Exhibit 10.11
FORM OF
REGISTRATION RIGHTS AGREEMENT
(Rockefeller Interests)
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made and
entered into as of [____ __], 2004, among Strategic Hotel Capital, Inc., a
Maryland corporation (the "Company"), each of the parties identified as an
"Investor" on Schedule I hereto (each, an "Investor") and Rockmark Corporation,
a Delaware corporation ("Rockmark"), on behalf of itself and as Investor
Representative.
WHEREAS, Strategic Hotel Capital, L.L.C., a Delaware limited liability
company ("SHC LLC"), the Investors and Rockmark are parties to a Second Amended
and Restated Transfer and Registration Rights Agreement dated as of October 31,
1999 (the "SHC LLC Agreement");
WHEREAS, concurrently with the execution of this Agreement, the Company
will effect an initial public offering of shares of its common stock (the
"IPO"); and
WHEREAS, the parties desire to provide each investor with certain
registration rights analogous to those in the SHC LLC Agreement.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
respective meanings:
"Affiliate": with regard to a Person, a Person that controls, is
controlled by, or is under common control with, such original Person. For
purposes of this definition, "control" when used with respect to any Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
"Closing Price": the reported last sale price of a unit of a security,
on a given day, regular way, or, in case no such sale takes place on such day,
the average of the reported closing bid and asked prices regular way, in each
case on the New York Stock Exchange Composite Tape, or, if the security is not
listed or admitted to trading on such exchange, on the American Stock Exchange
Composite Tape, or, if the security is not listed or admitted to trading on such
exchange, the principal national securities exchange on which the security is
listed or admitted to trading, or, if the security is not listed or admitted to
trading on any national securities exchange, the closing sales price, or, if
there is no closing sales price, the average of the closing bid and asked
prices, in the over-the-counter market as reported by the Nasdaq Stock Market,
Inc., or, if not so reported, as reported by the National Quotation Bureau,
Incorporated, or any successor thereof, or, if not so reported, the average of
the closing bid and asked prices as furnished by any member of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose, or, if no such prices are furnished, the fair market
value of the security as determined in good faith by the board of directors of
the Company, which determination shall be based upon recent issuances or current
offerings pursuant to bona fide private offerings of the same class of security
by the Company; provided, however, that any determination of the "Closing Price"
of any security hereunder shall be based on the assumption that such security is
freely transferable without registration under the Securities Act.
"Commission": the Securities and Exchange Commission or any other
applicable Federal agency at the time administering the Securities Act.
"Company": as defined in the preamble, and shall include, where the
context requires, any Person into which the Company is merged or with which the
Company is consolidated.
"Exchange Act": the Securities Exchange Act of 1934, as amended.
"Membership Units": any Membership interests in Strategic Hotel Capital
Funding, L.L.C., a Delaware limited liability company.
"Operating Agreement": the Limited Liability Company Agreement of
Strategic Hotel Funding, L.L.C. of even date herewith, as such agreement may be
amended and supplemented from time to time.
"Partnership Agreement": as defined in Section 4.1.
"Person": an individual, partnership, corporation, company (including a
limited liability company), trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Resale Rules": as defined in Section 3.3.
"Securities": the Shares and the Membership Units owned by any
Investor.
"Securities Act": the Securities Act of 1933, as amended.
"Shares": shares of common stock of the Company and any other
securities that subsequently may be issued or issuable by the Company upon
conversion or exchange of any convertible or exchangeable securities (including
any Membership Units) or as a result of a split or dividend or other similar
transaction involving the Shares by the Company and any securities into which
the Shares may thereafter be changed or exchanged as a result of the
reincorporation of the Company or merger, consolidation, recapitalization or
other similar transaction.
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"Shelf Registration": a registration under Rule 415 of the Securities
Act pursuant to Section 2.1 that has become effective under the Securities Act
and not subsequently withdrawn.
"Violation": as defined in Section 3.2(a).
