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EXHIBIT 4.1
AMERICAN RESIDENTIAL INVESTMENT TRUST, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered
into as of February 11, 1997, by and among AMERICAN RESIDENTIAL INVESTMENT
TRUST, INC., a Maryland corporation (the "Company"), and the Holders.
RECITALS
WHEREAS, the Company is issuing new shares of its Common Stock in
connection with a series of transactions pursuant to which Holdings will acquire
substantially all the outstanding stock of the Company, and it is a condition to
the closing of that transaction that the Company and the Holders enter into this
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants, and conditions set forth in this
Agreement, the parties hereto hereby mutually agree as follows:
1. Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"Affiliate" shall mean, with respect to any Person, another
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with such Person.
"Collateral Agent" shall mean the collateral agent under the
Collateral Agency Agreement.
"Collateral Agency Agreement" shall mean the Collateral Agency
Agreement dated as of February 11, 1997 by an among Management, Holdings, the
purchasers of the Notes named therein, as beneficiaries, and Bankers Trust
Company, a New York banking corporation, as collateral agent, as such agreement
may be amended, supplemented, restated or modified from time to time.
"Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Company's Common Stock, par value
$.0001 per share.
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"Crescent" shall mean, collectively, TCW/Crescent Mezzanine
Partners, L.P., a Delaware limited partnership, TCW/Crescent Mezzanine
Investment Partners, L.P., a Delaware limited partnership, Crescent/Mach I
Partners, L.P., a Delaware limited partnership, TCW Shared Opportunity Fund II,
L.P., a Delaware limited partnership, and such Persons to whom Crescent sells,
pledges, grants a security interest in, transfers, gives, assigns, devises or
otherwise disposes of Notes, Common Stock or Registrable Securities; provided,
that MDC and its Affiliates shall not become "Crescent" by acquiring any such
securities from Crescent.
"Crescent Initiating Holders" shall mean, with respect to any
registration requested by Crescent, any Holder or Holders of a majority of the
then outstanding Registrable Securities held by Crescent.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Holder" or "Holders" shall mean any Person holding Common Stock
or Registrable Securities and any Person who becomes a party to this Agreement
in the future, holding Common Stock or Registrable Securities and any Person to
whom the registration rights under this Agreement have been transferred in
accordance with Section 2.10.
"Holders of a Majority of the Registrable Securities" shall mean
(a) the Holders of a majority of the Registrable Securities and (b) the Holders
of a majority of the Registrable Securities being sold by the Crescent
Initiating Holders, the L/C Initiating Holders, the Series A Initiating Holders
or the MDC Initiating Holders, as the case may be.
"Holdings" shall mean MDC REIT Holdings, LLC, a Delaware limited
liability company.
"Initiating Holder" shall mean any of the MDC Initiating Holders,
the Crescent Initiating Holders, the Series A Initiating Holders and the L/C
Initiating Holders.
"L/C Holders" shall mean Xxxxxx X. Xxxxx 1991 Family Trust,
Xxxxxx X. Xxxxx 1994 Family Trust, Xxxxxxxxx X. Xxxxx 1990 Family Trust, Xxxxxx
1991 Trust, Xxxxxxx Partners, PLF Partners, PK Partners. Xxxxxxxxx X. Xxxx
Revocable Trust, Saw Island Partners, Xxxxxx Xxxxxxxx and Persons to whom the
L/C Holders have transferred registration rights under this Agreement in
accordance with Section 2.10.
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"L/C Initiating Holders" shall mean any Holder or Holders of not
less than 25% of the then outstanding Registrable Securities held by the L/C
Holders.
"Management" shall mean Home Asset Management Corp. a Delaware
corporation.
"MDC" shall mean MDC Management Company II, L.P., a California
limited partnership, and its Affiliates.
"MDC Initiating Holders" shall mean any Holder or Holders of not
less than 25% of the then outstanding Registrable Securities held by the MDC
Holders.
"MDC Holders" shall mean MDC and its Affiliates.
"Non-MDC Holder" shall mean any holder or holders of Common Stock
other than MDC Holders.
"Notes" shall mean the 12% Senior Secured Notes due February 11,
2002 issued by Management.
"Options" shall mean the options to purchase Common Stock granted
to the Management Holders and to other employees of the Company from time to
time.
"Person" shall mean an individual, partnership, corporation,
limited liability company, trust or unincorporated organization or a government
or agency or political subdivision thereof.
"Pledge Agreement" shall mean the Pledge Agreement dated February
11, 1997 by and between Holdings and the Collateral Agent, pursuant to which
Holdings has pledged to Crescent the Common Stock of the Company owned by
Holdings.
The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registrable Securities" shall mean shares of the Company's
Common Stock (i) issued or issuable to the Holders now or in the future upon
exercise of Options or rights to acquire shares of Common Stock, (ii) owned by
Holdings, (iii) acquired by members of Holdings upon a distribution by Holdings
to such members, (iv) acquired by the holders of Notes (or the Collateral Agent
acting for their benefit) in connection with a foreclosure upon such Common
Stock under the Pledge Agreement or (v) any securities issued or issuable with
respect to such Common Stock referred to in clauses (i) through (iv) immediately
above by way
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of stock dividends or stock splits or in connection with a combination of
shares, recapitalization, merger, consolidation, other reorganization or
otherwise. Shares of Common Stock or other securities issued with respect to
such Common Stock shall cease to be Registrable Securities (and shall be
excluded from the calculation of the number of outstanding Registrable
Securities) when they have been distributed to the public pursuant to an
offering registered under the Securities Act or sold to the public through a
broker, dealer or market maker in compliance with Rule 144 or Rule 145(d) under
the Securities Act or any successor rules. The foregoing notwithstanding, a
Security will not cease to be a Registrable Security until all stop transfer
instructions and notations and restrictive legends with respect to such security
have been lifted or removed. For purposes of this Agreement, a Person will be
deemed to be a Holder of Registrable Securities whenever such Person has the
right to acquire, directly or indirectly, such securities (upon exercise of
Options or otherwise, so long as such Options or other rights are then
exercisable), regardless of whether such acquisition has actually been effected.
"Registration Expenses" shall mean all expenses incurred by the
Company in complying with Sections 2.1, 2.2 and 2.3 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, reasonable fees and disbursements of a
single special counsel for the Holders and Other Holders (as defined in Section
2.3(a)), blue sky fees and expenses, and accounting and auditing expenses
including the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company and excluding Selling Expenses).
"registration statement" shall mean a registration statement
under the Securities Act of the Company that covers any Registrable Securities
pursuant to the provisions of this Agreement, including the related prospectus,
all amendments and supplements to such registration statement, including
pre-effective and post-effective amendments, all exhibits thereto and material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale.
