Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made and
entered into as of November 17, 1997, by and among CapStar Hotel Company, a
Delaware corporation (the "Company"), and the other parties signatory hereto
(each a "Holder" and, collectively, the "Holders").
RECITALS
WHEREAS, the Holders have entered into, or are equity owners in
entities that have entered into, agreements which contemplate, among other
things, the execution and delivery of this Agreement by the Company and the
Holders.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
1. Definitions: For purposes of this Agreement, the following terms
have the following meanings when used herein with initial capital letters:
"Advice" shall have the meaning set forth in Section 3 hereof.
"Black-Out Period" shall have the meaning set forth in Section 2(c)
hereof.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock" shall mean the Common Stock, par value $0.01 per
share, of the Company.
"Holder" or "Holders" shall have the meaning set forth in the
Preamble and their respective transferees in accordance with Section 8(f)
hereof.
"Losses" shall have the meaning set forth in Section 5 hereof.
"Operating Partnership" shall mean CapStar Management Company, L.P.,
a Delaware limited partnership.
"Prospectus" shall mean the prospectus included in the Shelf
Registration Statement (including without limitation a prospectus that discloses
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information previously omitted from a prospectus filed as part of the effective
Shelf Registration Statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Shelf 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.
"Registrable Securities" shall mean each of the Shares, until, in
the case of any such Share, (i) it is effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement covering it, (ii) it is saleable by the holder thereof pursuant to
Rule 144(k), or (iii) it is distributed to the public by the holder thereof
pursuant to Rule 144.
"Registration Expenses" shall have the meaning set forth in Section
4 hereof.
"Resale Notice" shall have the meaning set forth in Section 2(c)
hereof.
"Rule 144" shall mean Rule 144 promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" shall mean all shares of Common Stock issued or to be
issued to any Holder upon the redemption of the Units which were issued to the
Holders pursuant to the Acquisition Agreement, dated October 29, 1997, among the
Company and the other parties identified on the signature pages thereof.
"Shelf Registration Statement" shall have the meaning set forth in
Section 2(a) hereof, and shall include the related Prospectus, all amendments
and supplements to such thereto (including post-effective amendments), all
exhibits and all material incorporated by reference or deemed to be incorporated
by reference therein.
"Special Counsel" shall have the meaning set forth in Section 4(b)
hereof.
"Underwritten registration or underwritten offering" shall mean a
sale of securities of the Company to an underwriter for reoffering to the public
pursuant to the Shelf Registration Statement filed by the Company with the
Commission under the Securities Act.
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"Units" shall mean units representing limited partnership ownership
interests in the Operating Partnership, which interests may be redeemed, under
certain circumstances for Shares.
2. Shelf Registration.
(a) Shelf Registration Statement. The Company hereby agrees
to: (i) cause to be filed a shelf registration statement pursuant to Rule 415
under the Securities Act (the "Shelf Registration Statement"), which Shelf
Registration Statement shall provide for resales of all of the Registrable
Securities held by those Holders which shall have provided the information
required pursuant to Section 2(b) hereof; and (ii) cause such Shelf Registration
Statement to be declared effective by the Commission on or before October 17,
1998. The Company shall use its best efforts to keep such Shelf Registration
Statement continuously effective, supplemented and amended until the earlier of
(i) the date when all of the Registrable Securities covered thereby are issued
or resold or (ii) the date on which Holders may sell Registrable Securities
without registration under the Securities Act, pursuant to Rule 144(k)
thereunder or any similar rule that may be adopted by the Commission.
(b) Provision by Holders of Certain Information in Connection
with the Shelf Registration Statement. No Holder of Registrable Securities may
include any of its Registrable Securities in any Shelf Registration Statement
pursuant to this Agreement unless and until such Holder furnishes to the Company
in writing, within 20 business days after receipt of a request therefor, such
information as the Company may reasonably request for use in connection with the
Shelf Registration Statement or Prospectus or preliminary Prospectus included
therein. Each Holder as to which the Shelf Registration Statement is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading.
