EXHIBIT 4.2
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
This REGISTRATION RIGHTS AND LOCK-UP AGREEMENT (this "Agreement"), dated
as of May 13, 2004, is by and between Manufactured Home Communities, Inc., a
Maryland corporation (the "Company"), MHC Operating Limited Partnership, an
Illinois limited partnership (the "Partnership"), and Monte Vista, LLC (the
"Investor"). For the purposes of this Agreement, the term Investor shall be
deemed to include any Holder.
RECITALS
A. Pursuant to that certain Subscription Agreement dated as of the date
hereof and executed by the Investor (the "Subscription Agreement"), Investor is
acquiring limited partnership interests in the Partnership known as, and
hereinafter referred to as, "OP Units", which are in turn exchangeable for
either common shares of the Company, par value $.01 per share (the "Common
Shares" or "Shares") or cash; and
B. The Investor is willing to enter into the agreements contained herein
as a condition to the Partnership's issuance of the OP Units to Investor.
THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Registration Rights.
In connection with the issuance of Registrable Shares (as defined in
Section 10 below) of the Company upon exchange by Investor of the OP Units
pursuant to the terms of the Second Amended and Restated MHC Operating Limited
Partnership Agreement of Limited Partnership dated as of March 15, 1996 (as
amended from time to time in accordance thereof, the "OP Partnership
Agreement"), Investor shall be entitled to registration of the Registrable
Shares under the Securities Act of 1933, as amended (the "Securities Act"),
subject to the terms and conditions set forth herein (the "Registration
Rights").
(a) Shelf Registration. Subject to Section 1(c) below, at any time
after the date which is ninety days prior to the expiration of the Lock-up
Period (as defined in Section 6 hereof), upon written request of the
Investor (the "Demand Date"), the Company shall file with the Securities
and Exchange Commission (the "SEC") a shelf registration statement
("Registration Statement") and related prospectus ("Prospectus") that
comply in all material respects with applicable SEC rules providing for
registration under the Securities Act of the total number of Registrable
Shares that the Investor would own if it were to redeem all OP Units
issuable to it (a "Shelf Registration"). The Company shall use its best
efforts to cause the Registration Statement to be declared effective under
the Securities Act not later than ninety (90) days after the Demand Date
(including filing with the Commission a request for acceleration of
effectiveness in accordance with Rule 461 promulgated under the Securities
Act within five (5) business days of the date that the Company is notified
(orally or in writing, whichever is earlier) by the Commission that a
Registration Statement will not be "reviewed," or not be
subject to further review. The Company will use its best efforts to keep
the Registration Statement continuously effective until the earlier of (i)
the date when all Registrable Shares covered by the Registration Statement
have been sold, or (ii) if the Investor has exchanged its OP Units for
Shares or cash, the later of (A) the date on which the Investor has
received registered Shares or cash in exchange for OP Units, and (B) the
date on which the Investor consummates the sale of all unregistered Shares
it received in exchange for OP Units or is eligible to sell its
unregistered Shares pursuant to Rule 144(k). Such Registration Statement
also shall cover, to the extent allowable under the Securities Act and the
Rules promulgated thereunder (including Securities Act Rule 416), such
indeterminate number of additional shares of Common Stock resulting from
stock splits, stock dividends or similar transactions with respect to the
Registrable Shares.
(b) Shelf Registration Expenses All fees and expenses in connection
with registering the Registrable Shares in a Shelf Registration,
including, without limitation SEC filing fees, fees of legal counsel to
the Company, fees of the Company's accountants and printing fees (the
"Shelf Registration Expenses") will be borne by the Company.