2. SHELF REGISTRATION RIGHTS.
2.1 Shelf Registration.
(a) Shelf Registration. Beginning on [___ __], 2005, the
Company shall file and thereafter use its reasonable efforts to
continuously maintain a registration statement relating to the resale
of all of the Investors' Shares pursuant to Rule 415 under the
Securities Act. No Investor shall have the right to cause the Company
to register its Shares under this Section 2.1 if the number of Shares
requested to be so registered may be immediately sold pursuant to the
Resale Rules.
(b) Company's Ability to Postpone. The Company shall have the
privilege to postpone, on one occasion only, each filing of a
registration statement under this Section 2.1 and each proposed sale of
Shares by an Investor under an effective Shelf Registration, for a
reasonable period of time (not exceeding 90 days) if the Company
furnishes the Investor with a certificate signed by the Chairman of the
Board or the Chief Executive Officer of the Company stating that, in
its good faith judgment, the Company's board of directors has
determined that effecting the registration at such time would adversely
affect a material financing, acquisition, disposition of assets or
stock, merger or other comparable transaction or would require the
Company to make public disclosure of information the public disclosure
of which would have a material adverse effect upon the Company.
2.2 Registration Procedures. If and whenever the Company is required by
any of the provisions of this Article 2 to use its reasonable efforts to effect
the registration of any of the Shares pursuant to Rule 415 under the Securities
Act, the Company shall use its reasonable efforts to as expeditiously as
possible:
(a) prepare and file with the Commission a registration
statement with respect to such securities and use its reasonable
efforts to cause such registration statement to become effective and
remain effective for as long as shall be necessary to complete the
distribution of the Shares so registered;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for so long as shall be necessary to complete the
distribution of the Shares so registered and to comply with the
provisions of the Securities Act with respect to the sale or other
disposition of all securities covered by such registration statement
whenever the Investor shall desire to sell or otherwise dispose of the
same;
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(c) furnish to the Investor such numbers of copies of such
registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement, including any
preliminary prospectus, and any amendments or supplement thereto, and
such other documents, as the Investor may reasonably request in order
to facilitate the sale or other disposition of the Shares owned by the
Investor;
(d) use its reasonable efforts to register and qualify the
securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the Investor shall
reasonably request, and do any and all other acts and things reasonably
requested by the Investor to assist the Investor to consummate the sale
or other disposition in such jurisdictions of the securities owned by
the Investor, except that the Company shall not for any such purpose be
required to qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified or to file therein any
general consent to service of process;
(e) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, beginning with
the first fiscal quarter beginning after the effective date of the
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;
(f) use its reasonable efforts to list such securities on any
securities exchange or interdealer quotation system on which any stock
of the Company is then listed, if the listing or quotation of such
securities is then permitted under the rules of such exchange or
interdealer quotation system;
(g) if the Investor intends to dispose of its securities
through an underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter or underwriters of such
underwritten offering, including, without limitation, to obtain an
opinion of counsel to the Company and a "comfort letter" from the
independent public accountants to the Company in the usual and
customary form for such underwritten offering;
(h) notify the Investor, at any time when a prospectus
relating to such registration statement is required to be delivered
under the Securities Act, of the happening of any event of which it has
knowledge as a result of which the prospectus included in such
registration statement, as then in effect, contains an untrue statement
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 in the light of the circumstances then existing;
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(i) make the Company's executive officers available at the
Company's principal executive offices to discuss the affairs of the
Company at times that may be mutually and reasonably agreed to; and
(j) upon the request of the Investor, take any and all other
actions which may be reasonably necessary to complete the registration
and thereafter to complete the distribution of the Shares so
registered.
2.3 Dribble Out. From and after the time that an Investor's Shares are
registered under an effective registration statement under this Article 2, such
Investor shall not in any calendar quarter sell, transfer or assign through the
facilities of any exchange or quotation system on which the Shares are then
listed or quoted a number of Shares to another Person if the aggregate number of
Shares so sold, transferred or assigned in such calendar quarter would exceed 5%
of the Shares of the Company then outstanding. The foregoing provisions of this
Section 2.3 shall not restrict a block (as defined pursuant to Rule 10b-18(a)(5)
under the Exchange Act) sale of the Investor's Shares, the transfer of Shares to
an Affiliate or any sale of Shares by the Investor pursuant to an underwritten
offering.
