AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This Amended and Restated Registration Rights Agreement (this
"Agreement") is made and entered into this 18th day of March, 1998, among
Starwood Financial Trust, a California business trust (the "Trust"), Starwood
Mezzanine Investors, L.P., a Delaware limited partnership ("Starwood
Mezzanine"), SAHI Partners, a Delaware general partnership ("SAHI"), and SOFI-IV
SMT Holdings, L.L.C., a Delaware limited liability company ("SOFI IV"). Unless
otherwise indicated, capitalized terms used herein are used herein as defined in
Section 1.1.
RECITALS
WHEREAS, the Trust and Starwood Mezzanine are parties to the
Registration Rights Agreement, dated September 26, 1996 (the "Original
Agreement"); and
WHEREAS, the Trust and Starwood Mezzanine now desire to amend and
restate the Original Agreement in its entirety; and
WHEREAS, pursuant to a Contribution Agreement, dated February 11, 1998,
among the Trust, Starwood Mezzanine and SOFI IV (the "Contribution Agreement"),
on the date hereof, Starwood Mezzanine and SOFI IV are contributing certain
assets to the Trust in return for the issuance by the Trust of Class A Shares,
$.01 par value, of the Trust (the "Class A Shares"); and
WHEREAS, SAHI owns 244,100 Class A Shares on the date hereof; and
WHEREAS, the parties hereto desire to set forth the rights of Starwood
Mezzanine, SOFI IV and SAHI and the obligations of the Trust to cause the
registration of the Registrable Securities pursuant to the Securities Act;
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions and Usage.
1.1 Definitions. As used in this Agreement:
"Beneficially Owning" and "Beneficially Own" shall mean owning Class A
Shares directly, indirectly or constructively by a Person through the
application of Section 318(a) of the Code, as modified by Section 856(d)(5) of
the Code, or Section 544 of the Code, as modified by Section 856(h) of the Code.
"Class A Shares" shall have the meaning set forth in the Recitals.
"Code" shall mean the Internal Revenue Code of 1986 and the rules and
regulations thereunder.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Contribution Agreement" shall have the meaning set forth in the
Recitals.
"Exchange Act" shall mean the Securities Exchange Act of 1934 and the
rules and regulations of the Commission thereunder.
A "Holder" shall mean Starwood Mezzanine, the partners of Starwood
Mezzanine, SAHI, the partners of SAHI, SOFI IV, or the partners of SOFI IV as
long as such Person owns Registrable Securities.
"Independent Trustees", when used with respect to the Trust, has the
meaning set forth in the Amended and Restated Shareholders Agreement of the
Trust, as amended from time to time.
"Majority Selling Holders" means those Selling Holders whose
Registrable Securities included in a given registration pursuant to or in
accordance with this Agreement represent a majority of the Registrable
Securities of all Selling Holders included therein.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"Piggyback Registration" shall have the meaning set forth in Section 3.
"Register", "registered", and "registration" shall refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering by the Commission of effectiveness of such registration statement or
document.
"Registrable Securities" shall mean: (i) the Class A Shares issued to
Starwood Mezzanine pursuant to the exercise of a Class A Warrant issued by the
Trust on March 15, 1994 and held by Starwood Mezzanine; (ii) the Class A Shares
issued to Starwood Mezzanine pursuant to the Contribution Agreement or in
exchange for interests in the APMT Limited Partnership; (iii) the Class A Shares
issued to SOFI IV pursuant to the Contribution Agreement; (iv) the Class A
Shares owned by SAHI on the date hereof; (v) any Class A Shares or other
securities issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange by the Trust generally for, or in
replacement by the Trust generally of, such Class A Shares; and (vi) any
securities issued in exchange for such Class A Shares or other securities that
are Registrable Securities in any merger, reorganization, recapitalization or
combination of the Trust; provided, however, that Registrable Securities shall
not include any securities which have theretofore been sold in an offering
registered under the Securities Act or which have been sold pursuant to Rule 144
or any similar rule promulgated by the Commission pursuant to the Securities
Act, and, provided further, the Trust shall have no obligation under Sections 2
and 3 to register any Registrable Securities if the Trust shall deliver to the
Holders of such Registrable Securities an opinion of counsel to the effect that
the proposed sale or disposition of all of the Registrable Securities for which
registration was requested does not require registration under the Securities
Act for a sale or disposition in a single public sale, and offers to remove any
and all legends restricting transfer from the certificates evidencing such
Registrable Securities and the term
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Registrable Securities shall not include such securities if the Trust is willing
to deliver such an opinion and remove such legend.
"Registrable Securities then outstanding" shall mean, with respect to a
specified determination date, the Registrable Securities owned by all Holders on
such date.
