Exhibit 4.2
GLOBAL HYATT
CORPORATION
REGISTRATION RIGHTS
AGREEMENT
THIS REGISTRATION RIGHTS
AGREEMENT (this “
Agreement ”), dated as of August 28, 2007 (the
“ Effective Date ”), is by and among GLOBAL
HYATT CORPORATION, a Delaware corporation (the “
Company ”), and the Persons listed on Schedule
1 attached hereto (the “ Stockholders
”).
R E C I T A L
S
WHEREAS, the Company has agreed to
grant the Stockholders and their permitted transferees the
registration rights and other rights set forth in this
Agreement.
NOW, THEREFORE, in consideration of
the recitals and the mutual premises, covenants and agreements
contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions . In addition
to capitalized terms defined elsewhere in this Agreement, the
following capitalized terms shall have the following meanings when
used in this Agreement:
“ AAA ” means the
American Arbitration Association.
“ Affiliate ”
means as to any specified Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this
definition, “control,” as used with respect to any
Person, means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
“controlling,” “controlled by” and
“under common control with” have correlative
meanings.
“ Board ” means
the Board of Directors of the Company.
“ Business Day ”
means any day other than a Saturday, Sunday or other day in the
City of New York on which banking institutions are authorized by
law or regulations to close.
“ Cash Equivalents
” means:
(i) securities issued or directly
and fully and unconditionally guaranteed or insured by the United
States government or any agency or instrumentality thereof the
securities of which are unconditionally guaranteed as a full faith
and credit obligation of such government with maturities of 12
months or less from the date of acquisition,
(ii) certificates of deposit, time
deposits and eurodollar time deposits with maturities of one year
or less from the date of acquisition, bankers’ acceptances
with maturities not exceeding two years and overnight bank
deposits, in each case with any commercial bank having, at the time
of acquisition thereof, capital and surplus in excess of $250.0
million in the case of a domestic bank and $100.0 million in the
case of a foreign bank,
(iii) repurchase obligations for
underlying securities of the types described in clauses
(i) and (ii) entered into with any financial institution,
at the time of acquisition thereof, meeting the qualifications
specified in clause (ii) above,
(iv) commercial paper rated, at the
time of acquisition thereof, at least “P-1” by
Moody’s or at least “A-1” by S&P and in each
case maturing within 12 months after the date of creation
thereof,
(v) readily marketable direct
obligations issued by any state of the United States of America or
any political subdivision thereof having one of the two highest
rating categories obtainable from either Moody’s or S&P
with maturities of 12 months or less from the date of
acquisition,
(vi) Indebtedness or preferred stock
issued by Persons with a rating, at the time of acquisition
thereof, of “A” or higher from S&P or
“A2” or higher from Moody’s with maturities of 12
months or less from the date of acquisition, and
(vii) investment funds investing at
least 95% of their assets in securities of the types described in
clauses (i) through (vi) above.
“ Claim ” as
defined in Section 11.2.
“ Commission ”
means the Securities and Exchange Commission and any successor
agency performing comparable functions.
“ Common Stock ”
means the common stock, par value $0.01 per share, of the
Company.
“ Consolidated EBITDA
” means, for any period, (a) Consolidated Net Income for
such period (excluding from the determination of Consolidated Net
Income any income or losses attributable to unconsolidated joint
ventures of the Company and its Subsidiaries) and excluding any
proceeds from financings, refinancings or sales related thereto
plus (b) the sum of the following to the extent deducted in
calculating Consolidated Net Income: (i) Consolidated Interest
Expense for such period, (ii) provision for federal, state,
local, foreign income, value added and similar taxes payable by the
Company and its Consolidated Subsidiaries for such period,
(iii) depreciation and amortization expense of the Company and
its Consolidated Subsidiaries for such period, (iv) minority
interest loss (income), (v) losses (gains) on discontinued
operations and (vi) non-cash charges due to foreign currency
losses; provided that Consolidated EBITDA for any period
shall be adjusted on a Pro Forma Basis (i) to include (or
exclude) amounts attributable to operations acquired (or sold or
otherwise discontinued) during such period as if such acquisition
(or disposition) had occurred on the first day of such period,
(ii) to include amounts (annualized on a simple arithmetic
basis) attributable to projects which commenced operations during
such period and were in operation for at least one full fiscal
quarter during such period and (iii) to include the
proportionate amount of earnings before interest, taxes,
depreciation and amortization from unconsolidated joint venture
hotel properties based on the Company’s percentage ownership
of such properties. Any such adjustments shall be determined by the
Company acting in good faith.
