EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 7, 2001
AMONG
MORTGAGEIT, INC.
AND
THE HOLDERS IDENTIFIED ON SCHEDULE A TO
THE SERIES C STOCK PURCHASE AGREEMENT
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of June 7, 2001, (a) Mortgagelt, Inc., a New York corporation
(the "Company"), and (b) the purchasers ("Series C Purchasers") of the Company's
newly issued Series C Convertible Preferred Stock, par value $.01 per share (the
"Series C Preferred Stock"), pursuant to the Series C Preferred Stock Purchase
Agreement (the "Purchase Agreement") among the Company and the purchasers set
forth on Schedule A thereto (each, a "Purchaser" and collectively, the
"Purchasers"). The Purchasers are each a "Holder" and are collectively the
"Holders."
RECITALS
In order to induce the Series C Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide the Series C Purchasers with the
registration rights set forth in this Agreement.
The execution of this Agreement is an express condition to the closings
under the Purchase Agreement.
AGREEMENT:
In consideration of the mutual covenants and premises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, the parties
agree as follows:
Section 1. Definitions.
Capitalized terms not otherwise defined herein shall have the
respective meanings ascribed to them in the Purchase Agreement. As used in this
Agreement, the following capitalized terms shall have the following meanings:
"Affiliate" means a person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, a specified Holder.
"Agreement" means this Registration Rights Agreement, as it
hereinafter may be amended from time to time.
"By-laws" means the Restated By-laws of the Company.
"Certificate of Incorporation" means the Second Restated Certificate
of Incorporation of the Company, as heretofore amended.
"Board of Directors" means the board of directors of the Company as it
is constituted from time to time in accordance with the terms of the Certificate
of Incorporation, the By-laws and the Shareholders' Agreement.
"Closing Date" shall have the meaning set forth in Section 1.2 of the
Purchase Agreement.
"Common Stock" means the Class A Common Stock, par value $0.01 per
share, of the Company.
"Company" shall have the meaning set forth in the Preamble hereof.
"Convertible Securities" means the Series C Preferred Stock.
"Demand Qualifying Shares" means Registrable Securities having an
aggregate offering price of at least $1,000,000.
"Demand Registration" means a registration pursuant to Section 2
hereof.
"Demand Registration Request" shall have the meaning set forth in
Section 2(a) hereof.
"Equity Security" means the Common Stock or any Convertible Security
of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as from time
to time amended.
"Holder" shall have the meaning set forth in the Preamble hereof. A
Holder of Convertible Securities shall be deemed to be the Holder of the Common
Stock into which such Convertible Securities could be converted.
"Indemnified Holder Party" means any Holder of Registrable Securities
and any officer, director, employee, agent or Affiliate of any such holder.
"Initial Public Offering" means the Company's first Underwritten
Offering of its Common Stock.
"Market Deferral Period" shall have the meaning set forth in Section
2(c) hereof.
"Misstatement" means an untrue statement of a material fact or an
omission to state a material fact required to be stated in a Registration
Statement or Prospectus or necessary to make the statements in a Registration
Statement, Prospectus or preliminary prospectus not misleading.
"Other Registrable Securities" means (a) shares of Common Stock issued
or issuable upon conversion of the Company's Series A Convertible Preferred
Stock, par value $.01 per share, or the Company's Series B Convertible Preferred
Stock, par value $.01 per share,
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(b) any securities issued or issuable with respect to such Common Stock referred
to in clause (a) above by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or reorganization and (c) any other securities of the Company owned by Persons
to whom the Company has granted the right to have such securities registered
under the Securities Act. As to any particular Other Registrable Securities,
such securities shall cease to be Other Registrable Securities when (i) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (ii) such securities
shall have been sold pursuant to Rule 144 (or any successor provision) under the
Securities Act or are eligible for sale under Rule 144(k) (or any successor
provision), (iii) such securities shall have been otherwise transferred to a
person who is not an Affiliate or permitted transferee of the Holder, or (iv)
such securities shall have ceased to be outstanding.
