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EXHIBIT 10.3
▇▇▇▇▇▇▇▇ CAPITAL CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of _________________, 1998, by and between ▇▇▇▇▇▇▇▇ Capital Corporation,
a Georgia corporation (the "Company"), and FBR Asset Investment Corporation, a
Virginia corporation (the "Purchaser").
This Agreement is made pursuant to the Stock Purchase Agreement (the
"Purchase Agreement"), dated December 17, 1997 between the Company and the
Purchaser. In order to induce the Purchaser to enter into this Purchase
Agreement, the Company has agreed to provide the registration rights provided
for in this Agreement to the Purchaser and its respective direct and indirect
transferees. The execution of this Agreement is a condition to the closing of
the transactions contemplated by the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the following
meanings:
Affiliate: (1) Any person directly or indirectly owning, controlling, or
holding with power to vote ten percent or more of the outstanding voting
securities of such other person, (ii) any person ten percent or more of whose
outstanding voting securities are directly or indirectly owned, controlled, or
held, with power to vote, by such other person, (iii) any person directly or
indirectly controlling, controlled by, or under common control with such other
person, (iv) any executive officer, director, trustee or general partner of such
other person, and (v) any legal entity for which such person acts as an
executive officer, director, trustee or general partner. An indirect
relationship shall include circumstances in which a person's spouse, children,
parents, siblings or mothers-, fathers-, sisters or brothers-in-law is or has
been associated with a person.
Agreement: This Registration Rights Agreement, as the same may be amended,
supplemented or modified from time to time in accordance with the terms hereof.
Business Day: With respect to any act to be performed hereunder, each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in New York, New York, or other applicable place where
such act is to occur are authorized or obligated by applicable law, regulation
or executive order to close.
Closing Date: The Closing Date for the IPO.
Commission: The Securities and Exchange Commission.
Common Stock: Common stock of the Company.
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Company: ▇▇▇▇▇▇▇▇ Capital Corporation, a Georgia corporation, and any
successor corporation thereto.
Controlling person: As defined in Section 7(a) hereof.
Exchange Act: The Securities Act of 1934, as amended, and the rules and
regulations promulgated by the Commission pursuant thereto.
Form S-3: Such form under the Securities Act as is in effect on the date
hereof or any successor registration form under the Securities Act subsequently
adopted by the Commission that permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the
Commission.
Holder: Each holder of any Registrable Shares.
Indemnified Party: As defined in Section 7(a) hereof.
IPO: as defined in the Purchase Agreement.
Person: An individual, partnership, corporation, trust, unincorporated
organization, government or agency or political subdivision thereof, or any
other legal entity.
Proceeding: An action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or, to the knowledge of the person subject thereto,
threatened.
Prospectus: The prospectus included in any Registration Statement,
including any preliminary prospectus, and all other amendments and supplements
to any such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such prospectus.
Purchase Agreement: The Purchase Agreement is as defined in the preamble.
Purchaser: FBR Asset Investment Corporation.
Register, registered and registration: Such terms shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
Registrable Shares: Each of the Shares until (i) the date on which it has
been registered effectively pursuant to the Securities Act and disposed of in
accordance with a Registration Statement relating to it, (ii) the date on which
it is sold pursuant to Rule 144 (or any similar provisions then in effect) or
(iii) the date on which it can be sold without restriction, pursuant to an
available exemption from registration under the Securities Act, or (iv) the date
on which it is sold to the Company.
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Registration Statement: Any registration statement of the Company that
covers the resale of any of the Registrable Shares pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.
Rule 144: Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Rule 144A: Rule 144A promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Rule 424: Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the Commission thereunder.
Shares: The Shares of Common Stock being offered and sold pursuant to
the terms and conditions of the Purchase Agreement.
Underwritten Offering: A sale of securities of the Company to an
underwriter or underwriters pursuant to a Registration Statement for reoffering
to the public.
