EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of this 1st day of
January, 1997, by and between IMC MORTGAGE COMPANY, a Florida corporation (the
"Company"), and the persons signing below as shareholders (individually
"Shareholder" and collectively the "Shareholders") of MORTGAGE AMERICA, INC., a
Michigan corporation ("MAI").
RECITALS
WHEREAS, the Company, MAI and the Shareholders are parties to an Asset
Purchase Agreement and Plan of Reorganization dated December 14, 1996 (the
"Asset Purchase Agreement"), by which the Company has purchased substantially
all the assets and business of MAI and MAI is receiving fully paid,
nonassessable shares of common stock, $.01 par, of the Company (the "Common
Stock") which will be distributed to the Shareholders as part of the liquidation
of MAI.
WHEREAS, as an inducement to the Shareholders, MAI and the Company to
enter into the Asset Purchase Agreement, the Shareholders and the Company hereby
agree that this Agreement shall govern the rights of the Shareholders to
register shares of Common Stock issuable to the Shareholders in accordance with
the Asset Purchase Agreement.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Definitions.
(a) The term "Abbreviated Registration Statement" means a
registration statement on Form S-3 or any similar or successor form in which
financial statements and other detailed information about the issuer are
incorporated by reference from the issuer's periodic reports filed under
Securities Exchange Act of 1934.
(b) The term "Act" means the Securities Act of 1933, as amended,
or any successor legislation thereto.
(c) The terms "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement
or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document;
(d) The term "Registrable Securities" means the Common Stock
issuable or issued to a Shareholder pursuant to the terms of the Asset Purchase
Agreement.
2. Piggyback Registration.
2.1 Right to Include Registrable Stock. If the Company at any time
proposes to register any of its shares of Common Stock under the Act for its own
account for sale for cash (other than a registration on Form S-4 or Form S-8, or
any successor or similar forms) (the "Offering"), it will each such time
promptly give written notice thereof to the Shareholders. Upon the written
request of any Shareholder (the "Requesting Shareholders") made within 15 days
after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such Shareholders and the
intended method of distribution thereof), the Company will use its reasonable
good faith efforts to effect the registration under the Act of all Registrable
Securities which the Company has been so requested to register by the Requesting
Shareholders to the extent requisite to permit the disposition of the
Registrable Securities so to be registered in accordance with the intended
methods of distribution thereof specified in such request; provided that (i) if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any bona
fide good faith business reason not to register such securities, the Company
may, at its election, give written notice of such determination to the
Requesting Shareholders and, thereupon, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration, and
(ii) in case of a determination by the Company to delay registration of its
securities, the Company shall be permitted to delay the registration of
Registrable Securities for the same period as the delay in registering such
other securities.
2.2 Priority in Piggyback Registrations. If the managing
underwriter for a piggyback registration involving an underwritten Offering
shall advise the Company in writing that, in its opinion, the number of
securities of the Company (including Registrable Securities) requested to be
included in such registration by the holders thereof exceeds the number of
securities of the Company (the "Sale Number") which can be sold in an orderly
manner in such offering within a price range acceptable to the Company, the
Company shall, subject to the requirements of the following sentence, include
(i) first, all securities of the Company that the Company proposes to register
for its own account; (ii) second, to the extent that the number of securities of
the Company to be included by the Company is less than the Sale Number, all
Registrable Securities requested to be included by the Shareholders; and (iii)
third, all other securities of the Company requested to be included by the
holders thereof, pro rata based on the relative numbers of securities requested
to be included by each.
2.3 Demand Registrations/Portion of Base Payment. The Company has
agreed to register the sale, in the aggregate, of such Registrable Securities as
the Shareholders shall request on or before September 30, 1997, not to exceed
the lesser of (i) fifteen percent (15%) of the total Registrable Securities held
by the Shareholders at such time, or (ii) $7.5 million in value of Common Shares
(calculated at the closing price on NASDAQ for the last trading day preceding
the filing by the Company of a registration statement relating to the
Registrable Securities sought to be registered by the Shareholders).
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2.4. Demand Registration/Portion of Contingent Payment. The
Company has agreed to register the sale, in the aggregate, up to 50% of the
Registrable Securities received by Shareholder as the Contingent Payment upon
request of the Shareholder.