"Person" means a natural person, partnership, corporation, limited
liability company, business trust, association, joint venture or other entity or
a government or agency or political subdivision thereof.
"Piggyback Registration" means a registration pursuant to Section 3
hereof.
"Piggyback Registration Request" shall have the meaning set forth in
Section 3(a)(i) hereof.
"Preferred Stock" shall mean the Series C Preferred Stock.
"Prospectus" means the prospectus included in any Registration
Statement, as supplemented by any and all prospectus supplements and as amended
by any and all post-effective amendments and including all material incorporated
by reference in such prospectus.
"Purchase Agreement" shall have the meaning set forth in the Preamble
hereof.
"Purchased Shares" means the Preferred Stock purchased by the
Purchasers pursuant to the Purchase Agreement.
"Purchasers" shall have the meaning set forth in the Preamble hereof.
"Qualifying Holder" means a Holder or Holders of Demand Qualifying
Shares.
"Registrable Securities" means (a) shares of Common Stock issued or
issuable upon conversion of the Preferred Stock and (b) any securities issued or
issuable with respect to such Common Stock referred to in clause (a) above by
way of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or reorganization. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (i) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (ii) such securities shall have been sold pursuant to Rule 144 (or
any successor provision) under the Securities Act or are eligible for sale under
Rule 144(k) (or any successor provision), (iii) such securities shall have been
otherwise
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transferred to a person who is not an Affiliate or permitted transferee of the
Holder, or (iv) such securities shall have ceased to be outstanding.
"Registration" means a Demand Registration or a Piggyback
Registration.
"Registration Expenses" means the out-of-pocket expenses of a
Registration, including:
(i) all registration and filing fees (including, without limitation,
fees with respect to filings required to be made with the
National Association of Securities Dealers);
(ii) fees and expenses of compliance with securities or blue sky laws
(including, without limitation, fees and disbursements of counsel
for the underwriters in connection with blue sky qualifications
of the Registrable Securities and determinations of their
eligibility for investment under the laws of such jurisdictions
as the managing underwriters may designate);
(iii) printing, messenger, telephone and delivery expenses;
(iv) fees and disbursements of counsel for the Company and of not more
than one firm of attorneys for the sellers of the Registrable
Securities;
(v) expenses of the underwriters and fees and disbursements of
counsel for the underwriters, in each case, to the extent
required to be paid pursuant to an underwriting agreement
relating to a Registration;
(vi) fees and disbursements of all independent certified public
accountants of the Company incurred in connection with such
Registration (including the expenses of any special audit and
"cold comfort" letters incident to such registration);
(vii) premiums and other costs of securities acts liability insurance
if the Company so desires or if the underwriters so require; and
(viii) fees and expenses of any other Persons retained by the Company.
"Registration Statement" means any registration statement under the
Securities Act on an appropriate form (to the extent such form shall be
available for the sale of the Registrable Securities in accordance with the
intended method or methods of distribution thereof and shall include all
financial statements required by the SEC to be filed therewith) which covers
Registrable Securities pursuant to the provisions of this Agreement, including
the Prospectus included in such registration statement, amendments (including
post-effective amendments) and supplements to such registration statement, and
all exhibits to and all material incorporated by reference in such registration
statement.
"Securities Act" means the Securities Act of 1933, as from time to
time amended.
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"SEC" means the Securities and Exchange Commission.
"Shareholders' Agreement" means the Second Amended and Restated
Shareholders' Agreement, dated as of the date hereof, among the Company, the
Series A Shareholders, as defined therein, the Series B Shareholders, as defined
therein, the Series C Shareholders, as defined therein, and the Management
Shareholders, as defined therein.
"Underwriters' Commissions" means discounts of and commissions to
underwriters, selling brokers, dealer managers or similar securities
professionals relating to the distribution of the Registrable Securities.
"Underwritten Registration" or "Underwritten Offering" means a
registration in which securities of the Company are sold to an underwriter for
distribution to the public.