(c) Timing of Registrations. The Company shall be entitled to
postpone the filing of a Registration Statement if the Company reasonably
determines that such filing (y) would require disclosure of material
information the Company has a bona fide business purpose for retaining as
confidential or (z) have a material adverse effect on the Company or its
shareholders in relation to any financing, acquisition, corporate
reorganization or other material transaction contemplated by the Board of
Directors of the Company, involving the Company or any of its Affiliates,
in each case as determined by the Company in its reasonable judgment;
provided that the Company may only postpone such filing or suspend the
effectiveness of a Registration Statement for a period not to exceed
thirty (30) consecutive days, provided that the Company may not postpone
or suspend its obligations under this Section 1 for more than sixty (60)
days in the aggregate during any twelve (12) month period. Upon receipt of
any notice from the Company of the happening of any event during the
period a Registration Statement is effective which is of a type specified
in the preceding sentence or as a result of which the Registration
Statement or related Prospectus contains any untrue statement of a
material fact or omits 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 the Prospectus)
not misleading, Investor agrees that it will immediately discontinue
offers and sales of the Registrable Shares under the Registration
Statement until the Investor receives copies of a supplemented or amended
Prospectus that corrects the misstatement(s) or omission(s) referred to
above and receives notice that any post-effective amendment has become
effective. The Company agrees to promptly file with the SEC such
supplemental or amended prospectus. If so directed by the Company, the
Investor will deliver to the Company any copies of the Prospectus covering
the Registrable Shares in their possession at the time of receipt of such
notice.
2. Piggyback Registrations.
(a) Right to Piggyback. Following the Lock-up Period (as defined in
Section 6 hereof) and until the second anniversary of the date of
conversion of the OP
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Units to Common Shares (but in no event later than the sixth anniversary
of the date of this Agreement), if the Company proposes to register any of
its securities under the Securities Act (other than pursuant to (i) a
Shelf Registration (subject to the provisions of Section 1(a) hereof) or
(ii) a registration on Form S-4 or any successor form) and the
registration form to be used may be used for the registration of
Registrable Shares, the Company will give prompt written notice to the
Investor of its intention to effect such a registration (each a "Piggyback
Notice") and, subject to subparagraph 2(c) below, the Company will include
in such registration all Registrable Shares with respect to which the
Company has received written requests for inclusion therein within ten
(10) days after the date of sending the Piggyback Notice (a "Piggyback
Registration"), unless the Company, in its reasonable discretion, deems
that the inclusion of Registrable Shares would adversely interfere with
such offering, affect the Company's securities in the public markets, or
otherwise adversely affect the Company, provided that other similarly
situated holders of Common Stock are similarly cut back. Nothing herein
shall affect the right of the Company to withdraw any such registration,
or the Investor to withdraw its shares in any such registration, in their
sole discretion.
(b) Piggyback Registration Expenses. The Company's expenses in
connection with registering the Registrable Shares in a Piggyback
Registration, including without limitation SEC filing fees, fees of legal
counsel to the Company, fees of the Company's accountants and printing
fees, will be paid by the Company ("Piggyback Expenses").
(c) Priority on Primary Registrations. If a Piggyback Registration
is a primary registration on behalf of the Company and the Company
determines that, or in the case of an underwritten registration, the
managing underwriters advise the Company in writing that in their opinion,
the number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner within a price
range acceptable to the Company, the Company will include in such
registration (i) first, the securities the Company proposes to sell and
(ii) second, the Registrable Shares requested to be included in such
Registration and any other securities requested to be included in such
registration, pro rata among the holders of Registrable Shares requesting
such registration and the holders of such other securities on the basis of
the number of Shares requested for inclusion in such registration by each
such holder.
(d) Priority on Secondary Registrations. If a Piggyback Registration
is a secondary registration on behalf of holders of the Company's
securities other than the holders of Registrable Shares, and the Company
determines that, or in the case of an underwritten offering, the managing
underwriters advise the Company in writing that in their opinion, the
number of securities requested to be included in such registration exceeds
the number which can be sold in an orderly manner in such offering within
a price range acceptable to the holders initially requesting such
registration, the Company will include in such registration the securities
requested to be included therein by the holders requesting such
registration and the Registrable Shares requested to be included in such
registration, pro rata among the holders of securities requesting such
registration on the basis of the number of Shares requested for inclusion
in such registration by each such holder.
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(e) Selection of Underwriters. In the case of an underwritten
Piggyback Registration, the Company will have the right to select the
investment banker(s) and manager(s) to administer the offering.
3. Effectiveness. The registration rights granted by this Agreement shall
not be effective until ninety (90) days prior to the expiration of the Lock-up
Period; provided that the Investors may not use any Registration Statement or
Prospectus until the expiration of the Lock-up Period.