2. Piggyback Registration
(a) Piggyback Registration Rights and Notice of Registration. The Company
shall notify all Holders of Registrable Shares in writing at least fourteen (14
days prior to filing any registration statement under the Securities Act for the
purpose of effecting a public offering of securities of the Company (including,
but not limited to, registration statements relating to offerings of securities
of the Company by any shareholders of the Company, but excluding registration
statements relating to any registration under Section 3 of this Agreement or to
any employee benefit plan or corporate reorganization) and will afford each such
Holder an opportunity to include in such registration statement all or any part
of the Registrable Shares then held by such Holder. Each Holder desiring to
include in any such registration statement all or any part of the Registrable
Shares held by such Holder shall, within seven (7) days after receipt of the
above-described notice from the Company, so notify the Company in writing, and
in such notice shall inform the Company of the number of Registrable Shares such
Holder wishes to include in such registration statement. If a Holder decides not
to include all of its Registrable Shares in any registration statement
thereafter filed by the Company, such Holder shall nevertheless continue to have
the right to include any Registrable Shares in any subsequent
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registration statement or registration statements as may be filed by the Company
with respect to offerings of its securities, all upon the terms and conditions
set forth therein.
(b) Right to Terminate Registration. The Company shall have the
right, in its sole discretion to terminate or withdraw any registration
initiated by it under this Section 2 prior to the effectiveness of such
registration whether or not any Holder has elected to include Registrable Shares
in such registration.
(c) Underwriting. If a registration statement under which the
Company gives notice under this Section 2 is for an Underwritten Offering, then
the Company shall so advise the Holders of Registrable Shares. In such event,
the right of any Holder to include its Registrable Shares in a registration
pursuant to this Section 2 shall be conditioned upon such Holder's participation
in such underwriting and the inclusion of such Holder's Registrable Shares in
the underwriting to the extent provided herein. All Holders proposing to
distribute their Registrable Shares through such underwriting shall enter into
an underwriting agreement in customary form with the underwriter(s) selected for
such underwriting. Notwithstanding any other provision of this Agreement, if the
managing underwriter(s) determine(s) in good faith that marketing factors
require a limitation of the number of shares to be underwritten, then the
managing underwriter(s) may exclude shares (including Registrable Shares) from
the registration and the underwriting, and the number of shares that may be
included in the registration and the underwriting shall be allocated, first, to
the company, and second, to each of the holders (including the Holders)
requesting inclusion of their shares in such registration statement on a pro
rata basis based on the total number of shares then held by each such holder
[provide, however, that the right of the underwriters to exclude shares
(including Registrable Shares) from the registration and underwriting as
described above shall be restricted so that (i) the number of Registrable Shares
including in any such registration is not reduced below twenty-five percent
(25%) of the shares included in the registration, and (ii) all shares that are
not Registration Shares and are held by persons who are employees or directors
of the Company (or any subsidiary of the Company) shall first be excluded from
such registration and underwriting before any Registrable Shares are so
excluded.] If any Holder disapproves of the terms of any such underwriting, such
Holder may elect to withdraw therefrom by written notice to the Company and the
underwriter, delivered at least ten (10) business days prior to the effective
date of the registration statement. Any Registrable Shares excluded or
withdrawn from such underwriting shall be excluded and withdrawn from the
registration. For any Holder that is a partnership or corporation, the
partners, retired partners and shareholders of such Holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "Holder,"
and any pro rata reduction with respect to such "Holder" shall be based upon the
aggregate amount of shares carrying registration rights owned by all entities
and individuals included in such "Holder," as defined in this sentence.
(d) Holdback Agreement. By electing to include Registrable Shares in any
registration pursuant to Section 2 hereof, the Holder of the Registrable Shares
shall be deemed to have agreed not to effect any public sale or distribution of
securities of the Company of the same or similar class or classes of the
securities included in the Registration Statement or any securities convertible
into or exchangeable or exercisable for such securities, including a sale
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pursuant to Rule 144 or Rule 144A under the Securities Act, during such periods
as reasonably requested by the managing underwriter(s), if an Underwritten
Offering, or the Company, in any other registration. Any period up to 180 days
shall be deemed reasonable.