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“ Consolidated Interest
Expense ” means, for any period, all interest expense
with respect to Indebtedness for such period of the Company and its
Consolidated Subsidiaries on a consolidated basis to the extent
reflected in the Company’s consolidated income
statement.
“ Consolidated Net
Income ” means, for any period, net income (excluding
extraordinary items) after taxes of the Company and its
Consolidated Subsidiaries on a consolidated basis, as determined in
accordance with GAAP.
“ Consolidated
Subsidiaries ” means, as of any date of determination and
with respect to the Company, any Subsidiary of the Company whose
financial data is, in accordance with GAAP, reflected in the
Company’s consolidated financial statements.
“ Convertible Stock
” means the Series A Convertible Preferred Stock, par value
$0.01 per share, of the Company, which is convertible into shares
of Common Stock in accordance with the terms of the Company’s
Certificate of Designation of the Convertible Stock.
“ Demand Registration
” as defined in Section 2.2.
“ Effective Date
” as defined in the Preamble.
“ Exchange Act ”
means the Securities Exchange Act of 1934, as amended, or any
successor federal statute, and the rule and regulations of the
Commission thereunder, as the same shall be in effect from time to
time.
“ Framework Agreement
” means that certain Purchase and Framework Agreement, dated
as of the Effective Date, among the Company and the Stockholders
party thereto, as amended from time to time.
“ Fully Diluted Common
Stock ” means the total number of shares of Common Stock,
assuming the full exercise of all options, warrants and other
securities or instruments of the Company issued and outstanding
that are convertible, exercisable or exchangeable for shares of
Common Stock (whether or not such securities are then vested,
exercisable or in-the-money).
“ GAAP ” means
generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or
in such other statements by such other entity as have been approved
by a significant segment of the accounting profession, which are in
effect from time to time.
“ Governmental
Authority ” means any regional, federal, state or local
legislative, executive or judicial body or agency, any court of
competent jurisdiction, any department, political subdivision or
other governmental authority or instrumentality, or any arbitral
authority, in each case, whether domestic or foreign.
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“ Indebtedness ”
of any Person means, without duplication, (i) borrowed money,
including any indebtedness evidenced by bonds, notes, or debentures
and (ii) capitalized leases reflected as liabilities on the
Company’s consolidated balance sheet in accordance with
GAAP.
“ Indemnified Party
” as defined in Section 7.3.
“ Indemnifying Party
” as defined in Section 7.3.
“ Initiating
Stockholder ” as defined in Section 2.4.
“ Lien ” means
any mortgage, pledge, security interest, encumbrance, claim, lien
(including any lien for taxes other than taxes not yet due and
payable or being disputed in good faith), lease, option, right of
first refusal, easement, servitude, proxy, voting trust or
agreement, transfer restriction under any shareholder or similar
agreement, or charge of any kind (including any conditional sale or
other title retention agreement or lease in the nature
thereof).
“ Long-Form Demand
Registration ” as defined in
Section 2.1(b).
“ Notifying Stockholder
” as defined in Section 4.5(a).
“ Person ” means
an individual, a company, a partnership, a joint venture, a limited
liability company or limited liability partnership, an association,
a trust, estate or other fiduciary, any other legal entity, and any
government or governmental entity.
“ Piggyback
Registration ” as defined in Section 3.1.
“ Pro Forma Basis
” means, with respect to any transaction, that such
transaction shall be deemed to have occurred as of the first day of
the relevant twelve-month period.
“ Projected EBITDA
” means projected Consolidated EBITDA for the fiscal year in
which the Repurchase Right Notice is given based on the good faith
projection of the Company’s senior management and prepared
using a methodology consistent with the budget then most recently
approved by the Board for the fiscal year in which the Repurchase
Right Notice is given.
“ Property ”
means any property or asset, whether real, personal or mixed, or
tangible or intangible.
“ Public Offering
” means any offering by the Company of its equity securities
to the public pursuant to an effective registration statement under
the Securities Act or any comparable statement under any comparable
federal statute then in effect (other than any registration
statement on Form S-8 or Form S-4 or any successor forms
thereto).
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“ Purchase Agreement
” means that certain Purchase Agreement, dated as of the
Effective Date, among the Company and the Stockholders party
thereto, as amended from time to time.