Section 2. Demand Registrations.
(a) Timing of Demand Registrations.
Any Qualifying Holder may request in writing that the Company file a
Registration Statement covering the Demand Qualifying Shares (such request, a
"Demand Registration Request"); provided, however, that the Company shall not
be required to effect any Registration in accordance with this Section 2
pursuant to a Demand Registration Request made (i) within six months following
the effective date of any Initial Public Offering or (ii) prior to the second
anniversary of the Closing Date.
(b) Number of Demand Registrations.
The Company shall not be obligated to prepare, file and cause to
become effective more than two Registration Statement pursuant to this Section 2
(excluding Registration Statements on Form S-3, which shall be subject to the
limitation contained in the second to last sentence of this section 2(b));
provided, however, that a Registration Statement shall not be counted as a
Demand Registration hereunder (i) unless it becomes effective and is maintained
effective in accordance with the requirements specified in Section 5 unless (A)
the Company is unable to cause the Registration Statement to become effective or
to maintain its effectiveness solely by reason of an act, omission or refusal to
proceed by the applicable Qualifying Holder (other than a refusal to proceed
based upon the reasonable legal advice of counsel, a brief summary of which
shall be furnished to the Company either orally or in writing) and (B) such
Qualifying Holder shall have failed to pay all Registration Expenses incurred in
connection with such Registration Statement, (ii) if it is a shelf registration
on Form S-3 or any successor form relating to Registrable Securities with an
aggregate offering price of not less than $1 million or (iii) if more than
one-third of the Demand Qualifying Shares requested to be included in a
Registration Statement pursuant to a Demand Registration Request are excluded
from such Registration Statement pursuant to Section 2(e) below. The Company
shall not be obligated to effect, on behalf of the Holders, more than four
Demand Registrations on Form S-3 under this Section 2 during any 12-month
period. There shall be no limit to the total number of non-underwritten
registrations the Company may be required to effect on Form S-3 on behalf of the
Holders.
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(c) Deferral by Company.
Notwithstanding anything in this Section 2 to the contrary, the
Company shall not be obligated to prepare, file and cause to become effective
pursuant to this Section 2 a Registration Statement if the Company furnishes the
applicable Qualifying Holder with a certificate signed by the Chief Executive
Officer of the Company that in the good faith judgment of the Board of Directors
it would be detrimental to the Company or its shareholders for the Company to
comply with the Demand Registration, and it is therefore advisable to defer the
filing of the Registration Statement relating thereto. Any such deferral
("Market Deferral") shall be for a period of not more 180 days after the date of
the related Demand Registration Request (such period, a "Market Deferral
Period"); provided, however, that the Company may not exercise this Market
Deferral more than once in any twelve-month period and may only exercise two
Market Deferrals during the term of this Agreement.
(d) Participation.
The Company shall promptly give written notice to all Holders of
Registrable Securities upon its receipt of a Demand Registration Request. Any
Holder of Registrable Securities other than the Qualifying Holder may, by
written notice to the Company, within 20 days of the Company's notice, elect to
join in the Demand Registration, with respect to any number of shares of
Registrable Securities held by such Holder of Registrable Securities. Subject to
Section 2(e) hereof, the Company shall include in such Demand Registration such
shares of Registrable Securities for which it has received written requests for
registration.
(e) Underwriter's Cutback.
If the offering of Registrable Securities under this Section 2 is an
Underwritten Offering and, in the good faith judgment of the managing
underwriter, the inclusion of all the Registrable Securities and Other
Registrable Securities requested to be registered thereunder would adversely
affect the success of such offering, the number of shares of Registrable
Securities and Other Registrable Securities to be included shall be reduced to
such smaller number not having such effect and the number of shares of
Registrable Securities and Other Registrable Securities to be included in the
Underwritten Offering shall be allocated pro rata among the Holders of
Registrable Securities and the holders of Other Registrable Securities based
upon the number of shares of Registrable Securities and Other Registrable
Securities owned by such holder.
