primary
underwritten offerings, subject to receipt of appropriate documentation
as contemplated, and only if permitted, by the applicable Statement of
Auditing Standards.
(q) The Company will provide promptly to the Initial
Purchasers and each Holder, upon request, each document filed by the
Company and the Guarantor with the Commission pursuant to the
requirements of Section 13 or Section 15(d) of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act").
3. Registration Expenses. (a) All expenses incident to the Company's
and the Guarantor's performance of and compliance with this Agreement will be
borne by the Company, regardless of whether any Shelf Registration Statement is
ever filed or becomes effective, including without limitation;
(i) all registration and filing fees and expenses;
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(ii) all fees and expenses of compliance with federal
securities and state "blue sky" or securities laws;
(iii) all expenses of printing (including printing of
prospectuses), messenger and delivery services and telephone;
(iv) all fees and disbursements of counsel for the Company and
the Guarantor;
(v) all application and filing fees in connection with
listing the Shares on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and
(vi) all fees and disbursements of independent certified
public accountants of the Company and the Guarantor (including the
expenses of any special audit and comfort letters required by or
incident to such performance).
The Company will bear its and the Guarantor's internal expenses (including,
without limitation, all salaries and expenses of their officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any person, including special experts, retained by the
Company and the Guarantor.
(b) In connection with any Shelf Registration Statement required by
this Agreement, the Company and the Guarantor will reimburse the Initial
Purchasers and the Notice Holders of Transfer Restricted Securities who are
selling or reselling Transfer Restricted Securities pursuant to the "Plan of
Distribution" contained in such Shelf Registration Statement for the reasonable
fees and disbursements (not exceeding $25,000 in the aggregate) of not more than
one counsel, who shall be Xxxxxx & Xxxxxxx LLP unless another firm shall be
chosen by the Notice Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Shelf Registration Statement is
being prepared.
4. Indemnification. (a) The Company and the Guarantor agree to
indemnify and hold harmless each Notice Holder and each person, if any, who
controls such Notice Holder within the meaning of the Securities Act or the
Exchange Act (each Notice Holder and such controlling persons are referred to
collectively as the "INDEMNIFIED PARTIES") from and against any losses, claims,
damages or liabilities, joint or several, or any actions in respect thereof
(including, but not limited to, any losses, claims, damages, liabilities or
actions relating to purchases and sales of the Securities) to which each
Indemnified Party may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any Shelf Registration Statement or
the related prospectus or in any amendment or supplement thereto or in any
preliminary prospectus relating to such Shelf Registration, or (ii) the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse, as incurred, the Indemnified Parties for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action in respect thereof; provided,
however, that (x) the Company and the Guarantor shall not be liable in any such
case to the extent that such loss, claim, damage or liability arises out of or
is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in any Shelf Registration Statement or the related
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus relating to such Shelf Registration in reliance upon and in
conformity with written information pertaining to such Notice Holder and
furnished in writing to the Company or the Guarantor by or on behalf of such
Notice Holder specifically for inclusion therein and (y) with respect to any
untrue statement or omission or alleged untrue statement or omission made in any
preliminary prospectus relating to any Shelf Registration Statement, the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Notice Holder from whom the person asserting any such losses,
claims, damages or liabilities purchased the Transfer Restricted Securities
concerned, to the extent that a prospectus relating to such Transfer Restricted
Securities was required to be delivered by such Notice Holder under the
Securities Act in connection with such purchase and any such loss, claim, damage
or liability of such Notice Holder results from the fact that there was not sent
or given to such person, at or prior to the written confirmation of the sale of
such Transfer Restricted Securities to
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such person, a copy of the final prospectus if the Company and the Guarantor had
previously furnished copies thereof to such Notice Holder. This indemnity
agreement will be in addition to any liability which the Company and the
Guarantor may otherwise have to such Indemnified Party. The Company and the
Guarantor shall also indemnify underwriters, their officers and directors and
each person who controls such underwriters within the meaning of the Securities
Act or the Exchange Act to the same extent as provided above with respect to the
indemnification of the Notice Holders of the Transfer Restricted Securities if
requested by such Notice Holders.