"Registration Expenses" shall have the meaning set forth in Section
6.1.
"REIT Requirements" shall mean the requirements for the Trust to
qualify as a REIT under the Code.
"Securities Act" shall mean the Securities Act of 1933 and the rules
and regulations of the Commission thereunder, all as the same may be in effect
at the time.
"Selling Holders" shall mean, with respect to a specified registration
pursuant to this Agreement, Holders whose Registrable Securities are included in
such registration.
"Shelf Registration" shall have the meaning set forth in Section 2.1.
"Transfer" shall mean and include the act of selling, giving,
transferring, creating a trust (voting or otherwise), assigning or otherwise
disposing of (other than pledging, hypothecating or otherwise transferring as
security) (and correlative words shall have correlative meanings); provided
however, that any transfer or other disposition upon foreclosure or other
exercise of remedies of a secured creditor after an event of default under or
with respect to a pledge, hypothecation or other transfer as security shall
constitute a "Transfer".
"Underwriters' Representative" shall mean the managing underwriter, or,
in the case of a co-managed underwriting, the managing underwriter designated as
the Underwriters' Representative by the co-managers.
"Violation" shall have the meaning set forth in Section 7.1.
1.2 Usage.
(i) References to a Person are also references to its assigns and
successors in interest (by means of merger, consolidation or sale of all or
substantially all the assets of such Person or otherwise, as the case may be).
(ii) References to Registrable Securities "owned" by a Holder shall
include Registrable Securities beneficially owned by such Person but which are
held of record in the name of a nominee, trustee, custodian, or other agent.
(iii) References to a document are to it as amended, waived and
otherwise modified from time to time and references to a statute or other
governmental rule are to it as amended and otherwise modified from time to time
(and references to any provision thereof shall include references to any
successor provision).
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(iv) References to Sections or to Schedules are to sections hereof or
schedules hereto, unless the context otherwise requires.
(v) The definitions set forth herein are equally applicable both to the
singular and plural forms and the feminine, masculine and neuter forms of the
terms defined.
(vi) The term "including" and correlative terms shall be deemed to be
followed by "without limitation" whether or not followed by such words or words
of like import.
(vii) The term "hereof" and similar terms refer to this Agreement as a
whole.
(viii) The "date of" any notice or request given pursuant to this
Agreement shall be determined in accordance with Section 12.
Section 2. Shelf Registrations.
2.1 The Trust shall use its best efforts to cause to be filed with the
Commission within 90 days from the date hereof but in no event prior to that
date which is 60 days after the date hereof, a registration statement in
accordance with the Securities Act for an offering on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act (a "Shelf Registration") and
the Trust shall include therein all Registrable Securities; provided each Holder
will provide at least 10 business days notice of its intention to effect a
resale of any Registrable Securities pursuant to the Shelf Registration to the
Trust and the Trust's transfer agent. The notice requirement set forth in the
preceding sentence will be shortened to 3 business days for any resale made
within 30 days of a distribution of Registrable Securities by Starwood Mezzanine
or SOFI IV to their limited partners. In no event will any Holder be permitted
to Transfer any Registrable Securities in violation of federal and state
securities laws, including pursuant to the Shelf Registration if the Shelf
Registration has been suspended pursuant to Section 2.2 or prior to delivery by
the Trust of the requested number of prospectuses. Any Holder may Transfer
Registrable Securities at any time including periods during which the Shelf
Registration is suspended if such transfer is otherwise in compliance with
applicable state and federal securities law. Any notice given pursuant to this
Section 2.1 shall be addressed to the attention of the Secretary of the Trust
and the Trust's transfer agent, and shall specify the maximum number of
Registrable Securities to be sold, the intended methods of disposition thereof
and the number of copies of the prospectus included in the Shelf Registration as
the Holder requests.