(f) Managing Underwriter.
The managing underwriter or underwriters of any Underwritten Offering
covered by a Demand Registration shall be selected by the Company, subject to
the approval of the Qualifying Holder, which approval shall not be unreasonably
withheld or delayed.
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Section 3. Piggyback Registrations.
(a) Participation.
Each time the Company decides to file a Registration Statement under
the Securities Act (other than registrations on Forms S-4 or S-8 or any
successor form thereto) covering the offer and sale by it or any of its security
holders of any of the Company's securities, the Company shall give written
notice thereof to all Holders of Registrable Securities. Subject to Section
3(b), the Company shall include in such Registration Statement all shares of
Registrable Securities for which it has received a written request within 30
days from such written notice from any Holder (such request, a "Piggyback
Registration Request"). Subject to Section 3(b), if the Registration Statement
is to cover an Underwritten Offering, such Registrable Securities shall be
included in the underwriting on the same terms and conditions as the securities
otherwise being sold through the underwriters. No registration effected under
this Section 3 shall relieve the Company of its obligations to effect the
required registrations under Section 2.
(b) Underwriter's Cutback.
If an offering pursuant to this Section 3 is an Underwritten Offering
and, in the good faith judgment of the managing underwriter, the inclusion of
all or a portion of the shares of Registrable Securities and Other Registrable
Securities requested to be registered would adversely affect the success of such
offering, the number of shares of Registrable Securities and Other Registrable
Securities to be included in the offering shall be reduced to such smaller
number of shares not having such effect or no shares as the managing underwriter
may determine in its good faith judgment, with the participation in such
offering to be in the following order of priority: (i) first, the shares of
Common Stock that the Person(s) initiating the registration (which may be the
Company) propose(s) to sell for their own account, and (ii) second, any
remainder shall be allocated pro rata among the Company and other Persons, if
any, entitled to incidental registrations, with respect to all shares of their
Common Stock, based upon, in the case of the Company, the number of shares of
Common Stock sought to be registered by it, and in the case of any Holder, the
number of shares of Common Stock owned by it.
(c) Company Control.
The Company may decline to file a Registration Statement set forth in
Section 3 hereof upon the good faith determination of the Company's Board of
Directors after giving notice to Holders of Registrable Securities pursuant to
Section 3(a) above, or withdraw a Registration Statement after filing and after
such notice, but prior to the effectiveness thereof; provided, that the Company
shall promptly notify each Holder of Registrable Securities in writing of any
such action and the Company shall bear all Registration Expenses incurred by
each such Holder.
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Section 4. Hold-Back Agreements.
(a) By Holders of Registrable Securities
Upon the written request of the managing underwriter of any
Underwritten Offering of the Company's securities, a Holder of Registrable
Securities shall not sell or otherwise dispose of any Registrable Securities
(other than those included in such registration) without the prior written
consent of the managing underwriter for a period (not to exceed ten (10) days
prior to the effective date thereof and one hundred twenty (120) days after such
effective date) that the managing underwriter reasonably determines is necessary
in order to effect the Underwritten Offering; provided, that the officers and
directors of the Company shall have entered into substantially similar holdback
agreements with such managing underwriter covering at least the same period.
(b) By the Company and Others.
The Company agrees not to effect any public or private sale or
distribution of its Equity Securities during the thirty (30) day period prior
to, and during the sixty (60) day period after, the effective date of each
Underwritten Offering made pursuant to a Demand Registration or a Piggyback
Registration, if so requested in writing by the managing underwriter (except as
part of such Underwritten Offering or pursuant to registrations on Forms S-4 or
S-8 or any successor forms thereto).
Section 5. Registration Procedures.