3. Obligations of the Company. Whenever required under this Agreement to effect
the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such of the Registrable Securities as are set forth in the request,
use its reasonable good faith efforts to cause such registration statement to
become effective and use its reasonable good faith efforts to keep such
registration statement effective for up to one year (nine months in the case of
a registration statement that is not an Abbreviated Registration Statement) but
not after such securities cease being Registrable Securities.
(b) Prepare and file with the SEC 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
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Requesting Shareholders such numbers of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by such
Shareholders.
(d) Use its best reasonable efforts to register or qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions within the United States as shall be
reasonably requested by the Requesting Shareholders, provided that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business, subject itself to taxation or to file a general consent
to service of process in any such states or jurisdictions.
(e) In the event the registration statement is used in an
underwritten public offering, enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the managing
underwriter of such offering, provided that the Requesting Shareholders also
have entered into and performed their obligations under such an agreement.
(f) Notify the Requesting Shareholders, at any time when a
prospectus relating thereto is required to be delivered under the 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.
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4. Furnish Information. The Company's obligation to cause any registration
statement to become effective in connection with distribution of any Registrable
Securities pursuant to this Agreement shall be contingent upon each of the
Shareholders, with reasonable promptness, furnishing to the Company such
information regarding such Shareholder, the Registrable Securities held by such
Shareholder, and the intended method of disposition of such securities, as shall
be required to effect the registration of the Registrable Securities.
5. Indemnification. In the event of any registration under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless the Requesting Shareholders, any underwriter (as defined in the
Act) for such Shareholders and each person, if any, who controls such
Shareholders or underwriter within the meaning of the Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Act, or the 1934 Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Act, or the 1934 Act or any state
securities law, and the Company will pay to the Requesting Shareholders,
underwriter or controlling person, as incurred, any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection 5(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon (1) a Violation which occurs in reliance upon and
in conformity with written information furnished expressly for use in connection
with such registration by the Requesting Shareholders, underwriter or
controlling person or (2) a Violation which results from the fact that there was
not sent or given to a person who bought Registrable Stock, at or prior to the
written confirmation of the sale, a copy of the final prospectus, as then
amended or supplemented, if the Company had previously furnished copies of such
prospectus hereunder and such prospectus corrected the misstatement or omission
forming the basis of the Violation.
(b) To the extent permitted by law, the Requesting Shareholders
will indemnify and hold harmless, to the extent of the proceeds received by such
Shareholders, the Company, each of its directors, each of its officers who has
signed the registration statement, each person, if any, who controls the Company
within the meaning of the Act, any underwriter, any other
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shareholder of the Company selling securities in such registration statement and
any controlling person of any such underwriter or other shareholder, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Act, or the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or action in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by the
Requesting Shareholders expressly for use in connection with such registration;
and such Shareholders will pay, as incurred, any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
subsection 5(b), in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this subsection 5(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Requesting Shareholders, which
consent shall not be unreasonably withheld; provided further, that in no event
shall any indemnity under this subsection 5(b) exceed the gross proceeds from
the Offering (excluding underwriting discounts and commissions) received by the
Requesting Shareholders.
(c) If any third party makes a claim for which an indemnifying
party under this Section 5 ("Indemnified Party") seeks indemnity from the
indemnifying party ("Indemnitor"), the Indemnified Party shall as soon as
practicable notify Indemnitor of the details of the claim ("Claim Notice").
After receiving a Claim Notice, Indemnitor may elect, by written
notice to the Indemnified party, to assume the defense of such claim by using
counsel selected by Indemnitor, acting reasonably. If Indemnitor assumes such
defense and admits that the claim is subject to the Indemnitor's indemnity
obligations, then (i) the claim shall be deemed to be a claim indemnified by the
Indemnitor; (ii) the Indemnified Party may, at its election, participate in the
defense of the claim, but Indemnitor will have no obligation to pay for any
defense costs including attorneys' fees of the Indemnified Party after
Indemnitor assumes the defense of the claim; and (iii) Indemnitor will have the
right, without cost to Indemnified Party, to compromise and settle the claim on
any basis believed reasonable, in good faith, by Indemnitor, and Indemnified
Party shall be bound thereby, provided that Indemnitor can reasonably
demonstrate the financial resources to perform under the terms of the proposed
Settlement.