2.2 Subject to the provisions of this Section 2.2, the Trust shall be
entitled to postpone or suspend the filing, effectiveness, supplementing or
amending of any registration statement otherwise required to be prepared and
filed pursuant to this Section 2, if the Board of Trustees of the Trust
determines that such registration and the Transfer of Registrable Securities
contemplated thereby would interfere with, or require premature disclosure of,
any material financing, acquisition, disposition, reorganization or other
transaction involving the Trust, including the filing of a registration
statement covering primary sales of securities by the Trust, as to which, in
each instance of the Trust determining that the registration and Transfer would
require premature disclosure, the Trust has a bonafide business purpose for
preserving the confidentiality thereof and the Trust promptly gives Starwood
Mezzanine, SAHI, SOFI IV and each Holder notice of such determination. Upon
receipt of such notice, Starwood Mezzanine, SAHI, SOFI IV and the Holders agree
to cease making offers or Transfers of Registrable Securities pursuant to such
registration statement. Notwithstanding the foregoing, during any period
commencing on the date of a distribution of Class A Shares by Starwood
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Mezzanine and/or SOFI IV to their limited partners and ending on the date that
all such distributed Class A Shares have been resold by the limited partners or
are otherwise immediately eligible for resale by the limited partners (other
than limited partners that are both affiliates of the Trust and are, or whose
affiliates are, a partner or member, directly or indirectly, of SOFI IV
Management, L.L.C., Starwood Capital Group, L.P. or Starwood Mezzanine Holding,
L.P. or an officer, member or Trustee of the Trust or the Advisor) under Rule
144(k) of the Securities Act, the Trust shall not postpone or suspend the
filing, effectiveness, supplementing or amending of any registration statement
(i) during the thirty-five (35) day period following any distribution of Class A
Shares by Starwood Mezzanine or SOFI IV to their limited partners, (ii) on more
than two (2) occasions during any 12 month period or (iii) for any period longer
than ninety (90) days; provided that in the event of a distribution by Starwood
Mezzanine or SOFI IV to their partners within a thirty (30) day period of more
than twenty five percent (25%) of the Class A Shares received by such
partnership pursuant to the Contribution Agreement, the thirty-five (35) day
period referred to in clause (i) above shall be a ninety (90) day period
commencing on the date of the first distribution in such thirty (30) day period.
Each of Starwood Mezzanine, SAHI, SOFI IV and each Holder hereby acknowledges
that any notice given by the Trust pursuant to this Section 2.2 may constitute
material non-public information and that the United States securities laws
prohibit any Person who has material non-public information about a company from
purchasing or selling securities of such company or from communicating such
information to any other Person under circumstances in which it is reasonably
foreseeable that such Person is likely to purchase or sell such securities.
2.3 Within 90 days of the date hereof, the Trust shall use its best
efforts to:
(i) file the Shelf Registration with the Commission and have the
registration declared effective under the Securities Act giving due regard to
the need to prepare current financial statements, conduct due diligence and
complete other actions that are reasonably necessary to effect a registered
public offering; and
(ii) subject to Section 2.2, keep the Shelf Registration continuously
effective until the Holders no longer hold any Registrable Securities.
2.4 Notwithstanding anything in this Agreement to the contrary, no
registration shall be effected under this Agreement and no Transfer of
Registrable Securities may be effected if as a result thereof the Trust would
not satisfy the REIT Requirements in any respect or if such registration or
Transfer would result in any Person Beneficially Owning Class A Shares in excess
of the ownership limitation provisions of the REIT Requirements or the Amended
and Restated Declaration of Trust of the Trust.
2.5 A registration pursuant to this Section 2 shall be on such
appropriate registration form of the Commission as shall be selected by the
Trust and shall permit the disposition of the Registrable Securities in
accordance with the intended method or methods of disposition specified in each
notice given pursuant to Section 2.1.
2.6 If any Shelf Registration pursuant to Section 2 involves an
underwritten offering (whether on a "firm commitment", "best efforts" or "all
reasonable efforts" basis or otherwise), the Majority Selling Holders
participating therein shall select the underwriter or underwriters and manager
or managers to administer such underwritten offering; provided, however, that
each Person so selected shall be reasonably acceptable to the Trust; provided,
further, that no such underwriter shall be an
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entity 5% or more of which is owned by an employer - sponsor of any Holder that
is an "ERISA Partner" within the meaning of the Amended and Restated Agreement
of Limited Partnership of SOFI IV, as in effect on the date hereof.
2.7 During any period that a Shelf Registration remains effective,
Starwood Mezzanine and SOFI IV shall use their respective best efforts to
provide the Trust with at least 5 business days prior notice of a distribution
of Registrable Securities by such partnership to its partners and shall provide
to the Trust notice of all information reasonably necessary for purposes of
Section 12.2 with respect to each partner to which Class A Shares are to be so
distributed.
Section 3. Piggyback Registration.
3.1 If at any time prior to the later to occur of (a) the first
anniversary of the date on which Starwood Mezzanine and SOFI IV have distributed
all Class A Shares that they own to their limited partners and (b) the eighth
anniversary of the date hereof, the Trust proposes to register securities under
the Securities Act in connection with the public offering solely for cash on
Form X-0, X-0, X-0, or S-11 (or any replacement or successor forms), the Trust
shall promptly give each Holder written notice of such registration. Upon the
written request of each Holder given as promptly as practicable but in any event
within twenty (20) days following the date of such notice, the Trust shall cause
to be included in such registration statement and use its reasonable efforts to
be registered under the Securities Act all the Registrable Securities that each
such Holder shall have requested to be registered; provided, however, that such
right of inclusion shall not apply to any registration statement covering an
offering of debt securities or convertible debt securities (any such
registration in which Holders participate pursuant to this Section 3.1 being
referred to as a "Piggyback Registration"). The Trust shall have the absolute
right to delay, withdraw or cease to prepare or file any registration statement
for any offering referred to in this Section 3 without any obligation or
liability to Starwood Mezzanine, SAHI, SOFI IV or any other Holder, it being
understood that any Registrable Securities previously included in any such
withdrawn Registration Statement shall not cease to be Registrable Securities by
reason of such inclusion or withdrawal.