2.4 Black-Out Period. During the period beginning on the date of each
subsequently filed prospectus or prospectus supplement with respect to an
offering under such Shelf Registration and ending [upon the earlier of (i)] 90
days thereafter [or (ii) one day after any date on which the Closing Price shall
have averaged 110% or more of the offering price listed in the prospectus or
prospectus supplement included in or deemed a part of the registration statement
for such Shelf Registration for a period of 20 consecutive days (or if no
offering price is listed in the prospectus included in such registration
statement, the Closing Price on the date of such prospectus or prospectus
supplement for a period of 20 consecutive days] each Investor agrees that it
will not request that the Company register any of its Shares pursuant to this
Article 2.
3. PROVISIONS APPLICABLE TO REGISTRATION RIGHTS.
3.1 Expenses.
(a) Except as set forth in Section 3.1(b), the expenses
specified in the following sentence incurred in any Shelf Registration
(or any attempted Shelf Registration that is not consummated) of an
Investor's Shares under this Agreement shall be paid by the Investor.
The expenses referred to in the preceding sentence shall be limited to
underwriters' discounts or commissions or fees or fees of placement
agents, the expenses of printing and distributing the registration
statement and the prospectus used in connection therewith and any
amendment or supplement thereto, fees and disbursements of counsel for
the Investor.
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(b) All other expenses incurred in any Shelf Registration (or
any attempted Shelf Registration that is not consummated) shall be paid
by the Company, including, without limitation, (i) the expenses of its
internal counsel (and/or, if the Company chooses, its outside counsel)
including fees and expenses related to the preparation of the
registration statement and the prospectus used in connection therewith
and any amendment or supplement thereto, (ii) any necessary accounting
expenses, including any special audits which shall be necessary to
comply with governmental requirements in connection with any such
registration, including the expense related to any comfort letters and
(iii) expenses of complying with the securities or blue sky laws of any
jurisdictions.
3.2 Indemnification. In the event any Investor's Shares are included in
a registration statement under Article 2:
(a) Indemnity by Company. Without limitation of any other
indemnity provided to an Investor, to the extent permitted by law, the
Company will indemnify and hold harmless each Investor, the Affiliates,
officers, directors and partners of each Investor, each underwriter (as
defined in the Securities Act), and each Person, if any, who controls
an Investor or underwriter (within the meaning of the Securities Act),
against any losses, claims, damages, liabilities and expenses (joint or
several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses,
claims, damages, liabilities and expenses (or actions in respect
thereof) 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 statements (including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto), (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading, or (iii) any other violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law, and the
Company will reimburse each Investor and its Affiliates, officers,
directors or partners, underwriter and controlling person for any
reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability,
expense or action; provided, however, that the Company shall not be
liable to any Investor in any such case for any such loss, claim,
damage, liability, expense or action to the extent that it arises out
of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in
connection with such registration by such Investor or any Affiliate,
officer, director, partner or controlling person thereof.
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(b) Indemnity by Investors. In connection with any
registration statement in which any Investor is participating, the
participating Investor(s) will furnish to the Company in writing such
reasonably necessary information and affidavits as the Company
reasonably requests for use in connection with any such registration
statement or prospectus and, to the extent permitted by law, will
indemnify the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act or
Exchange Act) against any losses, claims, damages, liabilities and
expenses resulting from any Violation, but only to the extent that such
Violation is contained in any information or affidavit so furnished in
writing to the Company by such Investor stated to be specifically for
use in such registration statement or prospectus (the furnishing of
such reasonably necessary information or affidavit by the Investor
being a condition precedent to the Company's obligation to cause the
registration statement to become effective); provided, that the
obligation to indemnify will be several and not joint with any other
Person and will be limited to the net amount received by the Investor
from the sale of Shares, pursuant to such registration statement.