In connection with the Company's registration obligations under
Section 2, the Company will use all commercially reasonable efforts to effect
the registrations to permit the sale of such Registrable Securities in
accordance with the intended plan of distribution thereof. With respect to both
Demand Registrations and Piggyback Registrations (except as otherwise
specifically provided), the Company will as expeditiously as practicable:
(a) prepare and file with the SEC as soon as practicable a
Registration Statement with respect to such Registrable Securities and use all
commercially reasonable efforts to cause such Registration Statement to become
effective within ninety (90) (unless it is a Registration Statement on Form S-1
or SB-2, then one hundred twenty (120) days) of the date of the Demand
Registration Request and remain continuously effective until the earlier of (i)
the date six (6) months from the date such Registration Statement was declared
effective, and (ii) the date the last of the Registrable Securities covered by
such Registration Statement have been sold; provided, that before filing a
Registration Statement or Prospectus or any amendments or supplements thereto,
the Company shall furnish to Holders of Registrable Securities covered by such
Registration Statement and the underwriters, if any, draft copies of all such
documents proposed to be filed, which documents will be subject to the review of
such Holders and such underwriters, and the Company shall not file any
Registration Statement or amendment thereto or any Prospectus or any supplement
thereto to which any of such Holders of Registrable Securities or the
underwriters, if any, shall reasonably object;
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(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement, and such supplements to the
Prospectus, as may be reasonably requested by any underwriter of Registrable
Securities or as may be required, in the opinion of the Company and its counsel,
by the rules, regulations or instructions applicable to the registration form
used by the Company or by the Securities Act or rules and regulations thereunder
to keep the Registration Statement effective until all Registrable Securities
covered by such Registration Statement are sold in accordance with the intended
plan of distribution set forth in such Registration Statement or supplement to
the Prospectus;
(c) promptly following its actual knowledge thereof notify the selling
Holders of Registrable Securities and the managing underwriter, if any, and (if
requested by any such Person) confirm such advice in writing,
(i) when the Prospectus or any supplement or post-effective
amendment has been filed, and, with respect to the Registration Statement
or any post-effective amendment, when the same has become effective,
(ii) of any written request by the SEC for amendments or
supplements to the Registration Statement or the Prospectus or for
additional information,
(iii) of the issuance by the SEC or any other governmental
authority of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose,
(iv) if at any time the representations and warranties of the
Company contemplated by clause (i) of paragraph (l) below cease to be
accurate in all material respects,
(v) of the receipt by the Company of any written notification
with respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, and
(vi) of the existence of any fact which results in the
Registration Statement, the Prospectus or any document incorporated therein
by reference containing a Misstatement;
(d) make all commercially reasonable efforts to obtain the withdrawal
of any order suspending the effectiveness of the Registration Statement at the
earliest practicable time;
(e) furnish to each selling Holder of Registrable Securities and the
managing underwriter, without charge, one copy of the signed Registration
Statement including any supplements and post-effective amendments thereto,
including financial statements and schedules, all documents incorporated therein
by reference and all exhibits (including those incorporated by reference);
(f) deliver to each Holder of Registrable Securities (on behalf of
each selling Holder of Registrable Securities) and the underwriters, if any,
without charge, as many copies of each Prospectus (and each preliminary
prospectus) as such Persons may reasonably request (the
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Company hereby consenting to the use of each such Prospectus (or preliminary
prospectus) by each of the selling Holders of Registrable Securities and the
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Prospectus (or preliminary prospectus));
(g) use all commercially reasonable efforts to register or qualify or
cooperate with the selling Holders of Registrable Securities, the underwriters,
if any, and their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as such Holders or such
underwriters may reasonably request in writing; provided, however, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which would
subject it to general service of process in any such jurisdiction where it is
not then so subject;
(h) cooperate with the selling Holders of Registrable Securities and
the managing underwriter, if any, to facilitate the timely preparation and
delivery of certificates not bearing any restrictive legends representing the
Registrable Securities to be sold and cause such Registrable Securities to be in
such denominations and registered in such names as the managing underwriter may
request at least three business days prior to any sale of Registrable Securities