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"Series A Initiating Holders" shall mean any Holder or Holders of
not less than 25% of the then outstanding Registrable Securities held by the
Series A Holders.
"Series A Holders" shall mean Xxxxxx X. Xxxxx 1991 Family Trust,
Xxxxxx X. Xxxxx 1994 Family Trust, Xxxxxxxxx X. Xxxxx 1990 Family Trust, Xxxxxx
1991 Trust, Xxxxxxx Partners, PLF Partners, PK Partners. Xxxxxxxxx X. Xxxx
Revocable Trust, Saw Island Partners, Xxxxxx Xxxxxxxx and Persons to whom the
Series A Holders have transferred registration rights under this Agreement in
accordance with Section 2.10..
2. Registration Rights.
2.1 Requested Registration. If, (x) following 180 days
after the distribution by Holdings to its members of all or a portion of the
Common Stock owned by it, the Company receives from either the Crescent
Initiating Holders, the MDC Initiating Holders, the Series A Initiating Holders
or the L/C Initiating Holders a written request that the Company effect a
registration under the Securities Act, or (y) following the foreclosure by the
Collateral Agent or Crescent under the Pledge Agreement, the Company receives
from the Collateral Agent or the Crescent Initiating Holders a written request
that the Company effect a registration under the Securities Act, the Company
will:
(a) promptly give written notice of the proposed
registration to all other Holders; and
(b) as soon as practicable, use its reasonable best
efforts to effect such registration (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws, and
appropriate compliance with applicable regulations issued under the Securities
Act) as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are specified in
a written request given within fifteen (15) days after receipt of such written
notice from the Company; provided that (x) the MDC Initiating Holders and the
Crescent Initiating Holders are each entitled to two registrations pursuant to
this Section 2.1, no more than one of which may be effected in any given
12-month period; (y) the Series A Initiating Holders and the L/C Initiating
Holders are each entitled to only one registration pursuant to this Section 2.1
and (z) that the Company shall not be obligated to take any action to effect any
such registration, qualification, or compliance pursuant to this Section 2.1:
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(i) In any particular jurisdiction in which the
Company would be required to execute a general consent to service
of process in effecting such registration, qualification, or
compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities
Act;
(ii) During the period of 180 days following the
effective date of the registration statement pertaining to a
registered public offering of securities of the Company for cash
for its own account (other than a registration relating solely to
a Commission Rule 145 transaction or a registration relating
solely to employee benefit plans); or
(iii) With respect to the MDC Initiating Holders,
after the Company has effected two registrations on behalf of the
MDC Initiating Holders requesting registration pursuant to this
Section 2.1 and such registrations have been declared effective;
with respect to the Crescent Initiating Holders, after the
Company has effected two registrations on behalf of the Crescent
Initiating Holders requesting registrations pursuant to Section
2.1 and such registrations have been declared effective (subject
to paragraph (f)); with respect to the Series A Initiating
Holders, after the Company has effected one registration on
behalf of the Series A Initiating Holders requesting registration
pursuant to Section 2.1 and such registration has been declared
effective (subject to paragraph (f)) and, with respect to the L/C
Initiating Holders, after the Company has effected one
registration on behalf of the L/C Initiating Holders requesting
registration pursuant to Section 2.1 and such registration has
been declared effective (subject to paragraph (f)); or
(iv) Unless the Holder or Holders requesting
registration (together with any other Holders who may participate
in such registration) propose to dispose of Registrable
Securities which they reasonably anticipate will have an
aggregate disposition price (before deduction of underwriting
discounts and expenses of sale) of at least $5,000,000.
Subject to the foregoing clauses (i) through (iv) and to Section
2.1(d), the Company shall file a registration statement covering the Registrable
Securities so requested to be registered as soon as practicable after receipt of
the request of the MDC Initiating Holders, the Crescent Initiating Holders, the
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Series A Initiating Holders or the L/C Initiating Holders, and in no event later
than 90 days after receipt of such request.
(c) Underwriting. If the MDC Initiating Holders, the
Crescent Initiating Holders, the Series A Initiating Holders or the L/C
Initiating Holders intend to distribute the Registrable Securities covered by
their request by means of an underwriting, they shall so advise the Company as a
part of their request made pursuant to this Section 2.1 and the Company shall
include such information in the written notice referred to in Section 2.1(a).
The right of each Holder to registration pursuant to Section 2.1 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent requested (unless otherwise mutually agreed by a majority in interest of
the Holders and such Holder) to the extent provided herein.
The Company shall (together with all Holders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by a majority in interest of the MDC Initiating
Holders, the Crescent Initiating Holders, the Series A Initiating Holders or the
L/C Initiating Holders, as the case may be; however, such selection shall be
subject to the approval of the Company, in its sole and absolute discretion.
Notwithstanding any other provision of this Section 4.1, if the Company and the
underwriter or underwriters determine that marketing factors require the number
of shares to be underwritten to be reduced and so advise the MDC Initiating
Holders, the Crescent Initiating Holders, the Series A Initiating Holders or the
L/C Initiating Holders, as the case may be, in writing, then the MDC Initiating
Holders, the Crescent Initiating Holders, the Series A Initiating Holders or the
L/C Initiating Holders, as the case may be, shall so advise all Holders who have
indicated to the Company that they intend to participate in such underwriting
and the number of Registrable Securities that may be included in the
registration and underwriting shall be allocated as follows:
(i) Registrable Securities held by any person who
is not an MDC Holder, in the case of a registration requested by
the MDC Initiating Holders, who is not Crescent, in the case of a
registration requested by the Crescent Initiating Holders, who is
not a Series A Holder, in the case of a registration requested by
the Series A Initiating Holders, or who is not a L/C Holder, in
the case of a registration requested by the L/C Initiating
Holders, shall first be excluded on a pro rata basis on the basis
of the number of Registrable Securities requested to be included
by such Holders;
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(ii) if further reductions are required, Registered
Securities held by the MDC Holders in the case of a registration
requested by the MDC Initiating Holders or held by Crescent in
the case of a registration requested by Crescent or held by the
Series A Holders in the case of a registration requested by the
Series A Initiating Holders or held by the L/C Holders in the
case of a registration requested by the L/C Initiating Holders
shall be excluded in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities requested to be
included by such Holders.
In the event any Non-MDC Holder is excluded as a result of the
foregoing provisions from a registration (other than a registration requested by
the Crescent Initiating Holders), then such Non-MDC Holder shall be entitled to
sell, on a pro rata basis, the excluded Registrable Securities, prior to any
other Registrable Securities, pursuant to the underwriters' over-allotment
option. Notwithstanding the preceding sentence, if the number of shares
includable by the MDC Holders is reduced in a registration requested by the MDC
Initiating Holders, then the maximum participation by Non-MDC Holders in the
underwriters' over-allotment option shall be limited to the number of shares
that such Holders would have been able to sell if the reduction was pro rata
among all Holders of Registrable Securities having the right to participate in
such registration, regardless of the reduction provisions of clause (i) above.
