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EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into
as of ___________, 1998, by and between AMRESCO CAPITAL TRUST, a Texas real
estate investment trust (the "Company"), AMREIT HOLDINGS, INC., a Nevada
corporation ("Holdings"), and AMREIT MANAGERS, L.P., a Delaware limited
partnership (the "Manager," and collectively with Holdings, the "Shareholders").
WITNESSETH:
WHEREAS, the Company and AMRESCO, INC. have entered into an agreement
(the "Purchase Agreement") pursuant to which the Company has agreed to sell to
Holdings, and Holdings has agreed to purchase from the Company, up to 2,556,000
common shares of beneficial interest, par value $.01 per share ("Common
Shares"), of the Company;
WHEREAS, the Company and the Manager have entered into an agreement
(the "Management Agreement") pursuant to which the Manager will perform
managerial services for the Company and its subsidiaries;
WHEREAS, the Company has established its 1998 Share Option and
Incentive Award Plan (the "Plan") pursuant to which options to acquire Common
Shares may be granted, and, pursuant to an agreement between the Company and the
Manager (the "Share Option Agreement"), the Company has granted to the Manager
options (the "Options") to purchase 2,222,322 Common Shares over a four-year
vesting period;
WHEREAS, neither the Common Shares to be acquired by Holdings pursuant
to the Purchase Agreement nor the Common Shares subject to the Options have been
registered under the Securities Act of 1933, as amended;
WHEREAS, from time to time, Holdings or the Manager may acquire
additional Common Shares; and
WHEREAS, the parties desire to set forth certain rights of Holdings and
the Manager as holders of Common Shares.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
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1. DEFINITIONS.
"Commission" means, as of any time, the United States
Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act.
"Demand Registration" means the registration of a Registrable
Security pursuant to the terms and provisions of Section 2.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such similar federal statute.
"Holder" means any Shareholder, and, subject to Section 10(f),
any assignee or transferee of a Registrable Security initially held by any
Shareholder, which assignee or transferee expressly is granted rights as a
Holder hereunder by any Shareholder at the time of such transfer.
"Indemnified Party" means a party who is to be indemnified
pursuant to Section 7.
"Indemnifying Party" means a party who shall indemnify an
Indemnified Party pursuant to Section 7.
"Inspectors" has the meaning set forth in Section 5(h).
"Person" means a natural person, a corporation, a partnership,
a trust, a joint venture, any regulatory authority or any other entity or
organization.
"Piggy-back Registration" means the registration of a
Registrable Security pursuant to the terms and provisions of Section 3.
"Pro Rata Basis" means a pro rata allocation based on the
number of Registrable Securities requested to be included in a registered
offering pursuant hereto.
"Records" has the meaning set forth in Section 5(h).
"Registrable Securities" means the Common Shares currently
held by the Shareholders, all Common Shares hereafter acquired by any
Shareholder, including all Common Shares issuable pursuant to the Options, and
any and all securities of the Company issued or issuable with respect to such
Common Shares by way of a dividend, reclassification, stock split, or other
distribution or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise. Any Registrable
Security will cease to be a Registrable Security when (i) a registration
statement covering such Registrable Security has been declared effective by the
REGISTRATION RIGHTS AGREEMENT - PAGE 2
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Commission and the Registrable Security has been disposed of pursuant to such
effective registration statement, (ii) the Registrable Security is sold under
circumstances in which all of the applicable conditions of Rule 144 (or any
similar provisions then in force) under the Securities Act are met, (iii) the
Registrable Security has been otherwise transferred, the Company has delivered a
new certificate or other evidence of ownership for it not bearing a legend
restricting further transfer, and it may be resold without subsequent
registration under the Securities Act or (iv) the Registrable Security is
eligible for sale pursuant to Rule 144(k) (or any successor provision) under the
Securities Act.
"Registration Expenses" means those expenses associated with
any registration statement filed hereunder, as described in Section 6.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act shall include a reference to the
comparable section, if any, of any such similar or successor federal statute.
"Shelf Registration" means the registration of a Registrable
Security pursuant to the terms and provisions of Section 2(b).
"Term" means that period of time set forth in Section 10(b).
"Underwriter" means a securities dealer which purchases any
Registrable Securities as principal and not as part of such dealer's
market-making activities.