“ Registrable
Securities ” means at any time, any of the following
owned by any Stockholder: (i) any Common Stock issued pursuant
to the Subscription Agreement; (ii) any Common Stock issued
upon conversion of the Convertible Stock; and (iii) any Common
Stock then issuable directly or indirectly upon the conversion,
exchange or exercise of other equity securities which were issued
as a dividend or other distribution with respect to or in
replacement of any equity securities referred to in clause
(i) of this definition; provided, however , that
Registrable Securities shall not include any equity securities
which (A) have been sold in a registered offering pursuant to
the Securities Act or (B) which have been sold pursuant to
Rule 144 of the Commission under the Securities Act.
“ Registration Expense
” as defined in Section 6.1.
“ Repurchase Price
” means the sum of, without duplication, (a) the product
of 12.25 times Projected EBITDA, minus , as of the
most current month-end balance sheet data available
(b) Indebtedness of the Company and its subsidiaries,
plus (c) cash and Cash Equivalents, plus
(d) restricted cash not relating to the defeasement of
liabilities, plus (e) the fair market value of non-operating
assets owned by the Company and its subsidiaries (less associated
liabilities), minus (f) minority interest, minus (g) the
proportionate amount of Indebtedness of the unconsolidated joint
venture hotel properties based on the Company’s percentage
ownership of such properties, all calculated in a manner consistent
with the valuation methodology used in connection with the
transactions contemplated by the Framework Agreement and the
Purchase Agreement.
“ Repurchase Right
” as defined in Section 4.5(a).
“ Repurchase Right
Notice ” as defined in Section 4.5(b).
“ Request for
Arbitration ” as defined in Section 11.1.
“ Securities Act
” means the Securities Act of 1933, as amended, or any
successor federal statute, and the rule and regulations of the
Commission thereunder, as the same shall be in effect from time to
time.
“ Short-Form Demand
Registration ” as defined in Section 2.2.
“ Stockholders ”
as defined in the Preamble.
“ Stockholders’
Agreement ” means that certain Stockholders’
Agreement, dated as of the Effective Date, among the Company and
the Stockholders, as amended from time to time.
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“ Subscription
Agreement ” means that certain Subscription Agreement,
dated as of the Effective Date, among the Company and the
Stockholders party thereto, as amended from time to
time.
“ Subsidiary ”
means, as to a Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power to elect a
majority of the directors or other managers of such corporation,
partnership, limited liability company or other entity
(irrespective of whether or not at the time, any class or classes
of such corporation shall have or might have more voting power by
reason of the happening of any contingency) are at the time owned
by such Person directly or indirectly through Subsidiaries. Unless
context otherwise requires, all references to a Subsidiary or
Subsidiaries under this Agreement shall refer to a direct or
indirect Subsidiary or direct or indirect Subsidiaries of the
Company.
2. Demand Registration
.
2.1 Long-Form Registrations
.
(a) Subject to the terms of this
Agreement, (i) subject to Section 4.5 below, in the event
that the Company has not consummated an initial Public Offering
prior to the fourth (4 th ) anniversary of the Effective Date, at any
time during the period between the day after the fourth (4
th ) anniversary of the Effective Date and the
fifth (5 th
) anniversary of the Effective
Date or (ii) at any time at least one hundred eighty
(180) days following the consummation of the initial Public
Offering of the Common Stock, each Stockholder, may request
registration under the Securities Act on Form S-1 or any similar
long-form registration statement for the offering of all or part of
its then outstanding Registrable Securities; provided, that
with respect to any requests under this clause (a), (A) the
anticipated aggregate offering price of the Registrable Securities
covered by such registration exceeds $750,000,000 (or $500,000,000
in the case of a demand pursuant to Section 2.1(a)(i) above);
(B) the Company is not eligible at the time of the request to
file a registration statement on Form S-3 or any similar short form
registration statement for the re-sale by a Stockholder of
Registrable Securities and (C) the Stockholder making the
request is (or will be at the anticipated time of effectiveness of
the applicable registration statement) permitted to sell Common
Stock under Sections 3(b) and/or 3(c) of the Stockholders
Agreement.