(b) Each Notice Holder, severally and not jointly, will indemnify and
hold harmless the Company and the Guarantor and each person, if any, who
controls the Company or the Guarantor within the meaning of the Securities Act
or the Exchange Act from and against any losses, claims, damages or liabilities
or any actions in respect thereof, to which the Company or the Guarantor or any
such controlling person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any Shelf Registration
Statement or the related prospectus or in any amendment or supplement thereto or
in any preliminary prospectus relating to such Shelf Registration Statement, or
(ii) the omission or alleged omission to state therein a material fact necessary
to make the statements therein not misleading, but in each case only to the
extent that the untrue statement or omission or alleged untrue statement or
omission was made in reliance upon and in conformity with written information
pertaining to such Notice Holder and furnished to the Company or the Guarantor
by or on behalf of such Notice Holder specifically for inclusion therein; and,
subject to the limitation set forth immediately preceding this clause, shall
reimburse, as incurred, the Company and the Guarantor for any legal or other
expenses reasonably incurred by the Company or the Guarantor or any such
controlling person in connection with investigating or defending any loss,
claim, damage, liability or action in respect thereof. This indemnity agreement
will be in addition to any liability which such Notice Holder may otherwise have
to the Company, the Guarantor or any of their respective controlling persons.
(c) Promptly after receipt by an indemnified party under this Section 4
of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 4,
notify the indemnifying party in writing of the commencement thereof; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 4 except to the extent
it has been materially prejudiced by such failure and, provided further, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 4. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnified party). After notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof the
indemnifying party will not be liable to such indemnified party under this
Section 4 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof; provided, however, that the indemnified parties shall
have the right to employ one counsel to represent jointly the indemnified
parties and their respective officers, employees and controlling persons who may
be subject to liability arising out of any claim in respect of which indemnity
may be sought by the indemnified parties under this Section 4 if the indemnified
parties have been advised by such counsel that there may be one or more legal
defenses available to it that are different from or additional to those
available to the indemnifying parties, and in that event the fees and expenses
of such separate counsel shall be paid by the indemnifying parties. No
indemnifying party shall, without the prior written consent of the indemnified
party (which consent shall not be unreasonably withheld), effect any settlement
of any pending or threatened action in respect of which any indemnified party is
or could have been 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 any claims that are the subject
matter of such action, and does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified party.
8
(d) If the indemnification provided for in this Section 4 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the offer and sale of the
Transfer Restricted Securities, pursuant to the Shelf Registration, or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof) as well
as any other relevant equitable considerations. The relative fault of the
parties shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or any Guarantor,
as the case may be, on the one hand or such Notice Holder or such other
indemnified party, as the case may be, on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Guarantor, and the Holders agree
that it would not be just and equitable if contributions pursuant to this
Section 4(d) were to be determined by pro rata allocation or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d). Notwithstanding
any other provision of this Section 4(d), the Notice Holders shall not be
required to contribute any amount in excess of the amount by which the net
proceeds received by such Notice Holders from the sale of the Transfer
Restricted Securities pursuant to any Shelf Registration Statement exceeds the
amount of damages which such Notice Holders have otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. 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. For purposes
of this paragraph (d), each person, if any, who controls such indemnified party
within the meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as such indemnified party and each person, if any, who
controls the Company or any Guarantor within the meaning of the Securities Act
or the Exchange Act shall have the same rights to contribution as the Company or
any Guarantor. The Notice Holders' obligations to contribute pursuant to this
Section 4 are several, and not joint.
(e) The agreements contained in this Section 4 shall survive the sale
of the Securities pursuant to any Shelf Registration Statement and shall remain
in full force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.
5. Holders Obligations. Each Holder agrees, by acquisition of the
Transfer Restricted Securities, that no Holder of Transfer Restricted Securities
shall be entitled to sell any of such Transfer Restricted Securities pursuant to
any Shelf Registration Statement or to receive a prospectus relating thereto,
unless such Holder has furnished the Company, the Trust and the Guarantor with a
Notice and Questionnaire as required pursuant to Section 1(d) hereof and the
information set forth in the next sentence. Each Notice Holder agrees promptly
to furnish to the Company, the Trust and the Guarantor all information required
to be disclosed in order to make the information previously furnished to the
Company, the Trust and the Guarantor by such Notice Holder not misleading and
any other information regarding such Notice Holder and the distribution of such
Transfer Restricted Securities as the Company and the Guarantor may from time to
time reasonably request. Any sale of any Transfer Restricted Securities by any
Holder shall constitute a representation and warranty by such Holder that the
information relating to such Holder and its plan of distribution is as set forth
in the prospectus delivered by such Holder in connection with such disposition,
that such prospectus does not as of the time of such sale contain any untrue
statement of a material fact relating to or provided by such Holder or its plan
of distribution and that such prospectus does not as of the time of such sale
omit to state any material fact relating to or provided by such Holder or its
9
plan of distribution necessary to make the statements in such prospectus, in the
light of the circumstances under which they were made, not misleading. Each
Holder shall notify the Company, the Trust and the Guarantor no later than three
(3) business days prior to any proposed sale by such Holder pursuant to a Shelf
Registration Statement of such proposed sale which notice shall be effective for
five (5) business days. Each Holder agrees that within ten (10) business days of
any sale, disposition or other transfer of Transfer Restricted Securities,
whether pursuant to a Shelf Registration Statement or exemption from
registration under the Securities Act, such Holder shall provide written notice
to the Company, the Trust and the Guarantor specifying the amount of Transfer
Restricted Securities sold, disposed of or transferred and the name and address
of the transferee of such Transfer Restricted Securities. Each Holder
acknowledges that such Holder, when it sells Transfer Restricted Securities
pursuant to a Shelf Registration Statement, will be required to be named as a
selling securityholder in the related prospectus, will be required to deliver a
prospectus to the purchaser, and will be subject to certain of the civil
liability provisions under the Securities Act in connection with such Holder's
sale.