(c) Notice and Postponement of Resales Under Shelf
Registration Statement. At any time when one or more Holders proposes to engage
in a transaction or series of related transactions to effect the resale of
Registrable Securities pursuant to the Shelf Registration Statement, in an
aggregate amount that exceeds 50,000 Registrable Securities, such Holder or
Holders shall provide written notice to the Company of such proposed sale (the
"Resale Notice"). With respect to each such transaction or series of related
transactions, the Resale Notice shall set forth (i) the name of each Holder that
proposes to offer Registrable Securities for resale, (ii) the number of
Registrable Securities each such Holder intends to offer, and (iii) the manner
in which each such Holder intends to offer the Registrable Securities for
resale. Within one (1) business day of the receipt of a Resale Notice, the
Company shall be entitled to require the Holders by written notice to postpone
any such offering of Registrable Securities (as contemplated by the applicable
Resale Notice) for a reasonable period of time not in excess of 30 calendar days
(a "Black-Out Period"), if
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the Company determines, in the good faith exercise of the business judgment of
its Board of Directors, that such offering could materially interfere with a
bona fide financing, acquisition, corporate reorganization or any other
corporate development involving the Company or would require disclosure of
information, the premature disclosure of which could materially and adversely
affect the Company; provided, however, that (i) no Black-Out Period may be
required by the Company within 30 days of any prior Black-Out Period, and (ii)
the Company may only require three (3) Black-Out Periods within any given
twelve-month period. If the events or circumstances permitting the Black-Out
Period end prior to the expiration of such Black-Out Period, the Company will
promptly notify the Holders in writing that such events or circumstances have
ended; the Holders will thereafter be permitted to effect the proposed resale of
the Registrable Securities as contemplated by the Resale Notice.
3. Registration Procedures. In connection with the Company's
registration obligations pursuant to Section 2 hereof, the Company will effect
such registration to permit the sale of such Registrable Securities in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company will as expeditiously as possible, in each case, to
the extent applicable:
(a) Prepare and file with the Commission at least sixty (60)
days prior to October 17, 1998, the Shelf Registration Statement on any
appropriate form under the Securities Act available for the sale of the
Registrable Securities by the Holders in accordance with the intended method or
methods of distribution thereof, and cause such Shelf Registration Statement to
become effective and remain effective as provided herein; provided, however,
that before filing the Shelf Registration Statement or Prospectus or any
amendments or supplements thereto (including documents that would be
incorporated or deemed to be incorporated therein by reference) the Company will
furnish to the Holders whose Registrable Securities are covered by such Shelf
Registration Statement, the Special Counsel and the managing underwriters, if
any, copies of all such documents proposed to be filed, which documents will be
subject to review of such Holders, the Special Counsel and such underwriters,
and the Company will not file the Shelf Registration Statement or amendment
thereto or any Prospectus or any supplement thereto (including such documents
which, upon filing, would or would be incorporated or deemed to be incorporated
by reference therein) to which the Holders of a majority of the Registrable
Securities covered by the Shelf Registration Statement, the Special Counsel or
the managing underwriter, if any, shall reasonably object on a timely basis.
(b) Prepare and file with the Commission such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep such Shelf Registration Statement continuously effective for
the applicable period specified in Section 2(a); cause the related Prospectus to
be supplemented by any required Prospectus supplement, and as so supplemented to
be filed pursuant to
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Rule 424 (or any similar provision then in force) under the Securities Act; and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by the Shelf Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
sellers thereof set forth in the Shelf Registration Statement as so amended or
to such Prospectus as so supplemented.