(b) Within ten (10) days after
receipt of any written request pursuant to this Section 2.1,
the Company will give written notice of such request to all other
holders of Registrable Securities and will use its reasonable best
efforts to include in such registration all Registrable Securities
with respect to which the Company has received written requests for
inclusion within thirty (30) days after delivery of the
Company’s notice, and, thereupon the Company will use its
reasonable best efforts to effect, at the earliest possible date,
the registration under the Securities Act. All registrations
requested pursuant to this Section 2.1 are referred to herein
as “ Long-Form Demand Registrations .” The
Company shall not be obligated to effect more than two
(2) Long-Form Demand Registrations for each Stockholder
pursuant to this Section 2.1.
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2.2 Short-Form Registrations
. In addition to the Long-Form Demand Registrations provided
pursuant to Section 2.1 above, commencing the date on which
the Company becomes eligible to register securities issued by it on
a Form S-3 or any similar short-form registration, each Stockholder
will be entitled to request registrations under the Securities Act
of all or part of their Registrable Securities on Form S-3, if
available to the Company, or any similar short-form registration
(“ Short-Form Demand Registrations ” and,
together with the Long-Form Demand Registrations, “ Demand
Registrations ”); provided, however , that with
respect to any requests under this Section 2.2, (a) the
anticipated aggregate offering amount of the Registrable Securities
included in any such Short Form Demand Registration exceeds
$100,000,000 and (b) the Stockholder making the request is (or
will be at the anticipated time of effectiveness of the applicable
registration statement) permitted to sell Common Stock under
Sections 3(b) and/or 3(c) of the Stockholders Agreement. Within ten
(10) days after receipt of any request pursuant to this
Section 2.2, the Company will give written notice of such
request to all other holders of Registrable Securities and will use
reasonable best efforts to include in such registration all
Registrable Securities with respect to which the Company has
received written requests for inclusion within ten (10) days
after delivery of the Company’s notice. Once the Company has
become subject to the reporting requirements of the Exchange Act,
the Company will use its reasonable best efforts to make Short-Form
Demand Registrations available for the sale of Registrable
Securities. Demand Registrations will be Short-Form Demand
Registrations whenever the Company is permitted to use any
applicable short form. If for marketing or other reasons the
underwriters with respect to any Short-Form Demand Registration
request the inclusion in the registration statement of information
which is not required under the Securities Act to be included in a
registration statement on the applicable form for the Short-Form
Demand Registration, the Company will provide such information as
may be reasonably requested for inclusion by the underwriters in
the Short-Form Demand Registration. Each Stockholder shall be
limited to two (2) Short-Form Demand Registrations during each
calendar year.
2.3 Payment of Expenses for
Demand Registrations . The Company will pay all Registration
Expenses (as defined in Section 6 below) for the Demand
Registrations permitted under Sections 2.1 and 2.2. A registration
will not count as a Demand Registration until it has become
effective.
2.4 Priority . If the
managing underwriters with respect to a Demand Registration advise
the Company in writing that in their opinion the inclusion of the
number of Registrable Securities and other securities requested to
be included creates a substantial risk that the price per security
will be reduced, the Company will include in such registration,
prior to the inclusion of any securities which are not Registrable
Securities, the number of Registrable Securities requested to be
included which in the opinion of such underwriters can be sold
without creating such a risk, pro rata among the respective holders
of such Registrable Securities on the basis of the number of
Registrable Securities requested by such holders to be included in
the applicable Demand Registration. In no event will a Demand
Registration pursuant to Section 2.1 count as a Long Form
Demand Registration for purposes of Section 2.1 unless at
least twenty-five percent (25%) of all Registrable Securities
requested to be registered in such Demand Registration by the
Stockholder initiating such Demand Registration (the “
Initiating Stockholder ”) are, in fact, registered in
such registration.
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2.5 Restrictions . The
Company will not be obligated to effect any Demand Registration
within one hundred eighty (180) days after the effective date
of a previous Demand Registration. With respect to any Demand
Registration, if (a) the Board determines in good faith that
such filing (i) would be materially detrimental to the
Company, (ii) would require a disclosure of a material fact
that might reasonably be expected to have a material adverse effect
on the Company or any plan or proposal by the Company or any of its
subsidiaries to engage in any acquisition or disposition of assets
or equity securities or any merger, consolidation, tender offer,
material financing or other significant transaction, or
(iii) is inadvisable because of the Company is planning to
prepare and file a registration statement for a primary offering by
the Company of its securities, and (b) the Company shall
furnish the holders of Registrable Securities who have requested a
Demand Registration a certificate signed by an executive officer of
the Company to such effect, the Company may postpone for up to one
hundred twenty (120) days the filing or the effectiveness of a
registration statement for a Demand Registration; provided ,
that the Company may not on any of the foregoing grounds postpone
the filing or effectiveness of a registration statement for a
Demand Registration for more than one hundred twenty
(120) days during any twelve (12) month
period.