6. Additional Interest as Liquidated Damages Under Certain
Circumstances. (a) Additional interest as liquidated damages (the "ADDITIONAL
INTEREST") shall accrue on the Notes as provided below if, and only if, any of
the following events shall occur (each such event in clauses (i) through (iii)
below being herein called a "REGISTRATION DEFAULT"):
(i) a Shelf Registration Statement required by this Agreement is
not filed with the Commission on or prior to August 14, 2003,
the date 90 days after the earliest date of original issuance
of any of the Notes;
(ii) a Shelf Registration Statement required by this Agreement is
not declared effective by the Commission on or prior to the
Effectiveness Target Date; or
(iii) a Shelf Registration Statement required by this Agreement has
been declared effective by the Commission but at any time
after the Effectiveness Target Date, (A) such Shelf
Registration Statement ceases to be effective or (B) such
Shelf Registration Statement or the related prospectus fails
to be usable in connection with resales of Transfer Restricted
Securities (other than pursuant to Section 2(c) hereof) and
(1) the Company fails to cure the Registration Default within
five (5) business days by a post-effective amendment or a
report filed pursuant to the Exchange Act or (2) if
applicable, the Company does not terminate the Deferral Period
by the 45th or 75th day, as applicable.
Each of the foregoing will constitute a Registration Default whatever the reason
for any such event and whether it is voluntary or involuntary or is beyond the
control of the Company or pursuant to operation of law or as a result of any
action or inaction by the Commission.
Additional Interest shall accrue daily on the Notes over and above the
interest set forth in the title of the Notes from and including the day
following the date on which a Registration Default shall occur until, but
excluding, the earlier of the day on which all Registration Defaults have been
cured and the first anniversary of the last date of original issuance of the
Notes at a rate of 0.25% per annum of the principal amount of the Notes to and
including the 90th day following such Registration Default and at a rate of
0.50% per annum of the principal amount of the Notes from and after the 91st day
following such Registration Default (the "ADDITIONAL INTEREST RATE"); provided,
however, that the Company and the Guarantor shall in no event be required to pay
Additional Interest in respect of more than one Registration Default at any one
time. In the event a Holder has converted some or all of its Notes into Shares,
the Holder shall be entitled to receive Additional Interest as provided above
calculated on the principal amount of the Notes so converted, except to the
extent such Shares have been registered. In no event will Additional Interest
accrue at a rate per year in excess of 0.50%.
(b) Any amounts of Additional Interest due pursuant to Section 6(a)
will be payable in cash semi-annually in arrears on each May 15 and November 15,
with the first semi-annual payment due on the first such payment date after
which a Registration Default occurs. The amount of Additional Interest will be
determined by multiplying the applicable Additional Interest Rate by the initial
issue price of the Notes
10
plus accrued interest (including contingent interest, if any) with respect to
such Notes through the date of determination and further multiplied by a
fraction, the numerator of which is the number of days such Additional Interest
Rate was applicable during such period (determined on the basis of a 360-day
year comprised of twelve 30-day months) and the denominator of which is 360. A
Holder will not be entitled to Additional Interest as provided in Section 6
hereof unless such Holder has timely delivered to the Company a duly completed
Notice and Questionnaire, together with such other information reasonably
requested of such Holder in accordance with this Agreement.
(c) "TRANSFER RESTRICTED SECURITIES" means each Security until the
earliest to occur of (i) the date on which such Security has been effectively
registered under the Securities Act and disposed of in accordance with a Shelf
Registration Statement and (ii) the date on which such Security is distributed
to the public pursuant to Rule 144 under the Securities Act or is saleable
pursuant to Rule 144(k) under the Securities Act.
