EXHIBIT 3
REGISTRATION RIGHTS AGREEMENT
▇▇▇▇▇▇▇-▇▇▇▇▇▇, Inc., a Delaware corporation (the "Company"), hereby
grants to Colony Investors III, L.P. ("Purchaser") and any permitted
assignee of the registration rights provided for herein.
Section 1. DEFINITIONS. As used herein, the following terms shall
have the following meanings:
"Advice" has the meaning set forth in Section 5.
"Additional Warrants" has the meaning set forth in Section 3.3 of the
Investor's Agreement.
"Affiliate" means, with respect to any Person, (a) any Person or
entity directly or indirectly controlling or controlled by or under direct
or indirect common control with such Person, (b) any spouse or non-adult
child (including by adoption) of any natural person described in clause (a)
above, (c) any relative other than a spouse or non-adult child (including
by adoption) who has the same principal residence of any natural person
described in clause (a) above, (d) any trust in which any such Persons
described in clause (a), (b) or (c) above has a beneficial interest and (e)
any corporation, partnership, limited liability company or other
organization of which any such Persons described in clause (a), (b) or (c)
above collectively own more than fifty percent (50%) of the equity of such
entity. For purposes of this definition, beneficial ownership of more than
ten percent (10%) of the voting common equity of a Person shall be deemed
to be control of such Person.
"Agreement" means this Registration Rights Agreement, dated as of July
16, 1998.
"Business Day" means any day other than a day on which banks are
authorized or required to be closed in the State of New York.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Company as filed with the Secretary of State of the State of
Delaware on March 27, 1992, as amended through and including April 30,
1998.
"Commission" means the Securities and Exchange Commission or any other
similar or successor agency of the Federal government administering the
Securities Act and/or the Exchange Act from time to time.
"Common Shares" means the shares of Common Stock issued pursuant to
that certain Stock Purchase Agreement, dated July 16, 1998, between the
Company and Purchaser.
"Common Stock" means the common stock, par value $0.01 per share, of
the Company.
"Company" has the meaning set forth in the first paragraph hereof and
shall include the Company's successors by merger, acquisition,
reorganization or otherwise.
"Controlling Persons" has the meaning set forth in Section 8(a).
"Effective Period" has the meaning set forth in Section 4(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute, and the rules and regulations
of the Commission promulgated thereunder.
"Holders" means the registered holders of Registrable Securities.
"Inspectors" has the meaning set forth in Section 4(m).
"Investor's Agreement" means that certain Investor's Agreement between
the Company and Purchaser dated of even date herewith.
"Market Value" means the number of shares of Common Stock to be
registered (or issuable upon the conversion or exchange of other securities
to be registered) pursuant to the demand for registration provided in
Section 2 below multiplied by the then Per Share Price of the Common Stock.
"NASD" has the meaning set forth in Section 4(q).
"Objecting Party" has the meaning set forth in Section 4(a).
"Per Share Price" means the daily closing price of the Common Stock on
the NASDAQ on the trading day before the Company receives the written
demand for registration.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"Piggy-Back Registration" has the meaning set forth in Section 3(a).
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus
supplement, including a prospectus supplement with respect to the terms of
the offering of any portion of the Registrable Securities covered by a
Shelf Registration Statement, and by all other amendments and supplements
to the prospectus, including post-effective amendments, and in each case
including all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
"Records" has the meaning set forth in Section 4(m).
"Registrable Securities" means, collectively, the Common Shares, the
Warrants, any Additional Warrants, the Warrant Shares and any other shares
of Common Stock acquired by Purchaser or its permitted assigns (so long as
not acquired in violation of the Investor's Agreement), unless (in the case
of any such securities) such securities have been (a) effectively
registered under Section 5 of the Securities Act and disposed of pursuant
to an effective Registration Statement, or (b) such securities have been
transferred pursuant to Rule 144 under the Securities Act or any successor
rule such that, after any such transfer referred to in this clause (b),
such securities may be freely transferred without restriction under the
Securities Act.
"Registration Expenses" has the meaning set forth in Section 7.
"Registration Statement" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, and all amendments and supplements to any
such registration statement, including post-effective amendments, in each
case including the Prospectus, all exhibits, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
"Rule 144" has the meaning set forth in Section 9(a).
"Rule 144A" has the meaning set forth in Section 9(b).
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor statute, and the rules and regulations of
the Commission promulgated thereunder.
"Suspension Notice" has the meaning set forth in Section 5(a).