(e) The Company shall not be obligated to effect, or to take any action to
effect any such registration of Registrable Shares pursuant to this Section 2;
(i) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process or to qualify to do
business in a foreign corporation in affecting such registration, qualification,
or compliance, unless the Company is already subject to service or required to
be so qualified in such jurisdiction and except as may be required by the
Securities Act, or
(ii) if within 14 days after its receipt of a written request to
effect such registration, the Company causes to be delivered to the Holders an
opinion of counsel reasonably acceptable to the Holders to the effect that the
proposed disposition of Registrable Shares by the Holders will not require
registration or qualification under the Securities Act, it being specifically
understood and agreed that the Holders will promptly furnish to the Company and
such counsel all information such counsel may reasonably request in order to
enable such counsel to determine whether it would be able to render such option.
(iii) Expenses. All expenses incurred in connection with a
registration pursuant to this Section 2 (excluding underwriters' and brokers'
discounts and commissions), including without limitation all federal and "blue
sky" registration and qualification fees, printers' and accounting fees and fees
and disbursement of one counsel for the Company and reasonable fees and
disbursements of one counsel for the selling Holders shall be borne by the
Company. Each Holder participating in a registration pursuant to this Section 2
shall bear such Holder's proportionate share (based on the total number of
shares sold in such registration other than for the account of the Company) of
all discounts, commissions or other amounts payable to underwriters or brokers
in connection with such offering.
3. Form S-3 Registration
In case the Company shall receive from the Holders of at least twenty-five
(25) percent of all outstanding Registrable Shares a written request or requests
that the Company effect a shelf registration on Form S-3 covering the resale of
the Registrable Shares and any related qualification or compliance with respect
to all or a part of the Registrable Shares owned by such Holders, then the
Company will:
(a) Notice. Promptly give written notice of the proposed registration and
the Holders' request therefor, and any related qualification or compliance, to
all other Holders of Registrable Shares; and
(b) Registration. as soon as practicable, use commercially reasonably
efforts to effect such registration and all such qualifications and compliances
as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Holders'
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Registrable Shares as are specified in such request, together with all or such
portion of the Registrable Shares of any other Holders joining in such request
as are specified in a written request given within twenty (20) days after
receipt of such written notice from the Company; provided, however, that the
Company shall not be obligated to effect any such registration, qualification
or compliance pursuant to this Section 3:
(1) if Form S-3 is not available for such offering by the
Holders;
(2) if the Holders, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose
to sell Registrable Shares and such other securities (if any) at an aggregate
price to the public of less than $2,500,000;
(3) if the Company shall furnish to the Holders a
certificate signed by the President or Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be detrimental to the Company and its shareholders for such
Form S-3 registration to be effected at such time, then the Company shall have
the right to defer the filing of the Form S-3 registration statement for a
period of not more than 120 days after receipt of the request of the Holders
under this Section 4;
(4) if the Company has, within the twelve (12) month period
preceding the date of such request, effected two registrations on Form S-3 for
the Holders pursuant to this Section 3;
(5) if the Company has already effected three registrations
pursuant to Section this 3;
(6) in any particular jurisdiction in which the Company
would be required to qualify to do business as a foreign corporation or to
execute a general consent to service of process in effecting such registration,
qualification, or compliance, unless the Company is already subject to service
or required to be so qualified in such jurisdiction and except as may be
required by the Securities Act; or
(7) if within 14 days after its receipt of a written
request to effect such registration, the Company causes to be delivered to the
Holders an opinion of counsel reasonably acceptable to the Holders to the effect
that the proposed disposition of Registrable Shares by the Holders will not
require registration or qualification under the Securities Act; it being
specifically understood and agreed that the Holders will promptly furnish to the
Company and such counsel all information such counsel may reasonably request in
order to enable such counsel to determine whether it would be able to render
such opinion.