2. DEMAND REGISTRATION.
(a) Request for Registration. At any time after the earlier to
occur of (i) the expiration of the Lock-Up Period (as defined in Section 4(a))
and (ii) the date when the Manager (or any other member of the AMRESCO Group, as
defined in the Management Agreement) ceases for any reason to act as manager for
the Company pursuant to the Management Agreement (or any similar agreement), any
Holder may make a written request ("Demand Notice") for registration under Rule
415 of the Securities Act (a "Demand Registration") of all or part of its
Registrable Securities, subject to the terms and conditions hereof. Each Demand
Notice will specify the number of shares of Registrable Securities proposed to
be sold and will also specify the intended method of disposition thereof. The
Company shall not be required to file and effect more than two Demand
Registrations pursuant to this Section 2(a).
Notwithstanding any provision hereof to the contrary, the Company shall
not be obligated to honor any Demand Notice requesting a Demand Registration, or
otherwise cause a Demand Registration to become effective if the Demand Notice
is delivered to the Company during the period commencing 90 days before the
effective date of a registration statement pursuant to which the Company is
offering shares of any class of equity securities of the Company in an
underwritten offering and ending 120 days after the closing date of any such
offering.
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(b) Effective Registration and Expenses. Upon receipt of a
written request for a Demand Registration, the Company will (i) take appropriate
action, on a reasonable, timely basis, to prepare and file a registration
statement covering the Registrable Securities requested to be included in such
Demand Registration (subject to Section 2(d)) and (ii) use its commercially
reasonable efforts to cause each Demand Registration to become effective under
the Securities Act and thereafter to keep it effective under the Securities Act
until the earliest of (A) the date on which the Holders no longer hold any
Registrable Securities registered under the Demand Registration, (B) the date on
which the Registrable Securities registered under the Demand Registration may be
sold by the Holders thereof pursuant to Rule 144(k) promulgated under the
Securities Act or (C) the date which is two years from the effective date of
such Demand Registration statement.
(c) No Third-Party Piggy-back on Demand Registrations. Neither
the Company nor any of its respective securityholders (other than the Holders of
Registrable Securities in such capacity pursuant to Section 3) may include
securities of the Company in any Demand Registration without the prior written
consent of the Demanding Holder (as hereinafter defined) or, if more than one
Demanding Holder, the Majority Demanding Holder (as hereinafter defined), and
the Company shall not enter into any agreement providing any such right to any
of its securityholders.
(d) Priority on Demand Registrations. In the event the
offering of shares pursuant to a Demand Registration shall be in the form of an
underwritten offering pursuant to Section 2(e), if the managing Underwriter or
Underwriters of such offering advise the Company and the selling Holders in
writing that, in their good faith judgment, the number of Registrable Securities
and any other securities requested to be included in such offering is
sufficiently large to materially and adversely affect the success of such
offering (a "Material Adverse Effect"), the Company shall include in such
registration the aggregate number of Common Shares which in the good faith
judgment of such managing Underwriter or Underwriters can be sold without any
such Material Adverse Effect, and such amount shall be allocated (i) first on a
Pro Rata Basis among the selling Holders, unless any of the selling Holders
desires to sell a number of Registrable Securities that is less than the total
pro rata amount that it is entitled to sell, in which event the number of
Registrable Securities not so elected to be sold shall be allocated among the
other selling Holders on a Pro Rata Basis, and (ii) second, among the Company
and, subject to Section 2(c), all other holders of securities of the Company
permitted to include their securities in such Demand Registration (allocated
among such shareholders as they may so determine).
(e) Manner of Offering; Selection of Underwriters. If the
Holder(s) requesting a Demand Registration ("Demanding Holder(s)") so requests
(or if more than one Demand Holder, if the Demanding Holder owning a majority of
the Registrable Securities requested to be included in the Demand Registration
by the Demanding Holders so requests (the "Majority Demanding Holder")), the
offering of Registrable Securities pursuant to a Demand Registration shall be in
the form of an underwritten offering. If a Demand Registration is in the form of
an underwritten offering, the Majority Demanding Holder shall select the
managing Underwriter or Underwriters to be used in
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connection with the offering; provided, however, that such Underwriter or
Underwriters must be reasonably satisfactory to the Company.