"Suspension Period" means the period from the date on which the
Holders receive a Suspension Notice to the date on which any Holder
receives either the Advice or copies of the supplemented or amended
Prospectus contemplated by Section 4(f).
"Warrants" means the warrants to acquire shares of Common Stock,
issued pursuant to that certain Warrant Agreement, dated of even date
herewith, between the Company and Purchaser.
"Warrant Shares" means the shares of Common Stock issuable upon the
exercise of the Warrants and any Additional Warrants.
Section 2. DEMAND REGISTRATION.
(a) Demand for Registration. The Holders may, at their option,
at any time after the date hereof, require the Company to use its best
efforts to effect a registration of Registrable Securities under the
Securities Act (the "Demand Registration"); provided, however, that
(i) the Company shall not be required to effect such Demand
Registration unless the Company is requested to do so with respect to
Registrable Securities having a Market Value of not less than
$2,000,000; (ii) at its option, the Company shall not be required to
effect such registration prior to three (3) months immediately
following the date on which an underwritten public offering of equity
securities (pursuant to an effective registration statement under the
Securities Act) is commenced, if such public offering is commenced
prior to the date of a request for the Demand Registration; provided,
further, that, if in the opinion of an independent investment banking
firm of national reputation such registration, if not deferred,
materially and adversely would affect a proposed business or financial
transaction of substantial importance to the Company's financial
condition, the Company may defer such registration for a single period
(specified in such notice) of not more than 180 days; and (iii) the
Company shall not be required to use its best efforts to effect a
registration of Registrable Securities under this Section 2 more than
three times or more often than nine months following the completion of
a Demand Registration. At the election of Holders requesting a Demand
Registration, such registration statement shall be filed under
Rule 415 promulgated under the Securities Act (a "Resale Registration
Statement"), and the Company shall use its best efforts to keep a
Resale Registration Statement continuously effective until the earlier
of four (4) years and the date on which there are no more Registrable
Securities unsold thereunder. The Company shall promptly cause a
Resale Registration Statement to be amended to remove a Holder's
Registrable Securities upon notice to the Company from such Holder.
The Company shall not be required to file and effect more than one (1)
Resale Registration Statement pursuant to this Section 2(a). If,
after a Demand Registration becomes effective, the offering of
securities thereunder is or becomes subject to any stop order,
injunction or other order or requirement of the Commission that
prevents or limits the sale of securities thereunder for a period of
more than five (5) Business Days, then such Demand Registration shall
be deemed not to have been effected for purposes of this Section 2(a).
(b) Underwritten Offerings. If underwritten, the underwriter in
a Demand Registration must be reasonably acceptable to the Company.
In connection with any Demand Registration in which more than one
Holder participates, in the event that such Demand Registration
involves an underwritten offering and the managing underwriter or
underwriters participating in such offering advise in writing the
Holders of Registrable Shares to be included in such offering that the
total number of Registrable Shares to be included in such offering
exceeds the amount that can be sold in (or during the time of) such
offering without delaying or jeopardizing the success of such offering
(including the price per share of the Registrable Shares to be sold),
then the amount of Registrable Shares to be offered for the account of
such Holders shall be reduced pro rata on the basis of the number of
Registrable Shares to be registered by each such Holder. The Company
shall not include any securities that are not Registrable Securities
in any Registration Statement filed pursuant to this Section 2 without
the prior written consent of the Holders of a majority in number of
the Registrable Securities covered by such Registration Statement.
Section 3. PIGGY-BACK REGISTRATION.
(a) Request for Registration. Each time the Company proposes to
file a registration statement under the Securities Act with respect to
an offering by the Company for its own account or for the account of
any of its securityholders of any class of equity security (except,
(i) a registration statement on Form S-4 or S-8 (or any substitute
form that is adopted by the Commission), (ii) a registration statement
filed in connection with a dividend reinvestment plan, stock option
plan or unit investment trusts, or (iii) a registration statement
filed in connection with an exchange offer or offering of securities
solely to the Company's existing securityholders), and the form of
registration statement to be used permits the registration of
Registrable Securities, then the Company shall give written notice of
such proposed filing to the Holders as soon as reasonably practicable
(but in no event less than 20 days before the anticipated filing date
and no less than 30 days before the anticipated effective date), and
such notice shall offer the Holders the opportunity to register such
Registrable Securities as the Holders may request (which request shall
specify the Registrable Securities intended to be disposed of by the
Holders and the intended method of distribution thereof) up to 20 days
before the anticipated effective date (a "Piggy-Back Registration").