(c) Expenses. The Company shall pay all expenses incurred in
connection with each registration requested pursuant to this Section 3,
(excluding underwriters' or brokers' discounts and commissions), including
without limitation all filing, registration and qualification, printers' and
accounting fees and the fees and disbursements of counsel for the Company, and
the reasonable fees and disbursements of one counsel for the selling Holders.
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Securities Act; and comply with the provisions of the Securities Act applicable
to the Company with respect to such Registration Statement during the
applicable period;
(c) furnish to the Holder of Registrable Shares without charge as many
copies of each Prospectus, including each preliminary Prospectus, and any
amendment or supplement thereto and such other documents as such Holder may
reasonably request, in order to facilitate the public sale or other disposition
of the Registrable Shares; the Company consents to the use of any such
Prospectus, including each preliminary Prospectus, by the Holder of Registrable
Shares, if any, in connection with the offering and sale of the Registrable
Shares covered by any such Prospectus;
(d) use commercially reasonable efforts to register or qualify, or obtain
and for registration or qualification for, all Registrable Shares by the time
the applicable Registration Statement is declared effective by the Commission
under all applicable state securities or "blue sky" laws of such jurisdictions
as the Holder of Registrable Shares covered by a Registration Statement shall
reasonably request in writing, keep each such registration or qualification or
exemption effective during the period such Registration Statement is required
to be kept effective and do any and all other acts and things that may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Registrable Shares owned by such
Holder; provided, however, that the Company shall not be required to (i)
qualify generally to do business in any jurisdiction or to register as a broker
or dealer in such jurisdiction where it would not otherwise be required to
qualify but for this Section 5(d), (ii) subject itself to taxation in any such
jurisdiction, or (iii) submit to the general service of process in any such
jurisdiction; provided, further, that if the Company fails to list the
Registrable Shares on a national stock exchange or qualify for quotation on an
automatic quotation system at or prior to the time the Registration Statement is
declared effective by the Commission because it fails to meet requirements for
such listing or quotation regarding the number of holders, the obligation in
this Section 5(d) shall not require the Company to register or qualify the
Registrable Shares in any jurisdiction where the Company reasonably concludes,
based upon the advice of securities counsel, that such registration or
qualification would require unreasonable effort (including, without limitation,
amendments to the Company's charter or bylaws) or expense;
(e) notify the Holder of Registrable Shares promptly and, if requested
by such Holder, confirm such advice in writing (i) when a Registration
Statement has become effective and when any post-effective amendments and
supplements thereto become effective, (ii) of the issuance by the Commission or
any state securities authority of any stop order suspending the effectiveness of
a Registration Statement or the initiation of any proceedings for that purpose,
and (iii) of the happening of any event during the period a Registration
Statement is effective as a result of which such 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 not misleading, and (iv) at the request of any such Holder,
promptly to furnish to such Holder a reasonable number of copies of a
supplement to or an amendment of such Prospectus as may be necessary so that,
as thereafter delivered to the purchaser of such securities, such Prospectus
shall not include an untrue statement of a material
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fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(f) upon request by the Holder, furnish to the Holder of Registrable
Shares copies of any request by the Commission or any state securities
authority of amendments or supplements to a Registration Statement and
Prospectus or for additional information;
(g) make every reasonable effort to avoid the issuance of, or if issued
to obtain the withdrawal of, any enjoining order suspending the use or
effectiveness of a Registration Statement or the lifting of any suspension of
the qualification (or exemption from qualification) of any of the Registrable
Shares for sale in any jurisdiction, at the earliest possible moment;
(h) upon the request furnish to the Holder of Registrable Shares,
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);
(i) upon the occurrence of any event contemplated by Section 5(c)(iii)
hereof, use commercially reasonable efforts to prepare a supplement or
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
Shares, 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;
(j) If requested by the representative underwriters, if any, or any
Holders of Registrable Shares being sold in connection with such offering; (i)
promptly incorporate in a prospectus supplement or post-effective amendment
such information as the representative of the underwriters, if any, or such
Holders indicate relates to them or otherwise reasonably request be included
therein, and (ii) make all required filings of such prospectus supplement or
such post-effective amendment as soon as practicable after the Company