Except as provided in the last sentence of this paragraph, no
Registrable Securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration. If
any Holder disapproves of the terms of the underwriting, such person may elect
to withdraw therefrom by written notice to the Company, the underwriter and the
MDC Initiating Holders, the Crescent Initiating Holders, the Series A Initiating
Holders or the L/C Initiating Holders, as the case may be. The Registrable
Securities and/or other securities so withdrawn from such underwriting shall
also be withdrawn from such registration; provided, however, that, if by the
withdrawal of such Registrable Securities a greater number of Registrable
Securities held by other Holders may be included in such registration (up to the
maximum of any limitation imposed by the underwriters), then the Company shall
offer to all Holders who have included Registrable Securities in the
registration the right to include additional Registrable Securities in the same
proportion used above in determining the underwriter limitation.
If the underwriter or underwriters have not limited the number of
Registrable Securities to be underwritten, the Company may include securities
for its own account or the account of
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others in such registration if the underwriter or underwriters so agree and if
the number of Registrable Securities that would otherwise have been included in
such registration and underwriting will not thereby be limited.
(d) Delay of Registration. If the Company shall
furnish to the MDC Initiating Holders, the Crescent Initiating Holders, the
Series A Initiating Holders or the L/C Initiating Holders a certificate signed
by the President of the Company stating that, in the good faith discretion of
the Board of Directors of the Company, it would not be in the best interest of
the Company for such registration statement to be filed on or before the date
filing would be required then the Company may defer the filing of the
registration statement for a period or periods not in excess of an aggregate of
90 days, such right to delay a request to be exercised by the Company not more
than once in any calendar year.
(e) Shelf Registration. (i) If any registration
pursuant to this Section 2.1 is requested to be a shelf registration pursuant to
Rule 415 under the Securities Act (a "Shelf Registration"), the Company shall,
within 90 days use all reasonable efforts to file pursuant to Rule 415 under the
Securities Act, a shelf registration statement (a "Shelf Registration
Statement") relating to the Registrable Securities requested to be so
registered. The Company shall keep such Shelf Registration Statement
continuously effective for a period of 90 days following the date on which the
Commission declares such Shelf Registration Statement effective under the
Securities Act (subject to the extension pursuant to Section 2.9 hereof), or
such shorter period ending when all the Registrable Securities covered by such
Shelf Registration Statement have been sold.
(ii) Upon the occurrence of any event that would cause
the Shelf Registration Statement (A) to contain an untrue or alleged untrue
statement of material fact, or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or (B) not to be effective and usable for resale of Registrable
Securities during the period that such Shelf Registration Statement is required
to be effective and usable, the Company shall promptly file an amendment to the
Shelf Registration Statement, in the case of clause (A), to correct any such
misstatement or omission and, in the case of either clause (A) or (B), use all
reasonable efforts to cause such amendment to be declared effective and such
Shelf Registration Statement to become usable as soon as practicable thereafter.
(f) Effective Registration Statement. A registration
requested pursuant to this Section 2.1 shall not be deemed to have been effected
(i) unless a registration statement with respect thereto has become effective;
provided, however,
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that if such registration statement does not become effective after the Company
has filed it solely by reason of the refusal to proceed by the Holders (other
than a refusal to proceed based upon the advice of counsel relating to a matter
with respect to the Company), then such registration shall be deemed to have
been effected unless the MDC Initiating Holders, the Crescent Initiating
Holders, the Series A Initiating Holders or the L/C Initiating Holders, as the
case may be, shall have elected to pay all Registration Expenses referred to in
Section 2.4 hereof in connection with such registration, (ii) if, after the
registration statement that relates to such registration has become effective,
such registration statement becomes subject to any stop order, injunction or any
order or requirement of the Commission or other governmental agency or court for
any reason and such order, injunction or requirement is not promptly withdrawn
or lifted, or (iii) the conditions to closing specified in the purchase
agreement or underwriting agreement entered into in connection with such
registration are not satisfied, other than by reason of some act or omission by
such Holders.
2.2 Form S-3. After the Company has qualified for the
use of Form S-3, the MDC Initiating Holders, the Crescent Initiating Holders,
the Series A Initiating Holders and the L/C Initiating Holders each shall have
the right to registrations on Form S-3 (but not more than one registration in
any twelve (12) month period shall be requested by each of the MDC Initiating
Holders, the Crescent Initiating Holders, the Series A Initiating Holders or the
L/C Initiating Holders, as the case may be) under this Section 2.2 (requests
shall be in writing and shall state the number of Registrable Securities to be
disposed of and the intended method of disposition of such shares by such Holder
or Holders); provided, however, that the Company shall not be required to effect
a registration pursuant to this Section 2.2 unless (a) the Holder or Holders
requesting registration propose to dispose of Registrable Securities which they
reasonably anticipate will have an aggregate disposition price (before deduction
of underwriting discounts and expenses of sale) of at least $5,000,000 and (b)
such Holder or Holders are not entitled to sell all of their shares within a
three-month period under Rule 144 under the Securities Act.
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The Company shall give notice to all Holders of
Registrable Securities and all other Holders of the receipt of a request for
registration pursuant to this Section 2.2 and shall provide a reasonable
opportunity for all Holders and all other Holders to participate in the
registration. Subject to the foregoing, the Company will use all reasonable
efforts to effect promptly the registration of all Registrable Securities on
Form S-3, as the case may be, to the extent requested by the Holder or Holders
thereof for purposes of disposition.
2.3 Company Registration.
(a) Notice of Registration. If at any time or from
time to time, the Company shall determine to register any of its Common Stock,
for its own account or for the account of others, other than a registration
relating to an initial public offering or a registration relating solely to
employee benefit plans or a registration relating solely to a Commission Rule
145 transaction or registration on any registration form which does not include
substantially the same information about the Company as would be required to be
included in a registration statement covering the sale of Registrable
Securities, the Company will:
(i) promptly give to (A) each Holder and (B) those
other Holders of the Company who have "piggyback" registration
rights ("Other Holders") written notice thereof; and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in
any underwriting involved therein, all the Registrable Securities
specified in a written request or requests by any Holder or
Holders, and all shares of Common Stock specified in a written
request or requests by the Other Holders, provided such written
requests are received by the Company within 20 days following
receipt by such Holders and the Other Holders of such notice from
the Company.