The Company shall cause the managing underwriter or underwriters of a
proposed underwritten offering to permit the Registrable Securities
requested to be included in a Piggy-Back Registration to be included
on substantially the same terms and conditions as any similar
securities of the Company or any other securityholder included therein
and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method of distribution
thereof. Any Holder shall have the right to withdraw such Holder's
request for inclusion of its Registrable Securities in any
Registration Statement pursuant to this Section 3 by giving written
notice to the Company of such withdrawal no later than two Business
Days prior to the anticipated effective date. The Company may
withdraw a Piggy-Back Registration at any time prior to the time it
becomes effective, provided that the Company shall give prompt notice
of such withdrawal to the other Holders, if any, requested to be
included in such Piggy-Back Registration.
(b) Reduction of Offering. If the managing underwriter or
underwriters of an underwritten offering with respect to which
Piggy-Back Registration has been requested as provided in Section 3(a)
hereof shall have informed the Company, in writing, that in the
opinion of such underwriter or underwriters the total number of shares
which the Company, the Holders and any other Persons participating in
such registration intend to include in such offering is such as to
materially and adversely affect the success of such offering
(including without limitation any material decrease in the proposed
public offering price), then the number of shares to be offered for
the account of all Persons and Holders (other than the Company)
participating in such registration shall be reduced or limited (to
zero if necessary) pro rata in proportion to the respective number of
shares requested to be registered by such Persons to the extent
necessary to reduce the total number of shares requested to be
included in such offering to the number of shares, if any, recommended
by such managing underwriter or underwriters.
(c) Underwriting. In the case of a Piggy-Back Registration, if
the Company has determined to enter into an underwriting agreement in
connection therewith, all Registrable Securities to be included in
such Registration Statement shall be subject to such underwriting
agreement, and no Holder may participate in such Registration unless
such Holder agrees to sell its Registrable Securities on the basis
provided for in such underwriting arrangements approved by the Company
and completes and/or executes all reasonable and customary
questionnaires, powers of attorney, indemnities, underwriting
agreements and other reasonable documents which must be executed under
the terms of such underwriting arrangements.
Section 4. REGISTRATION PROCEDURES. In connection with the
obligations of the Company to effect or cause the registration of any
Registrable Securities pursuant to the terms and conditions of this
Agreement, the Company shall use its best efforts to effect the
registration and sale of such Registrable Securities in accordance with the
terms of this Agreement as quickly as reasonably practicable, and in
connection therewith:
(a) Prior to filing a Registration Statement or Prospectus or
any amendments or supplements thereto, excluding for purposes of this
Section 4(a) documents incorporated by reference after the initial
filing of the Registration Statement, the Company will furnish to the
Holders covered by such Registration Statement (the "Selling Holders")
and the underwriters, if any, draft copies of all such documents
proposed to be filed at least ten Business Days prior thereto (or, in
the case of amendments or supplements, such shorter period as may be
reasonably permitted under the circumstances), which documents will be
subject to the reasonable review of the Holders and the underwriters,
if any, and the Company will not, unless required by law, file any
Registration Statement or amendment thereto or any Prospectus or any
supplement thereto to which Selling Holders of at least a majority in
interest of the Registrable Securities (the "Objecting Party") shall
reasonably object pursuant to notice given to the Company prior to the
filing of such amendment or supplement (the "Objection Notice") and no
later than five Business Days after receipt of the documents to which
the Objection Notice relates. The Objection Notice shall set forth
the objections and the specific areas in the draft documents where
such objections arise. The Company shall have five Business Days
after receipt of the Objection Notice to correct such deficiencies to
the reasonable satisfaction of the Objecting Party, and will notify
each Selling Holder of any stop order issued or threatened 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.
(b) The Company promptly shall prepare and file with the
Commission such amendments and post-effective amendments to each
Registration Statement as may be necessary to keep such Registration
Statement effective for a period of not more than 60 days or (in the
case of a Resale Registration Statement) up to four (4) years (as
applicable, the "Effective Period"); shall cause the Prospectus to be
supplemented by any required Prospectus supplements, and, as so
supplemented, to be filed pursuant to Rule 424 under the Securities
Act; and shall comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all Registrable
Securities covered by such Registration Statement during the Effective
Period in accordance with the intended methods of disposition by the
Holders set forth in such Registration Statement or supplement to the
Prospectus.