4. Registration Procedures. Whenever the Investor has requested that any
Registrable Shares be registered pursuant to this Agreement, the Company will
use its best efforts to effect the registration and facilitate the sale and
distribution of all such Registrable Shares specified in such Registration
Request in accordance with the intended method of disposition thereof and
pursuant thereto the Company will as expeditiously as possible, but subject to
the provisions of this Agreement:
(a) prepare and file with the SEC such amendments, post-effective
amendments and supplements to such Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement continuously effective for the period required by
the intended method of disposition or to describe the terms of any
offering made from an effective Registration Statement, and comply with
the provisions of the Securities Act with respect to the disposition of
all securities covered by such Registration Statement during such period
in accordance with the intended methods of disposition by the Holders
thereof set forth in such Registration Statement;
(b) Notify Holders of Registrable Shares to be sold as promptly as
possible (A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be
filed (but in no event in the case of this subparagraph (A), less than
three (3) Business Days prior to date of such filing); (B) when the SEC
notifies the Company whether there will be a "review" of such Registration
Statement and whenever the SEC comments in writing on such Registration
Statement; and (C) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective, and after
the effectiveness thereof: (i) of any request by the SEC or any other
Federal or state governmental authority for amendments or supplements to
the Registration Statement or Prospectus or for additional information;
(ii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement covering any or all of the
Registrable Shares or the initiation of any proceedings for that purpose;
(iii) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any
of the Registrable Shares for sale in any jurisdiction, or the initiation
or threatening of any proceeding for such purpose; and (iv) if the
financial statements included in the Registration Statement become
ineligible for inclusion therein or of the occurrence of any event that
makes any statement made in the Registration Statement or Prospectus or
any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to
the Registration Statement, Prospectus or other documents so that, in the
case of the Registration
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Statement or the Prospectus, as the case may be, 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 the light of the circumstances under which they were made, not
misleading. Without limitation to any remedies to which the Holders may be
entitled under this Agreement, if any of the events described in this
Section 3(b) occur, the Company shall use its best efforts to respond to
and correct the event.
(c) furnish to each Holder of Registrable Shares such number of
copies of such Registration Statement, each amendment, post-effective
amendment and supplement thereto, the Prospectus included in such
Registration Statement (including each preliminary Prospectus) and such
other documents as such Holder may reasonably request in order to
facilitate the disposition of the Registrable Shares owned by such Holder;
the Company consents to the use of the Prospectus for such Registration
Statement, including each preliminary Prospectus, by each such holder of
Registrable Shares in connection with the offering and sale of the
Registrable Shares covered by the Prospectus or the preliminary
Prospectus;
(d) use its best efforts to register or qualify such Registrable
Shares under such other securities or blue sky laws of such jurisdictions
as any Holder reasonably requests and do any and all other acts and things
which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in such jurisdictions of the Registrable Shares
owned by such Holder (provided that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this subparagraph, (ii)
subject itself to taxation in any such jurisdiction, (iii) consent to
general service of process in any such jurisdiction (unless the Company is
subject to service in such jurisdiction and except as may be required by
the Securities Act), or (iv) qualify such Registrable Shares in a given
jurisdiction where expressions of investment interest are not sufficient
in such jurisdiction to reasonably justify the expense of qualification in
that jurisdiction or where such qualification would require the Company to
register as a broker or dealer in such jurisdiction);
(e) notify each Holder of such Registrable Shares, at any time when
a Prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
Prospectus included in such Registration Statement contains an untrue
statement of a material fact or omits any material fact necessary to make
the statements therein not misleading, and, at the request of any such
Holder, the Company will promptly prepare and furnish such Holders a
supplement or amendment to such Prospectus so that, as thereafter
delivered to the purchasers of such Registrable Shares, such Prospectus
will not contain an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading;
(f) cause all such Registrable Shares to be listed on each
securities exchange on which similar securities issued by the Company are
then listed and to be qualified for trading on each system on which
similar securities issued by the Company are from time
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to time qualified;
(g) provide a transfer agent and registrar for all such Registrable
Shares not later than the effective date of such Registration Statement
and thereafter maintain such a transfer agent and registrar; and otherwise
cooperate with the Holders and the managing underwriter to facilitate the
timely preparation and delivery of certificates representing Registrable
Shares to be sold and not bearing any restrictive legends, other than as
provided in the Company's By-laws or Articles of Incorporation
("Charter"), and enable such Registrable Shares to be in such
denominations and registered in such names as the Holder may reasonably
request;
(h) use its reasonable efforts to comply with all applicable rules
and regulations of the SEC;
(i) permit any Holder of Registrable Shares which Holder, in the
Company's 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;
(j) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related Prospectus or suspending the
qualification of any Common Shares included in such Registration Statement
for sale in any jurisdiction, the Company will use its reasonable best
efforts promptly to obtain the withdrawal of such order; and
(k) use its best efforts to cause the Registrable Shares covered by
a Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable holders that have
delivered registration requests to the Company to consummate the
disposition of such Registrable Shares.
The Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in paragraphs 4(e) or (j) hereof,
the Investor will forthwith discontinue disposition of Common Shares pursuant to
a Shelf or Piggyback Registration until receipt of the copies of an appropriate
supplement or amendment to the Prospectus under paragraph 4(e) or until the
withdrawal of such order under paragraph 4(j). If any such registration or
comparable statement refers to any Holder by name or otherwise as the Holder of
any securities of the Company and if, in such Holder's reasonable judgment, such
Holder is or might be deemed to be a controlling person of the Company, such
Holder shall have the right to require (i) the insertion therein of language, in
form and substance satisfactory to such Holder and presented to the Company in
writing, to the effect that the holding by such Holder of such securities is not
to be construed as a recommendation by such Holder of the investment quality of
the Company's securities covered thereby and that such holding does not imply
that such Holder will assist in meeting any future financial requirements of the
Company, or (ii) in the event that such reference to such Holder by name or
otherwise is not required by the Securities Act or any similar Federal statute
then in force, the deletion of the reference to such Holder; provided that
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with respect to this clause (ii) such Holder shall furnish to the Company an
opinion of counsel to such effect, which opinion and counsel shall be reasonably
satisfactory to the Company.
5. Listing Requirement/Rule 144.
(a) The Company hereby agrees to use its best efforts to cause all
Registrable Shares to be listed on each securities exchange on which
similar securities issued by the Company are listed and to be qualified
for trading on each system on which similar securities issued by the
Company are from time to time qualified.
(b) As long as any Holder owns Registrable Shares, the Company
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to Section 13(a) or 15(d) of
the Exchange Act. As long as any Holder owns Registrable Shares, if the
Company is not required to file reports pursuant to Section 13(a) or 15(d)
of the Exchange Act, it will prepare and furnish to the Holders and make
publicly available in accordance with Rule 144(c) promulgated under the
Securities Act annual and quarterly financial statements, together with a
discussion and analysis of such financial statements in form and substance
substantially similar to those that would otherwise be required to be
included in reports required by Section 13(a) or 15(d) of the Exchange
Act, as well as any other information required thereby, in the time period
that such filings would have been required to have been made under the
Exchange Act. The Company further covenants that it will take such further
action as any Holder may reasonably request, all to the extent required
from time to time to enable such Person to sell Registrable Shares without
registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act. Upon
the request of any Holder, the Company shall deliver to such Holder a
written certification of a duly authorized officer as to whether it has
complied with such requirements.
6. Restrictions on Transfer of Shareholder Shares.
(a) Transfer of Shares. In addition to any restrictions which may be
contained in the OP Partnership Agreement or in the Subscription Agreement
executed by Investor, without the Company's prior written consent,
Investor agrees that, except as set forth in Section 6(b) below, it will
not, directly or indirectly, offer, sell, contract to sell or otherwise
dispose of, or exchange (including without limitation an exchange of OP
Units for Common Shares), or announce any offer, sale, contract of sale or
other disposition or exchange ("Transfer"), any Common Shares, or any
securities directly or indirectly convertible into or exchangeable for
Common Shares, including, without limitation, OP Units (all of such
securities being hereinafter referred to as "Restricted Securities"), for
a period of twelve (12) months after the issuance of the OP Units to
Investor (the "Lock-up Period"); provided, however, that notwithstanding
anything in this Agreement or any other agreement to the contrary, no
Holder shall be prevented from (and Holders shall be permitted to) making
short sales or transactions to cover short sales, hedging transactions,
put and call arrangements relating to the Common Shares or collar or other
similar arrangements relating to the Common Shares. Investor agrees that
it shall not voluntarily dissolve, liquidate, wind up its affairs or
otherwise voluntarily distribute or Transfer its
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assets to its constituent partners or stockholders for a period of twelve
(12) months after the date of this Agreement, and nothing herein shall be
construed as permitting any such dissolution, liquidation, winding up,
distribution or Transfer.
