EXHIBIT 10.11
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of November 25, 2002 (this
"Agreement"), by and among LODGIAN, INC., a Delaware corporation (the
"Company"), and the other signatories hereto (the "Shareholders").
WHEREAS, pursuant to the First Amended Joint Plan of Reorganization
(the "Plan") of the Company and certain of its subsidiaries, as confirmed by the
United States Bankruptcy Court for the Southern District of New York on November
5, 2002, the Shareholders shall receive shares of the Company's Common Stock,
par value $0.01 per share (the "Original Issue Common Stock"), shares of the
Company's Series A Preferred Stock, par value $0.01 per share (the "Original
Issue Preferred Stock"), Class A Warrants and/or Class B Warrants (the "Original
Issue Warrants") in connection with the Plan.
WHEREAS, in connection with the foregoing, the Company has agreed,
subject to the terms, conditions and limitations set forth in this Agreement, to
provide the Shareholders and their respective successors, assigns and
transferees as permitted herein with certain registration rights in respect of
the Original Issue Common Stock, the Original Issue Preferred Stock, the
Original Issue Warrants and the Warrant Shares (as hereinafter defined).
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. Capitalized words and phrases used and not otherwise
defined in this Agreement shall have the following meanings:
Class A Warrants: means the Class A Warrants of the Company issued
pursuant to the Plan, each of which is exercisable for one share of Common Stock
and, in the case of a reclassification, recapitalization or other similar change
in such warrants or in the case of a consolidation or merger of the Company with
or into another Person, such consideration to which a holder of a warrant would
have been entitled upon the occurrence of such event.
Class B Warrants: means the Class B Warrants of the Company issued
pursuant to the Plan, each of which is exercisable for one share of Common Stock
and, in the case of a reclassification, recapitalization or other similar change
in such warrants or in the case of a consolidation or merger of the Company with
or into another Person, such consideration to which a holder of a warrant would
have been entitled upon the occurrence of such event.
Commission: means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
Common Stock: means the common stock, par value $0.01 per share, of the
Company and all shares hereafter authorized of any class of common stock of the
Company, and, in the case of a reclassification, recapitalization or other
similar change in such Common Stock or in the case of a consolidation or merger
of the Company with or into another Person, such consideration to which a holder
of a share of Common Stock would have been entitled upon the occurrence of such
event.
Company: includes, in addition to the Company, any successor or
assignee corporation or corporations into which or with which Lodgian, Inc. may
be merged or consolidated; any corporation for whose shares the Common Stock,
Preferred Stock, Class A Warrants and Class B Warrants may be exchanged; and any
assignee of or successor to all or substantially all of the assets of the
Company.
Effective Date: shall have the meaning set forth in the recitals.
Exchange Act: means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
Holder: means each of those Persons listed on Schedule A hereto, and
each Person who is a Permitted Transferee of any Shareholder.
Original Issue Common Stock: shall have the meaning set forth in the
recitals.
Original Issue Preferred Stock: shall have the meaning set forth in the
recitals.
Original Issue Warrants: shall have the meaning set forth in the
recitals.
Permitted Transferee: means:
(i) In the case of a Shareholder which is a corporation, partnership,
limited liability company or other entity, (a) any corporation, partnership,
limited liability company or other Person controlled by, controlling, or under
common control with any Shareholder to whom any Shareholder has Transferred
shares of Common Stock, Preferred Stock, Class A Warrants, Class B Warrants or
Warrant Shares or (b) any corporation, partnership, limited liability company or
other Person to whom any Shareholder has Transferred, in the aggregate, 15% or
more of such Shareholder's shares of Common Stock, Preferred Stock, Class A
Warrants, Class B Warrants or Warrant Shares;
(ii) In the case of any Shareholder which is an individual, any spouse
(including a former spouse under a legally terminated marriage), or descendant
(whether natural, step or adopted) of any such individual Shareholder or any
trust formed exclusively for the benefit of any such individual Shareholder; and
(iii) In the case of any Shareholder, any other Shareholder.