has received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment; provided, however, that the Company
shall not be required to take any action pursuant to this Section 6 that would,
in the opinion of counsel for the Company, violate applicable law;
(k) make available to inspection by representatives of Holder of the
Registrable Shares and the representative of any underwriters participating in
any disposition pursuant to a Registration Statement and any special counsel or
accountant retained by such Holders or underwriters, all financial and other
records, pertinent corporate documents and properties of the Company and cause
the respective officers, directors and employees of the Company to supply all
information reasonably requested by any such representatives, the
representative of the underwriters, the special counsel or accountants in
connection with a Registration Statement; provided, however, that such records,
documents or information that the Company determines, in good faith, to be
confidential and notifies such representatives, representative of the
underwriters, special counsel or accountants are confidential shall not be
disclosed by the representatives, representative of the underwriters, special
counsel or accountants unless (i) the disclosure of such records, documents or
information is necessary to avoid or correct a misstatement or omission in
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a Registration Statement, (ii) the release of such records, documents or
information is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, or (iii) such records, documents or information have
been generally made available to the public;
(l) use commercially reasonable efforts (including, without limitations,
seeking to cure any deficiencies (within the Company's control) cited by the
exchange or market in the Company's listing application) to list all
Registrable Shares on the American Stock Exchange or The Nasdaq National Market
(or the Nasdaq Small Cap Market) if not qualified for the Nasdaq National
Market (unless the Company qualifies and chooses to list all Registrable Shares
on the New York Stock Exchange, in which event the Company shall use its best
efforts to list all Registrable Shares on the New York Stock Exchange);
(m) otherwise use commerically reasonable efforts to comply with all
applicable rules and regulations of the Commission and make generally available
to its securityholders, as soon as reasonably practicable, earnings statements
covering at least 12 months that satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 (or any similar rule promulgated under the
Securities Act) thereunder;
(n) provide and cause to be maintained a transfer agent for all
Registrable Shares covered by any Registration Statement from and after a date
not later than the effective date of such Registration Statement; and
(o) In connection with any sale or transfer of the Registrable Shares
that will result in such securities no longer being the Registrable Shares,
cooperate with the Holders and the representative of the underwriters, if any,
to facilitate the timely preparation and delivery of certificates representing
the Registrable Shares to be sold, which certificates shall not bear any
restrictive legends and to enable such Registrable Shares to be in such
denominations and registered in such names as the representative of the
underwriters, if any, or Holders may request at least two Business Days prior
to any sale of the Registrable Shares.
(p) The Company may require the Holder of Registrable Shares to furnish
to the Company such information regarding the proposed distribution by such
Holder of such Registrable Shares as the Company may from time to time
reasonably request in writing or as shall be required to effect the
registration of their Registrable Shares.
(q) The Holder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 5(e)(iii)
hereof, such Holder will immediately discontinue disposition of Registrable
Shares pursuant to a Registration Statement until such Holder's receipt of the
copies of the supplemented or amended Prospectus. If so directed by the
Company, such Holder will deliver to the Company (at the expense of the
Company) all copies in its possession, other than permanent file copies then
in such Holder's possession, of the Prospectus covering such Registrable Shares
current at the time of receipt of such notice.
6. Black-Out Period. (a) Following the effectiveness of a Registration
Statement (and the filings with any state securities commissions), the Company
may direct the Holder to suspend
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sales of the Registrable Shares for such times as the Company reasonably may
determine is necessary and advisable, including the following events: (i) an
Underwritten Offering by the Company where the Company is advised by the
managing underwriter(s) for such Underwritten Offering that sale of Registrable
Shares under the Registration Statement would have a material adverse effect on
the offering, or (ii) pending negotiations relating to, or consummation of, a
transaction or the occurrence of an event (x) that would require additional
disclosure of material information by the Company in the Registration Statement
(or such filings), (y) as to which the Company has a boa fide business purpose
for preserving confidentiality, or (z) that renders the Company unable to comply
with Commission requirements, in each case under circumstances that would make
it impractical or inadvisable to cause the Registration Statement (or such
filings) to become effective or to promptly amend or supplement the Registration
Statement on a post-effective basis, as applicable.