3. PIGGY-BACK REGISTRATION.
(a) Request for Registration. At any time after the date
hereof (subject to the provisions of Section 4(a)), if the Company proposes to
file a registration statement under the Securities Act (other than a
registration statement on Form S-4 or S-8 (or any successor form that may be
adopted by the Commission) or a registration statement filed in connection with
an exchange offer or offering of securities or debt solely to the Company's
existing security or debt holders) with respect to an offering of any class of
equity securities by the Company for its own account or for the account of any
of its security holders, then the Company shall give written notice of such
proposed filing to each Holder as soon as practicable (but in no event less than
20 nor more than 60 days before the anticipated filing date). Such notice shall
offer each Holder the opportunity to have all or any of the Registrable
Securities held by such Holder included in the registration statement proposed
to be filed or, at the Company's option, in a separate registration statement to
be filed concurrently with such registration statement (the "Piggyback
Registration"). Within ten days after receiving such notice, each Holder may
make a written request to the Company that any or all of the Holder's
Registrable Securities be included in the Piggy-back Registration, which notice
shall specify the number of shares to be so included. Subject to Section 3(b),
the Company shall include in the Piggy-back Registration (or in a separate
registration statement filed concurrently therewith) all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein within ten days after the receipt by each Holder of the Company's
notice. The Company may in its discretion withdraw any registration statement
filed pursuant to this Section 3(a) subsequent to its filing without liability
to the Holders except with respect to expenses. Any Holder shall be permitted to
withdraw all or part of such Holder's Registrable Securities requested to be
included in a Piggy-back Registration at any time prior to the effective date of
such Piggy-back Registration without any liability for any Registration
Expenses.
(b) Priority on Piggy-back Registration. If any Piggy-back
Registration is to be an underwritten offering, the Company shall use its
commercially reasonable efforts to cause the managing Underwriter or
Underwriters to permit the shares of Registrable Securities requested by the
Holders of Registrable Securities ("Selling Piggyback Holders") to be included
in the Piggy-back Registration (on the same terms and conditions as similar
securities of the Company included therein to the extent appropriate).
Notwithstanding the foregoing, if the managing Underwriter or Underwriters of
such offering advise the Company in writing that, in their good faith judgment,
the number of Registrable Securities and any other securities requested to be
included in such offering is sufficiently large to have a Material Adverse
Effect, then (i) if such Piggy-back Registration is incident to a primary
registration on behalf of the Company, the amount of securities to be included
in the Piggy-back Registration for any Persons other than the Company and the
Selling Piggy-back Holders shall first be reduced, and thereafter the
Registrable Securities to be offered for the account of the Selling Piggy-back
Holders shall be reduced or limited on a Pro Rata Basis so that the total number
of securities to be
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included in the offering shall be the total number of securities recommended by
such managing Underwriter or Underwriters, unless any of the Selling Piggy-back
Holders desires to sell a number of Registrable Securities that is less than the
total pro rata amount that it is entitled to sell, in which event the number of
Registrable Securities not so elected to be sold shall be allocated among the
other Selling Piggy-back Holders on a Pro Rata Basis, and (ii) if such
Piggy-back Registration is incident to a secondary registration on behalf of
holders of securities of the Company (excluding pursuant to Section 2, in which
priority will be governed by Section 2(d)), the Company shall include in such
registration statement (A) first, the number of securities of such Person(s) on
whose behalf the registration is being made (allocated among such Persons as
they may so determine), (B) second, the number of Registrable Securities
requested to be included in such registration pursuant to this Section 3 in
excess of the securities such Persons on whose behalf the registration is being
made propose to sell that, in the good faith judgment of such managing
Underwriters, can be sold without causing a Material Adverse Effect on such
offering, allocated among the Selling Piggy-back Holders on a Pro Rata Basis as
described in clause (i) above and (C) third, the number of securities requested
to be included in such registration by the Company or by other Persons pursuant
to similar piggy-back registration rights (allocated among the Company and such
Persons as they may so determine).
4. HOLDBACK AGREEMENTS.
(a) Restrictions on Sale by Holders of Registrable Securities.
Upon inclusion by the Company of any Holder's Registrable Securities in a
registration statement filed pursuant to Sections 2 or 3, such Holder agrees not
to effect any public sale or distribution of the issue being registered or a
similar security of the Company or any securities convertible into or
exchangeable or exercisable for such securities, including a sale pursuant to
Rule 144 or Rule 144A under the Securities Act, during the 14 days prior to, and
during the 90-day period beginning on, the effective date of such registration
statement (except as part of such registration), if and to the extent requested
by the Company in the case of a non-underwritten public offering or if and to
the extent requested by the managing Underwriter or Underwriters in the case of
an underwritten public offering. Each of Holdings and the Manager acknowledges
that it is subject to certain restrictions on its ability to sell its Common
Shares pursuant to agreements between Holdings and the Manager, respectively,
and the underwriters of the Company's initial public offering, and agrees that
it shall not request any registration of its Registrable Securities pursuant to
the terms hereof until such restrictions have been terminated or waived (the
period during which such restrictions are in effect being herein referred to as
the "Lock-Up Period").