2.6 Underwritten Offerings;
Selection of Underwriters . All Demand Registrations shall be
underwritten. The Initiating Stockholder shall have the right in
connection with any Demand Registration to select the managing
underwriter(s), subject to the Company’s prior written
approval.
3. Piggyback Registration
.
3.1 Right to Piggyback . At
any time at least one hundred eighty (180) days following the
consummation of the initial Public Offering of the Common Stock,
whenever the Company proposes to register any of its Common Stock
under the Securities Act for its own account or otherwise, and the
registration form to be used may be used for the registration of
Registrable Securities (a “ Piggyback Registration
”) (except for the registrations on Form S-8 or Form S-4 or
any successor form thereto), the Company will give written notice,
at least fifteen (15) days prior to the proposed filing of
such registration statement, to all holders of the Registrable
Securities (provided, such holders are, or will be at the
anticipated time of effectiveness of the applicable registration
statement, permitted to sell Common Stock under Sections 3(b)
and/or 3(c) of the Stockholders Agreement) of its intention to
effect such a registration and will use reasonable best efforts to
include in such registration all Registrable Securities (in
accordance with the priorities set forth in Sections 3.2 and 3.3
below) with respect to which the Company has received written
requests for inclusion specifying the number of equity securities
desired to be registered, which request shall be delivered within
fifteen (15) days after the delivery of the Company’s
notice.
3.2 Priority on Primary
Registrations . If a Piggyback Registration is an underwritten
primary offering on behalf of the Company and the managing
underwriters advise the Company in writing that in their opinion
the number of Registrable Securities requested to be included in
the registration creates a substantial risk that the price per
share or unit of the primary securities will be reduced or that the
amount of the primary securities intended to be included on behalf
of the Company will be reduced, then the managing underwriter may
exclude securities (including Registrable Securities) from the
registration and the underwriting, and the number of securities
that may be included in such registration and underwriting shall
include first, any securities that the Company
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proposes to sell, second, the Registrable
Securities requested to be included in such registration, pro rata
among the holders of such Registrable Securities on the basis of
the total number of Registrable Securities which are requested by
such holders to be included in such registration, and third, other
securities requested to be included in such registration to be
allocated pro rata among the holders thereof.
3.3 Priority on Secondary
Registrations . If a Piggyback Registration is an underwritten
secondary offering on behalf of holders of the Company’s
securities and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to
be included in the registration creates a substantial risk that the
price per share of securities offered thereby will be reduced, the
Company will include in such registration first, the Common Stock
requested to be included therein by the Person requesting such
registration, second, the Registrable Securities requested to be
included in such registration, pro rata among the other holders of
such Registrable Securities on the basis of the total number of
Registrable Securities which are requested by such holders to be
included in such registration, and third, other Common Stock
requested to be included in such registration to be allocated pro
rata among the holders thereof.
3.4 Selection of Underwriters
. In connection with any Piggyback Registration, the Company will
have such right to select the managing underwriter(s) in respect of
such offering.
3.5 Payment of Expenses for
Demand Registrations . The Company will pay all Registration
Expenses (as defined in Section 6 below) for the Piggyback
Registrations permitted under Section 3.1.
4. Additional Agreements
.
4.1 Holders’ Agreements
. To the extent not inconsistent with applicable law, each holder
of Registrable Securities agrees that upon request of the Company
or the underwriters managing any underwritten offering of the
Company’s securities, it will (a) not sell, make any
short sale of, loan, grant any option for the purchase of,
otherwise dispose of, hedge or transfer any of the economic
interest in (or agree or commit to do any of the foregoing) any
Registrable Securities (other than those included by such holder in
the offering in question, if any) without the prior written consent
of the Company or such underwriters, as the case may be, for up to
fourteen (14) days prior to, and during the ninety
(90) day period (or one hundred eighty (180) day period
in the case of the Company’s initial Public Offering)
following, the effective date of the registration statement for
such underwritten offering, and (b) enter into and be bound by
such form of agreement with respect to the foregoing as the Company
or such managing underwriter may reasonably request; provided that
each executive officer and director also agrees to such
restrictions. Nothing herein shall prevent a holder of Registrable
Securities from transferring Registrable Securities to a permitted
Transferee ( as defined under and pursuant to the
Stockholders’ Agreement) of such Registrable Securities
pursuant to Section 3(a)(ii) of the Stockholders Agreement;
provided, that the Transferees of such Registrable Securities agree
to be bound by the provisions of this Agreement to the extent the
transferor would be so bound.