3.2 If the Underwriters' Representative shall advise the Trust that, in
its opinion, the amount or type of Registrable Securities requested to be
included in such registration would adversely affect such offering, or the
timing thereof, then the Trust will include in such registration, to the extent
of the amount and class which the Trust is so advised can be sold without such
adverse effect in such offering: first, securities proposed to be sold by the
Trust with a value equal to 80% of the aggregate gross proceeds from the sale of
all securities included in such registration; second, Registrable Securities
requested to be included in such registration by Holders of Registrable
Securities other than SAHI and the partners of SAHI pursuant to this Section 3,
pro rata based on the number of Registrable Securities owned by all such
Holders; provided that if any such Holder does not request inclusion of all of
its pro rata share of Registrable Securities, the other Holders may include
additional Registrable Securities up to the maximum number permitted to be
included for all such Holders, allocated and reallocated pro rata based on the
aggregate amount of Registrable Securities held by such Holders until such
maximum number is reached; third, the Registrable Securities requested to be
included in such registration by SAHI or its partners pursuant to this Section
3; and fourth, all other securities requested to be included in such
registration.
Section 4. Registration Procedures. Whenever required under Section 2
or Section 3 to effect the registration of any Registrable Securities, the Trust
shall, as promptly as practicable:
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4.1 Prepare and file with the Commission a registration statement with
respect to such Registrable Securities and in the case of a Shelf Registration,
use best efforts to cause such registration statement to become effective;
provided, however, that before filing a registration statement or prospectus or
any amendments or supplements thereto, the Trust shall furnish to one firm of
counsel for the Selling Holders, copies of all such documents in the form
substantially as proposed to be filed with the Commission and shall in good
faith consider incorporating in each such document such changes as such counsel
to the Selling Holders reasonably and in a timely manner may suggest.
4.2 Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act and rules thereunder with respect to the
disposition of all securities covered by such registration statement. If the
registration is for an underwritten offering, the Trust shall amend the
registration statement or supplement the prospectus whenever required by the
terms of the underwriting agreement entered into pursuant to Section 5.2. If the
registration statement is for a Shelf Registration, the Trust shall amend the
registration statement or supplement the prospectus so that it will remain
current and in compliance with the requirements of the Securities Act for the
period specified in Section 2.3(ii), and if during such period any event or
development occurs as a result of which the registration statement or prospectus
contains a misstatement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, the Trust shall promptly notify each Selling Holder and one counsel
to the Selling Holders, amend the registration statement or supplement the
prospectus so that each will thereafter comply with the Securities Act and
furnish to each Selling Holder and one counsel to the Selling Holders such
amended or supplemented prospectus, which each such Holder shall thereafter use
in the Transfer of Registrable Securities covered by such registration
statement. Following receipt of such notice and pending any such amendment or
supplement described in this Section 4.2, each such Holder shall cease making
offers or Transfers of Registrable Securities pursuant to the prior prospectus.
4.3 Furnish to each Selling Holder of Registrable Securities, without
charge, such numbers of copies of the registration statement, any pre-effective
or post-effective amendment thereto, the prospectus, including each preliminary
prospectus and any amendments or supplements thereto, in each case in conformity
with the requirements of the Securities Act and the rules thereunder, and such
other related documents as any such Selling Holder may reasonably request in
order to facilitate the disposition of Registrable Securities owned by such
Selling Holder.
4.4 Use best efforts in the case of a Shelf Registration and reasonable
efforts in the case of a registration pursuant to Section 3 (i) to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such states where an exemption from registration
is not available and as shall be reasonably requested by the Underwriters'
Representative or the Selling Holders and (ii) to obtain the withdrawal of any
order suspending the effectiveness of a registration statement, or the lifting
of any suspension of the qualification (or exemption from qualification) of the
offer and transfer of any of the Registrable Securities in any state, at the
earliest possible moment; provided, however, that the Trust shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to consent to general service of process in any state.