(b) Underwriting. If the registration of which the
Company gives notice is for a registered public offering involving a firm
commitment underwriting, the Company shall so advise the Holders and the Other
Holders as a part of the written notice given pursuant to Section 2.3(a)(i). In
such event, the right of any Holder and the Other Holders to registration
pursuant to this Section 2.3 shall be conditioned upon such Holder's and the
Other Holders' participation in such underwriting and the inclusion of such
Holder's Registrable Securities and such Other Holders' Common Stock in the
underwriting to the extent provided herein. All Holders and Other Holders
proposing to distribute their securities through such underwriting shall
(together with the Company and the other
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holders distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of this Section 2.3, if the Company and the underwriter or
underwriters determine that marketing factors require limitation of the number
of shares to be underwritten, the underwriter may exclude from such underwriting
all or some of the shares proposed for registration on the following basis:
(i) shares held by any person who does not have
contractual rights to cause the Company to register such shares
shall first be excluded;
(ii) if further reductions are required, any shares
held by the Other Holders will next be excluded, such reductions
to be allocated as nearly as practicable among each such Other
Holder in the proportion that the number of shares of Common
Stock (on a fully converted basis) held by such Other Holder
bears to the total number of shares of Common Stock (on a fully
converted basis) held by all Other Holders seeking to register
their shares; and
(iii) if further reductions are required,
Registrable Securities and any shares held by the Holders will
next be excluded, such reductions to be allocated pro rata among
such Holders based upon the number of shares of Common Stock
requested to be included by each such Holder.
In the event any Non-MDC Holder is excluded as a result of the
foregoing provisions from a registration, then such Non-MDC Holder shall be
entitled to sell, on a pro rata basis, the excluded Registrable Securities,
prior to any other Registrable Securities, pursuant to the underwriters'
over-allotment option.
Except as provided in the last sentence of this paragraph, no
shares excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration. If any Holder or Other Holder
disapproves of the terms of any such underwriting, such person may elect to
withdraw therefrom by written notice to the Company and the underwriter. The
Registrable Securities and/or other securities so withdrawn from such
underwriting shall also be withdrawn from such registration; provided, however,
that, if by the withdrawal of such shares a greater number of shares may be
included in such registration (up to the maximum of any limitation imposed by
the underwriters), then the Company shall offer to all Holders and Other Holders
who have included shares in the registration the right to include additional
shares in the same proportion used above in determining the underwriter
limitation.
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2.4 Expenses of Registration. All Registration
Expenses incurred in connection with one registration per year pursuant to
Section 2.1 requested by the MDC Initiating Holders, one registration per year
requested by the Crescent Initiating Holders, one registration requested by the
Series A Initiating Holders and one registration requested by the L/C Initiating
Holders and all Registration Expenses incurred in connection with a registration
pursuant to Section 2.2 or Section 2.3, including the reasonable fees and
expenses of one counsel for the selling Holders collectively, shall be borne by
the Company; and all Selling Expenses shall be borne by the Holders of the
Registrable Securities so registered pro-rata on the basis of the number of
shares so registered.
2.5 Registration Procedures. Whenever the Company is
required to register Registrable Securities pursuant to Sections 2.1, 2.2 or 2.3
hereof, the Company will use all reasonable efforts to effect the registration
to permit the sale of such Registrable Securities in accordance with the
intended method or methods of disposition thereof, and pursuant thereto the
Company will as expeditiously as possible:
(a) prepare and file with the Commission as soon as
practicable a registration statement with respect to such Registrable Securities
as prescribed by Section 2 on a form available for the sale of the Registrable
Securities by the Holders thereof in accordance with the intended method or
methods of distribution thereof and use all reasonable efforts to cause each
such registration statement to become and remain effective; provided, however;
that before filing a registration statement, the Company will furnish the
Holders of Registrable Securities covered by such registration statement, the
underwriters, if any, and any attorney, accountant or other agent required by
any such Holders of Registrable Securities or underwriters (a) copies of all
such documents proposed to be filed, which documents will be subject to the
review and comment of such Holders, their counsel and underwriters, if any, and
(ii) if requested, financial and other information required by the Commission to
be included in such registration statement and all financial and other records,
pertinent corporate documents and properties of the Company customarily reviewed
in connection with an underwritten registration; and shall cause the officers,
directors and employees of the Company, counsel to the Company and independent
certified public accountants to Company, to respond to such inquiries and supply
all information, as shall be necessary, in the opinion of respective counsel to
such Holders and underwriters, to conduct a reasonable investigation within the
meaning of the Securities Act, and will not file any registration statement to
which the Holders of at least a majority of the Registrable Securities covered
by such registration statement or the underwriters, if any, shall reasonably
object;
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(b) prepare and file with the Commission such
amendments, post-effective amendments and prospectus supplements to such
registration statement as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement
until the earlier of (i) the period provided in Section 2.1 hereof (as such
period may be extended pursuant to Section 2.9 hereof) or (ii) such time as all
such securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement; provided, that the Company shall be deemed not to have used all
reasonable efforts to keep a registration statement effective during the
applicable period if it voluntarily takes any action that results in the selling
Holders of the Registrable Securities covered thereby not being able to sell
such Registrable Securities during that period;
(c) furnish to each Holder of Registrable Securities
covered by a registration statement and to each underwriter, if any, such number
of copies of such registration statement, each amendment and post-effective
amendment thereto, the prospectus included in such registration statement
(including each preliminary prospectus and any supplement to such prospectus and
any other prospectus filed under Rule 424 of the Securities Act), in each case
including all exhibits, and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller or to be disposed of by such underwriter (the Company
hereby consenting to the use, in accordance with all applicable laws, of each
such registration statement (or amendment or post-effective amendment thereto)
and each such prospectus (or preliminary prospectus or supplement thereto) by
each such seller and the underwriters, if any, in connection with the offering
and sale of the Registrable Securities covered by such registration statement or
prospectus);
(d) use all reasonable efforts to register or qualify
and, if applicable, to cooperate with the selling Holders of Registrable
Securities, the underwriters, if any, and their respective counsel in connection
with the registration or qualification (or exemption from such registration or
qualification) of, the securities to be included in a registration statement for
offer and sale under the securities or blue sky laws of such jurisdictions as
any selling Holder or managing underwriters (if any) shall reasonably request,
to keep each such registration or qualification (or exemption therefrom)
effective during the period such registration statement is required to be kept
effective and to do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the securities covered by the
applicable registration statement, provided, that the Company will not be
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required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph or (ii)
consent to general service of process in any such jurisdiction;
(e) cause all such Registrable Securities to be listed
on each securities exchange on which securities of the same class as the
Registrable Securities are then listed and, if not so listed, to be listed on
the NASD automated quotation system and, if listed on the NASD automated
quotation system, use all reasonable efforts to secure designation of all such
Registrable Securities covered by such registration statement as a NASDAQ
"national market system security" within the meaning of Rule 11Aa2-1 under the
Exchange Act or, failing that, to secure NASDAQ authorization for such
Registrable Securities and, without limiting the generality of the foregoing, to