(c) Notify the selling Holders, the Special Counsel and the
managing underwriters, if any, promptly, and (if requested by any such person)
confirm such notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to the
Shelf Registration Statement or any post-effective amendment, when the same has
become effective, (ii) of any request by the Commission or any other federal or
state governmental authority for amendments or supplements to the Shelf
Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the Commission or any other federal or state
governmental authority of any stop order suspending the effectiveness of the
Shelf Registration Statement or the initiation of any proceedings for that
purpose, (iv) if at any time the representations and warranties of the Company
contained in any agreement contemplated by Section 3(m) hereof (including any
underwriting agreement) cease to be true and correct, (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (vi) of the occurrence of any event which makes any statement made in
the Shelf Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or which requires the making of any changes in the Shelf
Registration Statement, Prospectus or documents so that, in the case of the
Shelf Registration Statement, 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 not misleading and, in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated or is necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and (vii) of the Company's reasonable determination that a
post-effective amendment to the Shelf Registration Statement would be
appropriate.
(d) Use every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of the Shelf Registration Statement, or
the lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest possible moment.
(e) If requested by the managing underwriters, if any, or the
Holders of a majority of the Registrable Securities being registered, (i)
promptly incorporate in a Prospectus supplement or post-effective amendment such
information
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as the managing underwriters, if any, and such Holder agree should be included
therein as may be required by applicable law and (ii) make all required filings
of such Prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
provided, however, that the Company will not be required to take any actions
under this Section 3(e) that are not, in the opinion of counsel for the Company,
in compliance with applicable law.
(f) Furnish to each selling Holder, the Special Counsel and
each managing underwriter, if any, without charge, at least one conformed copy
of the Shelf Registration Statement and any post-effective amendment thereto,
including financial statements (but excluding schedules, all documents
incorporated or deemed incorporated therein by reference and all exhibits,
unless requested in writing by such selling Holder, counsel or underwriter).
(g) Deliver to each selling Holder, the Special Counsel and
the underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses relating to such Registrable Securities (including each preliminary
prospectus) and any amendment or supplement thereto as such persons may request;
and the Company hereby consents to the use of such Prospectus or each amendment
or supplement thereto by each of the selling Holders and the underwriters, if
any, in connection with the offering and sale of the Registrable Securities
covered by such Prospectus or any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the selling Holders, the underwriters, if
any, and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions within the United States as any seller or underwriter
reasonably requests in writing; use all reasonable efforts to keep each such
registration or qualification (or exemption therefrom) effective during the
period the Shelf Registration Statement is required to be kept effective and do
any and all other acts or things necessary or advisable to enable the
disposition in such jurisdiction of the Registrable Securities covered by the
Shelf Registration Statement; provided, however, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction in which it
is not then so qualified or (ii) take any action that would subject it to
general service of process in any such jurisdiction in which it is not then so
subject.
(i) Cooperate with the selling Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and enable such
Registrable Securities to be in such denominations and registered in such names
as the managing underwriters,
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if any, shall request at least two business days prior to any sale of
Registrable Securities to the underwriters.
(j) Use all reasonable efforts to cause the Registrable
Securities covered by the Shelf Registration Statement to be registered with or
approved by such other governmental agencies or authorities within the United
States except as may be required solely as a consequence of the nature of such
selling Holder's business, in which case the Company will cooperate in all
reasonable respects with the filing of the Shelf Registration Statement and the
granting of such approvals as may be necessary to enable the seller or sellers
thereof or the underwriters, if any, to consummate the disposition of such
Registrable Securities.
(k) Upon the occurrence of any event contemplated by Section
3(c)(vi) or 3(c)(vii) hereof, prepare a supplement or post-effective amendment
to the Shelf Registration Statement or a supplement to the related Prospectus or
any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the Registrable
Securities being sold thereunder, such Prospectus will not contain an untrue
statement of a material fact or omit to state a 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.
(l) Use all reasonable efforts to cause all Registrable
Securities covered by the Shelf Registration Statement to be listed on each
securities exchange, if any, on which similar securities issued by the Company
are then listed.