7. Rules 144 and 144A. The Company and the Guarantor agree with each
Holder, for so long as any Transfer Restricted Securities remain outstanding and
for any period in which the Company or such Guarantor (i) is not subject to
Section 13 or 15(d) of the Exchange Act, to make available, upon request of any
Holder, to such Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities designated by such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resale of such Transfer Restricted Securities pursuant to Rule 144A, and
(ii) is subject to Section 13(g) or 15(d) of the Exchange Act, to make all
filings required thereby in a timely manner in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144.
8. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering ("MANAGING UNDERWRITERS") will be selected by
the Notice Holders of a majority in aggregate principal amount of such Transfer
Restricted Securities to be included in such offering (provided that the Holders
of Shares issued upon conversion of Notes shall not be deemed Holders of Shares,
but shall be deemed to be Holders of the aggregate principal amount of Notes
from which such Shares were converted) and shall be reasonably acceptable to the
Company.
No Holder may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such Holder's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the Holders entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires (including the Notice and
Questionnaire), powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
11
9. Miscellaneous.
(a) Remedies. The sole and exclusive remedy of a Holder with respect to
any Registration Default shall be Additional Interest as provided in Section 6
hereof.
(b) No Inconsistent Agreements. The Company and the Guarantor will not
on or after the date of this Agreement enter into any agreement with respect to
its securities that is inconsistent with the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's or the
Guarantor's securities under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company, the Guarantor and
the written consent of the Holders of a majority in principal amount of the
Notes (provided that the Holders of Shares issued upon conversion of Notes shall
not be deemed Holders of Shares, but shall be deemed to be Holders of the
aggregate principal amount of Notes from which such Shares were converted)
affected by such amendment, modification, supplement, waiver or consents.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class mail
(registered or certified, return receipt requested), facsimile transmission, or
air courier which guarantees overnight delivery:
(1) if to a Holder, that is not a Notice Holder, at the
address of such Holder as set forth on the records of the Registrar under the
Indenture, with a copy to such Registrar.
(2) if to a Notice Holder, at the most current address given
by such Holder to the Company in a Notice and Questionnaire or any amendment
thereto.
(3) if to the Initial Purchasers;
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxx Xxxxxxxxx
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxxx X. Xxx
(4) if to the Company or the Guarantor, at its address as
follows:
Starwood Hotels & Resorts Worldwide, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
Attention: General Counsel
with a copy to:
12
Sidley Xxxxxx Xxxxx & Xxxx
Bank One Plaza
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.
(e) Third Party Beneficiaries. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantor, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect their rights or the
rights of Holders hereunder.
(f) Successors and Assigns. This Agreement shall be binding upon the
Company and the Guarantor and their successors and assigns; provided, however,
that nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Transfer Restricted Securities in violation of the terms hereof
or of the Purchase Agreement or the Indenture. If any transferee of any Holder
shall acquire Transfer Restricted Securities in any manner, whether by operation
of law or otherwise, such Transfer Restricted Securities shall be held subject
to all of the terms of this Agreement, and by taking and holding such Transfer
Restricted Securities such person shall be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of the Agreement and,
if applicable, the Purchase Agreement, and such person shall be entitled to
receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
(j) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
(k) Securities Held by the Company and Guarantor. Whenever the consent
or approval of Holders of a specified percentage of principal amount of Transfer
Restricted Securities is required hereunder, Transfer Restricted Securities held
by the Company, the Guarantor or their affiliates (other than subsequent Holders
of Transfer Restricted Securities if such subsequent Holders are deemed to be
affiliates solely by reason of their holdings of such Transfer Restricted
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.
13
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Guarantor a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the Initial Purchasers, the Company and the Guarantor in
accordance with its terms.
Very truly yours,
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
By: Xxxxxxx Xxxxxx
------------------------------
Name:
Title:
SHERATON HOLDING CORPORATION
By: Xxxxx Xxxxxxxxxxx
-----------------------------------------
Name:
Title:
The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.
BANC OF AMERICA SECURITIES LLC
By:/s/ Xxxxx Xxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
X.X. XXXXXX SECURITIES INC.
By:/s/ Xxxx X'Xxxx
-----------------------------------------
Name: Xxxx X'Xxxx
Title: Vice President
DEUTSCHE BANK SECURITIES INC.
By: /s/ Xxxx Xxxxxxxx
-----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Director
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
SCHEDULE 1
INITIAL PURCHASERS
Banc of America Securities LLC
Deutsche Bank Securities Inc.
X.X. Xxxxxx Securities Inc.