(c) The Company promptly shall furnish to any Holder and the
underwriters, if any, without charge, such reasonable number of
conformed copies of each Registration Statement and any post-effective
amendment thereto and such number of copies of the Prospectus
(including each preliminary Prospectus) and any amendments or
supplements thereto, any documents incorporated by reference therein
and such other documents as such Holder or underwriter reasonably may
request in order to facilitate the public sale or other disposition of
the Registrable Securities being sold by such Holder.
(d) The Company shall, (i) on or prior to the date on which a
Registration Statement is declared effective, use its reasonable best
efforts to register or qualify the Registrable Securities covered by
such Registration Statement under such other securities or "blue sky"
laws of such states of the United States as any Holder or underwriter
requests; (ii) do any and all other acts and things which may be
reasonably necessary to enable such Holder to consummate the
disposition of such Registrable Securities owned by such Holder in
accordance with the intended methods for distribution set forth
therein; and (iii) use its reasonable best efforts to keep each such
registration or qualification (or exemption therefrom) effective
during the Effective Period; provided, however, that the Company shall
not be required (A) to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but
for this Section 4(d) or (B) to file any general consent to service of
process.
(e) The Company shall cause the Registrable Securities covered
by a Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be reasonably
necessary by virtue of the business and operations of the Company to
enable the Holders to consummate the disposition of such Registrable
Securities.
(f) The Company promptly shall notify each Holder and any
underwriter in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed and, with
respect to a Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the
Commission or any state securities authority for amendments and
supplements to a Registration Statement and Prospectus or for
additional information after the Registration Statement has become
effective, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) of the issuance
by any state securities commission or other regulatory authority of
any order suspending the qualification or exemption from qualification
of any of the Registrable Securities under state securities or "blue
sky" laws or the initiation of any proceedings for that purpose, and
(v) of the happening of any event which makes any statement made in a
Registration Statement or related Prospectus untrue or which requires
the making of any changes in such Registration Statement or Prospectus
so that they will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(g) The Company shall make generally available to the Holders an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than 45 days (90 days in the event it relates
to a fiscal year) after the end of the 12-month period beginning with
the first day of the Company's first fiscal quarter commencing after
the effective date of a Registration Statement, which earnings
statement shall cover said 12-month period, and which requirement will
be deemed to be satisfied if the Company timely files complete and
accurate information on forms 10-Q, 10-K and 8-K under the Exchange
Act and otherwise complies with Rule 158 under the Securities Act.
(h) The Company promptly shall use its reasonable best efforts
to prevent the issuance of any order suspending the effectiveness of a
Registration Statement, and in the event a stop order is issued, use
its reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the
earliest possible moment.
(i) If requested by the managing underwriter or underwriters, if
any, or any Holder, the Company promptly shall incorporate in a
Prospectus supplement or post-effective amendment such information as
such managing underwriter or underwriters or such Holder reasonably
requests to be included therein, including, without limitation, with
respect to the Registrable Securities being sold by such Holder to
such underwriter or underwriters, the purchase price being paid
therefor by such underwriter or underwriters and with respect to any
other terms of an underwritten offering of the Registrable Securities
to be sold in such offering, and promptly make all required filings of
such Prospectus supplement or post-effective amendment.
(j) The Company shall deliver a copy of each document
incorporated by reference into a Registration Statement (in the form
in which it was incorporated) to each Holder as promptly as
practicable after filing such documents with the Commission.
(k) The Company shall cooperate with the Holders and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (which shall not bear any
restrictive legends unless required under applicable law) representing
securities sold under a Registration Statement, and enable such
securities to be in such denominations and registered in such names as
the Holders and the managing underwriter or underwriters, if any,
reasonably may request and keep available and make available to the
Company's transfer agent prior to the effectiveness of such
Registration Statement a supply of such certificates.
(l) The Company shall enter into such customary agreements
(including, if applicable, an underwriting agreement in customary
form) and take such other actions as the Holders, or the underwriters,
if any, retained by the Holders participating in an underwritten
public offering, if any, reasonably may request in order to expedite
or facilitate the disposition of Registrable Securities.