Notwithstanding any Person's status as a Permitted Transferee, any
Transfer of Registrable Securities shall be subject to the provisions of Section
10.1.
Person: means any individual, corporation, partnership, trust or other
entity of any nature whatsoever.
Piggyback Registration: shall have the meaning set forth in Section
3.1.
Plan: shall have the meaning set forth in the recitals.
Preferred Stock: means the Series A preferred stock, par value $0.01
per share, of the Company, and, in the case of a reclassification,
recapitalization or other similar change in such preferred stock or in the case
of a consolidation or merger of the Company with or into another Person, such
consideration to which a holder of a share of preferred stock would have been
entitled upon the occurrence of such event.
Registrable Securities: means, with respect to any Holder, (a) all
shares of Original Issue Common Stock, Original Issue Preferred Stock, Original
Issue Warrants and Warrant Shares (collectively, with the Original Issue Common
Stock, Original Issue Preferred Stock and Original Issue Warrants, the "Original
Issue Securities") beneficially owned by such Holder; and (b) all other
securities issued or distributed by the Company with respect to, or in exchange
for, the Original Issue Securities pursuant to a stock dividend or distribution,
stock split, merger, consolidation, reorganization, recapitalization,
reclassification, conversion right or otherwise. Shares of Original Issue
Securities held by any Holder shall cease to be Registrable Securities when (i)
a registration statement with respect to the sale of such securities shall have
become effective under the Securities Act pursuant to Section 2.1 of this
Agreement and such securities shall have been disposed of pursuant to such
registration statement, (ii) such securities shall have been sold or otherwise
distributed pursuant to Rule 144 (or any successor provision) under the
Securities Act, (iii) they may be freely transferred by such Holder pursuant to
Rule 144 under the Securities Act without compliance with paragraph (e) thereto,
(iv) all such securities then held by such Holder can be transferred within a
single 90-day period pursuant to Rule 144 under the Securities Act within the
limits specified in paragraph (e)(1)(i) thereof, provided that, in the case of
clauses (iii) and (iv), the Company shall have complied with paragraph
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(c) thereof, or (v) such securities shall have ceased to be outstanding.
Registration Statement: shall have the meaning set forth in Section
2.1.
Securities Act: means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
Shareholders: shall have the meaning set forth in the recitals.
Shelf Registration: shall have the meaning set forth in Section 2.1.
Transfer: means any transfer, sale, gift, assignment, distribution,
conveyance, pledge, hypothecation, encumbrance or other voluntary or involuntary
transfer of title or beneficial interest, whether or not for value, including,
without limitation, any disposition by operation of law or any grant of a
derivative or economic interest therein.
Warrant Shares: means the shares of Common Stock issuable upon exercise
of the Class A Warrants or the Class B Warrants.
ARTICLE II
SHELF REGISTRATION
2.1. Shelf Registration. The Company shall use its reasonable best
efforts to cause to be filed with the Commission, on or before six months after
the Effective Date, a shelf registration statement (the "Registration
Statement") on an appropriate form under the Securities Act, relating to the
offer and sale of the Registrable Securities by the Holders thereof from time to
time in accordance with the methods of distribution set forth in the
Registration Statement and Rule 415 under the Securities Act (the "Shelf
Registration"). The Company shall use its reasonable best efforts to have such
Shelf Registration declared effective by the Commission as promptly as
practicable thereafter and in no event later than eighteen months after the
Effective Date. The Company shall use its reasonable best efforts to keep the
Registration Statement continuously effective, supplemented and amended in order
to permit the prospectus included therein to be lawfully delivered by the
Holders of the relevant Registrable Securities for the period beginning on the
date on which such Registration Statement is declared effective and ending on
the first date that there are no Registrable Securities (the "Shelf Registration
Period"). (As used herein, except as otherwise provided or unless the context
otherwise requires, the term "prospectus" refers to the prospectus included in
the Registration Statement at the time such Registration Statement is declared
effective, as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such prospectus.) The Company's obligations under
this Section 2.1 are subject to the provisions of Section 4.1.
2.2. Notice of Offering. Notwithstanding anything in Section 2.1 to the
contrary, in the event that the Registration Statement is prepared on a Form
S-1, any Holder intending to distribute a prospectus in connection with the sale
of Registrable Securities, shall, prior to such distribution, provide the
Company with 5 business days prior written notice of such intention, in order to
provide the Company with sufficient time to amend, supplement, and/or otherwise
update the Registration Statement to permit the prospectus included therein to
be lawfully delivered.
ARTICLE III
PIGGYBACK REGISTRATION
3.1. Notice of Registration. In the event that the Company proposes to
register any of its Common Stock, either for its own account or for the account
of any Person other than the Holders, but not including a registration (i)
relating to employee stock option or purchase plans or (ii) relating to a
transaction pursuant to Rule 145 under the Securities Act (a "Piggyback
Registration"), the Company will:
(X) promptly give written notice thereof to the Holders; and
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(Y) use its best efforts to include in such Piggyback Registration and
in any underwriting involved therein up to all of the Registrable Securities
which the Holders request in writing to be so included within 20 days after
receipt of such written notice from the Company. Any Holder of Registrable
Securities shall have the right to withdraw its request for inclusion of its
Registrable Securities in any registration statement pursuant to this Section 3
by giving written notice to the Company, within a reasonable time, of its
request to withdraw. The Company's obligations under this Section 3.1 are
subject to the provisions of Section 4.1.
3.2. Underwriting. If the registration of which the Company gives
notice is for a registered underwritten public offering, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
3.1, and the right of the Holders to include Registrable Securities in such
registration shall be conditioned upon the Holders' participation in such
underwriting and the entry of the participating Holders (together with the
Company and other holders distributing their securities through such
underwriting) into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company.
3.3. Priority. If the underwriter of the registered public offering
referred to in Section 3.2 shall advise the Company in writing that marketing
factors require a limitation of the amount of securities to be underwritten,
securities shall be included in such offering in the following priority: first,
the Common Stock proposed to be registered by the Company; and second,
Registrable Securities requested to be included in such registration by
requesting Holders pursuant to Section 3.1, pro rata on the basis of the number
of Registrable Securities requested to be included by such Holders. Any
securities excluded pursuant to the provisions of this Section 3.3 shall be
withdrawn from and shall not be included in such Piggyback Registration.
ARTICLE IV
PERMITTED DELAYS IN REGISTRATION; HOLDBACK AGREEMENTS
4.1. Suspension of Company Obligations. Notwithstanding anything to the
contrary set forth in this Agreement, the Company's obligation under Article II
of this Agreement to file the Registration Statement and to use its best efforts
to cause Registrable Securities to be registered as provided therein shall be
suspended in the event either (i) the Company is engaged in an underwritten
primary offering and the Company is advised in writing by the underwriters that
the sale of Registrable Securities would have a material adverse effect on such
primary offering, or (ii) in the good faith opinion of counsel to the Company's
Board of Directors, effecting the registration of Registrable Securities 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 (any of the events set forth in
clauses (i) and (ii) being hereinafter referred to as a "Suspension Event"), but
such suspension shall occur on not more than one occasion in a 365-day period
and shall continue only for so long as such event or its effect is continuing,
but in no event will any such suspension exceed 100 days. The Company shall
promptly notify the Holders in writing of the existence of any Suspension Event,
and with such notice shall provide the Holders with a copy of such underwriters'
determination (in the case of clause (i) above), or such opinion of counsel to
the Board of Directors (in the case of clause (ii) above).
4.2. Restrictions on Public Sale by Holders. Each Holder agrees, if
requested in writing by:
(i) the managing underwriter or underwriters in an underwritten primary
offering of equity securities of the Company made pursuant to the Securities
Act; or
(ii) the principal placement agent or agents in any offering of equity
securities to be effected by the Company pursuant to an exemption from
registration under the Securities Act;
not to effect any public sale or distribution of any Registrable Securities,
including a sale pursuant to Rule 144 (or any successor provision) under the
Securities Act (except to the extent included in any such offering or
distribution pursuant to Sections 2.1 or 3.1), during the period starting with
the date 15 days prior to and ending on the date 90 days after the closing date
of any such offering, sale or distribution; provided that, with respect to a
given offering of securities, (x) each other Holder is similarly restricted and
(y) each director and executive officer (including any
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"key" employees) of the Company agrees in writing to identical restrictions.
4.3. Release from Restrictions. The Company may, in its sole and
absolute discretion, elect to waive the applicability in any particular instance
of the provisions of Section 4.2.
ARTICLE V
REGISTRATION PROCEDURES
5.1. Registration Procedures. In connection with each registration to
be effected by the Company pursuant to this Agreement in which any Holder is
participating, the Company shall keep the Holder advised in writing as to the
initiation of each registration and as to the completion thereof. In connection
with each such offering, the Company shall as expeditiously as possible, at its
sole expense:
(a) prepare and file with the Commission a registration statement with
respect to such Holder's Registrable Securities and use its reasonable best
efforts to cause such registration statement to become effective, and thereafter
use its best efforts to keep such registration statement, in the case of the
Shelf Registration, continuously effective for the Shelf Registration Period,
and in the case of the Piggyback Registration, until the distribution described
in the registration statement relating thereto has been completed;
(b) in connection with the preparation and filing of a registration
statement, give the Holders, the underwriters, if any, and their respective
counsel, the opportunity to participate (including the inclusion of any
reasonable comments proposed by the Holders) in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto (provided that the
Company shall not file any such registration statement including Registrable
Securities or amendment thereto or any related prospectus or any supplement
thereto to which such Holders or the managing underwriter or underwriters, if
any, shall reasonably object in writing), and give each of them such access to
its books and records and such opportunities to discuss the business of the
Company with its officers, its counsel and the independent public accountants
who have certified its financial statements as shall be necessary, in the
opinion of the Holder's and such underwriters' respective counsel, to conduct a
reasonable due diligence investigation within the meaning of the Securities Act;
(c) furnish to the Holders and to the underwriters of the Registrable
Securities such number of copies of the registration statement, preliminary
prospectus, final prospectus and other documents incident thereto as such
underwriters and Holders from time to time may reasonably request;
(d) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(e) register or qualify the Registrable Securities under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by any of the Holders for the distribution of the Registrable
Securities covered by the registration statement to be sold by such Holders; and
to take any other action which may be reasonably necessary to enable such
Holders to consummate the disposition in such jurisdictions in the United States
of such Registrable Securities owned by such Holders, provided that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions, or to subject itself to taxation in any such
jurisdiction;
(f) enter into an underwriting agreement in customary form and
substance reasonably satisfactory to the Company, the Holders and the managing
underwriter or underwriters of the public offering of Registrable Securities, if
the offering is to be underwritten, in whole or in part, provided that the
Holders shall be a party to such underwriting agreement and the Holders may, at
their option, require that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of the Holders. The Holders shall not be required
to make any representations or warranties to or agreement with the Company or
the underwriters other than representations, warranties or agreements regarding
the Holders and their
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intended method of distribution and any other representation or warranty
required by law;
(g) promptly notify the Holders 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 as a result of which the
prospectus included in such registration statement, as then in effect, includes
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, and at the request
of any such Holder prepare and furnish to such Holder a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an 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 in light of the circumstances then existing,
provided that each Holder agrees that upon receipt of any notice from the
Company of the happening of any event of the kind described in this Section
5.1(g), such Holder shall forthwith discontinue its disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by this Section 5.1(g) and, if so directed by
the Company, such Holder shall use its reasonable best efforts to deliver to the
Company all copies, other than permanent file copies then in such Holder's
possession, of the prospectus relating to such Registrable Securities current at
the time of receipt of such notice;
(h) use its reasonable best efforts promptly to obtain the withdrawal
of any stop order suspending the effectiveness of a registration statement, or
any order suspending or preventing the use of any related prospectus or
suspending the qualification of any securities included in such registration
statement for sale in any jurisdiction;
(i) furnish, at the request of a Holder on the date that any
Registrable Securities are to be delivered to the underwriters for sale in
connection with a registration pursuant to this Agreement, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to such Holder and (ii) a
letter dated such date, from the independent certified public accountants of the
Company who have certified the Company's financial statements included in such
registration statement, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to such Holder;
(j) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission to effect the prompt
registration of the securities covered by the registration statement, and make
generally available to the Holders, as soon as reasonably practicable, an
earnings statement covering a period of at least twelve months beginning after
the effective date of such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act; and
(k) list all Registrable Securities covered by such registration
statement on the American Stock Exchange or such other national securities
exchange or inter-dealer quotation system as may be mutually agreed upon by the
parties and such securities exchange.
ARTICLE VI
INDEMNIFICATION
6.1. Indemnification by the Company. In the event of any registration
of any Registrable Securities pursuant to this Agreement under the Securities
Act, the Company will, and hereby does, indemnify and hold harmless each
participating Holder, each of its trustees, beneficiaries, directors, officers,
employees, agents, advisors and controlling persons, if any, each other Person
who participates as an underwriter in the offering or sale of such securities
and each other Person who controls any such underwriter within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such participating Holder or any such Person, underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise
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out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such
Registrable Securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any 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, and the Company will reimburse each participating Holder and
each such Person, underwriter and controlling person for any reasonable legal or
any other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, liability, action or proceeding; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such participating Holder
or any other Person who participates as an underwriter in the offering or sale
of such securities, in either case, specifically stating that it is for use in
the preparation thereof; and provided, further, that the Company shall not be
liable to any Person who participates as an underwriter in the offering or sale
of Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus or supplement to the Persons asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such final prospectus or
supplement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of any participating Holder or any such
underwriter or controlling person and shall survive the transfer of such
securities by the Holder.
6.2. Indemnification by Participating Holders. Each of the
participating Holders whose Registrable Securities are included or to be
included in any registration statement, as a condition to including Registrable
Securities in such registration statement, agrees to indemnify and hold harmless
(in the same manner and to the same extent as set forth in Section 6.1) the
Company, each director of the Company, each officer of the Company and each
other Person, if any, who controls the Company within the meaning of the
Securities Act, and each other Person who participates as an underwriter in the
offering or sale of such securities and each other Person who controls any such
underwriter within the meaning of the Securities Act with respect to any untrue
statement or alleged untrue statement of a material fact in or omission or
alleged omission to state a material fact from such registration statement, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company
pertaining to such participating Holder by such participating Holder
specifically stating that it is for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement. The obligation to provide indemnification pursuant to
this Section 6.2 shall be several, and not joint and several, among the
participating Holders. The indemnity provided by each Holder under this Section
6.2 shall be limited to an amount equal to the net proceeds received by such
Holder from the sale of Registrable Securities pursuant to such registration
statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company or any such director,
officer, or any such underwriter or controlling person and shall survive the
transfer of such securities by any participating Holder.
6.3. Notices of Claims. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in Section 6.1 or 6.2, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give written notice
to the latter of the commencement of such action; provided, however, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under Section 6.1 or 6.2,
except to the extent that the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to the
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the
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defense thereof other than reasonable costs of investigation, provided that the
indemnified party may participate in such defense at the indemnified party's
expense and provided, further, that all indemnified parties shall have the right
to employ one counsel to represent them if, in the reasonable judgment of such
indemnified parties, it is advisable for them to be represented by separate
counsel by reason of having legal defenses which are different from or in
addition to those available to the indemnifying party, and in that event the
reasonable fees and expenses of such one counsel shall be paid by the
indemnifying party. If the indemnifying party is not entitled to, or elects not
to, assume the defense of a claim, it will not be obligated to pay the fees and
expenses of more than one counsel for the indemnified parties with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other
indemnified parties with respect to such claim, in which event the indemnifying
party shall be obligated to pay the fees and expenses of such additional counsel
for the indemnified parties. No indemnifying party shall consent to entry of any
judgment or enter into any settlement without the consent of the indemnified
party which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation. No indemnifying party shall be subject
to any liability for any settlement made without its consent, which consent
shall not be unreasonably withheld.
6.4. Other Indemnification. Indemnification similar to that specified
in the preceding Sections of this Article VI (with appropriate modifications)
shall be given by the Company and any participating Holder with respect to any
required registration or other qualification of securities under any federal or
state law or regulation of any governmental authority other than the Securities
Act.
6.5. Indemnification Payments. The indemnification required by this
Article VI shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
6.6. Contribution. If, for any reason, the foregoing indemnity is
unavailable, or is insufficient to hold harmless an indemnified party, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of the expense, loss, claim, damage or liability
(a) in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on the other
(determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission), or (b) if the allocation
provided by clause (a) above is not permitted by applicable law or provides a
lesser sum to the indemnified party than the amount otherwise payable hereunder,
in the proportion as is appropriate to reflect not only the relative fault of
the indemnifying party and the indemnified party, but also the relative benefits
received by the indemnifying party on the one hand and the indemnified party on
the other, as well as any other relevant equitable considerations. No
indemnified party guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent misrepresentation. The
contribution provided by each participating Holder under this Section 6.6 shall
be limited to an amount equal to the net proceeds received by such participating
Holder from the sale of Registrable Securities pursuant to such registration
statement.
ARTICLE VII
REGISTRATION EXPENSES
7.1. Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Agreement will be borne by the Company,
including, without limitation: (i) all registration, filing and National
Association of Securities Dealers fees and expenses; (ii) all fees and expenses
associated with compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing of
certificates for the Common Stock, Preferred Stock, Class A Warrants, Class B
Warrants, Warrant Shares and the prospectuses), messenger and delivery services
and telephone; (iv) all fees and disbursements of counsel for the Company and
the Holders, except to the extent otherwise provided in this Section 7.1; (v)
all application and filing fees in connection with listing the Registrable
Securities on a securities exchange pursuant to the requirements hereof; and
(vi) all fees and disbursements of independent certified public accountants of
the Company (including the expenses associated with preparing any special audit
and comfort letters required by or incident to such
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performance or compliance).
The Company will reimburse the Holders of Registrable Securities
registered pursuant to the Registration Statement, or any Piggyback
Registration, for the reasonable fees and disbursements of not more than one
counsel, which shall be chosen by Holders of a majority of Registrable
Securities being registered pursuant to such registration. Notwithstanding the
provisions of this Section 7.1, each Holder shall bear the expense of any
broker's commission, agency fee or underwriter's discount or commission.
ARTICLE VIII
INFORMATION BY HOLDERS
8.1. Information Regarding Holders. Each Holder shall furnish to the
Company and any applicable underwriter such information regarding such Holder
and the distribution proposed by such Holder as the Company or such underwriter
may request in writing and as shall be required in connection the registration
referred to in this Agreement.
ARTICLE IX
RULE 144 SALES
9.1. Reporting. With a view to making available to the Holders the
benefits of certain rules and regulations of the Commission which may permit the
sale of Registrable Securities (and shares of Original Issue Common Stock,
Original Issue Preferred Stock, Original Issue Warrants and Warrant Shares held
by a Holder which are eligible for sale or distribution under Rule 144 (or any
successor provision) promulgated under the Securities Act) to the public without
registration or through short form registration forms the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times after 90 days after the
Effective Date;
(b) 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;
and
(c) furnish to each Holder, so long as such Holder owns any Registrable
Securities (or any shares of Original Issue Common Stock, Original Issue
Preferred Stock, Original Issue Warrants or Warrant Shares held by a Holder
which are eligible for sale or distribution under Rule 144 (or any successor
provision) promulgated under the Securities Act), forthwith upon request a
written statement by the Company that it has complied with the reporting
requirements of Rule 144 (at any time after 90 days after the Effective Date),
the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by the
Company as such Holder may reasonably request in availing itself of any rule or
regulation of the Commission permitting such Holder to sell any such securities
without registration.
ARTICLE X
TRANSFER OF RIGHTS
10.1. Transfer or Assignment. The rights granted hereunder by the
Company may be assigned or otherwise conveyed to the respective Permitted
Transferees of the Shareholders. It shall be a condition to any Transfer that
(a) such Transfer is effected in accordance with applicable federal and state
securities laws, (b) such transferee or assignee becomes a party to this
Agreement or agrees in writing to be subject to the terms hereof to the same
extent as if it were the Holder hereunder, and (c) the Company is given written
notice by the Holder of said Transfer, stating the name and address of said
transferee and identifying the securities with respect to which such
registration rights are being assigned.
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ARTICLE XI
TERMINATION
11.1. Termination. This Agreement and the rights provided hereunder
shall terminate and be of no further force and effect with respect to each
Holder on such date as such Holder shall no longer hold any Registrable
Securities.
ARTICLE XII
MISCELLANEOUS
12.1. Remedies for Breach. It is expressly understood that the
equitable remedies of specific performance and injunction shall be available for
the enforcement of the covenants and agreements herein, and that the
availability of these equitable remedies shall not be deemed to limit any other
right or remedy to which any party to this Agreement would otherwise be
entitled.
12.2. Successors and Assigns. Subject to the provisions of Section
10.1, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors, assigns and transferees of the
parties. If any successor, assignee or transferee of any Holder shall acquire
Registrable Securities, in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such Person
shall be conclusively deemed to have agreed to be bound by all of the terms and
provisions hereof.
12.3. Notices. All notices and other communications provided for
hereunder shall be in writing and sent by registered or certified mail, return
receipt requested, postage prepaid or delivered in person or by courier,
telecopier or electronic mail, and shall be deemed to have been duly given when
received, by the party to whom such notice is to be given at its address set
forth below, or at such other address for the party as shall be specified by
notice given pursuant hereto:
(a) if to the Company, to:
LODGIAN, INC.
3445 Peachtree Road - Suite 700
Atlanta, Georgia 30326
Attention: General Counsel
with a copy to:
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, NY 10038
Attention: Michael C. Ryan
(b) If to a Holder, to such Holder at the address set forth for such
Holder in the stock records of the Company.
12.4. Governing Law. This Agreement and any controversy or claim
arising out of or relating to this Agreement shall be governed by the laws of
the State of Delaware, without giving effect to the principles of conflicts of
laws.
12.5. Consent to Jurisdiction and Service of Process. Each of the
Company and each Holder hereby irrevocably appoints the Corporation Trust
Company, at its office at 1209 Orange Street, Wilmington, DE 19801, its lawful
agent and attorney to accept and acknowledge service of any and all process
against it in any action, suit or proceeding arising in connection with this
Agreement and upon whom such process may be served, with the same effect as if
such party were a resident of the State of Delaware and had been lawfully served
with such process in
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such jurisdiction, and waives all claims of error by reason of such service,
provided that in the case of any service upon such agent and attorney, the party
effecting such service shall also deliver a copy thereof to each other party at
the address and in the manner specified in Section 12.3. Each of the Company and
each Holder will enter into such agreements with such agent as may be necessary
to constitute and continue the appointment of such agent hereunder. In the event
that such agent and attorney resigns or otherwise becomes incapable of acting as
such, each party will appoint a successor agent and attorney in Wilmington,
Delaware, reasonably satisfactory to the Company, with like powers. Each party
hereby irrevocably submits to the non-exclusive jurisdiction of the United
States District Court for the District of Delaware or any court of the State of
Delaware located in the City of Wilmington in any such action, suit or
proceeding, and agrees that any such action, suit or proceeding shall be brought
only in such court (and waives any objection based on forum non conveniens or
any other objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this Section 12.5 and
shall not be deemed to be a general submission to the jurisdiction of said
courts or in the State of Delaware other than for such purpose. Nothing herein
shall affect the right of any party to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
any other party in any other jurisdiction.
12.6. Entire Agreement; Amendments and Waivers. This Agreement
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions whether oral or written, of the parties. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by all parties. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
12.7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Copies of executed
counterparts transmitted by telecopy or other electronic transmission service
shall be considered original executed counterparts for purposes of this Section
12.7.
12.8. Severability. In the event that any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement.
12.9. Attorneys' Fees. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs and disbursements in addition
to any other relief to which such party may be entitled.
12.10. Headings. The headings of the Articles and Sections herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
12.11. Gender and Other References. Unless the context clearly
indicates otherwise, the use of any gender pronoun in this Agreement shall be
deemed to include all other genders, and singular references shall include the
plural and vice versa.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
LODGIAN, INC.
By: /s/ Daniel E. Ellis
--------------------------------------
Name: Daniel E. Ellis
Title: Vice President and Secretary
OCM REAL ESTATE OPPORTUNITIES
FUND II, L.P.
BY: OAKTREE CAPITAL
MANAGEMENT, LLC,
ITS GENERAL PARTNER
By: /s/ Mark Porosoff
--------------------------------------
Name: Mark Porosoff
Title: Senior Vice President, Legal
By: /s/ Bruce Nuzie
--------------------------------------
Name: Bruce Nuzie
Title: Senior Vice President
BRE/HY FUNDING, L.L.C.
By:
--------------------------------------
Name:
Title:
THIRD AVENUE TRUST, ON BEHALF OF
THIRD AVENUE VALUE FUND
By: /s/ David Barse
--------------------------------------
Name: David Barse
Title: President
THIRD AVENUE TRUST, ON BEHALF OF THIRD
AVENUE REAL ESTATE VALUE FUND
By: /s/ David Barse
--------------------------------------
Name: David Barse
Title: President
THIRD AVENUE MANAGEMENT LLC, as Investment
Advisor for, and on behalf of,
Aegon/Transamerica Series Fund, Inc.
By: /s/ David Barse
--------------------------------------
Name: David Barse
Title: President
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GENERAL MOTORS TRUST COMPANY
By: /s/ Tony Kow
--------------------------------------
Name: Tony Kow
Title: Managing Director
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SCHEDULE A
NAME NUMBER OF SHARES OF NUMBER OF SHARES OF NUMBER OF SHARES OF
OF ORIGINAL ISSUE ORIGINAL ISSUE ORIGINAL ISSUE
SHAREHOLDER COMMON STOCK PREFERRED STOCK WARRANTS
----------- ------------------- ------------------- -------------------
OCM Real Estate 1,578,611 1,332,364.9 N/A
Opportunities Fund II, L.P.
General Motors Trust 86,141.4 72,704.3 N/A
Company
BRE/HY Funding, L.L.C. 833,626.7 703,590 N/A
Third Avenue Value 439,629.6 N/A Class A - 637,571.8
Fund Class B - 127,159.3
Third Avenue Real Estate 31,000 N/A Class A - 44,957.7
Value Fund Class B - 8,966.5
Ageon/Transamerica 22,320 N/A Class A - 32,369.5
Series Fund, Inc. Class B - 6,455.9
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