use its reasonable efforts to arrange for at least two market makers to register
as such with respect to such Registrable Securities with the NASD;
(f) provide a transfer agent and registrar for all such
Registrable Securities and a CUSIP number for all such Securities not later than
the effective date of such registration statement;
(g) comply with all applicable rules and regulations of
the Commission and make available to its security holders an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than 45 days after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) (or in each case within
such extended period of time as may be permitted by the Commission for filing
the applicable report with the Commission) (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in a
firm commitment or best efforts under written offering or (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a registration
statement, which earnings statement shall cover said 12-month period;
(h) permit any Holder which, in its sole and exclusive
judgment, might be deemed to be an underwriter or a controlling person of the
Company, to participate in the preparation of such registration or comparable
statement and to require the insertion therein of material, furnished to the
Company in writing, which in the reasonable judgment of such Holder and its
counsel should be included;
(i) use all reasonable efforts to prevent the issuance
of any order suspending the effectiveness of a registration statement or
suspending the qualification (or
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exemption from qualification) of any of the securities included therein for sale
in any jurisdiction, and, in the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending the qualification of any securities included in such registration
statement for sale in any jurisdiction, the Company will use all reasonable
efforts promptly to obtain the withdrawal of such order at the earliest possible
moment;
(j) obtain "cold comfort" letters and updates thereof
(which letters and updates (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and counsel to the selling
Holders of Registrable Securities) from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the registration statement), addressed to each of
the underwriters, if any, and each selling Holder of Registrable Securities,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with underwritten
offerings and such other matters as the underwriters, if any, or the Holders of
a Majority of the Registrable Securities being sold may reasonably request;
(k) obtain opinions of independent counsel to the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing underwriters, if
any, and not objected to by the Holders of a Majority of the Registrable
Securities being sold), addressed to each selling Holder and each of the
underwriters, if any, covering the matters customarily covered in opinions of
issuer's counsel requested in underwritten offerings, such as the effectiveness
of the registration statement and such other matters as may be requested by the
underwriters, if any;
(l) promptly (but in any event, within two business
days) notify the selling Holders of Registrable Securities, their counsel and
the managing underwriters, if any, and confirm such notice in writing:
(i) when a prospectus or any supplement or post-
effective amendment to such prospectus has been filed, and, with respect
to a registration statement or any post-effective amendment thereto,
when the same has become effective;
(ii) of any request by the Commission or any other
Federal or state governmental authority for amendments or supplements to
a registration statement or related prospectus or for additional
information;
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(iii) of the issuance by the Commission of any
stop order suspending the effectiveness of a registration statement or
of any order preventing or suspending the use of any prospectus or the
initiation of any proceedings by any Person for that purpose;
(iv) if at any time the representations and
warranties of the Company contemplated by clause (i) of paragraph (q)
below cease to be true and correct in any material respect,
(v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of a registration statement or any of the
Registrable Securities for offer or sale under the securities or blue
sky laws of any jurisdiction, or the contemplation, initiation or
threatening, of any proceeding for such purpose;
(vi) of the happening of any event that makes any
statement made in such registration statement untrue in any material
respect or that requires the making of any changes in such registration
statement so that it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made (in the case of any prospectus), not
misleading; and
(vii) of the Company's reasonable determination
that a post-effective amendment to a registration statement would be
appropriate.
(m) if requested by the managing underwriters, if any,
or a Holder of Registrable Securities being sold, promptly incorporate
in a prospectus, supplement or post-effective amendment any information
as the managing underwriters, if any, and the Holders of a Majority of
the Registrable Securities being sold reasonably request to be included
therein relating to the sale of the Registrable Securities, including,
without limitation, information with respect to the number of shares of
Registrable Securities being sold to underwriters, the purchase price
being paid therefor by such underwriters and with respect to any other
terms of the underwritten offering of the Registrable Securities to be
sold in such offering, and make all required filings of such prospectus,
supplement or post-effective amendment promptly following notification
of the matters to be incorporated in such supplement or post-effective
amendment;
(n) furnish to each selling Holder of Registrable
Securities and the managing underwriter, without charge, at least one
signed copy of the registration statement;
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(o) cooperate with the selling Holders of Registrable
Securities and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing in the Registrable
Securities not bearing any restrictive legends and in a form eligible for
deposit with The Depository Trust Company to be sold and cause such Registrable
Securities to be in such denominations and registered in such names as the
managing underwriters, if any, or holder of Registrable Securities may request
at least three business days prior to any sale of Registrable Securities to the
underwriters;
(p) as promptly as practicable upon the occurrence of
any event contemplated by clause (l)(vi) above, prepare a supplement or
post-effective amendment to the registration statement, or file any other
required documents so that, as thereafter delivered to the purchasers of the
Registrable Securities being sold hereunder, the prospectus will not contain an
untrue statement of a material fact or an omission to state a material fact
required to be stated in a registration statement or prospectus or necessary to
make the statements therein (in the case of the prospectus, in light of the
circumstances under which they were made), not misleading;
(q) enter into such agreements (including underwriting
agreements in customary form, scope and substance) and take all such other
actions in connection therewith as the Holders of a Majority of the Registrable
Securities being sold or the underwriters, if any, reasonably request in order
to expedite or facilitate the registration or the disposition of such
Registrable Securities, and in such connection, whether or not an underwriting
agreement is entered into and whether or not the registration is an underwritten
registration:
(i) make such representations and warranties to
the Holders of such Registrable Securities and the underwriters, if any,
with respect to the business of the Company and the registration
statement, in form, substance and scope as are customary made by issuers
to underwriters in underwritten offerings and confirm the same, if and
when requested;
(ii) if an underwriting agreement is entered into,
cause the same to include the indemnification and contribution
provisions and procedures substantially similar to (and use all
reasonable efforts to assure that such provisions are no less favorable
to the selling Holders of Registrable Securities than) those contained
in Section 2.6 hereof with respect to all parties to be indemnified
pursuant to said Section (or, with respect to the indemnification of
such underwriters, such similar indemnification and contribution
provisions as such underwriters shall customarily require); and
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(iii) deliver such documents and certificates as
may be requested by the Holders of a Majority of the Registrable
Securities being sold and managing underwriters, if any, to evidence
compliance with clause (i) above and with any conditions contained in
the underwriting agreement or other similar agreement entered into by
the Company;
The above shall be done at each closing under such underwriting
or similar agreement or as and to the extent otherwise reasonably requested by
the Holders of a Majority of the Registrable Securities being sold.
(r) cooperate with each seller of Registrable
Securities covered by any registration statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
NASD;
(s) use all reasonable efforts to take all other steps
necessary to effect the registration of the Registrable Securities covered by
the registration statement contemplated hereby.