(m) Enter into such agreements (including, in the event of an
underwritten offering, an underwriting agreement in form, scope and substance as
is customary in underwritten offerings) and take all such other actions in
connection therewith (including those requested by the selling Holders, in the
event of an underwritten offering, those requested by the managing underwriters)
in order to expedite or facilitate the disposition of such Registrable
Securities and in such connection, whether or not an underwriting agreement is
entered into and whether or not the registration is an underwritten
registration, (i) make such representations and warranties to the Holders and
the underwriters, if any, with respect to the business of the Company and its
subsidiaries, the Shelf Registration Statement, Prospectus and documents
incorporated by reference or deemed incorporated by reference, if any, in each
case, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and the Holders of a majority
of the Registrable Securities being sold) addressed to such selling Holders and
each of the underwriters, if
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any, covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such selling Holders and underwriters, including without limitation the matters
referred to in Section 3(m)(i) hereof; (iii) use its best efforts to obtain
"comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other certified public
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data is, or is required to
be, included in the Shelf Registration Statement), addressed to each selling
Holder and each of the underwriters, if any, such letters to be in customary
form and covering matters of the type customarily covered in "comfort" letters
in connection with underwritten offerings; and (iv) deliver such documents and
certificates as may be requested by the Holders of a majority of the Registrable
Securities being sold, the Special Counsel and the managing underwriters, if
any, to evidence the continued validity of the representations and warranties of
the Company and its subsidiaries made pursuant to clause (i) above and to
evidence compliance with any customary conditions contained in the underwriting
agreement or similar agreement entered into by the Company. The foregoing
actions will be taken in connection with each closing under such underwriting or
similar agreement as and to the extent required thereunder.
(n) Make available for inspection by a representative of the
selling Holders, any underwriter participating in any disposition of Registrable
Securities, and any attorney or accountant retained by such selling Holders or
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the officers,
directors and employees of the Company and its subsidiaries to supply all
information reasonably requested by any such representative, underwriter,
attorney or accountant in connection with the Shelf Registration Statement;
provided, however, that any records, information or documents that are
designated by the Company in writing as confidential at the time of delivery of
such records, information or documents will be kept confidential by such persons
unless (i) such records, information or documents are or come to be in the
public domain or otherwise publicly available, (ii) disclosure of such records,
information or documents is required by court or administrative order or is
necessary to respond to inquiries of regulatory authorities, or (iii) disclosure
of such records, information or documents, in the opinion of counsel to such
person, is otherwise required by law (including, without limitation, pursuant to
the requirements of the Securities Act).
(o) Comply with all applicable rules and regulations of the
Commission and make generally available to its security holders earning
statements satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 calendar days after the end of any 12-month period (or 90
calendar days after the end of any 12-
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month period if such period is a fiscal year) (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in a
firm commitment or best efforts underwritten offering, and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company, after the effective date of the Shelf
Registration Statement, which statements shall cover said 12-month period.
(p) In connection with any underwritten offering, cause
appropriate members of its management to cooperate and participate on a
reasonable basis in the underwriters' "road show" conferences related to such
offering.
The Company may require each selling Holder as to which any
registration is being effected to furnish to the Company such information
regarding the distribution of such Registrable Securities as the Company may,
from time to time, reasonably request in writing and the Company may exclude
from such registration the Registrable Securities of any selling Holder who
unreasonably fails to furnish such information within a reasonable time after
receiving such request.
Each Holder will be deemed to have agreed by virtue of its
acquisition of such Registrable Securities that, upon receipt of any notice from
the Company of the occurrence of any event of the kind described in Section
3(c)(ii), 3(c)(iii), 3(c)(v), 3(c)(vi) or 3(c)(vii) hereof, such Holder will
forthwith discontinue disposition of such Registrable Securities covered by the
Shelf Registration Statement or Prospectus until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 3(k)
hereof, or until it is advised in writing (the "Advice") by the Company that the
use of the applicable Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus. The Company shall be obligated to
use its reasonable best efforts to allow use of the applicable Prospectus as
quickly as practicable. In the event the Company shall give any such notice, the
time period prescribed in Section 2(a) hereof will be extended by the number of
days during the time period from and including the date of the giving of such
notice to and including the date when each seller of Registrable Securities
covered by the Shelf Registration Statement shall have received (x) the copies
of the supplemented or amended Prospectus contemplated by Section 3(k) hereof or
(y) the Advice.