4.5 In the event of any underwritten offering, use best efforts to
enter into and perform its obligations under an underwriting agreement
(including indemnification and contribution obligations of underwriters), in
usual and customary form, with the managing underwriter or underwriters of such
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offering. The Trust shall also cooperate with the Majority Selling Holders, and
the Underwriters' Representative for such offering in the marketing of the
Registrable Securities, including making available the officers, accountants,
counsel, premises, books and records of the Trust for such purpose, but the
Trust shall not be required to incur any material out-of-pocket expense pursuant
to this sentence.
4.6 Promptly notify each Selling Holder of any stop order issued or
threatened to be issued by the Commission in connection therewith and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.
4.7 Make available for inspection by any Selling Holder, any
underwriter participating in such offering and the representatives of such
Selling Holder and Underwriter (but not more than one firm of counsel to such
Selling Holders), all financial and other information as shall be reasonably
requested by them, and provide any Selling Holder, any underwriter participating
in such offering and the representatives of such Selling Holder and Underwriter
the reasonable opportunity to discuss the business affairs of the Trust with its
principal executives and independent public accountants who have certified the
audited financial statements included in such registration statement, in each
case all as necessary to enable them to exercise their due diligence
responsibility under the Securities Act; provided, however, that information
that the Trust determines to be confidential and which the Trust advises such
Person in writing, is confidential shall not be disclosed unless such Person
signs a confidentiality agreement reasonably satisfactory to the Trust or the
related Selling Holder of Registrable Securities agrees to be responsible for
such Person's breach of confidentiality on terms reasonably satisfactory to the
Trust.
4.8 Use reasonable efforts to obtain a so-called "comfort letter" from
the independent public accountants of the Trust, and legal opinions of counsel
to the Trust addressed to the Selling Holders, in customary form and covering
such matters of the type customarily covered by such letters, and in a form that
shall be reasonably satisfactory to Starwood Mezzanine and SOFI IV. Delivery of
any such opinion or comfort letter shall be subject to the recipient furnishing
such written representations or acknowledgments as are customarily provided by
selling shareholders who receive such comfort letters or opinions.
4.9 Use reasonable efforts to cause the Registrable Securities covered
by such registration statement (i) if the Class A Shares are then listed on a
securities exchange or included for quotation in a recognized trading market, to
continue to be so listed or included for a reasonable period of time after the
offering, and (ii) to be registered with or approved by such other United States
or state governmental agencies or authorities as may be necessary by virtue of
the business and operations of the Trust to enable the Selling Holders of
Registrable Securities to consummate the disposition of such Registrable
Securities.
4.10 Take such other actions as are reasonably required in order to
expedite or facilitate the disposition of Registrable Securities included in
each such registration.
Section 5. Holders' Obligations. It shall be a condition precedent to
the obligations of the Trust to take any action pursuant to this Agreement with
respect to the Registrable Securities of any Selling Holder of Registrable
Securities that such Selling Holder shall:
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5.1 Furnish to the Trust such information regarding such Selling
Holder, the number of the Registrable Securities owned by it, and the intended
method of disposition of such securities as shall be required to effect the
registration of such Selling Holder's Registrable Securities, and to cooperate
fully with the Trust in preparing such registration statement.
5.2 In the event of an underwritten offering agree to sell their
Registrable Securities to the underwriters at the same price and on
substantially the same terms and conditions as the Trust or the other Persons on
whose behalf the registration statement is being filed have agreed to sell their
securities, and to execute the underwriting agreement agreed to by the Majority
Selling Holders (in the case of a registration under Section 2) or the Trust (in
the case of a registration under Section 3).
Section 6. Expenses of Registration. Expenses in connection with
registrations pursuant to this Agreement shall be allocated and paid as follows:
6.1 With respect to each Shelf Registration, the Trust shall bear and
pay all expenses incurred in connection with any registration, filing, or
qualification of Registrable Securities with respect to such registration for
each Selling Holder, including all registration, filing and National Association
of Securities Dealers, Inc. fees, all fees and expenses of complying with
securities or blue sky laws, all printing expenses, messenger and delivery
expenses, the reasonable fees and disbursements of counsel for the Trust, and of
the independent public accountants for the Trust, including the expenses of
"cold comfort" letters required by or incident to such performance and
compliance (the "Registration Expenses"), but excluding underwriting discounts
and commissions relating to Registrable Securities (which shall be paid on a pro
rata basis by the Selling Holders) and all fees and expenses of the Selling
Holders including counsel for the Selling Holders.
6.2 The Trust shall bear and pay all Registration Expenses incurred in
connection with any Piggyback Registrations pursuant to Section 3 but excluding
underwriting discounts and commissions relating to Registrable Securities (which
shall be paid on a pro rata basis by the Selling Holders) and all fees and
expenses of counsel for the Selling Holders.
