Exhibit 10.3
Execution Copy
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into
as of August 15, 2006, by and among CharterMac, a statutory trust formed under
the laws of the State of Delaware ("CharterMac"), CM ARCap Investors LLC, a
Delaware limited liability company ("CM ARCap Investors"), Xxxxxxx X. Xxxxxx and
Xxxxx X. Xxxxxxx (collectively, the "Holders").
WHEREAS, pursuant to that certain Securities Purchase Agreement (the
"SPA"), dated as of August 15, 2006, by and among the Sellers (as defined
therein), the Sellers' Representative (as defined therein), ARCap Investors,
L.L.C. (the "Company"), CharterMac, Charter Mac Corporation and CM ARCap
Investors, pursuant to which CM ARCap Investors agreed to acquire all of the
membership interests of the Company, except for those membership interests owned
by CharterMac and the Holders;
WHEREAS, the Company, CM ARCap Investors and the Holders are parties to
an Exchange Rights Agreement (as defined below) which provides the Holders with
the right to exchange all or a portion of their special common interests in the
Company ("Special Common Interests") for cash or, at the election of CM ARCap
Investors, for CharterMac Common Shares (as defined below);
WHEREAS, in order to induce the Holders to consummate the transactions
contemplated by the SPA, CharterMac has agreed to grant to the Holders the
registration rights set forth in Section 2 hereof.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, do hereby agree as follows:
Section 1. Definitions.
Capitalized terms used herein but not defined herein shall have
the meaning given to them in the SPA. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Business Day" shall mean a day except a Saturday, Sunday or other
day on which banking institutions in New York, New York are permitted or
required by any applicable law to close.
"CharterMac" shall have the meaning set forth in the Preamble and
also shall include CharterMac's successors.
"CharterMac Common Shares" shall mean the common shares of
beneficial interest of CharterMac.
"CM ARCap Investors" shall have the meaning set forth in the
Preamble.
"Commission" shall mean the Securities and Exchange Commission.
"Company" shall have the meaning set forth in the Preamble.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exchange Rights Agreement" shall mean the Exchange Rights
Agreement, dated the date hereof, among the Company, CM ARCap Investors and the
Holders.
"Exchange Shares" shall mean the CharterMac Common Shares
issuable, as applicable, upon exchange of the Special Common Interests.
"Holdback Period" shall have the meaning set forth in Section
4(c).
"Holder" or "Holders" shall have the meaning set forth in the
Preamble, and shall include any Person to which Exchange Shares are Transferred.
For purposes of this Agreement, a Person will be deemed to be a Holder of
Registrable Securities whenever such Person has the then-existing right to
acquire such Registrable Securities (by conversion, exchange, purchase or
otherwise), whether or not such acquisition has actually been effected and
whether or not the Company or any other Person has the right to redeem the
securities exchangeable for the Registrable Securities in lieu of issuing the
Registrable Securities. If CharterMac receives conflicting instructions, notices
or elections from two or more Persons with respect to the same Exchange Shares,
CharterMac may act upon the basis of the instructions, notice or election
received from the registered owner of such Exchange Shares.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"Operating Agreement" shall mean the Second Amended and Restated
Limited Liability Company Agreement of the Company, dated as of August 15.
"Person" shall mean an individual, partnership, corporation,
limited liability company, trust, estate, or unincorporated organization, or
other entity, or a government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement or free-writing prospectus
with respect to the terms of the offering of any portion of the Registrable
Securities covered by a Shelf
Registration Statement, and by all other amendments and supplements to such
prospectus, including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Registrable Securities" shall mean (i) the Exchange Shares; (ii) any
CharterMac Common Shares or other securities issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange by
CharterMac generally for, or in replacement by CharterMac generally of, any
Exchange Shares; (iii) any CharterMac Common Shares issued pursuant to a stock
dividend, subdivision or combination into a smaller amount of shares, or
securities issued pursuant to a reclassification of, or in substitution for, any
Exchange Shares; and (iv) any securities issued in exchange for the Exchange
Shares in any merger, consolidation, combination or reorganization of
CharterMac; provided, however, that Registrable Securities shall not include any
securities which have theretofore been registered and sold pursuant to the
Securities Act or which have been sold to the public pursuant to Rule 144 or any
similar rules promulgated by the Commission pursuant to the Securities Act or
are eligible for sale pursuant to Rule 144(k).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance with this Agreement, including, without limitation:
(i) all Commission, stock exchange or NASD registration and filing fees; (ii)
all fees and expenses incurred in connection with compliance with state
securities or "blue sky" laws (including reasonable fees and disbursements of
counsel in connection with "blue sky" qualification of any of the Registrable
Securities and the preparation of a blue sky memorandum) and compliance with the
rules of the NASD; (iii) all expenses of any Persons in preparing or assisting
in preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, certificates, documents incorporated by reference and
other documents required to be prepared by CharterMac in its ordinary course of
business relating to the performance of and compliance with this Agreement; (iv)
all fees and expenses incurred in connection with the listing, if any, of any of
the Registrable Securities on any securities exchange or exchanges; and (v) the
fees and disbursements of counsel for CharterMac and of the independent public
accountants of CharterMac, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and compliance.