(m) The Company promptly shall make available to each Holder,
any underwriter participating in any disposition pursuant to a
Registration Statement, and any attorney, accountant or other agent or
representative retained by any such Holder or underwriter
(collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company
(collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause
the Company's officers, directors and employees to supply all
information reasonably requested by any such Inspector in connection
with such Registration Statement; provided that, unless the disclosure
of such Records is necessary to avoid or correct a misstatement or
omission in such Registration Statement or the release of such Records
is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, the Company shall not be required to provide
any information under this paragraph if (i) the Company believes,
after consultation with counsel for the Company and counsel for the
Holders, that to do so would cause the Company to forfeit an
attorney-client privilege that was applicable to such information or
(ii) either (A) the Company has requested and been granted from the
Commission confidential treatment of such information contained in any
filing with the Commission or documents provided supplementally or
otherwise or (B) the Company reasonably determines in good faith that
such Records are confidential and so notifies the Inspectors in
writing unless, prior to furnishing any such information with respect
to (A) or (B), such Holder requesting such information agrees to enter
into a confidentiality agreement in customary form and subject to
customary exceptions reasonably acceptable to the Company; and,
provided, further, that each Holder agrees that it will, upon learning
that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at its
expense, to undertake appropriate action and to prevent disclosure of
the Records deemed confidential.
(n) In the case of any underwritten offering, the Company shall
furnish to each Holder and to each underwriter, if any, a signed
counterpart, addressed to such Holder or underwriter, of (i) an
opinion or opinions of counsel to the Company, and (ii) a comfort
letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the
type customarily covered by opinions or comfort letters, as the case
may be, as the managing underwriter therefor reasonably requests.
(o) The Company shall cause the Registrable Securities to be
authorized for quotation and/or listing, as applicable, on such
exchange or quotation system as the Common Stock is listed or quoted.
(p) The Company shall provide a CUSIP number for all Registrable
Securities covered by a Registration Statement not later than the
effective date of such Registration Statement.
(q) The Company shall cooperate with each Holder and each
underwriter participating in the disposition of Registrable Securities
and their respective counsel in connection with any filings required
to be made with the National Association of Securities Dealers, Inc.
("NASD").
(r) During the period when the Prospectus is required to be
delivered under the Securities Act, the Company promptly shall file
all documents required to be filed with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act.
(s) The Company shall appoint a transfer agent and registrar for
all the shares of Common Stock covered by a Registration Statement not
later than the effective date of such Registration Statement.
(t) In connection with an underwritten offering, the Company
will participate, to the extent reasonably requested by the managing
underwriter for the offering or the Holders, in customary efforts to
sell the securities under the offering, including without limitation,
participating in "road shows."
Each Selling Holder shall provide the Company with such information
about the Selling Holder and its intended manner of distribution of the
Registrable Securities, and otherwise shall cooperate with the Company and
the underwriters, if any, as may be needed or helpful to complete any
obligation of the Company hereunder.
Section 5. LIMITATIONS ON SALES.
(a) Suspension Period. Each Holder, upon receipt of any notice
(a "Suspension Notice") from the Company of the happening of any event
of the kind described in Section 4(f)(v), forthwith shall discontinue
disposition of the Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such Holder's
receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(f) or until it is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental
filings which are incorporated by reference in the Prospectus, and, if
so directed by the Company, such Holder will, or will request the
managing underwriter or underwriters, if any, to deliver to the
Company (at the Company's expense) all copies, other than permanent
file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of
such notice; provided, however, that the Company shall not give a
Suspension Notice until after the Registration Statement has been
declared effective. In the event that the Company shall give any
Suspension Notice, (i) the Company shall use its reasonable best
efforts and take such actions as are reasonably necessary to end the
Suspension Period as promptly as practicable and (ii) immediately
following expiration of the Suspension Period, the Company shall, to
the extent necessary, prepare and file with the Commission and furnish
a supplement or amendment to such Prospectus so that, as thereafter
deliverable to the purchasers of such Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) Lock-up. If on any occasion of registration in which the
Company proposes to file a registration statement under the Securities
Act with respect to the proposed sale of Common Stock pursuant to a
fully-underwritten public offering, and the managing underwriter or
underwriters shall request an agreement by each Holder not to sell any
of the Registrable Securities so held by such Holder for a period of
90 days after the date of the underwriting agreement in order to
effect an orderly public distribution thereof, then so long as (i) the
Holder and its Affiliates own five percent (5%) or more of the
Company's outstanding securities or the Holder has a representative on
the Company's Board of Directors and (ii) the Holder is deemed to be
an Affiliate of the Company for purposes of the Securities Act, each
Holder shall enter into and execute such an agreement with such
managing underwriter or underwriters and the Company pertaining to a
restriction on the transfer of any equity securities of the Company
during such period. Each Holder further agrees, upon request of the
managing underwriter or underwriters, to enter into and execute an
agreement with such managing underwriter or underwriters and the
Company pursuant to the terms of which such Holder will agree not to
transfer any securities of the Company during the seven-day period
immediately preceding the effectiveness of such registration statement
to the extent necessary to avoid violation of the Exchange Act.