(b) Restrictions on Public Sale by the Company. The Company
agrees (i) that it shall not effect any public or private sale or distribution
of securities of the nature of the Registrable Securities, or any securities
convertible into or exchangeable or exercisable for securities of the nature of
the Registrable Securities (except pursuant to a registration statement on Form
S-4 or S-8 or any successor form that may be adopted by the Commission), during
the 14 days prior to, and during the 90-day period beginning on, the effective
date of any Demand Registration other than a Shelf Registration and
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(ii) that any agreement entered into after the date hereof pursuant to which the
Company agrees to issue any securities, the issuance of which is not registered
under the Securities Act, shall contain a provision under which holders of such
securities agree not to effect any public sale or distribution of any such
securities during the periods described in clause (i) above, including a sale
pursuant to Rule 144 or Rule 144A under the Securities Act; provided, however,
that the provisions of this Section 4(b) shall not prevent the grant of options
or similar rights to employees of the Company pursuant to the Plan and shall not
prevent the exercise, conversion or exchange of any securities pursuant to their
terms into or for other securities.
5. REGISTRATION PROCEDURES.
Subject to the other provisions and limitations contained herein
whenever any Holder has requested that any Registrable Securities be registered
pursuant to Sections 2 or 3, the Company will use its commercially reasonable
efforts to effect the registration and the sale of such Registrable Securities
in accordance with the intended method of disposition thereof as quickly as
practicable, and in connection with any such request, the Company will as
expeditiously as possible:
(a) prepare and file with the Commission a registration
statement on any form for which the Company then qualifies or which
counsel for the Company shall deem appropriate and which form shall be
available for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution
thereof, and use its commercially reasonable efforts to cause such
filed registration statement to become effective under the Securities
Act; provided, however, that, (i) at least five days before filing a
registration statement or prospectus or as promptly as practicable
prior to filing any amendments or supplements thereto, the Company will
furnish to one counsel selected by the Holder or Holders of the
Registrable Securities covered by such registration statement copies of
all such documents proposed to be filed, which documents will be
subject to the review of such counsel and (ii) after the filing of the
registration statement, the Company will promptly notify each such
Holder and such counsel of comments received from, or any stop order
issued or threatened by, the Commission and take all reasonable actions
required to respond to such comments or, as the case may be, prevent
the entry of such stop order or to remove it if it has been entered;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the applicable period required by the terms
hereof, and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
registration statement during such period in accordance with the
intended methods of disposition as set forth in such registration
statement;
(c) furnish to each Holder of Registrable Securities covered
by such registration statement, prior to filing the registration
statement, if requested, copies
REGISTRATION RIGHTS AGREEMENT - PAGE 7
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of such registration statement as proposed to be filed, and thereafter
furnish to each such Holder such number of copies of such registration
statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated or deemed to
be incorporated therein by reference), the prospectus included in such
registration statement (including each preliminary prospectus), and
such other documents as each such Holder may reasonably request in
order to facilitate the disposition of the Registrable Securities owned
by each such Holder;
(d) register or qualify, or file requisite notifications with
respect to the sale of, such Registrable Securities under such other
securities or blue sky laws of such jurisdictions as each Holder of
Registrable Securities covered by such registration statement
reasonably (in light of each such Holder's intended plan of
distribution) requests and do any and all other acts and things which
may be reasonably necessary to enable each such Holder to consummate
the disposition in such jurisdictions of the Registrable Securities
owned by each such Holder and keep each such registration or
qualification (or exemption therefrom) effective during the period such
registration statement is effective; provided, however, that the
Company will not be required to (i) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify
but for this Section 5(d), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction;
(e) use its commercially reasonable efforts to cause such
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of
the business and operations of the Company to enable each Holder of
Registrable Securities covered by the registration statement to
consummate the disposition of such Registrable Securities; provided,
however, that the Company will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 5(e), (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service
of process in any such jurisdiction;
(f) at any time when a prospectus relating to Registrable
Securities is required to be delivered under the Securities Act, (i)
notify each Holder of Registrable Securities covered by the
registration statement of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus, (ii)
prepare and file such supplement, amendment or any other required
document so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and (iii) promptly make available to each such
Holder any such supplement, amendment or other document;
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(g) enter into and perform customary agreements (including an
underwriting agreement in customary form with the managing Underwriter
or Underwriters, if any), use its commercially reasonable efforts to
obtain any necessary consents in connection with any proposed
registration and sale of Registrable Securities, and take such other
actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities;
(h) make available for inspection during business hours on