"Registration Statement" or "Shelf Registration Statement" shall mean a
"shelf" registration statement of CharterMac and any other Person required to be
a registrant with respect to such shelf registration statement pursuant to the
requirements of the Securities Act which covers the issuance or resale of the
Registrable Securities on Form S-3 or otherwise under Rule 415 promulgated under
the Securities Act, or any similar rule that may be adopted by the Commission,
and all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus, all exhibits
thereto and all materials incorporated by
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reference therein, and including any information deemed to be a part thereof as
of the time of effectiveness pursuant to Rule 430A, 430B or 430C.
"Rule 144" and "Rule 145" shall mean Rule 144 and Rule 145 promulgated
under the Securities Act, and any successor rule or regulation under the
Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time, and any successor act.
"Selling Holders" means, with respect to a specified Registration
Statement pursuant to this Agreement, the Holders whose Registrable Securities
are included in such Registration Statement.
"Shelf Registration" shall mean a registration required to be effected
pursuant to Section 2 hereof.
"Special Common Interests" shall have the meaning set forth in the
Preamble.
"Transfer" means to, directly or indirectly, offer to sell, sell,
contract to sell, assign, pledge, grant any option to purchase, make any short
sale, exchange, encumber or otherwise dispose of.
"Underwritten Offering" shall have the meaning set forth in Section
4(c).
"Violation" shall have the meaning set forth in Section 5(a)(1).
Section 2. Shelf Registration Under the Securities Act.
(a) Filing of Shelf Registration Statement. Not later than the ninety
(90) days after the date of this Agreement, CharterMac shall file a Shelf
Registration Statement pursuant to Rule 415(a)(6) providing for the sale by the
Holders of the Registrable Securities. If CharterMac is (i) a "well-known
seasoned issuer", the Shelf Registration Statement shall be immediately
effective pursuant to Rule 462 or (ii) not a "well-known seasoned issuer,"
CharterMac will use its commercially reasonable efforts to cause such Shelf
Registration Statement to be declared effective by the Commission as soon as
practicable. CharterMac agrees to use its commercially reasonable efforts to
keep the Shelf Registration Statement continuously effective for a period
expiring on the date on which all of the Registrable Securities covered by the
Shelf Registration Statement have been sold pursuant to the Shelf Registration
Statement or have become eligible for sale pursuant to Rule 144(k) promulgated
under the Securities Act and further agrees during such period to supplement or
amend the Shelf Registration Statement, if and as required by the rules,
regulations or instructions applicable to the registration form used by
CharterMac for such Shelf Registration Statement or by the Securities Act or by
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any other rules and regulations thereunder for shelf registration to the extent
necessary to ensure that it is available for resales by the Holders of the
Registrable Securities. Notwithstanding the foregoing, CharterMac shall not be
required to file a Registration Statement or to keep a Registration Statement
effective if the negotiation or consummation of a transaction is pending or an
event has occurred, which negotiation, consummation or event would require
additional disclosure by CharterMac in the Registration Statement of material
information which CharterMac has a bona fide business purpose for keeping
confidential and the nondisclosure of which in the Registration Statement might
cause the Registration Statement to fail to comply with applicable disclosure
requirements; provided, however, that CharterMac may not delay, suspend or
withdraw a Registration Statement for such reason for more than sixty (60) days
or more often than twice during any period of twelve (12) consecutive months.
CharterMac is not required to file a separate Registration Statement, but may
file one Registration Statement covering the Registrable Securities held by more
than one Holder.