Each Holder agrees by the acquisition of such Registrable
Securities that, upon receipt of written notice from the Company of the
happening of any event of the kind described in Section 2.5(l)(ii), 2.5(l)(iii),
2.5(l)(v), 2.5(l)(vi), or 2.5(l)(vii), such Holder will forthwith discontinue
disposition of such Registrable Securities covered by such registration
statement until such Holder's receipt of the copies of the supplemented or
amended registration statement contemplated by Section 2.5(p), or until it is
advised in writing (the "Advice") by the Company that the use of applicable
prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such prospectus, and, if so directed by the Company, such Holder
shall deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice. If the Company shall give any such notice, the time periods mentioned in
Section 2.1 hereof shall be extended by the number of days during such periods
from and including the date of the giving of such notice to and including the
date when each seller of Registrable Securities covered by such registration
statement receives (x) the copies of the supplemented or amended prospectus
contemplated by Section 2.5(p) hereof or (y) the Advice, as the case may be.
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2.6 Indemnification and Contribution.
(a) Company Indemnification. The Company will
indemnify, to the fullest extent permitted by law, each Holder (which term, for
purposes of this Section 2.6, shall be deemed to include Other Holders who
include shares in a registration), its Affiliates, each of its and its
Affiliates' officers, directors, employees, counsel, agents, representatives and
partners, and each person controlling, within the meaning of Section 15 of the
Securities Act or Section 20 the Exchange Act, such Holder or its Affiliates,
participating in any registration, qualification, or compliance effected
pursuant to this Section 2 with respect to Registrable Securities held by such
Holder, each person controlling the Company who is not participating in such
registration, qualification or compliance and each underwriter, if any, and each
person who controls any underwriter, against all claims, losses, damages, costs
(including, without limitation, costs of investigation and reasonable attorneys'
fees and disbursements), expenses and liabilities (or actions in respect thereof
collectively "Losses"), including any of the foregoing incurred in settlement of
any litigation, commenced or threatened, to which they may become subject under
the Securities Act, the Exchange Act, or other federal or state law, arising out
of or based on (i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other similar
document (including any related registration statement, notification, or the
like) incident to any such registration, qualification or compliance, or based
on any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
(in the case of the prospectus, in light of the circumstances under which they
were made), or (ii) any violation by the Company of any federal, state, or
common law rule or regulation applicable to the Company in connection with any
such registration, qualification, or compliance, and will reimburse each such
Holder, each of its Affiliates and its and its Affiliates' officers, directors,
employees, counsel, agents, representatives and partners, and each person
controlling such Holder or its Affiliates, each such person controlling the
Company who is not participating in such registration, qualification or
compliance, each such underwriter, and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating or defending any Losses, as incurred, provided
that the Company will not be liable to such Holder in any such case to the
extent that any such Losses arise out of or are based on any untrue statement or
omission, made in reliance on and in conformity with written information
furnished to the Company expressly for use in the registration statement by such
Holder.
(b) Holder Indemnification. Each Holder will, if
Registrable Securities held by such Holder are included in the
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securities as to which such registration, qualification, or compliance is being
effected, indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of the Securities Act, each other Holder and each Other Holder, and each
of its officers, directors, and partners and each person controlling such other
Holder or Other Holder, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on (i) any untrue statement
(or alleged untrue statement) by such Holder of a material fact contained in any
such registration statement, prospectus by such Holder, offering circular, or
other similar document, or any omission (or alleged omission) by such Holder to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances under
which they were made, and will reimburse the Company, such other Holders, such
directors, officers, persons, underwriters, or control persons for any legal or
any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability, or action, as incurred, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular, or other document in
reliance upon and in conformity with written information furnished to the
Company expressly for use in the registration statement by such Holder, or (ii)
any violation by such Holder, in connection with a non-underwritten offering, of
any federal, state, or common law rule or regulation applicable to such Holder
in connection with the distribution of securities pursuant to a registration
statement, and will reimburse the Company, such other Holders, such directors,
officers, persons, or control persons for any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability, or action, as incurred; provided, however, that
the obligations of each such Holder hereunder shall be limited to an amount
equal to the aggregate proceeds (net of payment of all expenses) received by
such Holder in such offering.
(c) Notice of Actions. Each party entitled to
indemnification under this Section 2.6 (the "Indemnified Party") shall give
notice to the party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has received written notice of any
claim as to which indemnity may be sought, and shall permit the Indemnifying
Party to assume the defense (including the payment of all fees and expenses
incurred in connection thereof) of any such claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party, who shall conduct
the defense of such claim or litigation, shall be approved by the Indemnified
Party (whose
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approval shall not unreasonably be withheld). Each Indemnified Party shall have
the right to employ separate counsel in such defense but the fees and expenses
of such counsel shall be at the expense of each such Indemnified Party unless
the representation of both parties by the same counsel would be inappropriate
due to actual or potential conflicts of interest or if the Indemnifying Party
fails to promptly assume the defense. No Indemnified Party shall be liable for
any settlement effected without its written consent. Each Indemnifying Party
agrees, jointly and severally, that it will not, without the Indemnified Party's
prior written consent, consent to entry of any judgment or settle or compromise
any pending or threatened claim, action or proceeding in respect of which
indemnification or contribution may be sought hereunder unless the foregoing
contains an unconditional release, in form and substance reasonably satisfactory
to the Indemnified Party, of the Indemnified Party from all liability and
obligation arising therefrom.
The Indemnifying Party's liability to any Indemnified Party
hereunder shall not be extinguished solely because any other Indemnified Party
is not entitled to indemnity hereunder.
The Indemnification provided for under this Agreement will 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 will survive the Transfer of Registrable Securities. The
failure of any Indemnified Party or Parties to give notice as provided herein
shall relieve the Indemnifying Party of its obligations under this Section 2.6
only to the extent that such failure to give notice shall materially adversely
prejudice the Indemnifying Party in the defense of any such claim or any such
litigation.
