Exhibit 10.12
FORM OF
REGISTRATION RIGHTS AGREEMENT
(Principal Investors)
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made and
entered into as of ____ __, 2004, among Strategic Hotel Capital, Inc., a
Maryland corporation (the "Company"), WHSHC, L.L.C., a Delaware limited
liability company ("Whitehall 7"), W9/WHSHC, L.L.C., a Delaware limited
liability company ("Whitehall 9"; and, together with Whitehall 7, "Whitehall"),
The Prudential Insurance Company of America, a New Jersey corporation
("Prudential Insurance"), PIC Realty Corporation, a Delaware corporation ("PIC";
and, together with Prudential Insurance, "Prudential") and Strategic Value
Investors, LLC, a Delaware limited liability company ("SVI").
WHEREAS, Strategic Hotel Capital, L.L.C., a Delaware limited liability
company ("SHC LLC"), Whitehall, Prudential and SVI are parties to a 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 ("IPO");
and
WHEREAS, the parties desire to provide each Investor (as defined
herein) with certain registration rights analogous to those under 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 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.
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"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.
"Demand Registration": an effective registration pursuant to a request
made by an Investor pursuant to Section 2.1.
"Exchange Act": the Securities Exchange Act of 1934, as amended.
"First Effective Date": the effective date of the First Registration
Statement in the event of a Proration.
"First Registration Statement": in the event of a Proration, the
registration statement initially filed in which all securities sought to be
included were not so included.
"Investor": means each of Whitehall and Prudential including each
member of the Whitehall Group and the SVI Group; provided that if (i) any member
of the SVI Group liquidates all of its assets by distributing such assets to its
members, investors or beneficial owners ("distributees") and (ii) there is no
Shelf Registration or other effective registration statement that would permit
such member of the SVI Group to distribute Securities that are not subject to
restrictions on transfer under the Exchange Act or the Securities Act to such
distributees then such distributees shall be included in the definition of
"Investor" hereunder.
"Membership Units": any membership interests in Strategic Hotel
Funding, L.L.C., a Delaware limited liability company.
"Overhang Risk": a substantial risk that the sale of some or all of the
Shares sought to be sold will substantially reduce the proceeds or price per
unit to be derived from a registration by the Person on whose behalf a
registration statement shall be filed.
"Person": an individual, partnership, corporation, company (including a
limited liability company), trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Proration": any reduction pursuant to Section 2.1(b) in the number of
securities to be included in a Demand Registration.
"Requesting Investor": as defined in Section 2.1.
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"Resale Rules": as defined in Section 4.3.
"Rockmark Registration Rights Agreement": the Registration Rights
Agreement of even date herewith between the Company, the Investors identified on
the signature pages thereto, and Rockmark Corporation, as Investor
Representative.
"Saleable Amount": the greatest number of securities which would not
create an Overhang Risk.
"Securities": the Shares and the Membership Units owned by any
Investor.
"Securities Act": the Securities Act of 1933, as amended.
"Selling Period": for purposes of a Proration pursuant to a Demand
Registration, the period beginning with the First Effective Date and ending
[upon the earlier of: (i)] 90 days after the First Effective Date[, or (ii) one
day after any date on which the Closing Price shall be at least 110% of the
offering price listed in the prospectus included in the First Registration
Statement (or, if no offering price is listed in the prospectus included in the
First Registration Statement, the Closing Price on the First Effective Date).]
"Shares": the 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 stock 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.
"Shelf Registration": an effective registration under Rule 415 of the
Securities Act pursuant to Section 3.1.
"SVI Group": Prudential, together with SVI, any direct or indirect
wholly-owned subsidiary of Prudential Financial, Inc. and any "Redemption
Vehicle" of SVI or Strategic Value Investors International, LLC, a Delaware
limited liability company, that is managed by Prudential or any of its
affiliates, as "Redemption Vehicle" is defined in the Investment Advisory
Agreement, dated as of October 7, 1997, by and among SVI and the parties
thereto, as amended and as in effect on March 19, 2003, and the Operating
Agreement of Strategic Value Investors International, LLC, dated as of October
7, 1997, as amended and as in effect on March 19, 2003.
"Unincluded Securities": any securities sought to be registered but
which are not registered due to a Proration.