(b) Expenses. CharterMac shall pay all Registration Expenses in
connection with any registration pursuant to Section 2(a). Each Holder shall pay
all underwriting discounts, if any, sales commissions, the fees and
disbursements of counsel representing such Holder and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to the Shelf Registration Statement or Rule 144 promulgated under the
Securities Act.
Section 3. Registration Procedures.
(a) Obligations of CharterMac. In connection with the obligations of
CharterMac with respect to the Registration Statement required to be filed
pursuant to Section 2 hereof, CharterMac shall, to the extent applicable:
(1) Prepare and file with the Commission within the time period
for such filing set forth in Section 2 hereof, a Shelf Registration Statement
with respect to such Registrable Securities (which Registration Statement shall
be available for the Selling Holders' intended method or methods of distribution
and shall comply in all material respects with the requirements of the
applicable form and include all financial statements required by the Commission
to be filed therewith) and, if not effective on filing, use commercially
reasonable efforts to cause such Registration Statement to become effective
within the time period for such effectiveness set forth in Section 2 hereof.
(2) Promptly notify each Selling Holder when the Registration
Statement and any post-effective amendments and supplements thereto are declared
effective, and confirm such notice in writing.
(3) Respond as promptly as practicable to any comments received
by the Commission with respect to the Shelf Registration Statement and prepare
and file with the Commission such amendments and supplements to each such
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Registration Statement and the Prospectus used in connection with such
Registration Statement or any document incorporated therein by reference or file
any other required document as may be necessary to comply with the provisions of
the Securities Act and rules thereunder, including the filing of a supplemental
Prospectus pursuant to Securities Act Rule 424 or any free-writing prospectus
pursuant to Rule 433, with respect to the disposition of all securities covered
by such Registration Statement and the instructions applicable to the
registration form used by CharterMac. In the event that any Registrable
Securities included in a Registration Statement subject to, or required by, this
Agreement remain unsold at the end of the period during which CharterMac is
obligated to maintain the effectiveness of such Registration Statement,
CharterMac may file a post-effective amendment to the Registration Statement for
the purpose of removing such securities from registered status.
(4) Furnish as promptly as practicable to each Selling Holder of
Registrable Securities, without charge, such numbers of copies of the
Registration Statement, any amendment thereto, the Prospectus, including each
preliminary Prospectus and any amendments or supplements thereto, in each case
in conformity with the requirements of the Securities Act and the rules
thereunder, and such other related documents as any such Selling Holder may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by such Selling Holder; CharterMac consents to the use of the
Prospectus, including each preliminary Prospectus, by each such Selling Holder
of Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or the preliminary Prospectus.
(5) Use CharterMac's commercially reasonable efforts (i) to
register and qualify the Registrable Securities covered by such Registration
Statement under such other securities or blue sky laws of such states or
jurisdictions in the United States as shall be reasonably requested by any
Selling Holder and to keep such qualification effective during the period such
Registration Statement is effective and do any and all other acts and things
which may be reasonably necessary or advisable to enable any Selling Holder to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Selling Holder, and (ii) to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement, or the
lifting of any suspension of the qualification (or exemption from qualification)
of the offer and transfer of any of the Registrable Securities in any
jurisdiction, at the earliest possible moment; provided, however, that
CharterMac shall not be required in connection therewith or as a condition
thereto to (i) qualify to do business or register as a broker or dealer in any
such jurisdiction where it would not otherwise be required to qualify or
register but for this Section 3(a)(5), (ii) subject itself to taxation in any
such jurisdiction, or (iii) to file a general consent to service of process in
any such states or jurisdictions.
(6) Promptly notify each Selling Holder of any stop order
suspending the effectiveness of a Registration Statement issued or for the
issuance of which proceedings have been instituted, or, to the extent CharterMac
has actual
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knowledge thereof, threatened to be issued by the Commission or any state
securities authority in connection therewith, and confirm such notice in
writing, and take all commercially reasonable actions required to prevent the
entry of such stop order or to remove it as soon as reasonably practicable if
entered.
(7) Promptly notify each Selling Holder of the happening of any
event as a result of which the Registration Statement or the 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, and confirm such notice in writing.