reasonable advance notice by each Holder of Registrable Securities
covered by the registration statement, any Underwriter participating in
any disposition pursuant to such registration statement, and any
attorney, accountant or other professional retained by any such Holder
or such Underwriter (collectively, the "Inspectors"), all financial and
other records, pertinent corporate documents, and properties of the
Company (collectively, the "Records") as shall be reasonably necessary
to enable them to exercise their due diligence responsibility, and
cause the Company's officers, directors, and employees to supply all
information reasonably requested by any such Inspectors in connection
with such registration statement. Records which the Company determines,
in good faith, to be confidential and which it notifies the Inspectors
are confidential shall not be disclosed by the Inspectors unless (i) in
the reasonable judgment of counsel to the Company the disclosure of
such Records is necessary to avoid or correct a misstatement or
omission in such registration statement or (ii) the release of such
Records is ordered pursuant to a subpoena or other order from a court
of competent jurisdiction. Each Holder agrees that information obtained
by him as a result of such inspections shall be deemed confidential and
shall not be used by him as the basis for any market transactions in
the securities of the Company unless and until such is made generally
available to the public. Each Holder further agrees that he will, upon
learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the
Company, at the Company's expense, to undertake appropriate action to
prevent disclosure of the Records deemed confidential;
(i) if such sale is pursuant to an underwritten offering, use
its commercially reasonable efforts to obtain a comfort letter or
comfort letters from the Company's independent public accountants in
customary form and covering such matters of the type customarily
covered by comfort letters as any Holder of Registrable Securities
covered by the registration statement or the managing Underwriter or
Underwriters may reasonably request;
(j) otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission, and
make available to its security holders as soon as reasonably
practicable, an earnings statement covering a period of 12 months,
beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;
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(k) if requested by the managing Underwriter or Underwriters,
if any, or any Holder of Registrable Securities covered by the
registration statement in connection with an underwritten offering
pursuant to Sections 2 or 3, (i) promptly incorporate in a prospectus
supplement or post-effective amendment such information as the managing
Underwriter or Underwriters, if any, and/or any such Holder reasonably
requests to be included therein, as may be required by applicable laws
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 actions pursuant to
this Section 5(k) that are not, in the reasonable opinion of counsel
for the Company, in compliance with applicable law;
(l) use its commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of a registration
statement filed in connection herewith, or the lifting of any
suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, at the
earliest possible moment;
(m) cooperate with each Holder of Registrable Securities
covered by the registration statement and the managing Underwriters, if
any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold, which certificates or
notes shall not bear any restrictive legends and shall be in a form
eligible for deposit with the transfer agent for the Common Stock; and
enable such Registrable Securities to be in such denominations and
registered in such names as the managing Underwriters, if any, or
holders may request at least two business days prior to any sale of
Registrable Securities; and
(n) take such other actions as are reasonably required in
order to expedite or facilitate the disposition of such Registrable
Securities.
Notwithstanding the provisions of this Section 5, the Company shall be
entitled to postpone, for a reasonable period of time not to exceed 45 days, the
filing or effectiveness of any registration statement under Sections 2 or 3 if
(A) the Company determines, in the good faith exercise of its reasonable
business judgment, that such registration and offering could materially
interfere with or adversely affect bona fide financing, acquisition or other
material business plans of the Company (including a proposed primary offering by
the Company of its own securities) at the time the right to delay is exercised
or would require disclosure of non-public information, the premature disclosure
of which could materially adversely affect the business, properties, operations
or financial results of the Company; provided, however, that the Company shall
not be required to disclose to the Holders requesting registration any such
transaction, plan or non-public information or (B) at any time prior to the
effectiveness of any Demand Registration or Piggy-back Registration the Company
determines that it is unable to comply with the provisions of Article 3 or
Article 11 of Regulation S-X under the Securities Act, to the extent then
applicable to the Company. If the Company postpones the filing or effectiveness
of a
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registration statement pursuant hereto, it shall promptly notify in writing the
Holders of Registrable Securities requesting such registration when the events
or circumstances permitting such postponement have ended and at such time shall
proceed with the filing of the registration statement as requested.
The Company may require each Holder to promptly furnish in writing to
the Company such information regarding the distribution of the Registrable
Securities as the Company may from time to time reasonably request and such
other information as may be legally required in connection with such
registration.
Each Holder requesting registration of Registrable Securities pursuant
to Sections 2 or 3 shall cooperate with the Company and, if applicable, the
Underwriter or Underwriters in providing such information and executing and
delivering such documents as the Company or the Underwriter or Underwriters
reasonably shall request in connection with any such registration, and the
Company shall not be obligated to include in any such registration any
Registrable Securities of any Holder who does not comply with this paragraph.