(b) Permitted Transfers. Except as provided in the last sentence of
Section 6(a) hereof, the restrictions contained in this Section 6 will not
apply with respect to any Transfer of the Restricted Securities by (A)
operation of law or testamentary disposition, in each case to or for the
benefit of Investor's parent(s), spouse or descendants, (B) the exchange
of OP Units for shares of beneficial interest in the Company (as provided
in the OP Partnership Agreement), and (C) any bona fide pledgee of OP
Units, any transfer of such OP Units to the pledgee pursuant to
foreclosure, transfer-in-lieu of foreclosure, or otherwise, and any
subsequent transfer of such OP Units following or in connection with any
such transfer to the pledgee or foreclosure or transfer-in-lieu thereof;
provided that (i) with respect to a Transfer described in clause (A)
above, the transferor provides an opinion of securities counsel acceptable
to the Partnership (it being agreed that Xxxxxxx XxXxxxxxx LLP is
acceptable) stating that such Transfer is permitted without registration
under the Securities Act, (ii) the restrictions contained in this Section
6 shall continue to be applicable to the Restricted Securities after any
such Transfer, (iii) the transferees and pledgees of such Restricted
Securities prior to any Transfer shall have agreed in writing to be bound
by the restrictions on transfer contained in this Agreement affecting the
Restricted Securities so transferred, and (iv) any Transfers will be
subject to the restrictions on transfer contained in the Company's Charter
(or the OP Partnership Agreement, if applicable).
7. Indemnification.
(a) The Company shall, notwithstanding any termination of this
Agreement, indemnify and hold harmless each Holder, the officers,
directors, agents, brokers (including brokers who offer and sell
Registrable Shares as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment advisors and
employees of each of them, each Person who controls any such Holder
(within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) and the officers, directors, agents and employees of
each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation
and reasonable attorneys' fees) and expenses (collectively, "Losses"), as
incurred, arising out of or relating to any untrue or alleged untrue
statement of a material fact contained or incorporated by reference in the
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or
arising out of or relating to any omission or alleged omission of a
material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
amendment or supplement thereto, in the light of the circumstances under
which they were made) not misleading, except to the extent, but only to
the extent, that such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by
such Holder expressly for use therein, which information was reasonably
relied on by the Company for use therein or to the extent that such
information relates to (x) such Holder and was
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reviewed and expressly approved in writing by such Holder expressly for
use in the Registration Statement, such Prospectus or such form of
prospectus or in any amendment or supplement thereto or (y) such Holder's
proposed method of distribution of Registrable Securities as set forth in
Exhibit A (or as such Holder otherwise informs the Company in writing);
provided, however, that the indemnity agreement contained in this Section
7(a) shall not apply to amounts paid in settlement of any Losses if such
settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld, conditioned or delayed.
The Company shall notify the Holders promptly of the institution, threat
or assertion of any proceeding of which the Company is aware in connection
with the transactions contemplated by this Agreement. Such indemnity shall
remain in full force and effect regardless of any investigation made by or
on behalf of an Indemnified Party (as defined in Section 7(c) to this
Agreement) and shall survive the transfer of the Registrable Shares by the
Holders.
(b) In connection with any Registration Statement in which the
Investor is participating, the Investor shall furnish to the Company in
writing such information relating to such Holder as the Company reasonably
requests for use in connection with any such Registration Statement or
Prospectus and, to the extent permitted by law, will indemnify the
Company, its officers, directors, stockholders, partners, employees and
trustees and each Person who controls (within the meaning of the
Securities Act) the Company against any losses, claims, damages,
liabilities and expenses whatsoever, as incurred, including any of the
foregoing, and fees and expenses of counsel incurred in investigating,
preparing or defending against, or aggregate amounts paid in settlement of
any litigation, action, investigation or proceeding by any governmental
agency or body, commenced or threatened, in each case whether or not a
party thereto, or any claim whatsoever based solely upon, caused by or
arising solely out of any untrue or alleged untrue statement of material
fact contained in the Registration Statement, Prospectus or preliminary
Prospectus or any amendment thereof or supplement thereto or any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the
extent that such untrue statement or omission is contained in any
information so furnished in writing by such Holder specifically for
inclusion in the Registration Statement or Prospectus and is reasonably
relied upon in conformity with such written information; provided that the
obligation to indemnify will be several and not joint and several with
respect to each Holder.