"Violation": as defined in Section 4.2(a).
"Whitehall Group": Whitehall and any entity that is an Affiliate of
Whitehall (if and for so long as such entity remains and Affiliate).
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2. DEMAND REGISTRATION.
2.1 Demand Registration. Subject to any limitations set forth in
Section 2.1(d) and to any applicable standstill agreement to which the Company
and any Investor is a party, from and after the date hereof and until ____ __,
2005 (and for such additional period during which the Company fails to file or
maintain a Shelf Registration pursuant to Article 3), each Investor may request
(a "Requesting Investor") registration of all or any portion of its Shares. The
request shall state that the Investor intends to dispose of such securities
through a registered public offering. The Company will effect the registration
of such Shares under the Securities Act, in accordance with the remaining
provisions of this Article 2.
(a) Company's Ability to Postpone. The Company shall have the
privilege to postpone the filing of a registration statement under this
Section 2.1 for a reasonable period of time (not exceeding 90 days) if
the Company furnishes the Requesting 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 shares, 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. The Company shall only be entitled to exercise its
rights under this Section 2.1(a) on one occasion during any 12-month
period as to any Investor.
(b) Overhang Risk. If the managing underwriter for the
Requesting Investor (and the other Investors pursuant to Section 2.3)
advises that the number of Shares sought to be included in such
registration would create an Overhang Risk, then the number of
securities to be registered by the Investors participating in such
registration shall be reduced to the number of Shares recommended by
the managing underwriter as set forth in Section 2.1(e) below.
(c) Required Inclusion in Underwritten Offering. If a Demand
Registration is an underwritten offering, the Requesting Investor shall
(together with the Company as provided in Section 2.4(g) and the other
Investors), enter into an underwriting agreement in customary and usual
form with the underwriter or underwriters selected for such
underwriting by the Requesting Investor.
(d) Number of Demand Registrations. Each of Whitehall 7 and
Prudential Insurance shall be entitled to two Demand Registrations
(such Demand Registrations being assignable to, and divisible among,
any Person who is an "Investor" as defined in this Agreement), provided
that such Investor continues to own at least $50 million of Securities
(based on the Closing Price) on the date the registration is requested;
provided, however, that in the event of a Proration, each Investor
shall be entitled to one additional Demand Registration (which shall
not be subject to such $50 million requirement). In the event of a
Proration: (i) upon the expiration of the Selling Period, the Company
shall be obligated to file an additional registration statement (which
registration statement shall contain a current prospectus) relating to
the Unincluded Securities; (ii) the Company shall use its reasonable
efforts to effect the registration of the Unincluded Securities as
promptly as practicable thereafter; and (iii) an Investor may withdraw
its Unincluded Securities from such additional registration without
cost or penalty at any time prior to the effective date of such
additional registration statement.
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(e) Limitation. If the number of securities to be registered
in any Demand Registration is to be reduced as described in Section
2.1(b), then the amount of securities to be offered by the
participating Investors shall be allocated first, to the securities
sought to be included by the Requesting Investor and second, pro rata
among the remaining Investors, on the basis of the number of securities
owned by such Investors.
(f) Black-Out Period. During the period beginning on either
(x) the effective date of a Demand Registration or (y) the effective
date of a registration statement filed pursuant to the exercise of
registration rights granted to other holders of securities of the
Company 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
included in the registration statement for such Demand Registration for
a period of 20 consecutive trading days (or if no offering price is
listed in the prospectus included in such registration statement, the
Closing Price on the effective date of such Demand Registration)], each
Investor agrees that it will not request that the Company register any
of its Shares pursuant to this Article 2; provided, however, that the
Company may only utilize clause (y) above to postpone an Investor's
right to require the Company to file a registration statement under
Section 2.1 on one occasion only as to each Demand Registration.
2.2 Option to Acquire. In the event that the Company has received a
request for a Demand Registration from an Investor pursuant to Section 2.1, the
Company or any non-Requesting Investor (in proportion to their percentage
ownership of Shares) shall have the option, for a period of 30 days from the
date of the Requesting Investor's request, to acquire all of the Shares sought
to be included in a Demand Registration at a per share price equal to the
average Closing Price of the Shares during the 20-day period beginning 10 days
prior to receipt of the Investor's request and ending 10 days thereafter. The
Requesting Investor shall have the absolute right to withdraw its request for a
Demand Registration at any time prior to the expiration of such 20-day period.