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Notwithstanding anything to the
contrary contained in this Section 4.1, but subject to the
last paragraph of Section 9 of the Stockholders Agreement,
Goldman, Sachs & Co. and its Affiliates may engage in any
brokerage, investment advisory, asset management, trading, market
making and other similar activities conducted in the ordinary
course of their business (including any activities conducted by its
or its Affiliates’ portfolio companies in the ordinary course
of their business).
4.2 Company’s
Agreements . The Company agrees not to effect any public sale
or public distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such
securities, during the ninety (90) day period (or one hundred
eighty (180) day period in the case of the Company’s
initial Public Offering) following, the effective date of a
registration statement of the Company for an underwritten Public
Offering (except as part of any such underwritten registration or
pursuant to registrations on Form S-8 or Form S-4 or any successor
forms thereto), unless the underwriters managing the Public
Offering otherwise agree.
4.3 Other Registrations . If
the Company has previously filed a registration statement with
respect to Registrable Securities pursuant to Sections 2 or 3, and
if such previous registration has not been withdrawn or abandoned,
the Company will not file or cause to be effected any other
registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity
securities under the Securities Act (except on Form S-8 or Form S-4
or any successor forms thereto), whether on its own behalf or at
the request of any holder or holders of such securities, until the
earlier of (i) one hundred eighty (180) days has elapsed
from the effective date of such previous registration, or
(ii) the date that all of the securities covered by the
previous registration have been sold.
4.4 Suspension of Resales .
The Company shall be entitled to suspend the use of the prospectus
forming the part of any registration statement which has
theretofore become effective at any time if, in the good faith
judgment of the Company, there is a material development relating
to the condition (financial or other) of the Company that has not
been disclosed to the general public and the chief executive
officer or chief financial officer of the Company certifies in
writing to the holders of the Registrable Securities included in
such registration statement and not previously sold thereunder
that, after consultation with counsel, such officers have
reasonably concluded that under such circumstances it would be in
the Company’s best interest to suspend the use of such
prospectus; provided, however, that the aggregate period of
suspension under this Section 4.4, when combined with the
aggregate period of any delay under Section 2.5 hereof, may
not exceed, in any twelve-month period, more than 120 days unless
the holders of a majority in interest of the unsold Registrable
Securities included in such registration statement and not
previously sold thereunder consent in writing to a longer
suspension. Each holder of Registrable Securities included in any
such registration statement and not previously sold thereunder
agrees that upon its receipt of such written certification it will
immediately discontinue the sale of any Registrable Securities
pursuant to such registration statement or otherwise until such
holder has received copies of the supplemented or amended
prospectus or until such holder is advised in writing that the use
of the prospectus forming a part of such registration statement may
be resumed and has received copies of any additional or
supplemental filings that are incorporated by reference in such
prospectus.
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4.5 Company Repurchase Right
. (a) In the event that one or more Stockholders provides
notice of a Demand Registration under Section 2.1(a)(i) (each
a “ Notifying Stockholder ”), the Company shall
have the right to purchase all, but not less than all of each such
Notifying Stockholder’s Common Stock (the “
Repurchase Right ”). The purchase price for the
Repurchase Right per share of Common Stock shall be an amount equal
to the Repurchase Price divided by the number of shares of Fully
Diluted Common Stock outstanding on the date of the Repurchase
Right Notice.
(b) The Company may exercise the
Repurchase Right by delivering to Notifying Stockholder(s) a
written notice that the Company wishes to exercise such right (the
“ Repurchase Right Notice ”), which notice shall
set forth a date for closing not later than ninety (90) days
from the date of mailing of such notice. The closing of any
Repurchase Right transaction shall take place at the
Company’s principal executive office.
(c) In connection with any
Repurchase Right transaction, each Notifying Stockholder shall
deliver to the Company at closing (against payment of the
Repurchase Price on a per share basis as calculated pursuant to
Section 4.5(a)) the Common Stock held by such Notifying
Stockholder, free and clear of all Liens (other than those
contained in the Stockholders’ Agreement and this Agreement),
together with duly executed assignment and transfer documents in
favor of the Company and such other documents as the Company may
reasonably request in connection with the purchase of such
Notifying Stockholder’s Common Stock.