Section 6. HOLDER INFORMATION. If any Registration Statement refers
to any Holder by name or otherwise as the holder of any securities of the
Company, then such Holder shall have the right, to the extent permitted by
law, to require (a) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the
holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such
Holder will assist in meeting any future financial requirements of the
Company, or (b) in the event that such reference to such Holder by name or
otherwise is not required by the Securities Act or any similar Federal or
state "blue sky" statute and the rules and regulations thereunder then in
force, the deletion of the reference to such Holder.
Section 7. REGISTRATION EXPENSES. Any and all expenses incident to
the Company's performance of or compliance with this Agreement, including
without limitation all Commission and securities exchange, NASDAQ or NASD
registration and filing fees, all fees and reasonable expenses incurred in
connection with compliance with state securities or "blue sky" laws
(including reasonable fees and disbursements of one counsel for all
underwriters in connection with "blue sky" qualifications of the
Registrable Securities), printing expenses, messenger and delivery
expenses, internal expenses of the Company (including, without limitation,
all salaries and expenses of the Company's officers and employees
performing legal or accounting duties), all reasonable expenses for word
processing, printing and distributing any Registration Statement, any
Prospectus, any amendments or supplements thereto, any underwriting
agreements, securities sales agreements and other documents relating to the
performance of and compliance with this Agreement, the fees and expenses
incurred in connection with the listing of the Registrable Securities, the
fees and disbursements of counsel for the Company and of the independent
certified public accountants of the Company (including the expenses of any
special audit or comfort letters), Securities Act liability insurance (if
the Company elects to obtain such insurance), the fees and expenses of any
special experts or other Persons retained by the Company in connection with
any registration (all such expenses being herein called "Registration
Expenses"), will be borne by the Company whether or not the Registration
Statement to which such expenses relate becomes effective; provided,
however, that Registration Expenses shall not include underwriting fees,
discounts or commissions attributable to the sale or disposition of
Registrable Securities or the fees and expenses of legal counsel and
accountants retained by the Holders.
Section 8. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the fullest extent permitted by law,
each Holder, its partners, officers, directors, trustees,
stockholders, employees, agents and investment advisers, and each
Person who controls such Holder within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act, or is
under common control with, or is controlled by, such Holder, together
with the partners, officers, directors, trustees, stockholders,
employees and agents of such controlling Person (collectively, the
"Controlling Persons"), from and against all losses, claims, damages,
liabilities and expenses (including without limitation any reasonable
legal or other fees and expenses actually incurred in connection with
defending or investigating any action or claim in respect thereof,
provided, however, that such legal fees shall be limited to those
incurred by one individual counsel for all indemnified parties under
this paragraph (a), together with any appropriate or necessary local
counsel, if any) (collectively, the "Damages") to which such Holder,
its partners, officers, directors, trustees, stockholders, employees,
agents and investment advisers, and any such Controlling Person may
become subject under the Securities Act, insofar as such Damages (or
proceedings in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of material fact contained in any
Registration Statement or Prospectus (or any amendment thereto)
pursuant to which Registrable Securities were registered under the
Securities Act, including all documents incorporated therein by
reference, or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein in
light of the circumstances under which they were made not misleading,
or caused by any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus (as amended or supplemented
if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein in
light of the circumstances under which they were made not misleading,
except insofar as such Damages arise out of or are based upon any
such untrue statement or omission based upon information relating to
such Holder furnished in writing to the Company by such Holder (or by
a Person authorized to provide such information on behalf of such
Holder) expressly for use therein.
The Company shall also indemnify underwriters, selling brokers,
dealer managers and similar securities industry professionals
participating in the distribution, their officers, directors, agents,
employees and each Person who controls such Persons (within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) to the same extent as provided with respect to the
indemnification of the Holders.