(8) Make generally available to CharterMac's security holders
copies of an earnings statement satisfying the provisions of Section 11(a) of
the Securities Act as soon as reasonably practicable but in any event no later
than ninety (90) days following the end of the 12-month period beginning with
the first month of CharterMac's first fiscal quarter commencing after the
effective date of the Registration Statement filed pursuant to this Agreement.
(9) Subject to Section 2(a), upon the occurrence of any event contemplated by
Section 3(a)(7), use its reasonable efforts promptly to prepare and file a
supplement or prepare, file and obtain effectiveness of a post-effective
amendment to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(10) Make available for inspection by any Selling Holder and the
representatives of such Selling Holder all financial and other information as
shall be reasonably requested by them, and provide the Selling Holder and the
representatives of such Selling Holder the opportunity to discuss the business
affairs of CharterMac with its principal executives and independent public
accountants who have certified the audited financial statements included in such
Registration Statement, in each case all as reasonably necessary to enable them
to exercise their due diligence responsibility under the Securities Act;
provided, however, that information that CharterMac determines, in good faith,
to be confidential and which CharterMac advises such Person in writing is
confidential shall not be disclosed unless such Person signs a confidentiality
agreement reasonably satisfactory to CharterMac, or the related Selling Holder
of Registrable Securities agrees to be responsible for such Person's breach of
confidentiality on terms reasonably satisfactory to CharterMac or unless the
disclosure of such records, documents or information is necessary to avoid or
correct a material misstatement or omission in a Registration Statement.
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(11) Within a reasonable time prior to the filing of any
Registration Statement, any Prospectus, any amendment to a Registration
Statement or amendment or supplement to a Prospectus, provide, at no charge,
copies of such document (not including any documents incorporated by reference
therein unless requested) to the Holders of Registrable Securities. Within a
reasonable time after filing thereof with the Commission, furnish to each
Holder, without charge, at least one conformed copy of each Registration
Statement and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless requested).
(12) Provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such Registration Statement
from and after a date not later than the effective date of such Registration
Statement and to cooperate with the Selling Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
pursuant to the Registration Statement and not bearing any Securities Act legend
and enabling certificates to be issued for such number of shares and in such
names as the Persons registering the Transfer may request.
(13) Use commercially reasonable efforts to cause the Registrable
Securities covered by such Registration Statement (i) if similar securities of
CharterMac are then listed on a securities exchange or included for quotation in
a recognized trading market, to be so listed or included for so long as such
similar securities of CharterMac are so listed or included, and (ii) to be
registered with or approved by such other United States or state governmental
agencies or authorities as may be necessary by virtue of the business and
operations of CharterMac to enable the Selling Holders of Registrable Securities
to consummate the disposition of such Registrable Securities.
(14) Use CharterMac's commercially reasonable efforts to provide
a CUSIP number for the Registrable Securities if not CharterMac Common Shares
prior to the effective date of the first Registration Statement including
Registrable Securities.
(15) Take such other actions as are reasonably required in order
to expedite or facilitate the disposition of Registrable Securities included in
each such Registration Statement.
(b) Holders' Obligations. It shall be a condition precedent to the
obligations of CharterMac to take any action pursuant to Sections 2 and 3 hereof
with respect to the Registrable Securities of any Selling Holder of Registrable
Securities that such Selling Holder shall furnish to CharterMac such information
regarding such Selling Holder, the number of the Registrable Securities owned by
it, and the intended method of disposition of such Registrable Securities as
shall be required to effect the registration of such Selling Holder's
Registrable Securities, and to cooperate with CharterMac in preparing such
Registration Statement.
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Section 4. Agreements of Selling Holder. In connection with any Registration
Statement pursuant to Section 2 hereof, each Selling Holder agrees, as
applicable:
(a) that it will not offer or sell its Registrable Securities under the
Registration Statement until it has received copies of the supplemented or
amended Prospectus contemplated by Section 3(a)(3) hereof and receives notice
that any post-effective amendment (if required) has become effective;
(b) that upon receipt of any notice from CharterMac of the happening of
any transaction or event of the kind described in Section 3(a)(7) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to a Registration Statement until the Holder receives copies of the supplemented
or amended Prospectus contemplated by Section 3(a)(9) hereof and receives notice
that any post-effective amendment (if required) has become effective, and, if so
directed by CharterMac, the Holder will deliver to CharterMac (at the expense of
CharterMac) all copies in its possession, other than permanent file copies then
in such Holder's possession, of the Prospectus covering such Registrable
Securities current immediately preceding the time of receipt of such notice; and
(c) that upon the receipt of notice from CharterMac, as requested by
the managing underwriter or underwriters of a public offering of CharterMac
Common Shares, or other securities convertible into, or exercisable or
exchangeable for, CharterMac Common Shares, that is underwritten on a firm
commitment basis for the account of CharterMac (an "Underwritten Offering"), the
Holders shall not effect any public or private sale of any CharterMac Common
Shares through the Registration Statement, during the period (the "Holdback
Period") beginning fourteen (14) days prior to, and ending ninety (90) days
after, the effective date of the registration statement relating to such
Underwritten Offering; provided, however, that the aggregate number of days
during which one or more Holdback Periods are in effect shall not exceed one
hundred twenty (120) days during any period of twelve (12) consecutive months.