(d) A Notifying Stockholder shall
not be required to make any representations or warranties to the
Company in connection with the exercise and closing of the
Repurchase Right, except as to (i) good and valid title to the
Common Stock; (ii) the absence of Liens (other than those
pursuant to the Stockholders’ Agreement and this Agreement)
with respect to the Common Stock; (iii) its valid existence
and good standing (if applicable), (iv) the legal capacity and
authority for, and validity, binding effect and enforceability of
(as against such Notifying Stockholder), any agreement entered into
hereunder by such Notifying Stockholder in connection with the
transfer of such Common Stock (subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally and to general
principles of equity); (v) all required consents and approvals
to such Notifying Stockholder’s transfer of such Common
Stock; and (vi) the fact that no broker’s or commission
or finder’s fee is payable by the Company as a result of such
Notifying Stockholder’s conduct in connection with the
transfer of the Common Stock to the Company pursuant to the
Repurchase Right. In addition, a Notifying Stockholder shall only
be obligated to provide an indemnity to the Company for breach of
the representations and warranties described in this
Section 4.5(d).
5. Registration Procedures .
Whenever the holders of Registrable Securities have requested that
any Registrable Securities be registered pursuant to this
Agreement, the Company will use its reasonable best efforts to
effect the registration of such Registrable Securities in
accordance with the intended method of disposition thereof and,
pursuant thereto, the Company will as expeditiously as reasonably
possible:
(a) prepare and, as soon as
practicable after the end of the period within which requests for
registration may be given to the Company, file with the Commission
a registration statement with respect to such Registrable
Securities and use its reasonable
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best efforts to cause such registration
statement to become effective (provided that before filing a
registration statement or prospectus, or any amendments or
supplements thereto, the Company will furnish copies of all such
documents proposed to be filed to one counsel designated by holders
of a majority of the Registrable Securities covered by such
registration statement and to the extent practicable under the
circumstances, provide such counsel a reasonable period of time to
review and comment upon such documents; and the Company shall
consider in good faith any such reasonable changes that such
counsel may suggest);
(b) prepare and file with the
Commission such amendments and supplements to such registration
statement and the prospectus(es) used in connection therewith as
may be necessary to keep such registration statement effective for
a period of not less than the earlier of eighteen (18) months
or until the date that all of the securities covered by the
registration statement have been sold, and comply with the
provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement during such
period in accordance with the intended methods of disposition by
the sellers thereof set forth in such registration
statement;
(c) in connection with any filing of
any registration statement or prospectus or amendment or supplement
thereto, cause such document (i) to comply in all material
respects with the requirements of the Securities Act and the rules
and regulations of the Commission thereunder and (ii) to not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading;
(d) furnish to each seller of
Registrable Securities, without charge, such number of copies of
such registration statement, each amendment and supplement thereto,
the prospectus(es) included in such registration statement
(including each preliminary prospectus) and such other documents as
such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such
seller;
(e) use its reasonable best efforts
to register or qualify such Registrable Securities under such
securities or blue sky laws of such jurisdictions as the
Stockholders reasonably request, keep each such registration or
qualification effective during the period the associated
registration statement is required to be kept effective, and do any
and all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where
it would not otherwise be required to qualify but for this
subparagraph, (ii) consent to general service of process in
any such jurisdiction, or (iii) subject itself or any of its
Affiliates to taxation in any such jurisdiction in which it is not
subject to taxation);
(f) promptly notify each seller of
such Registrable Securities and, if requested by such seller,
confirm in writing, when a registration statement has become
effective and when any post-effective amendments and supplements
thereto become effective;
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(g) promptly notify each seller of
such Registrable Securities, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of
the happening of any event as a result of which the prospectus
included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make
the statements therein not misleading, and, at the request of any
such seller, the Company will prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus will not contain
any untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading;
(h) furnish counsel for each
underwriter, if any, and for the sellers of such Registrable
Securities with copies of any written request by the Commission or
any state securities authority for amendments or supplements to a
registration statement or prospectus or for additional information
generally;
(i) cause all such Registrable
Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed or if no
such securities are then listed, such securities exchange as the
holders of a majority of the Registrable Securities included in
such registration may request;
(j) provide a transfer agent,
registrar and CUSIP number for all such Registrable Securities not
later than the effective date of such registration
statement;
(k) enter into such customary
agreements (including underwriting agreements in customary form)