(b) In the case of an event that causes the Company the suspend the
effectiveness of a Registration Statement (a "Suspension Event"), the Company
may give notice (a "Suspension Notice") to the Holders to suspend sales of the
Registrable Shares so that the Company may correct or update the Registration
Statement (or such filings); provided, however, that such suspension shall
continue only for so long as the Suspension Event or its effect is continuing.
No Holder shall effect any sales of the Registrable Shares pursuant to such
Registration Statement (or such filings) at any time after it has received a
Suspension Notice from the Company. If so directed by the Company, the Holders
will deliver to the Company all copies of the Prospectus covering the
Registrable Shares held by them at the time of receipt of the Suspension
Notice. The Holders may recommence effecting sales of the Registrable Shares
pursuant to the Registration Statement (or such filings) following further
notice to such effect (an "End of Suspension Notice") from the Company, which
End of Suspension Notice shall be given by the Company promptly following the
conclusion of any Suspension Event.
(c) Notwithstanding Section 2 hereof, if the Company shall give a
Suspension Notice pursuant to this Section 7, the Company agrees that it shall
extend the period during which the Registration Statement shall be maintained
effective pursuant to this Agreement by the number of days during the period
from the date of the giving of the Suspension Notice to and including the date
when the Holders shall have received the End of Suspension Notice and copies of
the supplemented or amended Prospectus necessary to resume sales.
7. Indemnification Contribution
(a) Indemnification of the Company. The Company agrees to indemnify
and hold harmless (i) the Purchaser, (ii) each Holder of the Registrable
Shares, (iii) each person, if any, who controls (within the meaning of the
Securities Act or the Exchange Act) any of the foregoing (any of the persons
referred to in this clause (iii) being hereinafter referred to as a
"controlling person"),and (iv) the respective officers, directors, partners,
employees, representatives and agents of the Purchaser, each Holder of the
Registrable Shares, or any controlling person thereof (any person referred to
in clause (i), (ii), (iii) or (iv) may hereinafter be referred to as an
"Indemnified Party"), as follows:
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(i) from and against any and all loss, claim, liability, damage
and expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Registrable Shares were
registered under the Securities Act including all documents incorporated
therein by reference, or the omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading or
arising out of any untrue statement or alleged untrue statement of a material
fact contained in any Prospectus (or any amendment or supplement thereto),
including all documents incorporated therein by reference; provided, however,
that such indemnity with respect to any Prospectus shall not inure to the
benefit of the Holder (or any controlling person thereof) to the extent that
any such loss, claim, liability, damage or expense arises out of such Holder's
failure to send or give a copy of the final Prospectus, as the same may be then
supplemented or amended, to the person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Shares to such person if such statement
or omission was corrected in such final Prospectus.
(ii) from and against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, if such settlement
is effected with the written consent of the Company (which consent shall not be
unreasonably withheld); and
(iii) from and against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of one counsel, except as
otherwise provided in Section 7(c) hereof), incurred in investigating,
preparing or defending against any litigation, or investigation or proceeding
by any governmental agency or body, commenced or threatened, in each case
whether or not a party, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement does not apply to the Holder
with respect to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written information
furnished to the Company by such Holder expressly for use in a Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto).