Section 5. Indemnification; Contribution.
(a) Indemnification by CharterMac. If any Registrable Securities are
included in a Registration Statement under this Agreement:
(1) To the extent permitted by applicable law, CharterMac shall
indemnify and hold harmless each Selling Holder, each Person, if any, who
controls such Selling Holder within the meaning of the Securities Act, and each
officer, director, trustee, partner, and employee of such Selling Holder and
such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint or several), including attorneys' fees and
disbursements and expenses of investigation, incurred by such party arising out
of or based upon any of the following statements, omissions or violations
(collectively, a "Violation"):
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(i) Any untrue statement or alleged untrue statement of a
material fact contained in such Registration Statement, including any
preliminary Prospectus or final Prospectus, or any amendments or supplements
thereto or any document incorporated by reference therein;
(ii) The omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading; or
(iii) Any violation or alleged violation by CharterMac of the
federal securities laws or any applicable state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any
applicable state securities law in connection the registration of the
Registrable Securities pursuant to this Agreement;
provided, however, that the indemnification required by this Section 5(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if such settlement is effected without the consent of
CharterMac, which consent shall not be unreasonably withheld, nor shall
CharterMac be liable in any such case for any such loss, claim, damage,
liability or expense to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished to CharterMac by the indemnified party expressly for use
in connection with such Registration Statement.
(b) Indemnification by Holder. If any of a Selling Holder's Registrable
Securities are included in a Registration Statement under this Agreement, to the
extent permitted by applicable law, such Selling Holder shall indemnify and hold
harmless CharterMac, each of its trustees, officers, employees and agents, each
Person, if any, who controls CharterMac within the meaning of the Securities
Act, any other Selling Holder, any controlling Person of any such other Selling
Holder and each officer, director, partner, and employee of such other Selling
Holder and such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint and several), including attorneys' fees and
disbursements and expenses of investigation, incurred by such party arising out
of or based upon any Violation, in each case to the extent (and only to the
extent) that such Violation is based on or arises from written information
furnished by such Selling Holder to CharterMac expressly for use in connection
with such Registration Statement (or any amendments thereto) or any Prospectus
(or any amendment or supplement thereto); provided, however, that (x) the
indemnification required by this Section 5(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or expense if settlement
is effected without the consent of the relevant Selling Holder of Registrable
Securities, which consent shall not be unreasonably withheld, and (y) in no
event shall the amount of any indemnity under this Section 5(b) exceed the gross
proceeds from the applicable offering received by such
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Selling Holder. In no event shall a Holder be jointly liable with any other
Holder as a result of its indemnification obligations.