In the event that the Company or the non-requesting Investors elect not to
purchase all of the Shares covered by the Investor's request, the Company shall
proceed with the registration of the Shares pursuant to this Article 2.
2.3 Participation Rights of Other Investors. Whenever the Company shall
be requested by an Investor pursuant to Section 2.1 to effect the registration
of any of its Shares under the Securities Act, and the Company or a
non-requesting Investor shall not have exercised its rights under Section 2.2,
the Company shall:
(a) promptly (but not later than 10 days after such request)
give written notice of such proposed registration to the other
Investors (which notice shall inform Investors that they have 15 days
to notify the Company that they wish to participate in such
registration and which notice shall also be sent to each investor
pursuant to the Rockmark Registration Rights Agreement);
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(b) as expeditiously as possible (but not later than 45 days
after such request) file a registration statement under the Securities
Act with respect to:
(1) those Shares which the Company has been requested
to register pursuant to Section 2.1; and
(2) all other Shares (subject to Section 2.1(e)) held
by the other Investors (including the investors requesting
inclusion pursuant to Section 2.3(a)) included by such
Investors in written request to the Company for registration
thereof within 15 days after the Company has given written
notice to such Investors; and
(c) use its reasonable efforts to effect such registration as
quickly as practicable.
2.4 Registration Procedures. If and whenever the Company is required by
any of the provisions of this Article 2 to effect the registration of any of the
Shares under the Securities Act, the Company will (except as otherwise provided
in this Agreement) 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 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 Investors shall
desire to sell or otherwise dispose of the same;
(c) furnish to the Investors such numbers of copies of a
summary prospectus or other prospectus, including a preliminary
prospectus or any amendment or supplement to any prospectus, in
conformity with the requirements of the Securities Act, and such other
documents, as the Investors may reasonably request in order to
facilitate the public sale or other disposition of the securities
covered by such registration statement;
(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 Investors
shall request, and do any and all other acts and things reasonably
requested by the Investors to assist them to consummate the public sale
or other disposition in such jurisdictions of the securities owned by
the Investors, 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;
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(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 shares
of the Company are then listed, if the listing or quotation of such
securities is then permitted under the rules of such exchange or
interdealer quotation system;
(g) 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 Investors, at any time when a prospectus
relating thereto covered by 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;
(i) with respect to a single Demand Registration by each
Investor, make the Company's executive officers available for a total
of five business days to participate in "road show" presentations in
New York City, Boston, Philadelphia, Baltimore, Washington D.C. and
Chicago and, with respect to any other Demand Registrations by an
Investor, 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 upon; and
(j) upon the request of any 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.
3. SHELF REGISTRATION RIGHTS.
3.1 Shelf Registration.
(a) Shelf Registration. Beginning on ____ __, 2005, the
Company shall file and use its reasonable efforts to continuously
maintain a registration statement relating to the resale of the
Investors' Shares pursuant to Rule 415 under the Securities Act. Any
Investor shall be entitled, upon 10 days' prior written notice to the
Company and each other Investor, to sell such number of Shares as are
then registered pursuant to such registration statement. The selling
Investor shall also give the Company and each other Investor prompt
written notice of the consummation of such sale. No Investor shall have
the right to cause the Company to register its Shares under this
Section 3.1 if the number of Shares requested to be so registered may
be immediately sold pursuant to the Resale Rules.
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(b) Company's Ability to Postpone. The Company shall have the
privilege to postpone, on one occasion only as to each Shelf
Registration to which a party is entitled, each filing of a
registration statement under this Section 3.1 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;
provided, however, that notwithstanding anything herein to the
contrary, the Company shall only be entitled to exercise its rights
under this Section 3.1(b) on one occasion during any 12-month period as
to any Investor.
3.2 Registration Procedures. If and whenever the Company is required by
any of the provisions of this Article 3 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:
(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;
(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;
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(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;
(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.
3.3 Dribble Out. From and after the time that an Investor's Shares are
registered under an effective registration statement under this Article 3, 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 3.3 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.