(b) Indemnification by Holders. Each Holder severally agrees to
indemnify and hold harmless the Company, each of its directors and officers
(including each officer of the Company who signed the Registration Statement),
each person, if any, who controls the Company, within the meaning of the
Securities Act and the Exchange Act, any underwriter and any Holder selling
securities under such Registration Statement or any of such other Holder's
partners, directors or officers or any person who controls such Holder within
the meaning of the Securities Act or the
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Exchange Act, against any and all loss, liability, claim, damage and expenses
described in the indemnity contained in Section 7(a) hereof (provided, however,
that any settlement described in Section 7(a)(ii) hereof is effected with the
written consent of such Holder, which consent shall not be unreasonably
withheld), as incurred, but only with respect to such untrue statement or
omission, or alleged untrue statements or omissions, made in a Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by the Holder expressly for use in such Registration
Statement (or any amendment thereto) or such Prospectus (or any amendment or
supplement thereto). If the Holder elects to include Registrable Shares in an
Underwritten Offering pursuant to Section 2, the Holder shall be required to
agree to such indemnification provisions as may be required by the underwriter
in connection with such Underwritten Offering.
(c) Conduct of Indemnification Proceedings. Each Indemnified Party
shall give reasonably prompt notice to each indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve it
from any liability that it may have under this indemnity agreement except to
the extent that the indemnifying party is actually prejudiced by such failure
to give notice. If the indemnifying party so elects within a reasonable time
after receipt of such notice, the indemnifying party may assume the defense of
such action or proceeding at such indemnifying party's own expense with counsel
chosen by the indemnifying party and approved by the Indemnified Party or
parties in such action or proceeding, which approval shall not be unreasonably
withheld; provided, however, that if such Indemnified Party or parties
reasonably determines that a conflict of interest exists where it is advisable
for such Indemnified Party or parties to be represented by separate counsel or
that, upon advice of counsel, there may be legal defenses available to them
that are different from or in addition to those available to the indemnifying
party, then the indemnifying party shall not be entitled to assume such defense
and the Indemnified Party or parties shall be entitled to one separate counsel
at the indemnifying party's expense. If an indemnifying party is not entitled
to assume the defense of such action or proceeding as a result of the proviso to
the preceding sentence, such indemnifying party's counsel shall be entitled
to conduct such indemnifying party's defense, and counsel for the Indemnified
Party or parties shall be entitled to conduct the defense of such Indemnified
Party or parties, it being understood that both such counsel will cooperate
with each other to conduct the defense of such action or proceeding as
efficiently as possible. If an indemnifying party is not so entitled to assume
the defense of such action or does not assume such defense, after having
received the notice referred to in the first sentence of this paragraph, the
indemnifying party or parties will pay the reasonable fees and expenses counsel
for the Indemnified Party or parties. In such event, however, no indemnifying
party will be liable for any settlement effected without the written consent of
such indemnifying party. No indemnifying party shall, without the consent of
the Indemnified Party, consent to entry of any judgment or enter into a
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. If an indemnifying party is
entitled to assume, and assumes, the defense of such action or proceeding in
accordance with this paragraph, such indemnifying party shall not be liable for
any fees and
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expenses for counsel for the Indemnified Parties incurred thereafter in
connection with such action or proceeding.
(d) Contribution. In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in this Section 7
is for any reason held to be unenforceable, unavailable or insufficient
although applicable in accordance with it terms, the Company and Holder shall
contribute to the aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by such indemnity agreement incurred by the Company
and the Holder in such proportion so that the Holder is responsible for the
portion represented by the percentage that the public offering price of its
Registrable Shares offered by and sold under the Registration Statement bears
to the public offering of all securities offered by and sold under such
Registration Statement. Notwithstanding the foregoing, 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. For purposes of this Section 7,
each person, if any, who controls a Holder within the meaning of Section 15 of
the Securities Act shall have the same rights to contribution as such Holder,
and each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Company. Each party entitled to contribution agrees that
upon the service of a summons or other initial legal process upon it in any
action instituted against it in respect of which contribution may be sought, it
shall promptly give written notice of such service to the party or parties from
whom contribution may be sought, but the omission so to notify such party or
parties of any such service shall not relieve the party from whom contribution
may be sought from any obligation it may have hereunder or otherwise.