Each Holder of Registrable Securities covered by a registration
statement agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(f), such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until such Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 5(f), and, if so directed by the Company, such Holder will deliver to
the Company all copies, other than permanent file copies then in such Holder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. If the Company shall give such notice,
the Company shall extend the period during which such registration statement
shall be maintained effective (including the period referred to in Section 5(b))
by the number of days during the period from and including the date of the
giving of notice pursuant to Section 5(f) to the date when the Company shall
make available to such Holder a prospectus supplemented or amended to conform
with the requirements of Section 5(f).
6. REGISTRATION EXPENSES.
In connection with any registration statement required to be filed
hereunder, the Company shall pay the following registration expenses (the
"Registration Expenses"): (a) all registration and filing fees; (b) fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with any blue sky qualifications
of the Registrable Securities); (c) printing expenses (including expenses of
printing certificates for Registrable Securities); (d) internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties); (e) any fees and expenses
incurred in connection with the listing of the Registrable Securities on the
national securities exchange or automated quotation system on which the Common
Shares are listed; (f) reasonable fees and disbursements of counsel for the
Company and customary fees and expenses for independent certified public
accountants retained by the Company (including the costs
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associated with the delivery by independent certified public accountants of a
comfort letter or comfort letters requested pursuant to Section 5(i)); (g) the
reasonable fees and expenses of any special experts or other Persons retained by
the Company in connection with such registration; and (h) messenger, delivery
and telephone expenses related to any registration contemplated hereunder. The
Company shall not have any obligation to pay any underwriting fees, discounts,
or commissions attributable to the sale of Registrable Securities, or any
out-of-pocket expenses of any Holder (or the agents who manage his accounts),
which amounts shall be the responsibility of the selling Holder or Holders.
7. INDEMNIFICATION; CONTRIBUTION.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder of Registrable Securities and, if
applicable, its directors and officers and each Person who controls such Holder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, covered by a registration statement filed pursuant hereto from
and against any and all losses, claims, damages, liabilities and expenses
(including reasonable legal and other costs of investigation and defense)
(collectively, "Losses") arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any such registration
statement or prospectus relating to the Registrable Securities or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such Losses arise out of, or are based upon,
any such untrue statement or omission or allegation thereof based upon
information furnished in writing to the Company by such Holder or on such
Holder's behalf expressly for use therein; provided, however, that with respect
to any untrue statement or omission or alleged untrue statement or omission made
in any preliminary or final prospectus, the indemnity agreement contained in
this Section 7(a) shall not apply to the extent that any such Losses result from
the fact that a current copy of the prospectus was not sent or given to the
Person asserting any such Losses at or prior to the written confirmation of the
sale of the Registrable Securities concerned to such Person if it is determined
that it was the responsibility of such Holder to provide such Person with a
current copy of the prospectus and such current copy of the prospectus would
have cured the defect giving rise to such Losses. The Company also agrees to
indemnify any Underwriters of the Registrable Securities, their officers and
directors, and each Person who controls such Underwriters within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act on
substantially the same basis as the indemnification of Holders provided in this
Section 7(a).
(b) Indemnification by Holders. Each Holder agrees to
indemnify and hold harmless the Company, its directors and officers, and each
Person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act (other than the Holder),
covered by a registration statement filed pursuant hereto from and against any
and all Losses arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any such registration statement
or prospectus relating to the Registrable Securities or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out
REGISTRATION RIGHTS AGREEMENT - PAGE 12
13
of or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only insofar as such Losses arise out of, or are based upon,
any such untrue statement or omission or allegation thereof based upon
information furnished in writing to the Company by such Holder or on such
Holder's behalf, solely in such Holder's capacity as a Holder and not in his
capacity as a trust manager or officer of the Company, as manager of the Company
pursuant to the Management Agreement, or as a director of officer of the
Manager, if applicable, expressly for use therein; provided, however, that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary or final prospectus, the indemnity agreement
contained in this Section 7(b) shall not apply to the extent that any such
Losses result from the fact that a current copy of the prospectus was not sent
or given to the Person asserting any such Losses at or prior to the written
confirmation of the sale of the Common Shares concerned to such Person if it is
determined that it was the responsibility of the Company or any other Person or
entity (other than the Holder) to provide such Person with a current copy of the
prospectus and such current copy of the prospectus would have cured the defect
giving rise to such Losses. Each Holder also agrees to indemnify and hold
harmless underwriters of the Registrable Securities, their officers and
directors, and each Person who controls such underwriters within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act on
substantially the same basis as the indemnification of the Company provided in
this Section 7(b).