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3.4 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 effective date of such registration
statement], each Investor agrees that it will not request that the Company
register any of its Shares pursuant to this Article 3. The Company may postpone,
on one occasion only, each filing of a registration statement under this Article
3 if registration rights granted pursuant to any other holders of securities of
the Company have been exercised and the distribution thereto not completed. The
period during which the Company may postpone such filing shall commence on the
date such registration rights have been commenced and shall terminate [on the
earlier to occur of (i)] 90 days after the effective date of such registration
statement [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 included in
the registration statement 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 effective date of such registration
statement;] provided, however, that the Company may only utilize this provision
to postpone an Investor's right to require the Company to file a registration
statement under this Article 3 on one occasion as to each Shelf Registration.
4. PROVISIONS APPLICABLE TO REGISTRATION RIGHTS.
4.1 Expenses.
(a) Except as set forth in Section 4.1(b), the expenses
specified in the following sentence incurred in any Shelf Registration
or Demand Registration (or any attempted Shelf Registration or Demand
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.
(b) All other expenses incurred in any Shelf Registration or
Demand Registration (or any attempted Shelf Registration or Demand
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.
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4.2 Indemnification. In the event any Investor's Shares are included in
a registration statement under Article 2 or Article 3:
(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.
(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.
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(c) Notice; Right to Defend. Promptly after receipt by an
indemnified party under this Section 4.2 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 4.2, 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 4.2 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 4.2.
(d) Contribution. If the indemnification provided for in this
Section 4.2 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
4.2(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).
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(e) Survival of Indemnity. The indemnification provided by
this Section 4.2 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.
4.3 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
(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.
4.4 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.
4.5 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.
4.6 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
another Investor pursuant to Article 3.
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5. MISCELLANEOUS.
5.1 Amendment. This Agreement may be amended, modified or supplemented
but only in writing signed by each of the parties hereto.
5.2 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:
If to the Company, addressed as follows:
Strategic Hotel Capital, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Whitehall 7 or Whitehall 9, addressed as follows:
c/o Whitehall Street Real Estate Limited Partnership
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Prudential or SVI, addressed as follows:
The Prudential Insurance Company of America
▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: SVI Portfolio Manager
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇, Procter LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
5.3 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.
5.4 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.
5.5 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.
5.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
5.7 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 rights or obligations shall be made by any party without the written consent
of each of SVI and Whitehall. Notwithstanding the foregoing, each of the members
of the Whitehall Group and each of the members of the SVI Group shall be
entitled to assign its rights under this Agreement to any Investor (as such term
is defined herein).
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5.8 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.
5.9 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.
5.10 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.
5.11 Specific Performance. Each of the parties acknowledges that the
obligations undertaken by it pursuant to this Agreement are unique and that the
other parties will not have an adequate remedy at law if it shall fail to
perform any of its obligations hereunder, and each party therefore confirms that
the right of each other party hereto to specific performance of the terms of
this Agreement is essential to protect the rights and interests of such parties.
Accordingly, in addition to any other remedies that the parties may have at law
or in equity, each party shall have the right to have all obligations,
covenants, agreements and other provisions of this Agreement specifically
performed by each other party, and shall have the right to obtain preliminary
and permanent injunctive relief to secure specific performance and to prevent a
breach or contemplated breach of this Agreement by each other party.
5.12 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 the parties hereto 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:
----------------------------------------
Name:
Title:
WHSHC, L.L.C.
By: Whitehall Street Real Estate Limited Partnership VII
By: WH Advisors, L.P. VII, its General Partner
By: WH Advisors, Inc. VII, General Partner
By:
--------------------------
Name:
Title:
W9/WHSHC, L.L.C. I
By: Whitehall Street Real Estate Limited Partnership IX,
Managing Member
By: WH Advisors, L.P. IX, General Partner
By: Whitehall IX/X, Inc. Managing Member
By:
------------------------
Name:
Title:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By:
----------------------------------------
Name:
Title:
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PIC REALTY CORPORATION
By:
----------------------------------------
Name:
Title:
STRATEGIC VALUE INVESTORS, LLC
By: Prudential Investment Management, Inc.
its Attorney-in-fact
By:
-----------------------------------
Name:
Title:
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