(c) Notice; Right to Defend. Promptly after receipt by an
indemnified party under this Section 3.2 of notice of the commencement
of any action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 3.2, deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in, and, if the indemnifying
party agrees in writing that it will be responsible for any costs,
expenses, judgments, damages and losses incurred by the indemnified
party with respect to such claim, 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 expenses to be paid by the indemnifying party, if the
indemnified party reasonably believes that 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 of the commencement of
any such action shall relieve such indemnifying party of any liability
to the indemnified party under this Section 3.2 only if and to the
extent that such failure is prejudicial to its ability to defend such
action, and the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may
have to any indemnified party other than under this Section 3.2.
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(d) Contribution. If the indemnification provided for in this
Section 3.2 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss,
liability, claim, damage or expense referred to therein, then the
indemnifying party, 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 loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative
fault of the indemnifying party on the one hand and of the indemnified
party on the other hand in connection with the statements or omissions
which resulted in such loss, liability, claim, damage or expense as
well as any other relevant equitable considerations. The relative fault
of the indemnifying party and the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material
fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. Notwithstanding the foregoing, the amount an
Investor shall be obligated to contribute pursuant to this Section
3.2(d) shall be limited to an amount equal to the proceeds to the
Investor of the Shares sold pursuant to the registration statement
which gives rise to such obligation to contribute (less the aggregate
amount of any damages which the Investor has otherwise been required to
pay in respect of such loss, claim, damage, liability or action or any
substantially similar loss, claim, damage, liability or action arising
from the sale of such Shares).
(e) Survival of Indemnity. The indemnification provided by
this Section 3.2 shall be a continuing right to indemnification and
shall survive the registration and sale of any securities by any Person
entitled to indemnification hereunder and the expiration or termination
of this Agreement.
3.3 Rule 144. In order to permit each Investor to sell the Shares it
holds, if it so desires, from time to time pursuant to Rule 144 promulgated by
the Commission or any successor to such rule or any other rule or regulation of
the Commission that may at any time permit each Investor to sell its Shares to
the public without registration ("Resale Rules"), the Company will:
(a) comply with all rules and regulations of the Commission
applicable in connection with use of the Resale Rules;
(b) make and keep adequate and current public information
available, as those terms are understood and defined in the Resale
Rules, at all times;
(c) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act
and the Exchange Act;
(d) furnish to each Investor so long as it owns any Shares,
forthwith upon request (i) a written statement by the Company that it
has complied with the reporting requirements of the Resale Rules, the
Securities Act and the Exchange Act, (ii) a copy of the most recent
annual or quarterly report of the Company and any other reports and
documents so filed by the Company, and (iii) such other information as
may be reasonably requested in availing an Investor of any rule or
regulation of the Commission which permits the selling of any such
Shares without registration; and
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(e) take any action (including cooperating with each Investor
to cause the transfer agent to remove any restrictive legend on
certificates evidencing the Shares) as shall be reasonably requested by
the Investor or which shall otherwise facilitate the sale of Shares
from time to time by the Investor pursuant to the Resale Rules.
3.4 Investor Status and Responsibilities. Each Investor acknowledges
the limitations that may be imposed upon the Investor under Section 10 of the
Exchange Act and the rules and regulations thereunder in connection with the
Investor's sale or transfer of Shares and agrees to sell or transfer any such
shares only subject to any such applicable limitations.
3.5 Limitations on Other Registration Rights. Except as otherwise set
forth in this Agreement, the Company shall not, without the prior written
consent of each Investor include in any registration in which an Investor has a
right to participate pursuant to this Agreement any securities of any Person.
3.6 Piggyback Registration Rights. Nothing contained in this Agreement
shall confer upon any holder of securities of the Company any right to include
any or all of such holder's securities in a registration statement filed by the
Company under the Securities Act for the sale of such securities for the
Company's own account or in any registration statement filed on behalf of
Investor pursuant to Article 2.