(d) Contribution. If the indemnification provided for
in this Section 2.6 is unavailable or insufficient to hold harmless an
Indemnified Party under Section 2.6(a) or (b) above, then each Indemnifying
Party shall contribute to the amount paid or payable by such indemnified party
as a result of the Losses referred to in Section 2.6(a) or (b) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Holders on the other from the offering of the
Shares and the relative fault of the Company on the one hand and the Holders on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. Relative fault 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 Company or the Holders and the parties' relative intent,
knowledge, access to information and
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opportunity to correct or prevent such untrue statement or omission. The Company
and the Holders agree that it would not be just and equitable if contributions
pursuant to this Section 2.6(d) were to be determined by pro rata allocation or
by any other method of allocation which does not take into account the equitable
considerations referred to in the first sentence of this Section 2.6(d). The
amount paid or payable by an Indemnified Party as a result of the Losses
referred to in the first sentence of this Section 2.6(d) shall be deemed to
include any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending against any action or claim
which is the subject of this Section 2.6(d). Notwithstanding the provisions of
this Section 2.6(d), no Holder shall be required to contribute any amount in
excess of the proceeds (net of payment of all expenses) received by such Holder
in the registration. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations in this Section 2.6(d) to contribute
are several in proportion to the number of Registrable Securities sold by each
Holder participating in a registration and not joint. Each party entitled to
contribution agrees that upon the service of a summons or other initial legal
process upon it in any action instituted against it in respect of which
contribution may be sought, it shall promptly give written notice of such
service to the party or parties from whom contribution may be sought, but the
omission so to notify such party or parties of any such service shall not
relieve the party from whom contribution may be sought from any obligation it
may have hereunder or otherwise (except as specifically provided in Section
2.6(c) hereof). The indemnity and contribution agreements contained in this
Section 2.6 are in addition to any indemnity that the Indemnifying Parties may
have to the Indemnified Parties.
2.7 Information by Holder. Each Holder of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Section 2.
2.8 Rule 144 Reporting. With a view to making
available the benefits of certain rules and regulations of the Commission that
may at any time permit the sale of shares of Common Stock to the public without
registration, after such time as a public market exists for the Common Stock of
the Company, the Company agrees to:
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(a) Use its best efforts to facilitate the sale of
shares of Common Stock to the public, without registration under the Securities
Act, pursuant to Rule 144 under the Securities Act, provided that this shall not
require the Company to file reports under the Securities Act or the Exchange Act
at any time prior to the Company's being otherwise required to file such
reports;
(b) Make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities Act at
all times after 90 days after the effective date of the first registration under
the Securities Act filed by the Company for an offering of its securities to the
general public;
(c) File with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act (at any time after it has become subject to such reporting
requirements);
(d) During any period in which the Company is not
subject to Section 13 or 15(d) of the Exchange Act, make available the
information required to be provided by Rule 144A(d)(4);
(e) So long as a Holder owns any shares of Common Stock
which constitute restricted securities under Rule 144 to furnish to the Holder
forthwith upon request a written statement by the Company as to its compliance
with the reporting requirements of said Rule 144 (at any time after 90 days
after the effective date of the first registration statement filed by the
Company for an offering of its securities to the general public), and of 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 a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration.
2.9 "Market Stand-off" Agreement. Each Holder and the
Company agree not to sell or otherwise transfer or dispose of any Common Stock
or other securities of the Company (other than in a private transaction) held by
it during a period of 180 days (or such shorter period as the Company and the
underwriters may agree upon in connection with an initial public offering)
following the effective date of a registration statement of the Company filed
under the Securities Act in connection with an initial public offering. The
Company may impose stop-transfer instructions with respect to the shares (or
securities) subject to the foregoing restriction until the end of such period.
If a request is made pursuant to this Section 2.9,
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then the time period during which a Shelf Registration is required to remain
continuously effective for Holders of Registrable Securities pursuant to the
terms of this Agreement shall be extended for 180 days.
2.10 Transfer of Registration Rights. Subject to
compliance with Sections 2 and 3 hereof, the rights granted under this Section 2
may be assigned or otherwise conveyed in whole or in part by any Holder of
Registrable Securities to any transferee; provided that in each case the Company
is given written notice of the transfer, stating the name and address of said
transferee and said transferee's agreement to be bound by the provisions of this
Agreement; provided however, that any Holder of Registrable Securities may
transfer to any partner, member or retired partner or retired member of the
Holder, or to any parent, subsidiary or other person or entity which is an
Affiliate of the Holder, the rights granted under this Section 2, so long as the
Company is given written notice of such transferee's agreement to be bound by
the provisions of this Agreement, without meeting the other conditions set forth
in this Section 2.10.
2.11 Certain Limitations in Connection with Future Grants
of Registration Rights. From and after the date of this Agreement, the Company
shall not enter into any agreement with any holder or prospective holder of any
securities of the Company providing for the granting to such holder of
registration rights unless such agreement:
(a) includes the equivalent of Section 2.9 as a term;
and
(b) contains provisions substantially similar to those
contained in Section 2.3(b) with respect to the allocation of Registrable
Securities to be included in an underwritten public offering if marketing
factors require a limitation on the number of such securities to be included.
Notwithstanding the foregoing, from and after the date of this
Agreement, without the prior written consent of the Holders of a Majority of the
Registrable Securities and the Holders of a Majority of the Registrable
Securities owned by Crescent, the Company shall not enter into any agreement
with any person or persons providing for the granting to such holder of
registration rights superior to those granted to Holders pursuant to Section
2.1, 2.2 or 2.3.
2.12 Covenants of Holders. (a) In the event any shares
of Common Stock are offered or sold by any Holder in a registration, each such
Holder will: (i) advise the Company in writing of any offer, sale or other
disposition by it of any Common Stock in any manner other than as set forth in
the
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registration statement or any prospectus included therein on or before the
respective dates thereof; (ii) not effect any stabilization activity in
connection with the Company's Common Stock; (iii) not bid for or purchase, for
any account in which it has a beneficial interest, any Common Stock other than
in transactions permitted pursuant to Regulation M under the Exchange Act (if
applicable); and (iv) not, until it has sold all of such shares of Common Stock,
attempt to induce any person to purchase any Common Stock other than in
transactions permitted pursuant to Regulation M.
(b) Each Holder shall, if requested by the Company or the
managing underwriter(s) in connection with any proposed registration and
distribution pursuant to this Agreement, (i) agree to sell the Registrable
Securities on the basis provided in any underwriting arrangements satisfactory
to such Holder entered into in connection therewith and (ii) complete and
execute all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents customary in similar offerings (and the Company
shall use all reasonable efforts to assure that such agreements and documents
contain provisions that are in no event less favorable to such Holder than the
indemnities provided herein).
3. Miscellaneous.
3.1 Governing Law and Jurisdiction. THIS AGREEMENT
AND ALL ISSUES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO PRINCIPLES OF
CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK
STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN
RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND IRREVOCABLE ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO UNDER APPLICABLE E LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHER PROCEED AGAINST THE COMPANY IN ANY
OTHER JURISDICTION.
3.2 Certain Adjustments. In the event of any increase
or decrease in the number of outstanding shares of the
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Company resulting from any recapitalization, payment of a Common Stock dividend,
stock split, combination of shares, or any other increase or decrease in the
number of such outstanding shares effected without the Company's receipt of
consideration therefor, any maximum, minimum, or threshold number of shares of
Common Stock or other securities referred to herein shall be proportionately
adjusted to reflect such increase or decrease and any additional securities
issued with respect to the such securities shall become subject to the terms and
conditions of this Agreement.