4. Registration Expenses.
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company will be borne by the Company
whether or not the Shelf Registration Statement becomes effective. Such fees and
expenses will include, without limitation, (i) all registration and filing fees
(including without limitation fees and expenses (x) with respect to filings
required to be made with the National Association of Securities Dealers, Inc.
and (y) of compliance with
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securities or "blue sky" laws (including without limitation fees and
disbursements of counsel for the underwriters or Holders in connection with
"blue sky" qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the managing underwriters, if any, or Holders of a majority of
the Registrable Securities being sold may designate)), (ii) printing expenses
(including without limitation expenses of printing certificates for Registrable
Securities in a form eligible for deposit with The Depository Trust Company and
of printing prospectuses if the printing of prospectuses is requested by the
Holders of a majority of the Registrable Securities included in the Shelf
Registration Statement), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company and the Special Counsel for
the selling Holders, (v) fees and disbursements of all independent certified
public accountants referred to in Section 5(m)(iii) hereof (including the
expenses of any special audit and "comfort" letters required by or incident to
such performance), (vi) any fees and expenses of any "qualified independent
underwriter" or other independent appraiser participating in an offering
pursuant to Section 3 of Schedule E to the By-laws of the National Association
of Securities Dealers, Inc., (vii) Securities Act liability insurance if the
Company so desires such insurance, and (viii) fees and expenses of all other
persons retained by the Company. In addition, the Company will pay its internal
expenses (including without limitation all salaries and expenses of its officers
and employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange on which similar
securities issued by the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company. In no event,
however, will the Company be responsible for any underwriting discount or
selling commission with respect to any sale of Registrable Securities pursuant
to this Agreement.
(b) In connection with any registration of Registrable
Securities hereunder, the Company will reimburse the Holders of the Registrable
Securities being registered in such registration for the reasonable fees and
disbursements of not more than one counsel (the "Special Counsel"), together
with appropriate local counsel, chosen by the Holders of a majority of the
Registrable Securities being registered.
5. Indemnification.
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(a) Indemnification by the Company. The Company will, without
limitation as to time, indemnify and hold harmless, to the fullest extent
permitted by law, each Holder of Registrable Securities registered pursuant to
this Agreement, the officers, directors, partners, managers, agents and
employees of each of them, each person who controls such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, partners, managers, agents and employees of any
such controlling person, from and against all losses, claims, damages,
liabilities, costs (including without limitation the costs of investigation and
attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out
of or based upon any untrue or alleged untrue statement of a material fact
contained in the Shelf Registration Statement, Prospectus or form of Prospectus
(including any document incorporated by reference into any such Shelf
Registration Statement, Prospectus or form of Prospectus) or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as the same are based solely upon information furnished in
writing to the Company by such Holder expressly for use therein; provided,
however, that the Company will not be liable to any Holder to the extent that
any such Losses arise out of or are based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any preliminary
prospectus if either (A) (i) such Holder failed to send or deliver a copy of the
Prospectus with or prior to the delivery of written confirmation of the sale by
such Holder to the person asserting the claim from which such Losses arise and
(ii) the Prospectus would have completely corrected such untrue statement or
alleged untrue statement or such omission or alleged omission; or (B) such
untrue statement or alleged untrue statement, omission or alleged omission is
completely corrected in an amendment or supplement to the Prospectus previously
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, and such Holder thereafter fails to deliver such
Prospectus as so amended or supplemented prior to or concurrently with the sale
of a Registrable Security to the person asserting the claim from which such
Losses arise.