(c) Conduct of Indemnification Proceedings. If any action or
proceeding (including any governmental investigation) shall be brought or
asserted against any Person entitled to indemnification under Sections 7(a) or
7(b) (an "Indemnified Party") in respect of which indemnity may be sought from
any party who has agreed to provide such indemnification (an "Indemnifying
Party"), the Indemnified Party shall promptly notify the Indemnifying Party in
writing, and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all expenses. The Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense 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
promptly assume the defense of such action or proceeding and to employ counsel
reasonably satisfactory to the Indemnified Party, (iii) the named parties to any
such action or proceeding (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such Indemnified Party shall
have been advised by counsel that there is a conflict of interest on the part of
counsel employed by the Indemnifying Party to represent such Indemnified Party,
or (iv) the Indemnified Party's counsel shall have advised the Indemnified Party
that there may be defenses available to the Indemnified Party that are different
from or in addition to those available to the Indemnifying Party and that the
Indemnifying Party is not able to assert on behalf of or in the name of the
Indemnified Party (in which case of either (iii) or (iv), 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 or
proceeding on behalf of such Indemnified Party); it being
REGISTRATION RIGHTS AGREEMENT - PAGE 13
14
understood, however, that the Indemnifying Party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (together with appropriate local
counsel) at any time for all such Indemnified Parties, which firm shall be
designated in writing by such Indemnified Parties. The Indemnifying Party shall
not be liable for any settlement of any such action or proceeding effected
without its written consent, which consent shall not be unreasonably withheld,
but if settled with its written consent, or if there be a final judgment for the
plaintiff in any such action or proceeding, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties from and against any loss
or liability (to the extent stated above) by reason of such settlement or
judgment.
(d) Contribution. If the indemnification provided for in this
Section 7 is unavailable to the Indemnified Parties in respect of any Losses
(other than by reason of exceptions provided in Section 7(a) or 7(b)), then each
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 (i) in such proportion as is appropriate to reflect the relative
fault of the Company, on the one hand, and Holders (together with any other
selling shareholders that may be obligated thereon pursuant to similar
indemnification or contribution provisions as contained herein), on the other
hand, with respect to the statements or omissions which resulted in such Losses,
or action in respect thereof, as well as any other relevant equitable
considerations or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect the relative benefits received by the Company, on the one hand, and
Holders (together with any other selling shareholders that may be obligated
thereon pursuant to similar indemnification or contribution provisions as
contained herein), on the other hand, from the offering of the securities
covered by such registration statement. The relative fault of the Company on the
one hand and of Holders (together with any other selling shareholders that may
be obligated thereon pursuant to similar indemnification or contribution
provisions as contained herein) on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by such party, and such party's relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission. The relative benefits received by the Company on the one
hand and Holders (together with any other selling shareholders that may be
obligated thereon pursuant to similar indemnification or contribution provisions
as contained herein) on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company bears to the
total proceeds (net of underwriting discounts and commissions but before
deducting expenses) received by the Holders (together with any other selling
shareholders that may be obligated thereon pursuant to similar indemnification
or contribution provisions as contained herein).
The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if
REGISTRATION RIGHTS AGREEMENT - PAGE 14
15
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to in the immediately preceding subsection.
Notwithstanding the provisions of this Section 7(d), no Holder shall be required
to contribute any amount in excess of the amount by which the total price at
which the securities of such Holder were offered to the public exceeds the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. 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) Survival. The indemnity and contribution agreements
contained in this Section 7 shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement or any underwriting
agreement, (ii) any investigation made by or on behalf of any Indemnified Party
or by or on behalf of the Company and (iii) the consummation of the sale or
successive resale of the Registrable Securities.
8. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
No Holder may participate in any underwritten registration hereunder
unless such Holder (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the Persons or entities entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements, and
other documents reasonably required under the terms of such underwriting
arrangements and this Agreement; provided, however, that no such Holder shall be
required to make any representations or warranties in connection with any such
registration other than representations and warranties as to (i) such Holder's
ownership of its Registrable Securities to be sold or transferred free and clear
of all liens, claims, and encumbrances, (ii) such Holder's power and authority
to effect such transfer and (iii) such matters pertaining to compliance with
securities laws as may be reasonably requested; provided further, however, that
the obligation of such Holder to indemnify pursuant to any such underwriting
arrangements shall be several, not joint and several, among such Holders selling
Registrable Securities, and the liability of each such Holder will be in
proportion to, and provided further that such liability will be limited to, the
net amount received by such Holder from the sale of its Registrable Securities
pursuant to such registration.
9. SPECIAL COVENANT.
The Company covenants that it will file any reports required to be
filed by it under the Securities Act and the Exchange Act, and it will take such
further action that any Holder may reasonably request to enable such Holder to
sell Registrable Securities, from time to time, without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such Rule may be amended from time to time, or (b)
any similar rule or regulation hereafter adopted by the Commission. Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such information and requirements.