to the underwriters;
(i) use all commercially reasonable efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof or the underwriters, if any, to
consummate the disposition of such Registrable Securities;
(j) if the Registration Statement or the Prospectus contains a
Misstatement, prepare a supplement or post-effective amendment to the
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, the Prospectus will
not contain a Misstatement;
(k) use all commercially reasonable efforts to cause all Registrable
Securities covered by the Registration Statement to be listed on any national
securities exchange or approved on the Nasdaq Stock Exchange on which the
Company's Common Stock is listed or authorized for quotation;
(l) enter into such customary and reasonable agreements (including an
underwriting agreement) and take all other actions necessary in order to
expedite or facilitate the disposition of such Registrable Securities, and in
such connection, whether or not the registration is an Underwritten
Registration:
(i) make such representations and warranties to the Holders of
such Registrable Securities and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to holders and
underwriters, respectively, in similar Underwritten Offerings;
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(ii) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriter, if any, and each
Holder (on behalf of itself and all permitted assignees who are Holders of
Registrable Securities)) addressed to each selling Holder of Registrable
Securities and the underwriter, if any, covering the matters customarily
covered in opinions delivered to holders and underwriters, respectively, in
similar Underwritten Offerings and such other matters as may be reasonably
requested by any such Holder or such underwriters;
(iii) obtain "cold comfort" letters and updates thereof from the
Company's independent certified public accountants addressed to the selling
Holders of Registrable Securities and the underwriters, if any, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters to holders and underwriters,
respectively, in connection with similar Underwritten Offerings; and
(iv) if an underwriting agreement is entered into, cause the same
to include customary indemnification and contribution provisions and
procedures with respect to such underwriters.
The Company shall take the above actions at each closing under such underwriting
or similar agreement or as and to the extent otherwise reasonably requested by
each Holder of Registrable Securities (on behalf of itself and all permitted
assignees who are Holders of Registrable Securities);
(m) otherwise use all commercially reasonable efforts to comply with
all applicable rules and regulations of the SEC relating to such Registration,
and make generally available to its security holders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act, no later than
45 days after the end of any 12 month period (or 90 days, if such period is a
fiscal year) commencing at the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in an Underwritten Offering, or, if not sold
to underwriters in such an offering, beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
Registration Statement, which statements shall cover such twelve (12) month
period; and
(n) upon reasonable notice and at reasonable times during normal
business hours, make available for inspection by a representative of the Holders
who are selling shareholders in the Registration Statement, any underwriter
participating in any disposition of Registrable Securities and any attorney or
accountant retained by such Holders or any underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the officers, directors and employees of the Company to supply all information
reasonably requested by any such representative, underwriter, attorney or
accountant in connection with such Registration Statement, provided, however,
that any records, information or documents that are designated by the Company in
writing as confidential at the time of delivery of such records, information or
documents will be kept confidential by those persons.
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Section 6. Registration Expenses.
(a) Demand Registrations.
The Company shall bear all Registration Expenses incurred in
connection with any Demand Registration, and of any Registrations which do not
become or are not maintained effective in accordance with the requirements
specified in Section 5; provided, however, that the Underwriters' Commissions
incurred in connection with a Demand Registration that becomes effective shall
be shared pro rata by the Holders of the Registrable Securities whose
Registrable Securities are included in such Registration based upon the
aggregate amount of Registrable Securities sold by each such Holder.
(b) Piggyback Registrations.
The Company shall bear all Registration Expenses incurred in
connection with any Piggyback Registrations, except that each Holder of the
Registrable Securities whose Registrable Securities are included in such
Registration shall pay its pro rata share of the Underwriters' Commissions
incurred in such Registration based upon the aggregate amount of Registrable
Securities sold by each such Holder.
(c) Company Expenses.
The Company also will, in any event, pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with any listing of the
securities to be registered on a securities exchange, and the fees and expenses
of any Person, including special experts, retained by the Company.
Section 7. Indemnification.
(a) Company Indemnification.