(b) Indemnification by the Holders. In connection with the
Shelf Registration Statement in which a Holder is participating, such Holder
will furnish to the Company in writing such information as the Company
reasonably requests for use in connection with the Shelf Registration Statement
or Prospectus and will indemnify, to the fullest extent permitted by law, the
Company, its directors and officers, agents and employees, each person who
controls the Company (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling persons, from and against all Losses arising out
of or based upon any untrue statement of a material fact contained in the Shelf
Registration Statement, Prospectus or preliminary prospectus or arising out of
or based upon any omission of a material fact required to be stated
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therein or necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by such Holder to the
Company expressly for use in the Shelf Registration Statement or Prospectus and
was relied upon by the Company in the preparation of the Shelf Registration
Statement, Prospectus or preliminary prospectus. In no event will the liability
of any selling Holder hereunder be greater in amount than the dollar amount of
the proceeds (net of payment of all expenses) received by such Holder upon the
sale of the Registrable Securities giving rise to such indemnification
obligation.
(c) Conduct of Indemnification Proceedings. If any person
shall become entitled to indemnity hereunder (an "indemnified party"), such
indemnified party shall give prompt notice to the party from which such
indemnity is sought (the "indemnifying party") of any claim or of the
commencement of any action or proceeding with respect to which such indemnified
party seeks indemnification or contribution pursuant hereto; provided, however,
that the failure to so notify the indemnifying party will not relieve the
indemnifying party from any obligation or liability except to the extent that
the indemnifying party has been prejudiced materially by such failure. All fees
and expenses (including any fees and expenses incurred in connection with
investigating or preparing to defend such action or proceeding) will be paid to
the indemnified party, as incurred, within five calendar days of written notice
thereof to the indemnifying party (regardless of whether it is ultimately
determined that an indemnified party is not entitled to indemnification
hereunder). The indemnifying party will not consent to entry of any judgment or
enter into any settlement or otherwise seek to terminate any action or
proceeding in which any indemnified party is or could be a party and as to which
indemnification or contribution could be sought by such indemnified party under
this Section 5, unless such judgment, settlement or other termination includes
as an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release, in form and substance satisfactory to the
indemnified party, from all liability in respect of such claim or litigation for
which such indemnified party would be entitled to indemnification hereunder.
(d) Contribution. If the indemnification provided for in this
Section 5 is unavailable to an indemnified party under Section 5(a) or 5(b)
hereof in respect of any Losses or is insufficient to hold such indemnified
party harmless, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, will, jointly and severally, contribute to the amount
paid or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party or indemnifying parties, on the one hand, and such indemnified party, on
the other hand, in connection with the actions, statement or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party or indemnifying parties, on the
one hand, and such indemnified party, on the other hand, will be
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determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or related to
the information supplied by, such indemnifying party or indemnified party, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses will be deemed to include any legal
or other fees or expenses incurred by such party in connection with any action
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provision of this Section 5(d), an indemnifying party that
is a selling Holder will not be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities sold by
such indemnifying party and distributed to the public were offered to the public
exceed the amount of any damages which such indemnifying party has 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) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity, contribution and expense reimbursement obligations of
the Company hereunder will be in addition to any liability the Company may
otherwise have hereunder or otherwise. The provisions of this Section 5 will
survive so long as Registrable Securities remain outstanding, notwithstanding
any transfer of the Registrable Securities by any Holder thereof or any
termination of this Agreement.
6. Rule 144. The Company will file the reports required to be filed
by it under the Securities Act and the Exchange Act, and will cooperate with any
Holder (including without limitation by making such representations as any such
Holder may reasonably request), all to the extent required from time to time to
enable such Holder to sell Registrable Securities without registration under the
Securities Act within the limitations of the exemptions provided by Rule 144.
Upon the request of any Holder, the Company will deliver to such Holder a
written statement as to whether it has complied with such filing requirements.