3.3 Enforcement. The parties expressly agree that the
provisions of this Agreement may be specifically enforced against each of the
parties hereto in any court of competent jurisdiction.
3.4 Successors and Assigns. Except as otherwise
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors, and administrators of
the parties hereto.
3.5 Entire Agreement. This Agreement and each of the
agreements referenced herein, constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereof and
supersede all prior oral or written (and all contemporaneous oral) agreements or
understandings with respect to the subject matter hereof.
3.6 Notices, etc. All notices and other communications
required or permitted hereunder shall be in writing and shall be mailed by
registered or certified mail, return receipt requested, postage prepaid, or
otherwise delivered by hand, messenger or facsimile transmission, addressed: (a)
if to a party listed on Exhibit A or a transferee of such party, at such party's
address as set forth on Exhibit A, or at such other address as such party or its
transferee shall have furnished to the Company in writing, or if to the
Purchaser:
if to the Company American Residential Investment Trust, Inc.
000 Xxxxxx Xxxx Xxxxxx, Xxxxx 000
Xxx Xxx, Xxxxxxxxxx 00000
with copies to XxXxxx De Leeuw & Co.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile Number (000) 000-0000
Attention: Xxxxx Xx Xxxxx
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Xxxxxx, Xxxx & Xxxxxxxx LLP
Xxx Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Facsimile Number (000) 000-0000
Attention: Xxxxxxxx Xxxxx
or such other address as the Company shall have furnished to the parties listed
on Exhibit A in writing. Notices to Holders shall be sent to the address of such
Holder on the books and records of the Company; provided, that with respect to
any notice sent to Crescent, a copy of such notice shall be sent to Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, 000 X. Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, Telecopy No. (000) 000-0000, Attention: Xxxxxxx X. Xxxxx. Each
such notice or other communication shall for all purposes of this Agreement be
treated as effective or as having been given when delivered, if delivered by
hand or by messenger (or overnight courier), 24 hours after confirmed receipt if
sent by facsimile transmission or at the earlier of its receipt or on the fifth
day after mailing as aforesaid.
3.7 Delays or Omissions. No delay or omission to
exercise any right, power or remedy accruing to any party hereto upon any breach
or default of the Company under this agreement, shall impair any such right,
power or remedy of such holder nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereunder occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement, or by law or otherwise afforded to any party, shall be
cumulative and not alternative.
3.8 Counterparts. This Agreement may be executed in
any number of counterparts, each of which may be executed by less than all of
the parties hereto, each of which shall be enforceable against the parties
actually executing such counterparts, and all of which together shall constitute
one instrument.
3.9 Severability. If any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
3.10 Amendments. The provisions of this Agreement
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may be amended at any time and from time to time, and particular provisions of
this Agreement may be waived, with and only with an agreement or consent in
writing signed by the Company and by the holders of at least a majority of the
Securities (i) held by Crescent and (ii) held by the other Holders.
3.11 Termination. The provisions of this Agreement
shall terminate upon the earlier of (a) the tenth anniversary of the date of
this Agreement or (b) as to any Holder, at such time as the Holder is able to
sell all its remaining Registrable Securities (including any securities that may
become Registrable Securities upon acquisition by any of the Holders pursuant to
distribution by Holdings to its members or a foreclosure by the holders of
Notes, or the Collateral Agent acting for their benefit, under the Pledge
Agreement) in accordance with Rule 144 during a 90-day period.
* * * *
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IN WITNESS WHEREOF, the foregoing Registration Rights Agreement
is hereby executed as of the date first above written.
AMERICAN RESIDENTIAL INVESTMENT
TRUST, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
XXXXXX DE LEEUW & CO. II, L.P.
By: MDC Management Company II, L.P.,
its General Partner
By: ----------------------------------
Name: Xxxxx X. Xx Xxxxx
Title: General Partner
XXXXXX DE LEEUW ASSOCIATES, L.P.
By: MDC Management Company II, L.P.,
its General Partner
By: __________________________________
Name: Xxxxx X. Xx Xxxxx
Title: General Partner
XXXXXX DE LEEUW & CO. OFFSHORE
(EUROPE), L.P.
By: MDC Management Company IIE, L.P.,
its General Partner
By: __________________________________
Name: Xxxxx X. Xx Xxxxx
Title: General Partner
XXXXXX DE LEEUW & CO. OFFSHORE
(ASIA), L.P.
By: MDC Management Company IIA, L.P.,
its General Partner
By: __________________________________
Name: Xxxxx X. Xx Xxxxx
Title: General Partner
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31
XXXXXX X. XXXXX 1991 FAMILY TRUST
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
XXXXXX X. XXXXX 1994 FAMILY TRUST
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
XXXXXXXXX X. XXXXX 1990 FAMILY TRUST
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
PK PARTNERS
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
XXXXXXXXX X. XXXX TRUST
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
XXXXXX 1991 TRUST
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
XXXXXXX PARTNERS
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
PLF PARTNERS
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
SAW ISLAND PARTNERS
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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32
-------------------------------------------
Xxxxxx Xxxxxxxx
-------------------------------------------
Xxx Xxxxxx
-------------------------------------------
Xxxx Xxxxxxx
-------------------------------------------
Xxxx Xxxxxx
-------------------------------------------
Xxxxxx Xxxx
CRESCENT/MACH I PARTNERS, L.P.
By: TCW ASSET MANAGEMENT COMPANY,
as investment manager and
attorney in fact
By:
---------------------------------------
Name: Xxxx-Xxxx Xxxxxx
Title: Managing Director
By:
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
TCW/CRESCENT MEZZANINE INVESTMENT
PARTNERS, L.P.
By: TCW/CRESCENT MEZZANINE, L.L.C.,
its general partner or managing owner
By:
---------------------------------------
Name: Xxxx-Xxxx Xxxxxx
Title: Managing Director
By:
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
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33
TCW/CRESCENT MEZZANINE PARTNERS, L.P.
TCW/CRESCENT MEZZANINE TRUST
By: TCW/CRESCENT MEZZANINE, L.L.C.,
its general partner or managing owner
By:
---------------------------------------
Name: Xxxx-Xxxx Xxxxxx
Title: Managing Director
By:
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
TCW SHARED OPPORTUNITY FUND II, L.P.
By: TCW INVESTMENT MANAGEMENT COMPANY,
its investment advisor
By:
---------------------------------------
Name: Xxxx-Xxxx Xxxxxx
Title: Managing Director
By:
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
MDC REIT HOLDINGS, LLC
By: HOME ASSET MANAGEMENT CORP.,
its managing member
By:
---------------------------------------
Name:
Title:
33