(c) Any Person entitled to indemnification under Section 7(a) or
7(b) (an "Indemnified Party") will (i) give reasonably prompt written
notice to the indemnifying party (the "Indemnifying Party") of any claim
with respect to which it seeks indemnification and (ii) unless in such
Indemnified Party's reasonable judgment a conflict of interest between
such Indemnified and Indemnifying Parties may exist with respect to such
claim, permit such Indemnifying Party to assume the defense of such claim
with counsel reasonably satisfactory to the Indemnified Party. If such
defense is assumed, the Indemnifying Party will not be subject to any
liability for any settlement made by the Indemnified Party without its
consent (but such consent will not be unreasonably withheld, conditioned
or delayed). An Indemnifying Party who is not entitled to, or elects not
to, assume the defense of a claim will not be obligated to pay the fees
and expenses of more than one counsel for all parties indemnified by such
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Indemnifying Party with respect to such claim, unless in the reasonable
judgment of any Indemnified Party a conflict of interest may exist between
such Indemnified Party and any other of such Indemnified Parties with
respect to such claim.
(d) 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
securities. If the indemnification provided for in Section 7(a) or 7(b) is
unavailable to or insufficient to hold harmless an Indemnified Party in
respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each Indemnifying Party shall
contribute to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and the Indemnified Party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as
any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact
relates to information supplied by such Indemnifying Party or by such
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The parties hereto agree that it would not be just and equitable
if contribution pursuant to this subsection (d) were determined by pro
rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in this subsection
(d). The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. 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. Notwithstanding any other
provisions of this Section 7, in no event will any Holder be required to
undertake liability to any person under this Section 7 for any amounts in
excess of the dollar amount of the proceeds to be received by such Holder
from the sale of such Holder's Registrable Shares (after deducting any
fees, discounts and commissions applicable thereto) pursuant to any
Registration Statement under which such Registrable Shares are to be
registered under the Securities Act.
(e) All reasonable fees and expenses of the Indemnified Party
(including reasonable fees and expenses to the extent incurred in
connection with investigating or preparing to defend such proceeding in a
manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten (10) business days of written
notice thereof to the Indemnifying Party, which notice shall be delivered
no more frequently than on a monthly basis (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may
require such Indemnified Party to undertake to reimburse all
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such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification hereunder).
8. Participation in Underwritten Registrations. No Person may participate
in any registration hereunder which is underwritten unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided that no
holder of Registrable Shares included in any underwritten registration shall be
required to make any representations or warranties to the Company or the
underwriters other than representations and warranties regarding such holder and
such holder's intended method of distribution.
9. Reports and Information. The Company hereby agrees to provide to the
Investor, so long as they continue to hold Registrable Shares, copies of all
filings made by the Company to the SEC promptly after such filing. Subject to
applicable securities laws and the receipt of confidentiality undertakings, if
appropriate, the Company further agrees to provide to the Investor other
detailed information regarding the Company and its properties as is reasonably
requested by the Investors promptly following any such request.
10. Definitions.
"Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or under common control with
such Person.
"Holder" means the holder or holders, as the case may be, from time to
time of Registrable Securities.
"Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
"Registrable Shares" means (i) the Common Shares issued or issuable to the
Investor upon exchange of OP Units issued to Investor and (ii) any Common Shares
issued or issuable with respect to the Common Shares referred to in clause (i)
above by way of replacement, share dividend, share split or in connection with a
combination of Shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Registrable Shares, such securities will
cease to be Registrable Shares when they have been sold to the public pursuant
to an offering registered under the Securities Act or sold to the public in
compliance with Rule 144 under the Securities Act (or any similar rule then in
force). For purposes of this Agreement, a Person will be deemed to be a holder
of Registrable Shares whenever such Person has the right (or will have in the
future the right) to acquire directly or indirectly such Registrable Shares
(upon conversion or exercise in connection with a transfer of securities or
otherwise, but disregarding any restrictions or limitations upon the exercise of
such right), whether or not such acquisition has actually been effected. In that
regard, Holders of OP Units shall be entitled to exercise the rights granted
hereunder with respect to the registration of Registrable Shares without first
having to actually effect the exchange of OP Units for Common Shares and the
11
Holders of OP Units shall be entitled to make a request for registration under
Section 1 of this Agreement prior to the expiration of the Lock-up Period. NO
SUCH EXCHANGE OF OP UNITS FOR COMMON SHARES SHALL BE REQUIRED UNTIL THE
REGISTRATION OF REGISTRABLE SHARES FOR WHICH THE OP UNITS SHALL BE EXCHANGED
SHALL HAVE BEEN DECLARED OR ORDERED "EFFECTIVE" BY THE SEC AND THE HOLDER OF OP
UNITS SHALL HAVE ELECTED TO SELL SUCH COMMON SHARES PURSUANT TO SUCH
REGISTRATION.