(c) Conduct of Indemnification Proceedings. Reasonably promptly after
receipt by an indemnified party under this Section 5 of notice of the
commencement of any action, suit, proceeding, investigation or threat thereof
made in writing for which such indemnified party may make a claim under this
Section 5, such indemnified party shall deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. The failure to deliver written notice to the indemnifying party within a
reasonable time following the commencement of any such action, if not otherwise
known by the indemnifying party shall relieve such indemnifying party of any
liability to the indemnified party under this Section 5 to the extent of any
material prejudice or forfeiture of substantial rights or defenses resulting
therefrom but shall not relieve the indemnifying party of any liability that it
may have to any indemnified party otherwise than pursuant to this Section 5. Any
fees and expenses incurred by the indemnified party (including any fees and
expenses incurred in connection with investigating or preparing to defend such
action or proceeding) shall be paid to the indemnified party, as incurred,
within thirty (30) days of written notice thereof to the indemnifying party so
long as such indemnified party shall have provided the indemnifying party with a
written undertaking to reimburse the indemnifying party for all amounts so
advanced if it is ultimately determined that the indemnified party is not
entitled to indemnification hereunder. Any such indemnified party shall have the
right to employ separate counsel in any such action, claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be the expenses of such indemnified party unless (i) the indemnifying
party has agreed to pay such fees and expenses, (ii) the indemnifying party
shall have failed to assume the defense of such action, claim or proceeding in a
timely manner, or (iii) such indemnified party reasonably determines that a
conflict of interest exists where it is advisable for such indemnified party to
be represented by separate counsel or that, upon advice of counsel, there may be
legal defenses available to such indemnified party which are different from or
in addition to those available to the indemnifying party (in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such
action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one additional firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties, unless
such indemnified party reasonably determines that a conflict of interest exists
where it is advisable for such indemnified party to be represented by separate
counsel or that, upon
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advice of counsel, there may be legal defenses available to such indemnified
party which are different from or in addition to those available to any other of
such indemnified parties in which event the indemnifying party shall be
obligated to pay the fees and expenses of such additional counsel or counsels).
No indemnifying party shall be liable to an indemnified party for any settlement
of any action, proceeding or claim without the written consent of the
indemnifying party, which consent shall not be unreasonably withheld.
(d) Contribution. If the indemnification required by this Section 5
from the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to in
this Section 5:
(1) The indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by reference to,
among other things, whether any Violation has been committed by, or relates to
information supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such Violation. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 5(a) and Section 5(b), any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
(2) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in Section 5(d)(1). 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.
(e) Full Indemnification. If indemnification is available under this
Section 5, the indemnifying parties shall indemnify each indemnified party to
the full extent provided in this Section 5 without regard to the relative fault
of such indemnifying party or indemnified party or any other equitable
consideration referred to in Section 5(d)(1).
(f) Survival. The obligations of CharterMac and the Selling Holders of
Registrable Securities under this Section 5 shall survive the completion of any
offering
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of Registrable Securities pursuant to a Registration Statement under this
Agreement, and otherwise.
Section 6. Transfer of Registration Rights. All rights of a Holder with
respect to Exchange Shares and Registrable Securities pursuant to this Agreement
may be Transferred by such Holder to any Person in connection with the Transfer
of Exchange Shares or Special Common Interests to such Person, in all cases and
shall inure to the benefit of and be exercisable by any Person entitled to
exchange Special Common Interests under the Exchange Rights Agreement.
CharterMac shall not be bound by any such Transfer until the transferor or
transferee shall have delivered to the secretary of CharterMac written
notification of such Transfer setting forth the name of the transferor, name and
address of the transferee, and the number of Exchange Shares which shall have
been so Transferred.
Section 7. Covenants of CharterMac. CharterMac hereby agrees and covenants
that it shall file as and when applicable, on a timely basis, all reports
required to be filed by it under the Securities Act and the Exchange Act. If
CharterMac is not required to file reports pursuant to the Exchange Act, upon
the request of any Holder of Registrable Securities, CharterMac shall make
publicly available the information specified in subparagraph (c)(2) of Rule 144.
CharterMac shall take such further action as may be reasonably required from
time to time and as may be within the reasonable control of CharterMac, to
enable the Holders to Transfer Exchange Shares without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144 or
any similar rule or regulation hereafter adopted by the Commission, including
procuring the delivery of legal opinions customarily delivered by issuer's
counsel in respect of a sale under Rule 144.
In connection with any sale, transfer or other disposition by a Holder
of any Exchange Shares pursuant to Rule 144, CharterMac shall cooperate with
such Holder to facilitate the timely preparation and delivery of certificates
representing Exchange Shares to be sold and not bearing any Securities Act
legend, and enable certificates for such Exchange Shares to be for such number
of shares and registered in such names as the Holder may reasonably request at
least two Business Days prior to any sale of Exchange Shares.
Section 8. Miscellaneous.