Section 7. Indemnification; Contribution. If any Registrable Securities
are included in a registration statement under this Agreement:
7.1 To the extent permitted by applicable law, the Trust shall
indemnify and hold harmless each Selling Holder, each Person, if any, who
controls such Selling Holder within the meaning of the Securities Act, and each
officer, director, trustee, partner and employee of such Selling Holder and such
controlling Person, against any and all losses, claims, damages, liabilities and
expenses (joint or several), including reasonable attorneys' fees and
disbursements and reasonable expenses of investigation, incurred by such party
pursuant to any actual or threatened action, suit, proceeding or investigation,
or to which any of the foregoing Persons may become subject under the Securities
Act, the Exchange Act or other federal or state laws, insofar as such losses,
claims, damages, liabilities and expenses arise out of or are based upon any of
the following statements, omissions or violations (collectively, a "Violation"):
(i) Any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein, or any amendments or supplements thereto;
or
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(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; provided, however, that the indemnification required by this Section
7.1 shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or expense if such settlement is effected without the consent
of the Trust (which consent shall not be unreasonably withheld), nor shall the
Trust be liable in any such case for any such loss, claim, damage, liability or
expense to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with information related to the
indemnified party furnished to the Trust by the indemnified party in writing
expressly for use in connection with such registration; and provided, further,
that the indemnity agreement contained in this Section 7 shall not apply to the
extent that any such loss is based on or arises out of an untrue statement or
alleged untrue statement of a material fact, or an omission or alleged omission
to state a material fact, contained in or omitted from any preliminary
prospectus if the final prospectus shall correct such untrue statement or
alleged untrue statement, or such omission or alleged omission, and a copy of
the final prospectus has not been sent or given to such person at or prior to
the confirmation of sale to such person if an underwriter was under an
obligation to deliver such final prospectus and failed to do so.
7.2 To the extent permitted by applicable law, each Selling Holder
shall indemnify and hold harmless the Trust, and each of the officers, employees
and Trustees of the Trust who shall have signed the registration statement, each
Person, if any, who controls the Trust within the meaning of the Securities Act,
any other Selling Holder, any controlling Person of any such other Selling
Holder and each officer, director, trustee, partner and employee of such other
Selling Holder and such controlling Person, against any and all losses, claims,
damages, liabilities and expenses (joint and several), including reasonable
attorneys' fees and disbursements and reasonable expenses of investigation,
incurred by such party pursuant to any actual or threatened action, suit,
proceeding or investigation, or to which any of the foregoing Persons may
otherwise become subject under the Securities Act, the Exchange Act or other
federal or state laws, but only insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based upon any Violation, in each
case to the extent that such Violation occurs in reliance upon and in conformity
with information related to the indemnified party seeking indemnification
furnished by such Selling Holder in writing expressly for use in connection with
such registration; provided, however, that (x) the indemnification required by
this Section 7.2 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or expense if such settlement is effected without the
consent of the relevant Selling Holder (which consent shall not be unreasonably
withheld) and (y) in no event shall the amount of any indemnity under this
Section 7.2 exceed the proceeds (net of any underwriting discounts or
commissions) from the applicable offering received by such Selling Holder.
7.3 Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action, suit, proceeding, investigation or
threat thereof made in writing for which such indemnified party may make a claim
under this Section 7, such indemnified party shall deliver to the indemnifying
party a written notice thereof and the indemnifying party shall have the right
to participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party shall have the right to retain its own counsel, with
the fees and disbursements and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time following the commencement of any
such action, if
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prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
7 to the extent of such prejudice but shall not relieve the indemnifying party
of any liability that it may have to any indemnified party otherwise than
pursuant to this Section 7. Any fees and expenses incurred by the indemnified
party (including any fees and expenses incurred in connection with investigating
or preparing to defend such action or proceeding) shall be paid to the
indemnified party, as incurred, within thirty (30) 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). Any such indemnified party shall have the right to employ separate
counsel in any such action, claim or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be the expenses
of such indemnified party unless (i) the indemnifying party has agreed to pay
such fees and expenses or (ii) the indemnifying party shall have failed to
promptly assume the defense of such action, claim or proceeding or (iii) the
named parties to any such action, claim or proceeding (including any impleaded
parties) include both such indemnified party and the indemnifying party, and
such indemnified party shall have been advised by counsel in writing that there
may be one or more legal defenses available to it which are different from or in
addition to those available to the indemnifying party and that the assertion of
such defenses would create a conflict of interest such that counsel employed by
the indemnifying party could not faithfully represent the indemnified party (in
which case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties, unless
in the reasonable judgment of such indemnified party a conflict of interest may
exist between such indemnified party and any other of such indemnified parties
with respect to such action, claim or proceeding, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels).