11. Miscellaneous.
(a) Public Company. Nothing herein shall be deemed to create an
obligation on the part of the Company to remain a reporting company under
the provisions of the Securities Exchange Act of 1934, as amended, or
limit the right of the Company to "go private" at any time during the term
hereof.
(b) Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement
and to exercise all other rights granted by law. The parties hereto agree
and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and that any party may in its
sole discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement.
(c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and holders of a majority of the then
outstanding Registrable Shares.
(d) Successors and Assigns. All covenants and agreements in this
Agreement, including the right to have the Company register for resale the
Registrable Shares, by or on behalf of any of the parties hereto will bind
and inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not, including any pledges of OP
Units or Registrable Shares. In addition, whether or not any express
assignment has been made, the provisions of this Agreement which are for
the benefit of purchasers or holders of Registrable Shares are also for
the benefit of, and enforceable by, any subsequent Holder of Registrable
Shares, including any assigns pursuant to the OP Partnership Agreement and
including any pledges of OP Units or Registrable Shares.
(e) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures
of more than one
12
party, but all such counterparts taken together will constitute one and
the same Agreement.
(g) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(h) Governing Law. The corporate laws of the State of Maryland will
govern all questions concerning the relative rights of the Company or its
shareholders and the laws of Illinois will govern all questions concerning
the relative rights of holders of OP Units. All other questions concerning
the construction, validity and interpretation of this Agreement will be
governed by and construed in accordance with the domestic laws of the
State of Illinois, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of Illinois or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Illinois.
(i) Consent to Jurisdiction. The parties hereto agree that any
action arising out of or relating to this Agreement, or concerning the
interpretation or enforcement thereof, shall be brought only in the
Circuit Court of Xxxx County, Illinois or in the Federal Courts for the
Northern District of Illinois. The parties hereto consent to the venue and
personal jurisdiction of those courts in any action brought pursuant to
the provisions hereof. Each party hereto hereby waives any right they may
have to transfer or change the venue of any litigation brought against it
by another party hereto in connection with this Agreement in accordance
with this Section 11(i) and each party hereto hereby waives any claim of
forum non conveniens.
(j) Waiver of Trial by Jury. Each party hereto knowingly,
voluntarily and intentionally waives any rights that such party may have
to a trial by jury in any litigation arising in any way in connection with
this Agreement or any related agreement or instrument or any of the
matters contemplated or described herein. Each party hereto acknowledges
that this waiver is a material inducement for the other party to enter
into this Agreement and undertake the obligations of such other party
hereunder. Each party hereto further agrees and acknowledges that this
waiver shall be effective as to each and every other agreement, document
or instrument concerning such other party and relating to this Agreement
or the matters contemplated or described herein).
(k) Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable express
courier service (charges prepaid) or mailed to the recipient by certified
or registered mail, return receipt requested and postage prepaid. Such
notices, demands and other communications will be sent to each Holder at
the address indicated on the records of the Company and to the Company at
the address indicated below:
13
c/o Xxxxx Xxxxxxxx
Executive Vice President and General Counsel
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending
party.
(l) Entire Agreement. This Agreement, together with the various
other instruments and agreements being executed concurrently herewith,
represent the entire agreement of the parties with respect to the subject
matter contained herein and supersede all prior agreements and
understandings between the parties with respect to such subject matter.
(m) Attorney Fees. In connection with any suit to enforce this
Agreement, the reasonable fees and expenses of legal counsel to the
prevailing party shall be paid by the losing party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth below the Company's signature.