REGISTRATION RIGHTS AGREEMENT - PAGE 15
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10. MISCELLANEOUS.
(a) Remedies. In addition to being entitled to exercise all
rights provided herein and granted by law, including recovery of damages, each
Holder will be entitled to specific performance of its rights hereunder. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions hereof and hereby
agrees to waive the defense in any action for specific performance that a remedy
at law would be adequate.
(b) Term. The term hereof shall terminate on the earlier to
occur of (i) the tenth anniversary of the date hereof or (ii) the first date on
which there are no longer any Registrable Securities (the "Term").
(c) No Inconsistent Agreements. The Company will not on or
after the date hereof enter into any agreement with respect to its securities
which is inconsistent with the rights granted to Holders herein or otherwise
conflicts with the provisions hereof.
(d) Amendments and Waivers. The provisions hereof may not be
amended, modified, or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the Company has obtained the
written consent of the Holders.
(e) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or air courier guaranteeing overnight
delivery:
(i) if to Holdings or the Manager, at the most
current address given to the Company in accordance with the provisions
of this Section 10(e)(i), which address initially is:
c/o AMRESCO, INC.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000, XX 342
Xxxxxx, Xxxxx 00000
Attention: President and General Counsel
(ii) if to the Company, at its most current address
and thereafter at such other address as may be designated from time to
time by notice given in accordance with the provisions of this section,
which address initially is:
AMRESCO CAPITAL TRUST
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000, XX 342
Xxxxxx, Xxxxx 00000
Attention: President and General Counsel
REGISTRATION RIGHTS AGREEMENT - PAGE 16
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(f) Successors and Assigns. The Company shall not assign its
rights or obligations hereunder without the prior written consent of the
Holders. Holder may assign their respective rights and obligations hereunder to
Persons to whom they transfer or otherwise assign Registrable Securities. In the
event of any such assignment, such assignees shall be entitled to the rights of
the assignor only to the extent such rights expressly are assigned to such
assignor. Any assignment of rights hereunder in violation of the foregoing shall
be null and void. Subject to the foregoing, this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the Company
(including, without limitation, any successor by operation of law or any
purchaser or acquiror of all or substantially all of the assets of the Company)
and each Holder; provided, however, that any assignee or transferee of
Registrable Securities that is deemed a Holder hereunder shall be entitled to
the rights and benefits afforded such Person hereby only upon such Person's
execution and delivery of an addendum hereto, in form and substance acceptable
to the Company, agreeing to be bound by the duties and obligations of a Holder
hereunder.
(g) Counterparts. This Agreement may be executed in a number
of identical counterparts and it shall not be necessary for the Company and each
Holder to execute each of such counterparts, but when both have executed and
delivered one or more of such counterparts, the several parts, when taken
together, shall be deemed to constitute one and the same instrument, enforceable
against each in accordance with its terms. In making proof of this Agreement, it
shall not be necessary to produce or account for more than one such counterpart
executed by the party against whom enforcement hereof is sought.
(h) Headings. The headings herein are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.
(j) Severability. If any provision hereof is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable; this Agreement shall
be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance from this Agreement.
Furthermore, in lieu of each such illegal, invalid, or unenforceable provision,
there shall be added automatically as a part hereof a provision as similar in
terms to such illegal, invalid, or unenforceable provision as may be possible
and be legal, valid, and enforceable.
(k) Entire Agreement. This Agreement is intended by the
Company and the Holders as a final expression of their agreement and is intended
to be a complete and exclusive statement of their agreement and understanding in
respect of the subject matter
REGISTRATION RIGHTS AGREEMENT - PAGE 17
18
contained herein. This agreement supersedes all prior agreements and
understandings between the Company and the Holders with respect to such subject
matter.
(l) Third Party Beneficiaries. Subject to the terms of Section
10(f), this Agreement is intended for the benefit of the Company and the Holders
and their respective successors and assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.
(m) Attorneys' Fees. In any proceeding brought to enforce any
provision hereof, the successful party shall be entitled to recover reasonable
attorneys' fees in addition to its costs and expenses and any other available
remedy.
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REGISTRATION RIGHTS AGREEMENT - PAGE 18
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY: AMRESCO CAPITAL TRUST
By:
--------------------------------
Title:
-----------------------------
HOLDINGS: AMREIT HOLDINGS, INC.
By:
--------------------------------
Title:
-----------------------------
MANAGER: AMREIT MANAGERS, L.P.
By: AMREIT MANAGERS G.P., INC.,
its General Partner
By:
--------------------------------
Title:
-----------------------------
REGISTRATION RIGHTS AGREEMENT - PAGE 19