(e) Survival. The obligations of the Company and the Holders under this
Section 7 shall survive the completion of any offering of Registrable Shares in
a Registration Statement and otherwise.
8. Termination of the Company's Obligations. The Company shall have no
obligations pursuant to this Agreement with respect to: (a) any request or
requests for registration made by any Holder on a date more than two (2) years
after the closing date of the Company's initial public offering; or (b) any
Registrable Shares proposed to be sold by a Holder in a registration pursuant
to this Agreement if, in the opinion of counsel to the Company, all such
Registrable Shares proposed to be sold by a Holder may be sold in a three-month
period without registration under the Securities Act pursuant to Rule 144 under
the Securities Act.
9. Miscellaneous
(a) Remedies. In the event of a breach by the Company, or by a Holder of
the Registrable Shares, of any of their obligations under this Agreement, each
Holder of the Registrable Shares of the Company, in addition to being entitled
to exercise all rights granted by law, including recovery and damages, will be
entitled to specific performance of its rights under this Agreement; provided,
however, that no holder shall have any right to obtain or seek an
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injunction restraining or otherwise delaying any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, except if the written consent of the Holders of a majority in aggregate
principal amount of the then outstanding Registrable Shares is obtained;
provided, however, that for the purposes of this Agreement, Registrable Shares
that are owned, directly or indirectly, by either the Company or an Affiliate
of the Company are not deemed outstanding. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders of the Registrable Shares
whose securities are being sold pursuant to a Registration Statement and that
does not directly or indirectly affect the rights of other Holders of the
Registrable Shares may be given by Holders of a majority of the Registrable
Shares being sold by such Holders pursuant to such Registration Statement;
provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(c) Notices. All notices and other communications provided for herein
shall be made in writing by hand-delivery, next-day air courier, certified
first-class mail, return receipt requested, telex or telecopy;
(i) if to the Company, to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary;
(ii) if to the Purchaser, to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ATTN: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chief Executive Officer;
(iii) if to any person who is then the registered Holder of any
Registrable shares, to the address of such Holder as it appears in the Common
Stock register of the Company.
Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given (v) when delivered by hand, if
personally delivered, (w) one Business Day after being timely delivered to a
next-day air courier, (x) five Business Days after being deposited in the mail,
postage prepaid, if mailed (y) when answered back, if telexed, or (z) when
receipt is acknowledged by the recipient's telecopier machine, if telecopied.
(d) Successors and Assigns. Notwithstanding anything herein to the
contrary, the registration rights of a Holder under Sections 2 or 3 hereof may
be assigned only to a party who acquires at least 10,000 Common Shares;
provided, however, that no party may be assigned any of the foregoing rights
unless the Company is given written notice by the assigning party at the time of
such assignment stating the name and address of the assignee and identifying the
securities of the Company as to which the rights in question are being assigned;
and provided, further that any such assignee shall receive such assigned rights
subject to all the terms and conditions of this Agreement, including without
limitation the provisions of this Section 12(d).
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(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same Agreement.
(f) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia, as applied to contracts
made and performed within the State of Georgia without regard to principles of
conflicts of law.
(g) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the terms of this
Agreement. All references made in this Agreement to "Section" refer to such
Section of this Agreement, unless expressly stated otherwise.
(i) Costs and Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the
court, shall be entitled to recover its reasonable costs and attorneys' fees in
addition to any other available remedy.
(j) Adjustment for Stock Splits, etc. Wherever in this Agreement there
is a reference to a specific number of shares, then upon the occurrence of any
subdivision, combination, or stock dividend of such shares, the specific number
of shares so referenced in this Agreement shall automatically be proportionally
adjusted to reflect the affect on the outstanding shares of such class or
series of stock by such subdivision, combination, or stock dividend.
(k) Aggregation of Stock. All shares held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
THE COMPANY: ▇▇▇▇▇▇▇▇ CAPITAL CORPORATION
By:
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Name:
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Title:
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THE PURCHASER: FBR ASSET INVESTMENT CORPORATION
By:
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Name:
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Title:
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