MANUFACTURED HOME COMMUNITIES,
INC., a Maryland corporation
By: /s/ Xxxxx X. Xxxx
--------------------------------
Name: Xxxxx X. Xxxx
Its: Vice President
Date: _____________________________
MHC OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership
By: MHC TRUST, a Maryland real estate
investment trust
Its: General Partner
By: /s/ Xxxxx X. Xxxx
--------------------------------
Name: Xxxxx X. Xxxx
Its: Vice President
Date: _____________________________
INVESTOR:
MONTE VISTA, LLC, an Arizona limited liability
company
By: Homefree Village Resorts, Inc.
Manager of Monte Vista, LLC
By: /s/ Xxxxx X. Xxxxxxx, Xx.
------------------------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: President
15
EXHIBIT A
PLAN OF DISTRIBUTION
We are registering the shares of common stock on behalf of the selling
security holders. Sales of shares may be made by selling security holders,
including their respective donees, transferees, pledgees or other
successors-in-interest directly to purchasers or to or through underwriters,
broker-dealers or through agents. Sales may be made from time to time on the New
York Stock Exchange, any other exchange or market upon which our shares may
trade in the future, in the over-the-counter market or otherwise, at market
prices prevailing at the time of sale, at prices related to market prices, or at
negotiated or fixed prices. The shares may be sold by one or more of, or a
combination of, the following:
- a block trade in which the broker-dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction (including crosses in which the
same broker acts as agent for both sides of the transaction);
- purchases by a broker-dealer as principal and resale by such
broker-dealer, including resales for its account, pursuant to this
prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchases;
- through options, swaps or derivatives;
- in privately negotiated transactions;
- in making short sales or in transactions to cover short sales; and
- put or call option transactions relating to the shares.
The selling security holders may effect these transactions by selling
shares directly to purchasers or to or through broker-dealers, which may act as
agents or principals. These broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the selling security holders
and/or the purchasers of shares for whom such broker-dealers may act as agents
or to whom they sell as principals, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). The
selling security holders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities.
The selling security holders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with those
transactions, the broker-dealers or other financial institutions may engage in
short sales of the shares or of securities convertible into or exchangeable for
the shares in the course of hedging positions they assume with the selling
security holders. The selling security holders may also enter into options or
other transactions with broker-dealers or other financial institutions which
require the delivery of shares offered by this prospectus to those
broker-dealers or other financial institutions. The broker-dealer or other
financial institution may then resell the shares pursuant to this prospectus (as
amended or supplemented, if required by applicable law, to reflect those
transactions).
The selling security holders and any broker-dealers that act in connection
with the sale of shares may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act of 1933, and any commissions received by
broker-dealers or any profit on the resale of the shares sold by them while
acting as principals may be deemed to be underwriting discounts or commissions
under the Securities Act. The selling security holders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving
sales of the shares against liabilities, including liabilities arising under the
Securities Act. We have agreed to indemnify each of the selling security holders
and each selling security holder has agreed, severally and not jointly, to
indemnify us against some liabilities in connection with the offering of the
shares, including liabilities arising under the Securities Act.
The selling security holders will be subject to the prospectus delivery
requirements of the Securities Act. We have informed the selling security
holders that the anti-manipulative provisions of Regulation M promulgated under
the Securities Exchange Act of 1934 may apply to their sales in the market.
Selling security holders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of Rule 144.
Upon being notified by a selling security holder that a material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, we will file a supplement to
this prospectus, if required pursuant to Rule 424(b) under the Securities Act,
disclosing:
- the name of each such selling security holder and of the participating
broker-dealer(s);
- the number of shares involved;
- the initial price at which the shares were sold;
- the commissions paid or discounts or concessions allowed to the
broker-dealer(s), where applicable;
- that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus; and
- other facts material to the transactions.
In addition, if required under applicable law or the rules or regulations
of the Commission, we will file a supplement to this prospectus when a selling
security holder notifies us that a donee or pledgee intends to sell more than
500 shares of common stock.
We are paying all expenses and fees customarily paid by the issuer in
connection with the registration of the shares. The selling security holders
will bear all brokerage or underwriting discounts or commissions paid to
broker-dealers in connection with the sale of the shares.
17