After receiving a Claim Notice, if Indemnitor either does not
assume the defense thereof, or does so under a reservation of rights without
admitting that the claim is subject to the Indemnitor's indemnity obligations,
then: (i) the claim shall not be deemed to be a claim indemnified by the
Indemnitor and neither party shall have waived any rights to assert that the
claim is or is not properly a claim subject to the Indemnitor's indemnity
obligations; (ii) both Indemnitor and Indemnified Party may, at their individual
election, participate in the defense of such claim but Indemnitor will remain
responsible for the costs of defense, including reasonable attorneys' fees of
the Indemnified Party should the claim ultimately be determined to be subject to
Indemnitor's indemnity obligation; and (iii) the Indemnified Party shall have
the right to
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compromise and settle the claim on any basis believed reasonable, in good faith,
by the Indemnified Party, and the Indemnitor will be bound thereby should the
claim ultimately be determined to be subject to Indemnitor's indemnity
obligation.
(d) If the indemnification provided for in this Section 5 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnitor, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnitor on
the one hand and of the Indemnified Party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage,
or expense as well as any other relevant equitable considerations. The relative
fault of the Indemnitor and of the Indemnified Party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the Indemnitor or by the Indemnified Party and the
parties' relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement or omission.
(e) The obligations of the Company and the Requesting Shareholders
under this Section 5 shall survive the completion of any offering of Registrable
Securities in a registration statement under this agreement, and otherwise.
6. Expenses of Registration. All expenses incurred in connection with any
registration, qualification or compliance pursuant to this Agreement, including,
without limitation, all registration, filing and qualification fees, printing
expenses, fees and disbursements of counsel for the Company and expenses of any
special audits incidental to or required by such registration, qualification or
compliance shall be borne by the Company, except that the Company shall not be
required to pay underwriters' discounts, commissions, or stock transfer taxes
relating to the Registrable Securities or the fees and disbursements of counsel
to the Shareholders.
7. Holdback Agreement. If requested by the Company, the Shareholders agree not
to effect any public sale or distribution, including any sale pursuant to Rule
144 under the Act, of any Registrable Securities (in each case, other than as
part of the offering to which such registration statement relates) within 7 days
before or for such time after the effective date of a registration statement
filed pursuant to this Agreement for an underwritten offering as is reasonably
required by the Underwriter in connection with the Offering.
8. Miscellaneous.
8.1 Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties; provided that the Shareholders may not assign its rights
under this Agreement without the consent of the Company. Nothing in this
Agreement, express or implied, is intended to confer upon any party
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other than the parties hereto any rights, remedies, obligations, or liabilities
under or by reason of this Agreement.
8.2 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Florida.
8.3 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.
8.4 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
8.5 Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given (i) upon personal delivery to the party to be notified, (ii) on the
seventh business day after deposit with the United States Post Office, by
registered or certified mail, postage prepaid, (iii) on the next business day
after dispatch via nationally recognized overnight courier or (iv) upon
confirmation of transmission by facsimile, all addressed to the party to be
notified at the address indicated for such party on the signature page hereof,
or at such other address as such party may designate by ten (10) days' advance
written notice to the other parties. Notices should be provided in accordance
with this Section at the following addresses:
If to the Shareholders to:
Xx. Xxxxxx XxXxxxx
Mortgage America, Inc.
000 0xx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxx X. Xxxx, Esquire
Joseph, Wolf, Endean & Stable, PC
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Facsimile: (___) ________
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If to the Company, to:
Xx. Xxxxxx Xxxxxxxx, Chairman
IMC Mortgage Company
c/o Industry Mortgage Corp.
0000 Xxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx X. Xxxxxx, Esquire
Xxxxxxxx X. Xxxxxx, P.A.
Xxx Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
9.8 Expenses. 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 necessary disbursements in addition to
any other relief to which such party may be entitled.
9.9 Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the holders of a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
Registrable Securities then outstanding, each future holder of all such
Registrable Securities, and the Company.
9.10 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
9.11 Entire Agreement; Amendment; Waiver. This Agreement constitutes the
full and entire understanding and agreement between the parties with regard to
the subjects hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
IMC MORTGAGE COMPANY
By:__________________________________________ __________________________________
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its President XXXXXX XxXXXXX
Address:
0000 Xxxx Xxxxx Xxxxxxxxx, Xxxxx 000 __________________________________
Xxxxx, XX 00000 XXXX X. XXXX
Fax: (000) 000-0000
"COMPANY"
__________________________________
XXX XxXXXXX
__________________________________
XXXXXX XXXXXX
"SHAREHOLDERS"
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