and take all such other customary actions as the holders of a
majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable
Securities;
(l) use commercially reasonable
efforts to cooperate with each seller and the underwriter or
managing underwriter, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to
be sold and not bearing any restrictive legends; and enable such
Registrable Securities to be in such denominations (consistent with
the provisions of the governing documents thereof) and registered
in such names as each seller or the underwriter or managing
underwriter, if any, may reasonably request at least three business
days prior to any sale of Registrable Securities;
(m) make available for inspection by
any seller of Registrable Securities, any underwriter participating
in any disposition pursuant to such registration statement, and any
attorney, accountant or other agent retained by any such seller or
underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the
Company’s officers, directors, employees and independent
accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in
connection with such registration statement; provided,
however , that any records, information or documents that are
furnished by the Company and that are non-public shall be used only
in connection with such registration and shall be kept strictly
confidential by any of the foregoing recipients, except to the
extent disclosure of such records, information or documents is
required by written order of any Governmental Authority;
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(n) advise each seller of such
Registrable Securities, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of such registration
statement or the initiation or threatening of any proceeding for
such purpose and promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop
order should be issued;
(o) 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 at least 12
months which shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder;
(p) cooperate and assist in any
filing required to be made with the National Association of
Securities Dealers and in the performance of any due diligence
investigation by any underwriter (including any “qualified
independent underwriter” that is required to be retained in
accordance with the rules and regulations of the National
Association of Securities Dealers).
(q) at least forty-eight
(48) hours prior to the filing of any registration statement
or prospectus, or any amendment or supplement to such registration
statement or prospectus, furnish a copy thereof to each seller of
such Registrable Securities and refrain from filing any such
registration statement, prospectus, amendment or supplement to
which counsel selected by the holders of a majority of the
Registrable Securities being registered shall have reasonably
objected on the grounds that such document does not comply in all
material respects with the requirements of the Securities Act or
the rules and regulations thereunder, unless, in the case of an
amendment or supplement, in the opinion of counsel for the Company
the filing of such amendment or supplement is reasonably necessary
to protect the Company from any liabilities under any applicable
federal or state law and such filing will not violate applicable
laws;
(r) at the request of any seller of
such Registrable Securities in connection with an underwritten
offering, furnish on the date or dates provided for in the
underwriting agreement: (i) an opinion of counsel, addressed
to the underwriters and the sellers of Registrable Securities,
covering such matters as such counsel, underwriters and the sellers
may reasonably agree upon, including such matters as are
customarily furnished in connection with an underwritten offering,
and (ii) a letter or letters from the independent certified
public accountants of the Company addressed to the underwriters and
the sellers of Registrable Securities, covering such matters as
such accountants, underwriters and sellers may reasonably agree
upon, in which letter(s) such accountants shall state, without
limiting the generality of the foregoing, that they are an
independent registered public accounting firm within the meaning of
the Securities Act and that in their opinion the financial
statements and other financial data of the Company included in the
registration statement, the prospectus(es), or any amendment or
supplement thereto, comply in all material respects with the
applicable accounting requirements of the Securities Act;
and
(s) with respect to Demand
Registrations, make senior executives of the Company reasonably
available to assist the underwriters with respect to, and accompany
the underwriters on, the so-called “road show” in
connection with the marketing efforts for, and the distribution and
sale of Registrable Securities pursuant to a registration
statement.
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6. Registration Expenses
.
6.1 Company’s Expenses
. The Company will pay all expenses incident to the Company’s
performance of or compliance with this Agreement, including, but
not limited to: all registration and filing fees; fees and expenses
of compliance with securities or blue sky laws; printing expenses;
messenger and delivery expenses; and fees and disbursements of
counsel for the Company; reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable
Securities included in such registration to represent all holders
of Registrable Securities included in the registration; fees and
disbursements of the Company’s registered public accounting
firm; reasonable fees and disbursements of a single counsel for the
underwriters (if the Company or the holders of Registrable
Securities are required to bear such expenses); and reasonable fees
and disbursements of all other Persons retained by the Company (all
such expenses being herein called “ Registration
Expenses ”); provided, however, that all
underwriting discounts, commissions and transfer taxes relating to
the Registrable Securities will be borne by the holders of such
Registrable Securities. In addition, the Company will pay its
internal expenses (including, but not limited to, all salaries and
expenses of its offi