(b) Indemnification by the Holders. Each Holder agrees,
severally and not jointly, to indemnify and hold harmless, to the
fullest extent permitted by law the Company, its directors, officers,
stockholders, employees, agents, attorneys, and investment advisers
and each Person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, or is under common control with, or is controlled by,
the Company, together with its Controlling Person, from and against
all Damages to which the Company and any Controlling Persons may
become subject under the Securities Act insofar as such Damages (or
proceedings in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of material fact contained in any
Registration Statement (or any amendment thereto) pursuant to which
Registrable Securities were registered under the Securities Act
(including all documents incorporated therein by reference), or caused
by any omission or alleged omission to state therein a material fact
necessary to make the statements therein in light of the circumstances
under which they were made not misleading, or caused by any untrue
statement or alleged untrue statement of a material fact contained in
any Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material fact
necessary to make the statements therein in light of the circumstances
under which they were made not misleading, to the extent, but only if
and to the extent that such Damages arise out of or are based upon any
such untrue statement or alleged untrue statement or omission or
alleged omission based upon information relating to such Holder
furnished in writing to the Company by such Holder (or by a Person
authorized to provide such information on behalf of such Holder)
expressly for inclusion therein; provided, however, that (i) such
selling Holder shall not be liable in any such case to the extent that
such Damages result from the failure of the Company to promptly amend
or take action to correct or supplement any such Registration
Statement or Prospectus on the basis of corrected or supplemental
information provided in writing by such selling Holder to the Company
expressly for such purpose and (ii) the total amount for which a
Holder shall be liable hereunder shall not in any event exceed the
aggregate proceeds received by such Holder from the sale of
Registrable Securities in such registration.
(c) Indemnification Procedures. In case any proceeding
(including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought
pursuant to either paragraph (a) or (b) above, such Person (the
"indemnified party") promptly shall notify the Person against whom
such indemnity may be sought (the "indemnifying party") in writing and
the indemnifying party shall retain counsel reasonably satisfactory to
the indemnified party to represent the indemnified party and any
others the indemnifying party may designate in such proceedings and
shall pay the reasonable fees and disbursements of such counsel
relating to such proceeding; provided, however, that (i) in the case
of any proceeding in respect of which indemnity may be sought pursuant
to both paragraphs (a) and (b) above, a Holder shall not be required
to assume the defense thereof and the fees and expenses of such
counsel shall be at the expense of the Company and (ii) the Company
shall not be obligated to pay the fees and expenses of more than one
individual counsel (together with any appropriate or necessary local
counsel, if any) for all indemnified parties, including the Company.
In any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel, or (ii) the indemnifying
party fails promptly to assume the defense of such proceeding or fails
to employ counsel reasonably satisfactory to such indemnified party or
parties, or (iii) (A) the named parties to any such proceeding
(including any impleaded parties) include both such indemnified party
or parties and any indemnifying party or an Affiliate of such
indemnified party or parties or of any indemnifying party, (B) there
may be one or more legal defenses available to such indemnified party
or parties or such Affiliate of such indemnified party or parties that
are different from or additional to those available to any
indemnifying party or such Affiliate of any indemnifying party and (C)
such indemnified party or parties shall have been advised by such
counsel that there may exist a legal conflict of interest between or
among such indemnified party or parties or such Affiliate of such
indemnified party or parties and any indemnifying party or such
Affiliate of any indemnifying party, in which case, if such
indemnified party or parties notifies the indemnifying party or
parties in writing that it elects to employ separate counsel of its
choice at the reasonable expense of the indemnifying parties, the
indemnifying parties shall not have the right to assume the defense
thereof and such counsel shall be at the reasonable expense of the
indemnifying parties, it being understood, however, that unless there
exists a conflict among indemnified parties, the indemnifying parties
shall not, in connection with any one such proceeding or separate but
substantially similar or related proceedings in the same jurisdiction,
arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of
attorneys at any time for such indemnified party or parties. The
indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent (which will not be
unreasonably withheld) but, if settled with such consent or if there
be a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party or parties from and against any
loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent (which
will not be unreasonably withheld) of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of
which such indemnified party is a party, and indemnity could have been
sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
(d) Contribution. To the extent that the indemnification
provided for in paragraph (a) or (b) of this Section 8 is unavailable
to an indemnified party or insufficient in respect of any Damages,
then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of
such Damages in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Holders on the
other hand in connection with the statements or omissions that
resulted in such Damages, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and
of the Holders on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the
Holders and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
Notwithstanding the provisions of this Section 8(d), no Holder shall
be required to contribute any amount in excess of the amount at which the
net sale proceeds from the Registrable Securities to such Holder exceeds
the amount of any damages which such Holder has otherwise been required to
pay by reason of such untrue statement or omission. Each Holder's
obligation to contribute pursuant to this Section 8(d) is several in the
proportion that the proceeds of the offering received by such Holder bears
to the total proceeds of the offering received by all the Holders and not
joint.