Notwithstanding the foregoing, nothing in this Section 6 will be deemed to
require the Company to register any of its securities under any section of the
Exchange Act.
7. Underwritten Registrations. If any of the Registrable Securities
covered by the Shelf Registration Statement are to be sold in an underwritten
offering, the managing underwriter that will administer the offering will be
selected by the
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Holders of a majority of the Registrable Securities included in such resale so
long as such managing underwriter shall be reasonably satisfactory to the
Company; provided, however, that the Company shall have the right to select any
co-managing underwriters so long as such co-managing underwriters shall be
reasonably satisfactory to the such Holders.
8. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, each Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specified
performance in respect of such breach, it will waive the defense that a remedy
at law would be adequate.
(b) No Inconsistent Agreements. The Company has not, as of the
date hereof, and will not, on or after the date hereof, enter into any agreement
with respect to its securities which is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of the
Holders of 90% of the then-outstanding Registrable Securities. Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of the Holders whose
securities are being sold pursuant to the Shelf Registration Statement and that
does not directly or indirectly affect the rights of other Holders may be given
by Holders of at least 75% of the Registrable Securities being sold by such
Holders; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing and will be deemed given (i)
when made, if made by hand delivery, (ii) upon confirmation, if made by
telecopier, or (iii) one business day after being deposited with a reputable
next-day courier, to the parties as follows:
(x) if to the Company, initially at 0000 Xxxxxxxxx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, Telecopier (000) 000-0000, Attention:
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Corporate Secretary, and thereafter at such other address, notice of which is
given to the Holders in accordance with the provisions of this Section 8(d); and
(y) if to any Holder, at the most current address given
by such Holder to the Company in accordance with the provisions of this Section
8(d).
(e) Owner of Registrable Securities. The Company will
maintain, or will cause its registrar and transfer agent to maintain, a stock
book with respect to the Common Stock, in which all transfers of Registrable
Securities of which the Company has received notice will be recorded. The
Company may deem and treat the person in whose name Registrable Securities are
registered in the stock book of the Company as the owner thereof for all
purposes, including without limitation the giving of notices under this
Agreement.
(f) Successors and Assigns. This Agreement will inure to the
benefit of and be binding upon the successors and assigns of each of the parties
(including any pledgee of Units or Registrable Securities acquiring such Units
or Registrable Securities as collateral from the Holder) and will inure to the
benefit of each Holder. Notwithstanding the foregoing, no transferee will have
any of the rights granted under this Agreement (i) until such transferee shall
have acknowledged its rights and obligations hereunder by a signed written
statement of such transferee's acceptance of such rights and obligations, (ii)
if the transferor notifies the Company in writing on or prior to such transfer
that the transferee shall not have such rights, or (iii) with respect to
specific Registrable Securities, if such transferee was not a party to this
Agreement on the date hereof (or an affiliate of a party hereto) and acquired
such Registrable Securities in open-market purchases or pursuant to an
underwritten public offering.
(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 will be deemed to be an original and all of which taken
together will constitute one and the same instrument.
(h) Headings. The headings in this Agreement are for
convenience of reference only and will not limit or otherwise affect the meaning
hereof.
(i) Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
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(j) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein will remain in full force and effect
and will in no way be affected, impaired or invalidated, and the parties hereto
will use their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
(k) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the registration rights granted by the Company with
respect to the Registrable Securities. This Agreement supersedes all prior
agreements and understandings among the parties with respect to such
registration rights.
(l) Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the court,
will be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
(m) Termination. This Agreement shall terminate, and thereby
become null and void, on the tenth anniversary of the date hereof; provided,
however, that the provisions of Section 5 and Sections 8(i) and (l) shall
survive the termination of this Agreement.
IN WITNESS HEREOF, the parties have executed a counterpart signature
page of this Agreement as of the date first above written.
CAPSTAR HOTEL COMPANY
By:__________________________________________
Name:
Title:
WINSTON HOSPITALITY, INC.
By:__________________________________________
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Name:
Title:
