Exhibit 10.3

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

by and between

 

MORGANS HOTEL GROUP CO.

 

and

 

RSA ASSOCIATES, L.P.

 

--------------------------------------------------------------------------------

 

Dated as of February 17, 2006

 

 

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

1.

Certain Definitions

1

 

 

 

2.

Demand Registrations

3

 

(a)

Right to Request Registration

3

 

(b)

Number of Demand Registrations

4

 

(c)

Priority on Demand Registrations

4

 

(d)

Restrictions on Demand Registrations

4

 

(e)

Selection of Underwriters

5

 

(f)

Other Registration Rights

5

 

(g)

Effective Period of Demand Registrations

5

 

 

 

 

3.

Piggyback Registrations.

5

 

(a)

Right to Piggyback

5

 

(b)

Priority on Primary Piggyback Registrations

6

 

(c)

Priority on Secondary Registrations

6

 

(d)

Selection of Underwriters

6

 

(e)

Other Registration Rights

6

 

 

 

 

4.

S-3 Registrations

7

 

(a)

Right to Request Registration

7

 

(b)

Priority on Shelf Takedowns

7

 

(c)

Selection of Underwriters

8

 

(d)

Other Registration Rights

8

 

 

 

 

5.

Holdback Agreements

8

 

 

 

6.

Registration Procedures

8

 

 

 

7.

Registration Expenses

13

 

 

 

8.

Indemnification

14

 

 

 

9.

Participation in Underwritten Registrations

15

 

 

 

10.

Rule 144

16

 

 

 

11.

Miscellaneous

16

 

(a)

Notices

16

 

(b)

No Waivers

17

 

(c)

Expenses

17

 

(d)

Successors and Assigns

17

 

(e)

Governing Law

17

 

(f)

Jurisdiction

17

 

i

--------------------------------------------------------------------------------

 

 

(g)

Waiver of Jury Trial

18

 

(h)

Counterparts; Effectiveness

18

 

(i)

Entire Agreement

18

 

(j)

Captions

18

 

(k)

Severability

18

 

(l)

Amendments

18

 

(m)

Equitable Relief

19

 

ii

--------------------------------------------------------------------------------

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is made and entered into
as of February 17, 2006, by and between Morgans Hotel Group Co., a Delaware
corporation (the “Company”), and RSA Associates, L.P., a Delaware limited
partnership (the “Securityholder”).

 

In consideration of the mutual covenants and agreements herein contained and
other good and valid consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement hereby agree as follows:

 

1.             Certain Definitions.

 

In addition to the terms defined elsewhere in this Agreement, the following
terms shall have the following meanings:

 

“Affiliate” of any Person means any other Person which directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person. The term “control” (including the terms
“controlling,” “controlled by” and “under common control with”) as used with
respect to any Person means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.

 

“Agreement” means this Registration Rights Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the
foregoing, and shall refer to this Registration Rights Agreement as the same may
be in effect at the time such reference becomes operative.

 

“Blackout Period” has the meaning set forth in Section 6(f) hereof.

 

“Common Stock” means any shares of common stock issued by the Company.

 

“Company” has the meaning set forth in the introductory paragraph.

 

“Delay Period” has the meaning set forth in Section 2(e) hereof.

 

“Demand Registration” has the meaning set forth in Section 2(a) hereof.

 

“Demand Registration Statement” has the meaning set forth in Section 2(a)
hereof.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Form S-3” means a registration statement on Form S-3 under the Securities Act
or such successor form thereto permitting registration of securities under the
Securities Act.

 

--------------------------------------------------------------------------------

 

“Governmental Entity” means any national, federal, state, municipal, local,
territorial, foreign or other government or any department, commission, board,
bureau, agency, regulatory authority or instrumentality thereof, or any court,
judicial, administrative or arbitral body or public or private tribunal.

 

“Holder” means the Securityholder to the extent that the Securityholder is the
holder of record of (1) Registrable Common Stock or (2) OP Units. For purposes
of this Agreement, the Company may deem and treat the registered holder of
Registrable Common Stock and OP Units as the absolute owner thereof, and the
Company shall not be affected by any notice to the contrary. In order to
determine the number of shares of Registrable Common Stock held by the Holder
and the number of shares of Registrable Common Stock outstanding, the OP Units
held by the Securityholder shall be deemed to have been redeemed for or
exchanged into shares of Common Stock.

 

“Morgans” means Morgans Hotel Group LLC.

 

“Morgans Group LLC” means Morgans Group LLC, a Delaware limited liability
company, or the other entity through which the Company owns its hotel
properties.

 

“Nasdaq” means The Nasdaq Stock Market, Inc. or any successor reporting system.

 

“OP Units” means any units of membership interest in Morgans Group LLC that are
issued to the Securityholder.

 

“Person” means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, incorporated organization, association,
corporation, institution, public benefit corporation, Governmental Entity or any
other entity.

 

“Piggyback Registration” has the meaning set forth in Section 3(a) hereof.

 

“Prospectus” means the prospectus or prospectuses included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Common Stock
covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus or prospectuses.

 

“Registrable Common Stock” means (1) any shares of Common Stock held of record
by the Securityholder as of the date hereof, (2) any shares of Common Stock held
of record by Morgans as of the date hereof that may be directly or indirectly
issued or distributed to the Securityholder by Morgans, (3) any shares of Common
Stock that may be issued to the Securityholder upon redemption or exchange of OP
Units held of record by the Securityholder as of the date hereof, (4) any shares
of Common Stock that may be issued upon redemption or exchange of OP Units held
of record by Morgans as of the date hereof to the extent such OP Units may be
issued or distributed to the Securityholder by Morgans, (5) any shares of Common
Stock held by the Holder from time to time, and (6) any securities of the
Company issued or issuable with respect to the shares of

 

2

--------------------------------------------------------------------------------

 

Common Stock referred to in clause (1) through (5) above by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise.

 

“Registration Expenses” has the meaning set forth in Section 7(a) hereof.

 

“Registration Statement” means any registration statement of the Company which
covers any of the Registrable Common Stock pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits and
all materials incorporated by reference in such Registration Statement.

 

“S-3 Registration” has the meaning set forth in Section 4 hereof.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Securityholder” has the meaning set forth in the introductory paragraph hereof.

 

“Suspension Notice” has the meaning set forth in Section 6(f) hereof.

 

“Termination Date” means the date upon which all the Registrable Common Stock
may be sold in any three-month period without registration under the Securities
Act.

 

“underwritten offering” means a registered offering in which securities of the
Company are sold to underwriters for reoffering to the public.

 

2.             Demand Registrations.

 

(a)           Right to Request Registration.  Subject to the provisions hereof,
beginning six months after the date hereof and continuing until the Termination
Date, the Holder may at any time request registration for resale under the
Securities Act of all or part of the Registrable Common Stock separate from an
S-3 Registration (a “Demand Registration”); provided, that (based on then
current market prices) the number of shares of Registrable Common Stock included
in the Demand Registration would yield gross proceeds to the Holder of at least
$25,000,000 unless the aggregate value (based on then current market prices) of
the Registrable Common Stock held by the Holder is less than $25,000,000 but
greater than $15,000,000, in which case the Demand Registration shall be for all
of the Holder’s Registrable Common Stock (other than Registrable Common Stock
which, as of the date of such demand, are in the form of OP Units and either
held directly by the Securityholder or that the Securityholder may be entitled
to receive from Morgans in a pro rata distribution of its OP Units, which such
Holder shall not be required to include in such Demand Registration).  Subject
to Section 2(d) below, the Company shall use its reasonable best efforts (i) to
file a Registration Statement (a “Demand Registration Statement”) registering
for resale such number of shares of Registrable Common Stock as requested to be
so registered within 30 days of the

 

3

--------------------------------------------------------------------------------

 

Holder’s request therefor and (ii) to cause such Demand Registration Statement
to be declared effective by the SEC as soon as practicable thereafter.

 

(B)           NUMBER OF DEMAND REGISTRATIONS.  SUBJECT TO THE LIMITATIONS OF
SECTION 2(A), THE HOLDER SHALL BE ENTITLED TO REQUEST ONE DEMAND REGISTRATION. A
REGISTRATION STATEMENT SHALL NOT COUNT AS THE PERMITTED DEMAND REGISTRATION
UNLESS AND UNTIL IT HAS BECOME EFFECTIVE AND THE HOLDER IS ABLE TO REGISTER AND
SELL AT LEAST 50% OF THE REGISTRABLE COMMON STOCK REQUESTED TO BE INCLUDED IN
SUCH REGISTRATION.

 

(C)           PRIORITY ON DEMAND REGISTRATIONS.  THE COMPANY MAY INCLUDE COMMON
STOCK OTHER THAN REGISTRABLE COMMON STOCK IN A DEMAND REGISTRATION ON THE TERMS
PROVIDED BELOW AND IN SECTION 2(G) HEREOF, AND, IF SUCH DEMAND REGISTRATION IS
AN UNDERWRITTEN OFFERING, ONLY WITH THE CONSENT OF THE MANAGING UNDERWRITERS OF
SUCH OFFERING. IF THE MANAGING UNDERWRITERS OF THE REQUESTED DEMAND REGISTRATION
ADVISE THE COMPANY AND THE HOLDER THAT IN THEIR OPINION THE NUMBER OF SHARES OF
COMMON STOCK PROPOSED TO BE INCLUDED IN THE DEMAND REGISTRATION EXCEEDS THE
NUMBER OF SHARES OF COMMON STOCK WHICH CAN BE SOLD IN SUCH UNDERWRITTEN OFFERING
AND/OR THE NUMBER OF SHARES OF COMMON STOCK PROPOSED TO BE INCLUDED IN SUCH
REGISTRATION WOULD ADVERSELY AFFECT THE PRICE PER SHARE OF THE REGISTRABLE
COMMON STOCK PROPOSED TO BE SOLD IN SUCH UNDERWRITTEN OFFERING, THE COMPANY
SHALL INCLUDE IN SUCH DEMAND REGISTRATION (I) FIRST, THE NUMBER OF SHARES OF
COMMON STOCK THAT THE HOLDER PROPOSES TO SELL, AND (II) SECOND, THE NUMBER OF
SHARES OF COMMON STOCK PROPOSED TO BE INCLUDED THEREIN BY ANY OTHER PERSONS
(INCLUDING SHARES OF COMMON STOCK TO BE SOLD FOR THE ACCOUNT OF THE COMPANY
AND/OR OTHER HOLDERS OF COMMON STOCK) ALLOCATED AMONG SUCH PERSONS IN SUCH
MANNER AS THEY MAY AGREE.

 

(D)           RESTRICTIONS ON DEMAND REGISTRATIONS.  THE COMPANY SHALL NOT BE
OBLIGATED TO EFFECT ANY DEMAND REGISTRATION ON BEHALF OF THE HOLDER WITHIN SIX
MONTHS AFTER THE EFFECTIVE DATE OF ANY DEMAND REGISTRATION, PIGGYBACK
REGISTRATION WHEREIN THE HOLDER WAS PERMITTED TO REGISTER, AND ACTUALLY SOLD, AT
LEAST 50% OF THE SHARES OF REGISTRABLE COMMON STOCK REQUESTED TO BE INCLUDED
THEREIN OR S-3 REGISTRATION. THE COMPANY MAY (I) WITHDRAW A REGISTRATION
STATEMENT PREVIOUSLY FILED (BUT NOT DECLARED EFFECTIVE) PURSUANT TO A DEMAND
REGISTRATION OR POSTPONE FOR UP TO NINETY (90) DAYS THE FILING OF A REGISTRATION
STATEMENT FOR A DEMAND REGISTRATION IF, BASED ON THE GOOD FAITH JUDGMENT OF THE
COMPANY, SUCH POSTPONEMENT OR WITHDRAWAL WOULD AVOID PREMATURE DISCLOSURE OF A
MATTER THE COMPANY HAS DETERMINED WOULD NOT BE IN THE BEST INTEREST OF THE
COMPANY TO BE DISCLOSED AT SUCH TIME OR (II) POSTPONE THE FILING OF A DEMAND
REGISTRATION IN THE EVENT THE COMPANY SHALL BE REQUIRED TO PREPARE (A) AUDITED
FINANCIAL STATEMENTS AS OF A DATE OTHER THAN ITS FISCAL YEAR END (UNLESS THE
HOLDER AGREES TO PAY THE EXPENSES OF SUCH AN AUDIT) OR (B) PRO FORMA FINANCIAL
STATEMENTS THAT ARE REQUIRED TO BE INCLUDED IN THE REGISTRATION STATEMENT;
PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE COMPANY WITHDRAW A REGISTRATION
STATEMENT UNDER CLAUSE (I) AFTER SUCH REGISTRATION STATEMENT HAS BEEN DECLARED
EFFECTIVE; AND PROVIDED, FURTHER, HOWEVER, THAT IN ANY OF THE EVENTS DESCRIBED
IN CLAUSE (I) OR (II) ABOVE, THE HOLDER SHALL BE ENTITLED TO WITHDRAW SUCH
REQUEST AND, IF SUCH REQUEST IS WITHDRAWN, SUCH DEMAND REGISTRATION SHALL NOT
COUNT AS ONE OF THE PERMITTED DEMAND REGISTRATIONS. THE COMPANY SHALL PROVIDE
WRITTEN NOTICE TO THE HOLDER OF (X) ANY POSTPONEMENT OR WITHDRAWAL OF THE FILING
OR EFFECTIVENESS OF A

 

4

--------------------------------------------------------------------------------

 

REGISTRATION STATEMENT PURSUANT TO THIS SECTION 2(D), (Y) THE COMPANY’S DECISION
TO FILE OR SEEK EFFECTIVENESS OF SUCH REGISTRATION STATEMENT FOLLOWING SUCH
WITHDRAWAL OR POSTPONEMENT AND (Z) THE EFFECTIVENESS OF SUCH REGISTRATION
STATEMENT, WHICH NOTICE, IF IT RELATES TO CLAUSE (X), SHALL INCLUDE THE REASONS
THEREFOR IF THE HOLDER SHALL HAVE PREVIOUSLY EXECUTED A CONFIDENTIALITY
AGREEMENT SATISFACTORY TO THE COMPANY IN RESPECT THEREOF. THE COMPANY MAY DEFER
THE FILING OF A PARTICULAR REGISTRATION STATEMENT PURSUANT TO THIS SECTION 2(D)
ONLY ONCE DURING ANY SIX-MONTH PERIOD.  THE PERIOD DURING WHICH FILING OR
EFFECTIVENESS IS SO POSTPONED HEREUNDER IS REFERRED TO AS A “DELAY PERIOD”.

 

(E)           SELECTION OF UNDERWRITERS.  IF ANY OF THE REGISTRABLE COMMON STOCK
COVERED BY A DEMAND REGISTRATION IS TO BE SOLD IN AN UNDERWRITTEN OFFERING, THE
COMPANY SHALL HAVE THE RIGHT TO SELECT THE MANAGING UNDERWRITERS TO ADMINISTER
THE OFFERING SUBJECT TO THE CONSENT OF THE HOLDER FOR THE BOOK-RUNNING OR LEAD
MANAGING UNDERWRITER, IN ITS SOLE DISCRETION.

 

(F)            OTHER REGISTRATION RIGHTS.  THE COMPANY SHALL NOT GRANT TO ANY
PERSON THE RIGHT TO REQUEST THE COMPANY (I) TO REGISTER ANY SHARES OF COMMON
STOCK IN A DEMAND REGISTRATION UNLESS SUCH RIGHTS ARE CONSISTENT WITH THE
PROVISIONS HEREOF, OR (II) TO REGISTER ANY SECURITIES OF THE COMPANY (OTHER THAN
SHARES OF COMMON STOCK) IN A DEMAND REGISTRATION.

 

(G)           EFFECTIVE PERIOD OF DEMAND REGISTRATIONS.  UPON THE DATE OF
EFFECTIVENESS OF ANY DEMAND REGISTRATION FOR AN UNDERWRITTEN OFFERING
CONTEMPLATED TO BE CONSUMMATED AT THE TIME OF EFFECTIVENESS OF THE DEMAND
REGISTRATION, THE COMPANY SHALL USE ITS REASONABLE BEST EFFORTS TO KEEP SUCH
DEMAND REGISTRATION STATEMENT EFFECTIVE FOR A PERIOD EQUAL TO 15 BUSINESS DAYS
FROM SUCH DATE OR SUCH SHORTER PERIOD WHICH SHALL TERMINATE WHEN ALL OF THE
REGISTRABLE COMMON STOCK COVERED BY SUCH DEMAND REGISTRATION HAS BEEN SOLD
PURSUANT TO SUCH DEMAND REGISTRATION. IF THE COMPANY SHALL WITHDRAW ANY DEMAND
REGISTRATION PURSUANT TO SECTION 2(D) OR ISSUE A SUSPENSION NOTICE PURSUANT TO
SECTION 6(F) WITHIN SUCH 15 BUSINESS DAY PERIOD AND BEFORE ALL OF THE
REGISTRABLE COMMON STOCK COVERED BY SUCH DEMAND REGISTRATION HAS BEEN SOLD
PURSUANT THERETO, THE HOLDER SHALL BE ENTITLED TO A REPLACEMENT DEMAND
REGISTRATION WHICH SHALL BE SUBJECT TO ALL OF THE PROVISIONS OF THIS AGREEMENT.

 

3.             PIGGYBACK REGISTRATIONS.

 

(A)           RIGHT TO PIGGYBACK.  BEGINNING SIX MONTHS AFTER THE DATE HEREOF,
WHENEVER THE COMPANY PROPOSES TO REGISTER ANY OF ITS COMMON STOCK UNDER THE
SECURITIES ACT (OTHER THAN A REGISTRATION STATEMENT ON FORM S-8 OR ON FORM S-4
OR ANY SIMILAR SUCCESSOR FORMS THERETO), WHETHER FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF ONE OR MORE STOCKHOLDERS OF THE COMPANY AND THE FORM OF REGISTRATION
STATEMENT TO BE USED MAY BE USED FOR ANY REGISTRATION OF REGISTRABLE COMMON
STOCK (A “PIGGYBACK REGISTRATION”), THE COMPANY SHALL GIVE PROMPT WRITTEN NOTICE
(IN ANY EVENT NO LATER THAN 10 DAYS PRIOR TO THE FILING OF SUCH REGISTRATION
STATEMENT) TO THE HOLDER OF ITS INTENTION TO EFFECT SUCH A REGISTRATION AND,
SUBJECT TO SECTION 3(B), SHALL INCLUDE IN SUCH REGISTRATION STATEMENT ALL
REGISTRABLE COMMON STOCK WITH RESPECT TO WHICH THE COMPANY HAS RECEIVED WRITTEN
REQUEST FOR INCLUSION THEREIN FROM THE HOLDER WITHIN 8 DAYS AFTER THE HOLDER’S
RECEIPT OF

 

5

--------------------------------------------------------------------------------

 

THE COMPANY’S NOTICE. THE COMPANY MAY POSTPONE OR WITHDRAW THE FILING OR THE
EFFECTIVENESS OF A PIGGYBACK REGISTRATION AT ANY TIME IN ITS SOLE DISCRETION.  A
PIGGYBACK REGISTRATION SHALL NOT BE CONSIDERED A DEMAND REGISTRATION FOR
PURPOSES OF SECTION 2 OF THIS AGREEMENT OR A S-3 REGISTRATION FOR PURPOSES OF
SECTION 4 OF THIS AGREEMENT.

 

(B)           PRIORITY ON PRIMARY PIGGYBACK REGISTRATIONS.  IF A PIGGYBACK
REGISTRATION IS INITIATED AS A PRIMARY UNDERWRITTEN OFFERING ON BEHALF OF THE
COMPANY AND THE MANAGING UNDERWRITERS ADVISE THE COMPANY AND THE HOLDER (IF THE
HOLDER HAS ELECTED TO INCLUDE REGISTRABLE COMMON STOCK IN SUCH PIGGYBACK
REGISTRATION) THAT IN THEIR OPINION THE NUMBER OF SHARES OF COMMON STOCK
PROPOSED TO BE INCLUDED IN SUCH REGISTRATION EXCEEDS THE NUMBER OF SHARES OF
COMMON STOCK WHICH CAN BE SOLD IN SUCH OFFERING AND/OR THAT THE NUMBER OF SHARES
OF COMMON STOCK PROPOSED TO BE INCLUDED IN ANY SUCH REGISTRATION WOULD ADVERSELY
AFFECT THE PRICE PER SHARE OF THE COMMON STOCK TO BE SOLD IN SUCH OFFERING, THE
COMPANY SHALL INCLUDE IN SUCH REGISTRATION (I) FIRST, THE NUMBER OF SHARES OF
COMMON STOCK THAT THE COMPANY PROPOSES TO SELL, AND (II) SECOND, THE NUMBER OF
SHARES OF COMMON STOCK REQUESTED TO BE INCLUDED THEREIN BY HOLDERS OF COMMON
STOCK, INCLUDING THE HOLDER (IF THE HOLDER HAS ELECTED TO INCLUDE REGISTRABLE
COMMON STOCK IN SUCH PIGGYBACK REGISTRATION), PRO RATA AMONG ALL SUCH HOLDERS ON
THE BASIS OF THE NUMBER OF SHARES OF COMMON STOCK REQUESTED TO BE INCLUDED
THEREIN BY ALL SUCH HOLDERS OR AS SUCH HOLDERS MAY OTHERWISE AGREE.

 

(C)           PRIORITY ON SECONDARY REGISTRATIONS.  IF A PIGGYBACK REGISTRATION
IS INITIATED AS AN UNDERWRITTEN REGISTRATION ON BEHALF OF A HOLDER OF COMMON
STOCK OTHER THAN REGISTRABLE COMMON STOCK, AND THE MANAGING UNDERWRITERS ADVISE
THE COMPANY THAT IN THEIR OPINION THE NUMBER OF SHARES OF COMMON STOCK PROPOSED
TO BE INCLUDED IN SUCH REGISTRATION EXCEEDS THE NUMBER OF SHARES OF COMMON STOCK
WHICH CAN BE SOLD IN SUCH OFFERING AND/OR THAT THE NUMBER OF SHARES OF COMMON
STOCK PROPOSED TO BE INCLUDED IN ANY SUCH REGISTRATION WOULD ADVERSELY AFFECT
THE PRICE PER SHARE OF THE COMMON STOCK TO BE SOLD IN SUCH OFFERING, THEN THE
COMPANY SHALL INCLUDE IN SUCH REGISTRATION (I) FIRST, THE NUMBER OF SHARES OF
COMMON STOCK REQUESTED TO BE INCLUDED THEREIN BY THE HOLDER(S) REQUESTING SUCH
REGISTRATION, (II) SECOND, THE NUMBER OF SHARES OF COMMON STOCK REQUESTED TO BE
INCLUDED THEREIN BY OTHER HOLDERS OF COMMON STOCK, INCLUDING THE HOLDER (IF THE
HOLDER HAS ELECTED TO INCLUDE REGISTRABLE COMMON STOCK IN SUCH PIGGYBACK
REGISTRATION), PRO RATA AMONG SUCH HOLDERS ON THE BASIS OF THE NUMBER OF SHARES
OF COMMON STOCK REQUESTED TO BE INCLUDED THEREIN BY SUCH HOLDERS OR AS SUCH
HOLDERS MAY OTHERWISE AGREE, AND (III) THIRD, THE NUMBER OF SHARES OF COMMON
STOCK THAT THE COMPANY PROPOSES TO SELL.

 

(D)           SELECTION OF UNDERWRITERS.  IF ANY PIGGYBACK REGISTRATION IS
INITIATED AS A PRIMARY UNDERWRITTEN OFFERING, THE COMPANY SHALL HAVE THE RIGHT
TO SELECT THE MANAGING UNDERWRITER OR UNDERWRITERS TO ADMINISTER ANY SUCH
OFFERING.

 

(E)           OTHER REGISTRATION RIGHTS.  THE COMPANY SHALL NOT GRANT TO ANY
PERSON THE RIGHT TO REQUEST THE COMPANY (I) TO REGISTER ANY SHARES OF COMMON
STOCK IN A PIGGYBACK REGISTRATION UNLESS SUCH RIGHTS ARE CONSISTENT WITH THE
PROVISIONS HEREOF, OR (II) TO REGISTER ANY SECURITIES OF THE COMPANY (OTHER THAN
SHARES OF COMMON STOCK) IN A PIGGYBACK REGISTRATION.

 

6

--------------------------------------------------------------------------------

 

4.             S-3 REGISTRATIONS.

 

(A)           RIGHT TO REQUEST REGISTRATION.  AT ANY TIME THAT THE COMPANY IS
ELIGIBLE TO USE FORM S-3 OR ANY SUCCESSOR THERETO, THE HOLDER SHALL BE ENTITLED
TO REQUEST THAT THE COMPANY FILE A REGISTRATION STATEMENT ON FORM S-3 OR ANY
SUCCESSOR THERETO FOR A PUBLIC OFFERING OF ALL OR ANY PORTION OF THE REGISTRABLE
COMMON STOCK PURSUANT TO RULE 415 PROMULGATED UNDER THE SECURITIES ACT OR
OTHERWISE. UPON SUCH REQUEST, THE COMPANY SHALL USE ITS REASONABLE BEST EFFORTS
(I) TO FILE A REGISTRATION STATEMENT COVERING THE NUMBER OF SHARES OF
REGISTRABLE COMMON STOCK SPECIFIED IN SUCH REQUEST UNDER THE SECURITIES ACT ON
FORM S-3 OR ANY SUCCESSOR THERETO (AN “S-3 REGISTRATION”) FOR PUBLIC SALE IN
ACCORDANCE WITH THE METHOD OF DISPOSITION SPECIFIED IN SUCH REQUEST WITHIN 30
DAYS OF THE HOLDER’S REQUEST THEREFOR AND (II) TO CAUSE SUCH S-3 REGISTRATION TO
BE DECLARED EFFECTIVE BY THE SEC AS SOON AS REASONABLY PRACTICABLE THEREAFTER. 
THE HOLDER SHALL BE ENTITLED, UPON NOT LESS THAN 24 HOURS (GIVEN ON A BUSINESS
DAY AND EFFECT AT THE SAME TIME ON THE NEXT BUSINESS DAY) PRIOR WRITTEN NOTICE
TO THE COMPANY IN THE MANNER PROVIDED BELOW, TO SELL SUCH REGISTRABLE COMMON
STOCK AS ARE THEN REGISTERED PURSUANT TO SUCH REGISTRATION STATEMENT (EACH, A
“SHELF TAKEDOWN”).  THE HOLDER SHALL BE ENTITLED TO REQUEST THAT ONE SUCH SHELF
TAKEDOWN SHALL BE AN UNDERWRITTEN OFFERING; PROVIDED, THAT (BASED ON THEN
CURRENT MARKET PRICES) THE NUMBER OF SHARES OF REGISTRABLE COMMON STOCK INCLUDED
IN SUCH SHELF TAKEDOWN WOULD YIELD GROSS PROCEEDS TO THE HOLDER OF AT LEAST
$25,000,000. THE HOLDER SHALL ALSO GIVE THE COMPANY PROMPT WRITTEN NOTICE OF THE
CONSUMMATION OF SUCH SHELF TAKEDOWN.  A NOTICE OF A PROPOSED SHELF TAKEDOWN
PURSUANT TO THIS SECTION SHALL BE GIVEN BY E-MAIL AND FACSIMILE TRANSMISSION TO
THE COMPANY’S CHIEF FINANCIAL OFFICER, WITH A COPY TO DESIGNATED COUNSEL, AS
PROVIDED IN SECTION 11(A) HEREOF, AND SHALL BE EFFECTIVE WHEN RECEIPT OF SUCH
NOTICE HAS BEEN CONFIRMED TELEPHONICALLY.  THE COMPANY AGREES TO WAIVE SUCH
24-HOUR NOTICE PERIOD IF AT THE TIME SUCH NOTICE IS EFFECTIVE, THE PROSPECTUS
INCLUDED IN THE REGISTRATION STATEMENT RELATED TO THE REGISTRABLE COMMON STOCK
PROPOSED TO BE SOLD IN THE SHELF TAKEDOWN DOES NOT CONTAIN AN UNTRUE STATEMENT
OF A MATERIAL FACT AND DOES NOT OMIT ANY MATERIAL FACT NECESSARY TO MAKE THE
STATEMENTS THEREIN NOT MISLEADING.

 

(B)           PRIORITY ON SHELF TAKEDOWNS.  THE COMPANY MAY INCLUDE COMMON STOCK
OTHER THAN REGISTRABLE COMMON STOCK IN A SHELF TAKEDOWN ON THE TERMS PROVIDED
BELOW, AND, IF SUCH SHELF TAKEDOWN IS AN UNDERWRITTEN OFFERING, ONLY WITH THE
CONSENT OF THE MANAGING UNDERWRITERS OF SUCH OFFERING.  IF THE MANAGING
UNDERWRITERS OF THE REQUESTED SHELF TAKEDOWN ADVISE THE COMPANY AND THE HOLDER
THAT IN THEIR OPINION THE NUMBER OF SHARES OF COMMON STOCK PROPOSED TO BE
INCLUDED IN ANY SHELF TAKEDOWN (1) EXCEEDS THE NUMBER OF SHARES OF COMMON STOCK
WHICH CAN BE SOLD IN SUCH UNDERWRITTEN OFFERING OR (2) WOULD ADVERSELY AFFECT
THE PRICE PER SHARE OF THE REGISTRABLE COMMON STOCK PROPOSED TO BE SOLD IN SUCH
UNDERWRITTEN OFFERING, THE COMPANY SHALL INCLUDE IN SUCH SHELF TAKEDOWN ONLY THE
NUMBER OF SHARES OF COMMON STOCK WHICH IN THE OPINION OF SUCH MANAGING
UNDERWRITERS CAN BE SOLD. IF THE NUMBER OF SHARES OF COMMON STOCK WHICH CAN BE
SOLD IS LESS THAN THE NUMBER OF SHARES OF COMMON STOCK PROPOSED TO BE
REGISTERED, THE AMOUNT OF COMMON STOCK TO BE SO SOLD SHALL BE ALLOCATED PRO RATA
AMONG THE HOLDERS OF COMMON STOCK DESIRING TO PARTICIPATE IN SUCH SHELF TAKEDOWN
ON THE BASIS OF THE NUMBER OF SHARES OF COMMON STOCK INITIALLY PROPOSED TO BE
REGISTERED BY SUCH HOLDERS OR AS SUCH HOLDERS MAY OTHERWISE AGREE.

 

7

--------------------------------------------------------------------------------

 

(C)           SELECTION OF UNDERWRITERS.  IF ANY OF THE REGISTRABLE COMMON STOCK
COVERED BY AN S-3 REGISTRATION IS TO BE SOLD IN AN UNDERWRITTEN OFFERING, THE
COMPANY SHALL HAVE THE RIGHT TO SELECT ONE OF THE CO-MANAGING UNDERWRITERS AND
THE HOLDER SHALL HAVE THE RIGHT TO SELECT ONE OF THE CO-MANAGING UNDERWRITERS TO
ADMINISTER THE OFFERING SUBJECT TO THE CONSENT OF THE OTHER FOR THE BOOK-RUNNING
OR LEAD MANAGING UNDERWRITER, IN ITS SOLE DISCRETION.

 

(D)           OTHER REGISTRATION RIGHTS.  THE COMPANY SHALL NOT GRANT TO ANY
PERSON THE RIGHT TO REQUEST THE COMPANY (I) TO REGISTER ANY SHARES OF COMMON
STOCK IN AN S-3 REGISTRATION UNLESS SUCH RIGHTS ARE CONSISTENT WITH THE
PROVISIONS HEREOF, OR (II) TO REGISTER ANY SECURITIES OF THE COMPANY (OTHER THAN
SHARES OF COMMON STOCK) IN AN S-3 REGISTRATION.

 

5.             HOLDBACK AGREEMENTS.

 

As long as the Holder is the beneficial owner of five percent or more of the
outstanding Common Stock of the Company, the Holder agrees not to sell,
transfer, hedge the beneficial ownership of or otherwise dispose of any shares
of Common Stock (or other securities of the Company) held by it for a period
equal to the lesser of (i) ninety (90) days following the date of a prospectus
or prospectus supplement, as applicable, relating to a sale of shares of Common
Stock (or other securities of the Company) in an underwritten offering
registered under the Securities Act or (ii) such shorter period as the managing
underwriters of such underwritten offering shall agree to. Such agreement shall
be in writing in form satisfactory to the Company and the managing underwriters.
The Company may impose stop-transfer instructions with respect to the shares of
Registrable Common Stock (or other securities) subject to the foregoing
restriction until the end of said period. The foregoing restrictions shall not
apply to (i) the exercise of any warrants or stock options to purchase shares of
capital stock of the Company (provided that such limitation does not affect
limitations on any actions specified in the first sentence of this Section 5
with respect to the shares issuable upon such exercise), (ii) transfers to
Affiliates where the transferee agrees to be bound by the terms hereof, (iii)
the participation in the filing of a registration statement with the Securities
and Exchange Commission, including, without limitation, any S-3 Registration
hereunder, or (iv) the shares of Registrable Common Stock included in the
underwritten offering giving rise to the application of this Section 5. 
Notwithstanding the foregoing, the holdback arrangement set forth in this
Section 5 shall not apply to sale shares of Common Stock that is registered on
Form S-8 or Form S-4.

 

6.             REGISTRATION PROCEDURES.

 

(A)           WHENEVER THE HOLDER REQUESTS THAT ANY REGISTRABLE COMMON STOCK BE
REGISTERED PURSUANT TO THIS AGREEMENT, THE COMPANY SHALL USE ITS REASONABLE BEST
EFFORTS TO EFFECT THE REGISTRATION AND THE SALE OF SUCH REGISTRABLE COMMON STOCK
IN ACCORDANCE WITH THE INTENDED METHODS OF DISPOSITION THEREOF, AND, PURSUANT
THERETO, THE COMPANY SHALL AS SOON AS REASONABLY PRACTICABLE USE ITS REASONABLE
BEST EFFORTS TO:

 

8

--------------------------------------------------------------------------------

 

(I)            SUBJECT TO SECTION 2(A) AND SECTION 4, PREPARE AND FILE WITH THE
SEC A REGISTRATION STATEMENT WITH RESPECT TO SUCH REGISTRABLE COMMON STOCK AND
CAUSE SUCH REGISTRATION STATEMENT TO BECOME EFFECTIVE AS SOON AS REASONABLY
PRACTICABLE THEREAFTER; AND BEFORE FILING A REGISTRATION STATEMENT OR PROSPECTUS
OR ANY AMENDMENTS OR SUPPLEMENTS THERETO, FURNISH TO THE HOLDER AND THE
UNDERWRITER OR UNDERWRITERS, IF ANY, COPIES OF ALL SUCH DOCUMENTS PROPOSED TO BE
FILED, INCLUDING DOCUMENTS INCORPORATED BY REFERENCE IN THE PROSPECTUS AND, IF
REQUESTED BY THE HOLDER, THE EXHIBITS INCORPORATED BY REFERENCE, AND THE HOLDER
SHALL HAVE THE OPPORTUNITY TO OBJECT TO ANY INFORMATION PERTAINING TO THE HOLDER
THAT IS CONTAINED THEREIN AND THE COMPANY WILL MAKE THE CORRECTIONS REASONABLY
REQUESTED BY THE HOLDER WITH RESPECT TO SUCH INFORMATION PRIOR TO FILING ANY
REGISTRATION STATEMENT OR AMENDMENT THERETO OR ANY PROSPECTUS OR ANY SUPPLEMENT
THERETO;

 

(II)           PREPARE AND FILE WITH THE SEC SUCH AMENDMENTS AND SUPPLEMENTS TO
SUCH REGISTRATION STATEMENT AND THE PROSPECTUS USED IN CONNECTION THEREWITH AS
MAY BE NECESSARY TO KEEP SUCH REGISTRATION STATEMENT EFFECTIVE FOR A PERIOD OF
NOT LESS THAN (A) 15 BUSINESS DAYS, IN THE CASE OF A DEMAND REGISTRATION, OR (B)
THE EARLIER OF 2 YEARS OR THE TERMINATION DATE IN THE CASE OF AN S-3
REGISTRATION, AND NO LONGER THAN IS NECESSARY TO COMPLETE THE DISTRIBUTION OF
THE COMMON STOCK COVERED BY SUCH REGISTRATION STATEMENT AND COMPLY WITH THE
PROVISIONS OF THE SECURITIES ACT WITH RESPECT TO THE DISPOSITION OF ALL THE
COMMON STOCK 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;

 

(III)          FURNISH TO EACH SELLER OF REGISTRABLE COMMON STOCK THE PROSPECTUS
INCLUDED IN SUCH REGISTRATION STATEMENT (INCLUDING EACH PRELIMINARY PROSPECTUS)
AND ANY SUPPLEMENT THERETO AND SUCH OTHER DOCUMENTS AS SUCH SELLER MAY
REASONABLY REQUEST IN ORDER TO FACILITATE THE DISPOSITION OF THE REGISTRABLE
COMMON STOCK OWNED BY SUCH SELLER;

 

(IV)          REGISTER OR QUALIFY SUCH REGISTRABLE COMMON STOCK UNDER SUCH OTHER
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTIONS AS ANY SELLER REASONABLY
REQUESTS 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 COMMON STOCK 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 (IV), (II) SUBJECT ITSELF TO TAXATION IN ANY SUCH
JURISDICTION OR (III) CONSENT TO GENERAL SERVICE OF PROCESS IN ANY SUCH
JURISDICTION);

 

(V)           NOTIFY EACH SELLER OF SUCH REGISTRABLE COMMON STOCK, AT ANY TIME
WHEN A PROSPECTUS RELATING THERETO IS REQUIRED TO BE DELIVERED

 

9

--------------------------------------------------------------------------------

 

UNDER THE SECURITIES ACT, OF THE OCCURRENCE 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
SHALL PREPARE A SUPPLEMENT OR AMENDMENT TO SUCH PROSPECTUS SO THAT, AS
THEREAFTER DELIVERED TO THE PURCHASERS OF SUCH REGISTRABLE COMMON STOCK, SUCH
PROSPECTUS SHALL NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO
STATE ANY MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING;

 

(VI)          IN THE CASE OF AN UNDERWRITTEN OFFERING ON BEHALF OF THE HOLDER
PURSUANT TO A DEMAND REGISTRATION, PIGGYBACK REGISTRATION OR AN S-3
REGISTRATION, ENTER INTO SUCH CUSTOMARY AGREEMENTS (INCLUDING UNDERWRITING AND
LOCK-UP AGREEMENTS IN CUSTOMARY FORM) AND TAKE ALL SUCH OTHER CUSTOMARY ACTIONS
AS THE HOLDER OR THE MANAGING UNDERWRITERS OF SUCH OFFERING REASONABLY REQUEST
IN ORDER TO EXPEDITE OR FACILITATE THE DISPOSITION OF SUCH REGISTRABLE COMMON
STOCK (INCLUDING, WITHOUT LIMITATION, MAKING MEMBERS OF SENIOR MANAGEMENT OF THE
COMPANY AVAILABLE TO PARTICIPATE IN “ROAD-SHOW” AND OTHER CUSTOMARY MARKETING
ACTIVITIES (INCLUDING ONE-ON-ONE MEETINGS WITH PROSPECTIVE PURCHASERS OF THE
REGISTRABLE COMMON STOCK)) AND CAUSE TO BE DELIVERED TO THE UNDERWRITERS
OPINIONS OF COUNSEL TO THE COMPANY IN CUSTOMARY FORM, COVERING SUCH MATTERS AS
ARE CUSTOMARILY COVERED BY OPINIONS FOR AN UNDERWRITTEN PUBLIC OFFERING AS THE
MANAGING UNDERWRITERS MAY REQUEST AND ADDRESSED TO THE UNDERWRITERS;

 

(VII)         TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW OR PRE-EXISTING
APPLICABLE CONTRACTUAL RESTRICTIONS, (A) MAKE AVAILABLE, FOR INSPECTION BY THE
HOLDER, ANY UNDERWRITER PARTICIPATING IN ANY DISPOSITION PURSUANT TO SUCH
REGISTRATION STATEMENT, AND ANY ATTORNEY RETAINED BY ANY SUCH UNDERWRITER, ALL
FINANCIAL AND OTHER RECORDS, PERTINENT CORPORATE DOCUMENTS AND PROPERTIES OF THE
COMPANY, (B) CAUSE THE COMPANY’S OFFICERS AND EMPLOYEES TO SUPPLY ALL
INFORMATION REASONABLY REQUESTED BY THE HOLDER OR SUCH UNDERWRITER OR ATTORNEY
IN CONNECTION WITH SUCH REGISTRATION STATEMENT, AND (C) MAKE THE COMPANY’S
INDEPENDENT ACCOUNTANTS AVAILABLE FOR ANY SUCH UNDERWRITER’S DUE DILIGENCE;

 

(VIII)        CAUSE ALL SUCH REGISTRABLE COMMON STOCK TO BE LISTED ON EACH
SECURITIES EXCHANGE ON WHICH SECURITIES OF THE SAME CLASS ISSUED BY THE COMPANY
ARE THEN LISTED OR, IF NO SUCH SIMILAR SECURITIES ARE THEN LISTED, ON NASDAQ OR
A NATIONAL SECURITIES EXCHANGE SELECTED BY THE COMPANY;

 

(IX)           PROVIDE A TRANSFER AGENT AND REGISTRAR FOR ALL SUCH REGISTRABLE
COMMON STOCK NOT LATER THAN THE EFFECTIVE DATE OF SUCH REGISTRATION STATEMENT;

 

10

--------------------------------------------------------------------------------

 

(X)            IF REQUESTED, CAUSE TO BE DELIVERED AT THE TIME OF DELIVERY OF
ANY REGISTRABLE COMMON STOCK SOLD PURSUANT TO A REGISTRATION STATEMENT, LETTERS
FROM THE COMPANY’S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ADDRESSED TO EACH
SELLING HOLDER (UNLESS SUCH SELLING HOLDER DOES NOT PROVIDE TO SUCH ACCOUNTANTS
THE APPROPRIATE REPRESENTATION LETTER REQUIRED BY RULES GOVERNING THE ACCOUNTING
PROFESSION) AND EACH UNDERWRITER, IF ANY, STATING THAT SUCH ACCOUNTANTS ARE
INDEPENDENT PUBLIC ACCOUNTANTS WITHIN THE MEANING OF THE SECURITIES ACT AND THE
APPLICABLE RULES AND REGULATIONS ADOPTED BY THE SEC THEREUNDER, AND OTHERWISE IN
CUSTOMARY FORM AND COVERING SUCH FINANCIAL AND ACCOUNTING MATTERS AS ARE
CUSTOMARILY COVERED BY LETTERS OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
DELIVERED IN CONNECTION WITH PRIMARY OR SECONDARY UNDERWRITTEN PUBLIC OFFERINGS,
AS THE CASE MAY BE;

 

(XI)           MAKE GENERALLY AVAILABLE TO ITS STOCKHOLDERS A CONSOLIDATED
EARNINGS STATEMENT (WHICH NEED NOT BE AUDITED) FOR THE 12 MONTHS BEGINNING AFTER
THE EFFECTIVE DATE OF A REGISTRATION STATEMENT AS SOON AS REASONABLY PRACTICABLE
AFTER THE END OF SUCH PERIOD, WHICH EARNINGS STATEMENT SHALL SATISFY THE
REQUIREMENTS OF AN EARNING STATEMENT UNDER SECTION 11(A) OF THE SECURITIES ACT;
AND

 

(XII)          PROMPTLY NOTIFY THE HOLDER AND THE UNDERWRITER OR UNDERWRITERS,
IF ANY:

 

(1)           WHEN THE REGISTRATION STATEMENT, ANY PRE-EFFECTIVE AMENDMENT, THE
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT OR POST-EFFECTIVE AMENDMENT TO THE
REGISTRATION STATEMENT HAS BEEN FILED AND, WITH RESPECT TO THE REGISTRATION
STATEMENT OR ANY POST-EFFECTIVE AMENDMENT, WHEN THE SAME HAS BECOME EFFECTIVE;

 

(2)           OF THE NOTIFICATION TO THE COMPANY BY THE SEC OF ITS INITIATION OF
ANY PROCEEDING WITH RESPECT TO THE ISSUANCE BY THE SEC OF ANY STOP ORDER
SUSPENDING THE EFFECTIVENESS OF THE REGISTRATION STATEMENT; AND

 

(3)           OF THE RECEIPT BY THE COMPANY OF ANY NOTIFICATION WITH RESPECT TO
THE SUSPENSION OF THE QUALIFICATION OF ANY REGISTRABLE COMMON STOCK FOR SALE
UNDER THE APPLICABLE SECURITIES OR BLUE SKY LAWS OF ANY JURISDICTION.

 

(B)           NO REGISTRATION STATEMENT (INCLUDING ANY AMENDMENTS THERETO) SHALL
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, AND NO PROSPECTUS (INCLUDING ANY SUPPLEMENTS THERETO) SHALL 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, IN
LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING, IN EACH
CASE, EXCEPT FOR ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL
FACT OR OMISSION OR ALLEGED OMISSION OF A MATERIAL FACT MADE IN RELIANCE ON

 

11

--------------------------------------------------------------------------------

 

AND IN CONFORMITY WITH WRITTEN INFORMATION FURNISHED TO THE COMPANY BY OR ON
BEHALF OF THE HOLDER SPECIFICALLY FOR USE THEREIN.

 

(C)           THE COMPANY SHALL MAKE AVAILABLE TO THE HOLDER SUCH NUMBER OF
COPIES OF A PROSPECTUS, INCLUDING A PRELIMINARY PROSPECTUS, AND ALL AMENDMENTS
AND SUPPLEMENTS THERETO AND SUCH OTHER DOCUMENTS AS THE HOLDER MAY REASONABLY
REQUEST IN ORDER TO FACILITATE THE DISPOSITION OF THE REGISTRABLE COMMON STOCK
OWNED BY THE HOLDER. THE COMPANY WILL PROMPTLY NOTIFY THE HOLDER OF THE
EFFECTIVENESS OF EACH REGISTRATION STATEMENT OR ANY POST-EFFECTIVE AMENDMENT.
THE COMPANY WILL PROMPTLY RESPOND TO ANY AND ALL COMMENTS RECEIVED FROM THE SEC,
WITH A VIEW TOWARDS CAUSING EACH REGISTRATION STATEMENT OR ANY AMENDMENT THERETO
TO BE DECLARED EFFECTIVE BY THE SEC AS SOON AS REASONABLY PRACTICABLE AND SHALL
FILE AN ACCELERATION REQUEST AS SOON AS REASONABLY PRACTICABLE FOLLOWING THE
RESOLUTION OR CLEARANCE OF ALL SEC COMMENTS OR, IF APPLICABLE, FOLLOWING
NOTIFICATION BY THE SEC THAT ANY SUCH REGISTRATION STATEMENT OR ANY AMENDMENT
THERETO WILL NOT BE SUBJECT TO REVIEW.

 

(D)           AT ALL TIMES AFTER THE COMPANY HAS FILED A REGISTRATION STATEMENT
WITH THE SEC PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THE COMPANY
SHALL USE ITS REASONABLE BEST EFFORTS TO FILE ALL REPORTS REQUIRED TO BE FILED
BY IT UNDER THE SECURITIES ACT AND THE EXCHANGE ACT AND THE RULES AND
REGULATIONS ADOPTED BY THE SEC THEREUNDER, AND USE ITS REASONABLE BEST EFFORTS
TO TAKE SUCH FURTHER ACTION AS THE HOLDER MAY REASONABLY REQUEST, ALL TO THE
EXTENT REQUIRED TO ENABLE THE HOLDER TO BE ELIGIBLE TO SELL REGISTRABLE COMMON
STOCK PURSUANT TO RULE 144 (OR ANY SIMILAR RULE THEN IN EFFECT).

 

(E)           THE COMPANY MAY REQUIRE EACH SELLER OF REGISTRABLE COMMON STOCK AS
TO WHICH ANY REGISTRATION IS BEING EFFECTED TO FURNISH TO THE COMPANY ANY OTHER
INFORMATION REGARDING SUCH SELLER AND THE DISTRIBUTION OF SUCH SECURITIES AS THE
COMPANY MAY FROM TIME TO TIME REASONABLY REQUEST IN WRITING.

 

(F)            EACH SELLER OF REGISTRABLE COMMON STOCK AGREES BY HAVING ITS
STOCK TREATED AS REGISTRABLE COMMON STOCK HEREUNDER THAT, UPON NOTICE 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 MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING (A
“SUSPENSION NOTICE”), SUCH SELLER WILL FORTHWITH DISCONTINUE DISPOSITION OF
REGISTRABLE COMMON STOCK FOR A REASONABLE LENGTH OF TIME NOT TO EXCEED 60 DAYS
UNTIL SUCH SELLER IS ADVISED IN WRITING BY THE COMPANY THAT THE USE OF THE
PROSPECTUS MAY BE RESUMED AND IS FURNISHED WITH A SUPPLEMENTED OR AMENDED
PROSPECTUS AS CONTEMPLATED BY SECTION 6(A)(V) HEREOF, AND, IF SO DIRECTED BY THE
COMPANY, SUCH SELLER WILL DELIVER TO THE COMPANY (AT THE COMPANY’S EXPENSE) ALL
COPIES, OTHER THAN PERMANENT FILE COPIES THEN IN SUCH SELLER’S POSSESSION, OF
THE PROSPECTUS COVERING SUCH REGISTRABLE COMMON STOCK CURRENT AT THE TIME OF
RECEIPT OF SUCH NOTICE; PROVIDED, HOWEVER, THAT SUCH POSTPONEMENT OF SALES OF
REGISTRABLE COMMON STOCK BY THE HOLDER SHALL NOT EXCEED ONE HUNDRED AND FIFTY
(150) DAYS IN THE AGGREGATE IN ANY ONE YEAR. IF THE COMPANY SHALL GIVE ANY
NOTICE TO SUSPEND THE DISPOSITION OF REGISTRABLE COMMON STOCK PURSUANT TO A
PROSPECTUS, THE COMPANY SHALL EXTEND THE PERIOD OF TIME DURING WHICH THE COMPANY
IS REQUIRED TO MAINTAIN THE REGISTRATION STATEMENT EFFECTIVE PURSUANT TO THIS
AGREEMENT BY THE NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING

 

12

--------------------------------------------------------------------------------

 

THE DATE OF THE GIVING OF SUCH NOTICE TO AND INCLUDING THE DATE SUCH SELLER
EITHER IS ADVISED BY THE COMPANY THAT THE USE OF THE PROSPECTUS MAY BE RESUMED
OR RECEIVES THE COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS CONTEMPLATED BY
SECTION 6(A)(V) (A “BLACKOUT PERIOD”). IN ANY EVENT, THE COMPANY SHALL NOT BE
ENTITLED TO DELIVER MORE THAN FOUR (4) SUSPENSION NOTICES IN ANY ONE YEAR.

 

7.             REGISTRATION EXPENSES.

 

(A)           ALL EXPENSES INCIDENT TO THE COMPANY’S PERFORMANCE OF OR
COMPLIANCE WITH THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ALL REGISTRATION
AND FILING FEES, FEES AND EXPENSES OF COMPLIANCE WITH SECURITIES OR BLUE SKY
LAWS, LISTING APPLICATION FEES, PRINTING EXPENSES, TRANSFER AGENT’S AND
REGISTRAR’S FEES, COST OF DISTRIBUTING PROSPECTUSES IN PRELIMINARY AND FINAL
FORM AS WELL AS ANY SUPPLEMENTS THERETO, AND FEES AND DISBURSEMENTS OF COUNSEL
FOR THE COMPANY AND ALL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS AND OTHER
PERSONS RETAINED BY THE COMPANY (ALL SUCH EXPENSES BEING HEREIN CALLED
“REGISTRATION EXPENSES”) (BUT NOT INCLUDING ANY UNDERWRITING DISCOUNTS OR
COMMISSIONS ATTRIBUTABLE TO THE SALE OF REGISTRABLE COMMON STOCK OR FEES AND
EXPENSES OF MORE THAN ONE COUNSEL REPRESENTING THE HOLDER), SHALL BE BORNE BY
THE COMPANY. IN ADDITION, THE COMPANY SHALL PAY ITS INTERNAL EXPENSES
(INCLUDING, WITHOUT LIMITATION, ALL SALARIES AND EXPENSES OF ITS OFFICERS AND
EMPLOYEES PERFORMING LEGAL OR ACCOUNTING DUTIES), THE EXPENSE OF ANY ANNUAL
AUDIT OR QUARTERLY REVIEW, THE EXPENSE OF ANY LIABILITY INSURANCE AND THE
EXPENSES AND FEES FOR LISTING THE SECURITIES TO BE REGISTERED ON EACH SECURITIES
EXCHANGE ON WHICH THEY ARE TO BE LISTED.

 

(B)           IN CONNECTION WITH ONE UNDERWRITTEN OFFERING INITIATED BY THE
HOLDER PURSUANT TO THE DEMAND REGISTRATION OR THE S-3 REGISTRATION, THE COMPANY
SHALL REIMBURSE THE HOLDER COVERED BY SUCH REGISTRATION OR SALE FOR THE
REASONABLE FEES AND DISBURSEMENTS OF ONE LAW FIRM CHOSEN BY THE HOLDER, SUBJECT
TO A MAXIMUM OF $15,000.

 

(C)           THE OBLIGATION OF THE COMPANY TO BEAR THE EXPENSES DESCRIBED IN
SECTION 7(A) AND TO REIMBURSE THE HOLDER FOR THE EXPENSES DESCRIBED IN
SECTION 7(B) SHALL APPLY IRRESPECTIVE OF WHETHER A REGISTRATION, ONCE PROPERLY
DEMANDED, IF APPLICABLE, BECOMES EFFECTIVE, IS WITHDRAWN OR SUSPENDED, IS
CONVERTED TO ANOTHER FORM OF REGISTRATION AND IRRESPECTIVE OF WHEN ANY OF THE
FOREGOING SHALL OCCUR; PROVIDED, HOWEVER, THAT REGISTRATION EXPENSES FOR ANY
REGISTRATION STATEMENT WITHDRAWN SOLELY AT THE REQUEST OF THE HOLDER (UNLESS
WITHDRAWN FOLLOWING POSTPONEMENT OF FILING BY THE COMPANY IN ACCORDANCE WITH
SECTION 2(D) OR SECTION 3(A)) OR ANY SUPPLEMENTS OR AMENDMENTS TO A REGISTRATION
STATEMENT OR PROSPECTUS RESULTING FROM A MISSTATEMENT FURNISHED TO THE COMPANY
BY THE HOLDER SHALL BE BORNE BY THE HOLDER.  IN ADDITION TO THE COMPANY’S
EXPENSE REIMBURSEMENT OBLIGATION UNDER SECTION 7(B), IF ANY REGISTRATION
STATEMENT IS WITHDRAWN (UNLESS SUCH WITHDRAWAL IS SOLELY AT THE REQUEST OF THE
HOLDER), THE COMPANY SHALL REIMBURSE THE HOLDER FOR ITS REASONABLE LEGAL FEES
AND RELATED DISBURSEMENTS IN CONNECTION WITH SUCH WITHDRAWN REGISTRATION
STATEMENT.

 

13

--------------------------------------------------------------------------------

 

8.             INDEMNIFICATION.

 

(A)           THE COMPANY SHALL INDEMNIFY, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE HOLDER AND EACH PERSON WHO CONTROLS THE HOLDER (WITHIN THE MEANING OF
THE SECURITIES ACT) AGAINST ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND
EXPENSES ARISING OUT OF OR BASED UPON ANY UNTRUE OR ALLEGED UNTRUE STATEMENT OF
MATERIAL FACT CONTAINED IN ANY REGISTRATION STATEMENT, PROSPECTUS, FREE WRITING
PROSPECTUS (AS DEFINED IN RULE 405 PROMULGATED UNDER THE SECURITIES ACT) OR ANY
AMENDMENT THEREOF OR SUPPLEMENT THERETO OR ANY OMISSION OR ALLEGED OMISSION OF A
MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS
THEREIN NOT MISLEADING, EXCEPT INSOFAR AS THE SAME ARE MADE IN RELIANCE AND IN
CONFORMITY WITH INFORMATION FURNISHED IN WRITING TO THE COMPANY BY THE HOLDER
EXPRESSLY FOR USE THEREIN OR CAUSED BY THE HOLDER’S FAILURE TO DELIVER TO THE
HOLDER’S IMMEDIATE PURCHASER A COPY OF THE REGISTRATION STATEMENT, PROSPECTUS,
FREE WRITING PROSPECTUS (AS DEFINED IN RULE 405 PROMULGATED UNDER THE SECURITIES
ACT) OR ANY AMENDMENTS OR SUPPLEMENTS THERETO (IF THE SAME WAS REQUIRED BY
APPLICABLE LAW TO BE SO DELIVERED) AFTER THE COMPANY HAS FURNISHED THE HOLDER
WITH A SUFFICIENT NUMBER OF COPIES OF THE SAME PRIOR TO ANY WRITTEN CONFIRMATION
OF THE SALE OF REGISTRABLE COMMON STOCK. IN CONNECTION WITH AN UNDERWRITTEN
OFFERING, THE COMPANY SHALL INDEMNIFY SUCH UNDERWRITERS AND EACH PERSON WHO
CONTROLS SUCH UNDERWRITERS (WITHIN THE MEANING OF THE SECURITIES ACT) TO THE
SAME EXTENT AS PROVIDED ABOVE WITH RESPECT TO THE INDEMNIFICATION OF THE HOLDER.

 

(B)           IN CONNECTION WITH ANY REGISTRATION STATEMENT IN WHICH THE HOLDER
IS PARTICIPATING, THE HOLDER SHALL FURNISH TO THE COMPANY IN WRITING SUCH
INFORMATION AND AFFIDAVITS AS THE COMPANY REASONABLY REQUESTS FOR USE IN
CONNECTION WITH ANY SUCH REGISTRATION STATEMENT OR PROSPECTUS OR FREE WRITING
PROSPECTUS (AS DEFINED IN RULE 405 PROMULGATED UNDER THE SECURITIES ACT) AND,
SHALL INDEMNIFY, TO THE FULLEST EXTENT PERMITTED BY LAW, THE COMPANY, ITS
OFFICERS, DIRECTORS AND EACH PERSON WHO CONTROLS THE COMPANY (WITHIN THE MEANING
OF THE SECURITIES ACT) AGAINST ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND
EXPENSES ARISING OUT OF OR BASED UPON ANY UNTRUE OR ALLEGED UNTRUE STATEMENT OF
MATERIAL FACT CONTAINED IN THE REGISTRATION STATEMENT, PROSPECTUS, FREE WRITING
PROSPECTUS (AS DEFINED IN RULE 405 PROMULGATED UNDER THE SECURITIES ACT) OR ANY
AMENDMENT THEREOF OR SUPPLEMENT THERETO OR ANY OMISSION OR ALLEGED OMISSION OF A
MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS
THEREIN NOT MISLEADING, BUT ONLY TO THE EXTENT THAT THE SAME ARE MADE IN
RELIANCE AND IN CONFORMITY WITH INFORMATION FURNISHED IN WRITING TO THE COMPANY
BY THE HOLDER EXPRESSLY FOR USE THEREIN OR CAUSED BY THE HOLDER’S FAILURE TO
DELIVER TO THE HOLDER’S IMMEDIATE PURCHASER A COPY OF THE REGISTRATION
STATEMENT, PROSPECTUS, FREE WRITING PROSPECTUS (AS DEFINED IN RULE 405
PROMULGATED UNDER THE SECURITIES ACT) OR ANY AMENDMENTS OR SUPPLEMENTS THERETO
(IF THE SAME WAS REQUIRED BY APPLICABLE LAW TO BE SO DELIVERED) AFTER THE
COMPANY HAS FURNISHED THE HOLDER WITH A SUFFICIENT NUMBER OF COPIES OF THE SAME
PRIOR TO ANY WRITTEN CONFIRMATION OF THE SALE OF REGISTRABLE COMMON STOCK;
PROVIDED, HOWEVER, THAT THE LIABILITY OF THE HOLDER SHALL BE IN PROPORTION TO
AND LIMITED TO THE NET AMOUNT RECEIVED BY THE HOLDER FROM THE SALE OF
REGISTRABLE COMMON STOCK PURSUANT TO SUCH REGISTRATION STATEMENT.

 

14

--------------------------------------------------------------------------------

 

(C)           ANY PERSON ENTITLED TO INDEMNIFICATION HEREUNDER SHALL (I) GIVE
PROMPT WRITTEN NOTICE TO THE INDEMNIFYING PARTY OF ANY CLAIM WITH RESPECT TO
WHICH IT SEEKS INDEMNIFICATION AND (II) PERMIT SUCH INDEMNIFYING PARTY TO ASSUME
THE DEFENSE OF SUCH CLAIM WITH COUNSEL REASONABLY SATISFACTORY TO THE
INDEMNIFIED PARTY. IF SUCH DEFENSE IS ASSUMED, THE INDEMNIFYING PARTY SHALL NOT
BE SUBJECT TO ANY LIABILITY FOR ANY SETTLEMENT MADE BY THE INDEMNIFIED PARTY
WITHOUT ITS CONSENT (BUT SUCH CONSENT WILL NOT BE UNREASONABLY WITHHELD). AN
INDEMNIFYING PARTY WHO IS ENTITLED TO, AND ELECTS TO, ASSUME THE DEFENSE OF A
CLAIM SHALL NOT BE OBLIGATED TO PAY THE FEES AND EXPENSES OF MORE THAN ONE
COUNSEL FOR ALL PARTIES INDEMNIFIED BY SUCH INDEMNIFYING PARTY WITH RESPECT TO
SUCH CLAIM, UNLESS IN THE REASONABLE JUDGMENT OF ANY INDEMNIFIED PARTY THERE MAY
BE ONE OR MORE LEGAL OR EQUITABLE DEFENSES AVAILABLE TO SUCH INDEMNIFIED PARTY
WHICH ARE IN ADDITION TO OR MAY CONFLICT WITH THOSE AVAILABLE TO ANOTHER
INDEMNIFIED PARTY WITH RESPECT TO SUCH CLAIM. FAILURE TO GIVE PROMPT WRITTEN
NOTICE SHALL NOT RELEASE THE INDEMNIFYING PARTY FROM ITS OBLIGATIONS HEREUNDER.

 

(D)           THE INDEMNIFICATION PROVIDED FOR UNDER THIS AGREEMENT SHALL REMAIN
IN FULL FORCE AND EFFECT REGARDLESS OF ANY INVESTIGATION MADE BY OR ON BEHALF OF
THE INDEMNIFIED PARTY OR ANY OFFICER, DIRECTOR OR CONTROLLING PERSON OF SUCH
INDEMNIFIED PARTY AND SHALL SURVIVE THE TRANSFER OF SECURITIES.

 

(E)           IF THE INDEMNIFICATION PROVIDED FOR IN OR PURSUANT TO THIS
SECTION 8 IS DUE IN ACCORDANCE WITH THE TERMS HEREOF, BUT IS HELD BY A COURT TO
BE UNAVAILABLE OR UNENFORCEABLE IN RESPECT OF ANY LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR EXPENSES REFERRED TO HEREIN, THEN EACH APPLICABLE INDEMNIFYING
PARTY, IN LIEU OF INDEMNIFYING SUCH INDEMNIFIED PARTY, SHALL CONTRIBUTE TO THE
AMOUNT PAID OR PAYABLE BY SUCH INDEMNIFIED PERSON AS A RESULT OF SUCH LOSSES,
CLAIMS, DAMAGES, LIABILITIES OR EXPENSES IN SUCH PROPORTION AS IS APPROPRIATE TO
REFLECT THE RELATIVE FAULT OF THE INDEMNIFYING PARTY ON THE ONE HAND AND OF THE
INDEMNIFIED PARTY ON THE OTHER IN CONNECTION WITH THE STATEMENTS OR OMISSIONS
WHICH RESULT IN SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR EXPENSES AS WELL AS
ANY OTHER RELEVANT EQUITABLE CONSIDERATIONS. THE RELATIVE FAULT OF THE
INDEMNIFYING PARTY ON THE ONE HAND AND OF THE INDEMNIFIED PERSON ON THE OTHER
SHALL BE DETERMINED BY REFERENCE TO, AMONG OTHER THINGS, WHETHER THE UNTRUE OR
ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT OR THE OMISSION OR ALLEGED OMISSION
TO STATE A MATERIAL FACT RELATES TO INFORMATION SUPPLIED BY THE INDEMNIFYING
PARTY OR BY THE INDEMNIFIED PARTY, AND BY SUCH PARTY’S RELATIVE INTENT,
KNOWLEDGE, ACCESS TO INFORMATION AND OPPORTUNITY TO CORRECT OR PREVENT SUCH
STATEMENT OR OMISSION. IN NO EVENT SHALL THE LIABILITY OF THE HOLDER BE GREATER
IN AMOUNT THAN THE AMOUNT OF NET PROCEEDS RECEIVED BY THE HOLDER UPON SUCH SALE
OR THE AMOUNT FOR WHICH SUCH INDEMNIFYING PARTY WOULD HAVE BEEN OBLIGATED TO PAY
BY WAY OF INDEMNIFICATION IF THE INDEMNIFICATION PROVIDED FOR UNDER SECTION 8(A)
OR 8(B) HEREOF HAD BEEN AVAILABLE UNDER THE CIRCUMSTANCES.

 

9.             PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.

 

No Person may participate in any registration hereunder which is underwritten
unless such Person (a) agrees to sell such Person’s securities on the basis
provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all questionnaires, powers of

 

15

--------------------------------------------------------------------------------

 

attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.

 

10.          RULE 144.

 

The Company shall use its reasonable best efforts to file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder, and use its reasonable best
efforts to take such further action as the Holder may reasonably request to make
available adequate current public information with respect to the Company
meeting the current public information requirements of Rule 144(c) under the
Securities Act, to the extent required to enable the Holder to sell Registrable
Common Stock without registration under the Securities Act within the limitation
of the exemptions provided by (i) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of the Holder, the Company will
deliver to the Holder a written statement as to whether it has complied with
such information and requirements.

 

11.          MISCELLANEOUS.

 

(A)           NOTICES.  EXCEPT AS OTHERWISE PROVIDED HEREIN, ALL NOTICES,
REQUESTS, CONSENTS AND OTHER COMMUNICATIONS REQUIRED OR PERMITTED HEREUNDER
SHALL BE IN WRITING AND SHALL BE HAND DELIVERED OR MAILED POSTAGE PREPAID BY
REGISTERED OR CERTIFIED MAIL OR BY FACSIMILE TRANSMISSION (WITH IMMEDIATE
TELEPHONE CONFIRMATION THEREAFTER),

 

If to the Company:

 

Morgans Hotel Group Co.
475 Tenth Avenue
New York, New York  10018
Attention:              Chief Financial Officer
Facsimile:               (212) 277-4201

E-mail:  richard.szymanski@morganshotelgroup.com

 

with a copy to (which shall not constitute notice):

 

NorthStar Capital Investment Corp.
527 Madison Avenue
New York, New York
Attention:              Richard McCready
Facsimile:               (212) 319-4557

 

with a copy to (which shall not constitute notice):

 

Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
Attention:              Robert W. Downes, Esq.

 

16

--------------------------------------------------------------------------------

 

Facsimile:               (212) 558-3588
E-mail:  downesr@sullcrom.com

 

If to the Securityholder:

 

c/o Ian Schrager Company LLC

818 Greenwich Street

New York, New York 10014

Facsimile:               (212) 898-1162

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York  10036-6522
Attention:              Benjamin F. Needell, Esq.
Facsimile:               (212) 735-2000

 

or at such other address as such party each may specify by written notice to the
others, and, except as otherwise provided herein, each such notice, request,
consent and other communication shall for all purposes of the Agreement be
treated as being effective or having been given when delivered personally, upon
receipt of facsimile confirmation if transmitted by facsimile, or, if sent by
mail, at the earlier of its receipt or 72 hours after the same has been
deposited in a regularly maintained receptacle for the deposit of United States
mail, addressed and postage prepaid as aforesaid.

 

(B)           NO WAIVERS.  NO FAILURE OR DELAY BY ANY PARTY IN EXERCISING ANY
RIGHT, POWER OR PRIVILEGE HEREUNDER SHALL OPERATE AS A WAIVER THEREOF NOR SHALL
ANY SINGLE OR PARTIAL EXERCISE THEREOF PRECLUDE ANY OTHER OR FURTHER EXERCISE
THEREOF OR THE EXERCISE OF ANY OTHER RIGHT, POWER OR PRIVILEGE. THE RIGHTS AND
REMEDIES HEREIN PROVIDED SHALL BE CUMULATIVE AND NOT EXCLUSIVE OF ANY RIGHTS OR
REMEDIES PROVIDED BY LAW.

 

(C)           EXPENSES.  EXCEPT AS OTHERWISE PROVIDED FOR HEREIN OR OTHERWISE
AGREED TO IN WRITING BY THE PARTIES, ALL COSTS AND EXPENSES INCURRED IN
CONNECTION WITH THE PREPARATION OF THIS AGREEMENT SHALL BE PAID BY THE COMPANY.

 

(D)           SUCCESSORS AND ASSIGNS.  THE PROVISIONS OF THIS AGREEMENT SHALL BE
BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS, IT BEING UNDERSTOOD THAT SUBSEQUENT HOLDERS OF THE
REGISTRABLE COMMON STOCK ARE INTENDED THIRD PARTY BENEFICIARIES HEREOF.

 

(E)           GOVERNING LAW.  THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE ENFORCEABILITY AND VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION OF
ITS TERMS AND THE INTERPRETATION OF THE RIGHTS AND DUTIES OF THE PARTIES.

 

(F)            JURISDICTION.  ANY SUIT, ACTION OR PROCEEDING SEEKING TO ENFORCE
ANY PROVISION OF, OR BASED ON ANY MATTER ARISING OUT OF OR IN CONNECTION WITH,
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY MUST BE BROUGHT IN ANY
FEDERAL OR STATE COURT

 

17

--------------------------------------------------------------------------------

 

LOCATED IN THE COUNTY AND STATE OF NEW YORK, AND EACH OF THE PARTIES HEREBY
CONSENTS TO THE JURISDICTION OF SUCH COURTS (AND OF THE APPROPRIATE APPELLATE
COURTS THEREFROM) IN ANY SUCH SUIT, ACTION OR PROCEEDING AND IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
IN ANY SUCH COURT OR THAT ANY SUCH SUIT, ACTION OR PROCEEDING WHICH IS BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. PROCESS IN ANY SUCH
SUIT, ACTION OR PROCEEDING MAY BE SERVED ON ANY PARTY ANYWHERE IN THE WORLD,
WHETHER WITHIN OR WITHOUT THE JURISDICTION OF ANY SUCH COURT. WITHOUT LIMITING
THE FOREGOING, EACH PARTY AGREES THAT SERVICE OF PROCESS ON SUCH PARTY AS
PROVIDED IN SECTION 11(A) SHALL BE DEEMED EFFECTIVE SERVICE OF PROCESS ON SUCH
PARTY.

 

(G)           WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

(H)           COUNTERPARTS; EFFECTIVENESS.  THIS AGREEMENT MAY BE EXECUTED IN
ANY NUMBER OF COUNTERPARTS (INCLUDING BY FACSIMILE) AND BY DIFFERENT PARTIES
HERETO IN SEPARATE COUNTERPARTS, WITH THE SAME EFFECT AS IF ALL PARTIES HAD
SIGNED THE SAME DOCUMENT. ALL SUCH COUNTERPARTS SHALL BE DEEMED AN ORIGINAL,
SHALL BE CONSTRUED TOGETHER AND SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.
THIS AGREEMENT SHALL BECOME EFFECTIVE WHEN EACH PARTY HERETO SHALL HAVE RECEIVED
COUNTERPARTS HEREOF SIGNED BY ALL OF THE OTHER PARTIES HERETO.

 

(I)            ENTIRE AGREEMENT.  THIS AGREEMENT CONTAINS THE ENTIRE AGREEMENT
BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
SUPERSEDES AND REPLACES ALL OTHER PRIOR AGREEMENTS, WRITTEN OR ORAL, AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF.

 

(J)            CAPTIONS.  THE HEADINGS AND OTHER CAPTIONS IN THIS AGREEMENT ARE
FOR CONVENIENCE AND REFERENCE ONLY AND SHALL NOT BE USED IN INTERPRETING,
CONSTRUING OR ENFORCING ANY PROVISION OF THIS AGREEMENT.

 

(K)           SEVERABILITY.  IF ANY TERM, PROVISION, COVENANT OR RESTRICTION OF
THIS AGREEMENT IS HELD BY A COURT OF COMPETENT JURISDICTION OR OTHER AUTHORITY
TO BE INVALID, VOID OR UNENFORCEABLE, THE REMAINDER OF THE TERMS, PROVISIONS,
COVENANTS AND RESTRICTIONS OF THIS AGREEMENT SHALL REMAIN IN FULL FORCE AND
EFFECT AND SHALL IN NO WAY BE AFFECTED, IMPAIRED OR INVALIDATED SO LONG AS THE
ECONOMIC OR LEGAL SUBSTANCE OF THE TRANSACTIONS CONTEMPLATED HEREBY IS NOT
AFFECTED IN ANY MANNER MATERIALLY ADVERSE TO ANY PARTY. UPON SUCH A
DETERMINATION, THE PARTIES SHALL NEGOTIATE IN GOOD FAITH TO MODIFY THIS
AGREEMENT SO AS TO EFFECT THE ORIGINAL INTENT OF THE PARTIES AS CLOSELY AS
POSSIBLE IN AN ACCEPTABLE MANNER IN ORDER THAT THE TRANSACTIONS CONTEMPLATED
HEREBY BE CONSUMMATED AS ORIGINALLY CONTEMPLATED TO THE FULLEST EXTENT POSSIBLE.

 

(L)            AMENDMENTS.  THE PROVISIONS OF THIS AGREEMENT, INCLUDING THE
PROVISIONS OF THIS SENTENCE, MAY NOT BE AMENDED, MODIFIED OR SUPPLEMENTED, AND
WAIVERS OR

 

18

--------------------------------------------------------------------------------

 

CONSENTS TO DEPARTURES FROM THE PROVISIONS HEREOF MAY NOT BE GIVEN WITHOUT THE
PRIOR WRITTEN CONSENT OF THE COMPANY AND THE HOLDER.

 

(M)          EQUITABLE RELIEF.  THE PARTIES HERETO AGREE THAT LEGAL REMEDIES MAY
BE INADEQUATE TO ENFORCE THE PROVISIONS OF THIS AGREEMENT AND THAT EQUITABLE
RELIEF, INCLUDING SPECIFIC PERFORMANCE AND INJUNCTIVE RELIEF, MAY BE USED TO
ENFORCE THE PROVISIONS OF THIS AGREEMENT.

[Execution Page Follows]

 

19

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this Registration Rights Agreement has been duly executed by
each of the parties hereto as of the date first written above.

 

RSA ASSOCIATES, L.P.

 

 

By:

/s/ Ian Schrager

 

 

 

MORGANS HOTEL GROUP CO.

 

 

By:

/s/ W. Edward Scheetz

 

 

Name:

W. Edward Scheetz

 

Title:

Chief Executive Officer

 

20

--------------------------------------------------------------------------------