If indemnification is available under paragraph (a) or (b) of this
Section 8, the indemnifying parties shall indemnify each indemnified party
to the full extent provided in such paragraphs without regard to the
relative fault of said indemnifying party or indemnified party or any other
equitable consideration provided for in this Section 8(d).
The Company and each Holder agrees that it would not be just or
equitable if contribution pursuant to this Section 8(d) were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the Damages referred
to in this Section 8 shall be deemed to include, subject to the limitations
set forth above, any reasonable legal or other expenses incurred (and not
otherwise reimbursed) by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The remedies provided for
in this Section 8 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law
or in equity.
(e) Survival. The parties' indemnification and contribution
obligations pursuant to this Section 8 shall survive the sale,
transfer, assignment or other disposition of any Registrable
Securities and shall survive any termination of this Agreement.
Section 9. AVAILABLE INFORMATION.
(a) Rule 144. The Company covenants that it will file any
reports required to be filed by it under the Securities Act and the
Exchange Act (or, if the Company is not required to file such reports,
it will, upon the request of any Holder, make publicly available other
information so long as necessary to permit sales under Rule 144 under
the Securities Act, as such rule may be amended from time to time or
any similar rule or regulation hereafter adopted by the Commission
("Rule 144"), and it will take such further action as any 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 limitation 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 requirements.
(b) Rule 144A. Upon the request of any Holder, the Company
shall deliver to such holder within 20 days following receipt by the
Company of such request, the information required by Section (d)(4) of
Rule 144A under the Securities Act, as such rule may be amended from
time to time or any similar rule or regulation hereafter adopted by
the Commission ("Rule 144A"), and will take such further action as any
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 or the
exemptions provided by Rule 144A. All information shall be
"reasonably current" as defined in Rule 144A.
Section 10. MISCELLANEOUS.
(a) 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 a majority in interest of the
Registrable Securities then outstanding.
(b) Notices. All notices, requests and other communications
provided for herein shall be given or made in writing:
if to the Company: ▇▇▇▇▇▇▇-▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., #▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
White & Case LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to Purchaser: Colony Investors III, L.P.
c/o Colony Capital, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to any other person who is a registered Holder, to the address
for such Holder as it appears in the stock or warrant ledger of the
Company; or, in the case of any Holder, at such other address as shall
be designated by such party in a notice to the Company; or, in the
case of the Company, at such other address as the Company may
designate in a notice to the Holders.
All such notices, requests and other communications shall be:
(i) personally delivered, sent by courier guaranteeing overnight
delivery or sent by registered or certified mail, return receipt
requested, postage prepaid, in each case given or addressed as
aforesaid; and (ii) effective upon receipt.
(c) Successors and Assigns. Subject to restrictions on the
transfer of Common Stock set forth in the Company's Certificate of
Incorporation and the Investor's Agreement of even date herewith
between the Company and Purchaser, this Agreement shall inure to the
benefit of and be binding only upon (i) Purchaser, (ii) the general
and limited partners of Purchaser, and (iii) assigns of the Purchaser
(so long as the Registrable Securities are not acquired in violation
of the Investor's Agreement and the Company's Certificate of
Incorporation).
(d) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(e) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without
regard to principles of conflicts of law.
(f) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of
any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby,
it being intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.
(g) Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement or where any provision hereof
is validly asserted as a defense, the successful party shall, to the
extent permitted by applicable law, be entitled to recover reasonable
attorneys' fees and expenses in addition to any other available
remedy.
(h) Further Assurances. Each party shall cooperate and take
such action as may be reasonably requested by another party in order
to carry out the provisions and purposes of this Agreement and the
transactions contemplated hereby.
(i) Remedies. In the event of a breach or a threatened breach
by the Company of its obligations under this Agreement, any party
injured or to be injured by such breach will be entitled to specific
performance of its rights under this Agreement or to injunctive
relief, in addition to being entitled to exercise all rights granted
by law. The parties agree that the provisions of this Agreement shall
be specifically enforceable, it being agreed by the parties that the
remedy at law, including monetary damages, is inadequate and that any
objection in any action for specific performance or injunctive relief
that a remedy at law would be adequate is waived.
▇▇▇▇▇▇▇-▇▇▇▇▇▇, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
___________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: CEO
COLONY INVESTORS III, L.P.
By: Colony Capital III, L.P.
By: ColonyGP III, Inc.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President