4. MISCELLANEOUS.
4.1 Appointment of Investor Representative. Each Investor hereby
designates and appoints Rockmark as its attorney-in-fact, representative and
agent (in such capacity, the "Investor Representative"), and Rockmark hereby
accepts such designation and appointment. By such designation and appointment,
each Investor authorizes the Investor Representative to act at the direction of
and for and on behalf such Investor whenever any consent, approval or action is
to be taken by or on behalf of the Investor under each of this Agreement, the
Operating Agreement, the Fifth Amended and Restated Agreement of Limited
Partnership of Strategic Hotel Capital Limited Partnership (the "Partnership
Agreement"). Delivery to the Investor Representative of any amount, notice,
document or instrument which is to be given, delivered or paid to any Investor
pursuant to this Agreement or the Partnership Agreement shall be deemed to be
(and shall be effective as) delivery to such Investor. The Company shall be
entitled to rely upon any notice, document or instrument delivered by the
Investor Representative as having been authorized by the Investor. The
appointment and powers conferred upon the Investor Representative shall be in
addition to the powers conferred upon Rockmark pursuant to the Operating
Agreement.
4.2 Amendment. This Agreement may be amended, modified or supplemented
but only in writing signed by each of the parties hereto.
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4.3 Notices. Any notice, request, instruction or other document to be
given hereunder by a party hereto shall be in writing and shall be deemed to
have been given, (a) when received if given in person or by courier or a courier
service, (b) on the date of transmission if sent by telex, facsimile or other
wire transmission or (c) three Business Days after being deposited in the U.S.
mail, certified or registered mail, postage prepaid:
(a) If to the Company, addressed as follows:
Strategic Hotel Capital Inc.
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Attention: General Counsel
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with a copy to:
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(b) If to any Investor, addressed as follows:
c/o Rockmark Corporation
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or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
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4.4 Waivers. The failure of a party hereto at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver by a party of any condition or of
any breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
4.5 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
4.6 Interpretation. The headings preceding the text of Articles and
Sections included in this Agreement and the headings to Exhibits and Schedules
attached to this Agreement are for convenience only and shall not be deemed part
of this Agreement or be given any effect in interpreting this Agreement. The use
of the masculine, feminine or neuter gender herein shall not limit any provision
of this Agreement. The use of the terms "including" or "include" shall in all
cases herein mean "including, without limitation" or "include, without
limitation," respectively. Underscored references to Articles, Sections,
Subsections, Exhibits or Schedules shall refer to those portions of this
Agreement.
4.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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4.8 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Except as otherwise specifically provided in this Agreement, no assignment of
any of Investor's rights or obligations shall be made without the written
consent of the Company.
4.9 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and no provision of this Agreement shall be deemed
to confer upon any third parties any remedy, claim, liability, reimbursement,
cause of action or other right.
4.10 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
4.11 Entire Understanding. This Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to the matters
set forth herein and supersedes any and all prior agreements, arrangements and
understandings among the parties.
4.12 Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to compel specific performance of the obligations of any other party under this
Agreement in accordance with the terms and conditions of this Agreement in any
court of the United States or any state thereof having jurisdiction.
4.13 Reorganization. In connection with any merger, consolidation, sale
of all or substantially all of the Company's assets, the Company will use its
best efforts to take such actions, or to cause the other party to such
transaction to take such actions, to ensure that Investors have, immediately
after consummation of such transaction, substantially the same rights in respect
of such other Person or the Company, as applicable, as they may have immediately
prior to consummation of such transaction in respect of the Company under this
Agreement.
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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of
the date and year first above written.
STRATEGIC HOTEL CAPITAL, INC.
By:
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Name:
Title:
INVESTORS:
ROCKMARK CORPORATION, on its own behalf
and as the Investor Representative
By:
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Name:
Title:
SCHEDULE I
[Rockmark Corporation
Fedmark Corporation
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EC Holdings, Inc.
Portman Family Trust
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DR & Descendants, L.L.C.
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Salomon 1969 Trust
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Winrock International Institute for Agricultural Development
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ECW Investor Associates
Realrock I
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Rockmark Corporation
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Portman Family Trust Number One
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