(a) Notices. All notices and other communications given or made
pursuant hereto shall be in writing and delivered by hand or sent by registered
or certified mail (postage prepaid, return receipt requested) or by nationally
recognized overnight air courier service and shall be deemed to have been duly
given or made as of the date delivered if delivered personally, or if mailed, on
the third Business Day after mailing (on the first Business Day after mailing in
the case of a nationally recognized overnight air courier service) to the
parties at the following addresses:
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if to CharterMac, to:
CharterMac
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxxx, Esq.
and:
if to the Holders, to each such Holder at their respective
addresses set forth on Schedule A hereto.
Any party may by notice given in accordance with this Section 8(a) to
the other parties designate another address or Person for receipt of notices
hereunder.
(b) Amendments and Waivers. This Agreement may be modified, amended or
supplemented only by an instrument in writing signed by all of the parties
hereto.
(c) Waiver of Compliance; Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party or parties
entitled to the benefits thereof only by a written instrument signed by the
party granting such waiver, but such a waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
8(c).
(d) Governing Law. This Agreement shall be governed by the laws of the
State of New York without regard to the conflict of laws principles thereof.
(e) Severability. The invalidity or unenforceability of any provisions
of this Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the
validity, legality or enforceability of this Agreement, including any such
provision, in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall
13
be enforceable to the fullest extent permitted by law. Upon such determination
that any provision is invalid, illegal or incapable of being enforced, the
parties hereto will negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby and
thereby are fulfilled to the extent possible.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) Section Headings. The section headings contained in this Agreement
are solely for the purpose of reference, are not part of the agreement of the
parties and shall not in any way affect the meaning or interpretation of this
Agreement. All references in this Agreement to Sections are to sections of this
Agreement, unless otherwise indicated.
(h) Entire Agreement. This Agreement, together with the SPA, the
Operating Agreement and the Exchange Rights Agreement, embodies the entire
agreement and understanding of the parties hereto in respect of the transactions
contemplated by this Agreement. There are no restrictions, promises,
inducements, representations, warranties, covenants or undertakings, other than
those expressly set forth or referred to herein or therein. This Agreement, the
SPA, the Operating Agreement and the Exchange Rights Agreement supersede all
prior written or oral agreements and understandings between the parties with
respect to the transactions contemplated hereby and thereby.
(i) Successors, Assigns and Transferees.
(1) This Agreement shall be binding upon and inure to the benefit
of each party hereto and their respective representatives, heirs, successors and
assigns, including, without limitation and without the need for an express
assignment, subsequent Holders. In connection with any transaction in which any
Person other than CharterMac becomes obligated to issue any securities in
exchange for Special Common Interests (including pursuant to any merger,
consolidation, combination or reorganization of CharterMac or any sale of all or
substantially all of the assets of CharterMac), such Person shall execute an
assumption agreement assuming CharterMac's obligations hereunder on terms
reasonably satisfactory to the Holders.
(2) If any successor, assignee or transferee of a Holder shall
acquire Special Common Interests, Exchange Shares or Registrable Securities, in
any manner, whether by operation of law or otherwise, such Special Common
Interests, Exchange Shares or Registrable Securities shall be held subject to
all of the terms of this Agreement, and by taking and holding such Special
Common Interests, Exchange Shares or Registrable Securities such Person shall be
entitled to receive the benefits hereof and
14
shall be conclusively deemed to have agreed to be bound by all of the terms and
provisions hereof.
(3) The term "successor, assignee or transferee of a Holder"
shall include any Person that acquires Special Common Interests, Exchange Shares
or Registrable Securities by operation of law, including upon the merger or
consolidation, liquidation or dissolution of the Holder.
(j) Interpretation.
(1) The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. If any ambiguity or question of
intent or interpretation arises, this Agreement will be construed as if drafted
jointly by the parties and no presumptions or burden of proof will arise
favoring or disfavoring any party by virtue of authorship of any provisions of
this Agreement.
(2) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
(3) The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation."
(k) Further Assurances. Each of the parties shall use reasonable
efforts to execute and deliver to any other party such additional documents and
take such other action, as any other party may reasonably request to carry out
the intent of this Agreement and the transactions contemplated hereby.
(l) Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to compel specific performance of the obligations of any other party under this
Agreement in accordance with the terms and conditions of this Agreement in any
court of the United States or any State thereof having jurisdiction.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Agreement, or caused
this Agreement to be duly executed on its behalf, as of the date first written
above.
CHARTERMAC
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer and President
CM ARCAP INVESTORS LLC
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer and President
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
XXXXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxxx
-------------------------------
XXXXX X. XXXXXXX
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