7.4 If the indemnification required by this Section 7 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to in this
Section 7:
(i) The indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any Violation has been committed by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such Violation. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 7.1 and Section 7.2,
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
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(ii) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 7.4 were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in Section 7.4(i). 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.
(iii) In no event shall the amount of any contribution from the Selling
Holders under this Section 7.4 exceed the proceeds (net of any underwriting
commissions or discounts) from the applicable offering received by such Selling
Holder.
7.5 If indemnification is available under this Section 7, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in this Section 7 without regard to the relative fault of such
indemnifying party or indemnified party or any other equitable consideration
referred to in Section 7.4.
7.6 The obligations of the Trust and the Selling Holders of Registrable
Securities under this Section 7 shall survive the completion of any offering of
Registrable Securities pursuant to a registration statement under this
Agreement, and otherwise.
Section 8. Determinations and Interpretation. All determinations of the
Trust (or the Board of Trustees of the Trust) provided for in or pursuant to
this Agreement shall be made by the Independent Trustees, including, without
limitation, any determination pursuant to Section 2.2. All interpretations of
the terms of this Agreement shall be resolved on behalf of the Trust by the
Independent Trustees.
Section 9. Holdback. In connection with an underwritten offering of any
securities covered by a registration statement filed by Trust, Starwood
Mezzanine, SAHI and SOFI IV, whether or not their Registrable Securities are
included in the registration statement, and each Selling Holder, if so requested
by the Underwriters' Representative shall not effect any public sale or
distribution of Class A Shares or any securities convertible into or
exchangeable or exercisable for Class A Shares, including a sale pursuant to
Rule 144 under the Securities Act (except as part of such underwritten
registration), during the 10-day period prior to, and during the 180-day period
in the case of the first registration statement declared effective after the
date hereof that registers resales of Registrable Securities pursuant to Section
3 and 90 days in the case of any subsequent registration beginning on, the date
such registration statement is declared effective under the Securities Act by
the Commission. In order to enforce the foregoing covenant, the Trust shall be
entitled to impose stop-transfer instructions with respect to the Registrable
Securities of each such Holder until the end of such period. Holders of
Registrable Securities shall have the right to participate in any such
registration on the terms provided in Section 3 hereof.
Section 10. Amendment, Modification and Waivers; Further Assurances.
(i) Subject to the partnership agreement of each of Starwood Mezzanine
and SOFI IV, this Agreement may be amended with the consent of the Trust and the
Trust may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Trust shall have obtained the
written consent of Starwood Mezzanine, SAHI and SOFI IV to such amendment,
action or omission to act and no consent or agreement of any other Holder shall
be required for such amendment, action or omission to act, provided that,
commencing on the date that Starwood Mezzanine and SOFI IV no longer own
Registrable Securities, the consent of the Holders owning a
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majority of the then outstanding Registrable Securities shall be required for
such amendment, action or omissions to act.
(ii) No waiver of any terms or conditions of this Agreement shall
operate as a waiver of any other breach of such terms and conditions or any
other term or condition, nor shall any failure to enforce any provision hereof
operate as a waiver of such provision or of any other provision hereof. No
written waiver hereunder, unless it by its own terms explicitly provides to the
contrary, shall be construed to effect a continuing waiver of the provisions
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance with such provision.
(iii) Each of the parties hereto shall execute all such further
instruments and documents and take all such further action as any other party
hereto may reasonably require in order to effectuate the terms and purposes of
this Agreement.
Section 11. Assignment; Benefit. This Agreement and all of the
provisions hereof shall be binding upon and shall inure to the benefit of the
parties hereto, each Holder, each limited partner of Starwood Mezzanine and SOFI
IV and each indemnified party under Section 7 hereof and their respective heirs,
assigns, executors, administrators or successors; provided, however, that
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned or delegated by the Trust (except in connection with a merger,
reorganization, sale of all or substantially all of the assets of the Trust, or
similar transaction if the primary purpose of such transaction is to change the
domicile of the Trust or to change the form of the Trust to a corporation)
without the consent of Starwood Mezzanine, SAHI and SOFI IV (which consent shall
not be unreasonably withheld) or, in the event of an assignment or delegation
other than in connection with a merger, sale of all or substantially all of the
assets or stock of the Trust, recapitalization or similar transaction, without
the consent of each Holder.
Section 12. Miscellaneous.
12.1 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving regard to
the conflict of laws principles thereof.
12.2 Notices. All notices and requests given pursuant to this Agreement
shall be in writing and shall be made by hand-delivery, first-class mail
(registered or certified, return receipt requested), confirmed facsimile or
overnight air courier guaranteeing next business day delivery to the relevant
address specified on Schedule I, as otherwise specified to the Trust in writing
or to the address set forth in the stock record books of the Trust. Except as
otherwise provided in this Agreement, the date of each such notice and request
shall be deemed to be, and the date on which each such notice and request shall
be deemed given shall be: at the time delivered, if personally delivered or
mailed; when receipt is acknowledged, if sent by facsimile; and the next
business day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next business day delivery.
12.3 Entire Agreement; Integration. This Agreement supersedes all prior
agreements between or among any of the parties hereto, including the Original
Agreement with respect to the subject matter contained herein and therein, and
such agreements embody the entire understanding among the parties relating to
such subject matter.
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12.4 Section Headings. Section headings are for convenience of
reference only and shall not affect the meaning of any provision of this
Agreement.
12.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which shall
together constitute one and the same instrument. All signatures need not be on
the same counterpart.
12.6 Severability. If any provision of this Agreement shall be invalid
or unenforceable, such invalidity or unenforceability shall not affect the
validity and enforceability of the remaining provisions of this Agreement,
unless the result thereof would be unreasonable, in which case the parties
hereto shall negotiate in good faith as to appropriate amendments hereto.
12.7 Termination. Subject to the terms of the Amended and Restated
Agreement of Limited Partnership of each of Starwood Mezzanine and SOFI IV, as
in effect on the date hereof, this Agreement may be terminated at any time by a
written instrument signed by the Trust and each Holder. Unless sooner terminated
in accordance with the preceding sentence, this Agreement (other than Section 7
hereof) shall terminate in its entirety on such date as there shall be no
Registrable Securities outstanding, provided that any Class A Shares previously
subject to this Agreement shall not be Registrable Securities following the date
such Class A Shares no longer meet the definition of Registrable Securities.
12.8 Submission to Jurisdiction. Each of the parties hereto and each of
the Holders irrevocably submits and consents to the jurisdiction of the United
States District Court for the Southern District of New York in connection with
any action or proceeding arising out of or relating to this Agreement, and
irrevocably waives any immunity from jurisdiction thereof and any claim of
improper venue, forum non conveniens or any similar basis to which it might
otherwise be entitled in any such action or proceeding.
12.9 References to Date Hereof. References to "the date hereof" or "the
date of this Agreement" shall be to the date of this Amended and Restated
Registration Rights Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first written above.
STARWOOD FINANCIAL TRUST
a California business trust
By: /s/ Xxx Xxxxxxxx
--------------------
Name: Xxx Xxxxxxxx
Title: CEO
STARWOOD MEZZANINE INVESTORS, L.P.
a Delaware limited partnership
By: Starwood Capital Group, L.P.
its general partner
By: BSS Capital Partners, L.P.
its general partner
By: Sternlicht Holdings II, Inc.
its general partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
SAHI PARTNERS
a Delaware general partnership
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
STARWOOD OPPORTUNITY FUND IV, L.P.,
a Delaware limited partnership
By: SOFI IV Management, L.L.C.
Its: General Partner
By: Starwood Capital Group, L.L.C.
Its General Manager
/s/ Xxxxxx X. Xxxxxx
----------------------
By: Xxxxxx X. Xxxxxx
Its: Vice President
SCHEDULE I
Addresses for Notice
If to the Trust to:
c/o Starwood Capital Group, L.P.
Three Pickwick Plaza, Suite 250
Greenwich, Connecticut 06830
Attention: Xxx Xxxxxxxx
Fax No.: (000) 000-0000
with copies to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Fax No.: (000) 000-0000
and
Xxxxxxx & Associates
Three Pickwick Plaza, Suite 250
Greenwich, Connecticut 06830
Attention: Xxxxx Xxxxxxx
Fax No.: (000) 000-0000
If to Starwood Mezzanine to:
c/o Starwood Capital Group, L.P.
Three Pickwick Plaza, Suite 250
Greenwich, Connecticut 06830
Attention: Madison X. Xxxxx, Esq.
Fax No.: (000) 000-0000
with a copy to:
Katten, Muchin & Zavis
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
Fax. No.: (000) 000-0000
If to SAHI Partners to:
c/o Starwood Capital Group, L.P.
Three Pickwick Plaza, Suite 250
Greenwich, Connecticut 06830
Attention: Madison X. Xxxxx, Esq.
Fax No.: (000) 000-0000
with a copy to:
Katten, Muchin & Zavis
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
Fax. No.: (000) 000-0000
If to SOFI IV to:
c/o Starwood Capital Group, L.P.
Three Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Madison X. Xxxxx, Esq.
Fax No.: (000) 000-0000
with a copy to:
Katten, Muchin & Zavis
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
Fax. No.: (000) 000-0000