The Company shall indemnify and hold harmless each Indemnified Holder
Party against any losses, claims, damages, liabilities or expenses (including
reasonable attorneys fees and disbursements) (collectively, "Losses") to which
such Indemnified Holder Party may become subject under the Securities Act or any
other applicable law, insofar as such Losses (or actions in respect thereof)
arise out of or are based upon (i) any alleged untrue statement of any material
fact contained, on the effective date thereof, in any Registration Statement
under which securities were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, or (ii) any alleged omission to state therein a material fact required
to be stated or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses are caused by
any such actual or alleged untrue statement or omission so made in strict
conformity with information furnished in writing to the Company by such
Indemnified Holder Party expressly for use therein.
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(b) Holder Indemnification.
In connection with any Registration Statement in which a Holder of
Registrable Securities is participating, such Holder will, severally but not
jointly, indemnify and hold harmless the Company, its directors and officers and
each Person, if any, who controls the Company within the meaning of the
Securities Act (collectively, "Company Indemnified Party") against any Losses to
which the Company or any Company Indemnified Party may become subject, insofar
as such Losses (or actions in respect thereof) arise out of or are based upon
information in writing furnished to the Company by such Holder of Registrable
Securities expressly for use in (and such information is contained in) any
registration statement under which securities were registered under the
Securities Act at the request of such Holder of Registrable Securities, any
preliminary prospectus or final prospectus contained therein or any amendment or
supplement thereto. Notwithstanding the provisions of this paragraph (b) or
paragraph (c) below, no Holder of Registrable Securities shall be required to
indemnify any Person pursuant to this Section 7 or to contribute pursuant to
paragraph (c) below in an amount in excess of the amount of the aggregate net
proceeds received by such Holder of Registrable Securities in connection with
any such registration under the Securities Act.
(c) Contribution.
If the indemnification provided for in this Section 7 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any Losses, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions, statements or omissions
which resulted in such Losses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the Losses shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection
with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
1l(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
Section 8. Exchange Act Reporting Requirements.
On or prior to the effective date of the IPO, the Company shall
register the Common Stock under Section 12 of the Exchange Act and shall
thereafter (whether or not it shall then be required to do so) use commercially
reasonable efforts to timely file such information,
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documents and reports as the SEC may require or prescribe under Section 13 or
15(d) (whichever is applicable) of the Exchange Act. In addition, the Company
shall use all commercially reasonable efforts to file such other information,
documents and reports, as shall hereafter be required by the SEC as a condition
to the availability of Rule 144 under the Securities Act (or any successor
provision) and the use of Form S-3.
The Company shall forthwith upon reasonable request furnish any Holder
of Registrable Securities (a) a written statement by the Company that it has
complied with such reporting requirements, (b) a copy of the most recent annual
or quarterly report of the Company, and (c) such other reports and documents
filed by the Company with the SEC as such Holder may reasonably request in
availing itself of an exemption for the sale of Registrable Securities without
registration under the Securities Act pursuant to Rule 144 thereunder.
Section 9. Requirements for Participation in Underwritten Offerings.
No Person may participate in any Underwritten Offering pursuant to a
Registration hereunder unless such Person (a) agrees to sell such Person's
securities on the basis provided in any underwriting arrangements approved by
the Persons 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.
Section 10. Suspension of Sales.
Upon receipt of written notice from the Company that a Registration
Statement or Prospectus contains a Misstatement, each selling Holder of
Registrable Securities shall forthwith discontinue disposition of Registrable
Securities until such Holder has received copies of the supplemented or amended
Prospectus required by Section 5 hereof, or until such Holder is advised in
writing by the Company that the use of the Prospectus may be resumed, and, if so
directed by the Company, such Holder shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. The Company shall use its best
efforts (without the expenditure of material funds) to minimize the length of
such suspension of sales. The period of time specified in Section 5(a) shall be
extended for the period of such suspension.
Section 11. Transfer of Registration Rights.
Neither this Agreement nor any of the rights or obligations hereunder
may be assigned (including any assignment by operation of law) by the Company
without the prior written consent of the Holders, which consent will not be
unreasonably withheld. Each Holder of Registrable Securities may assign its
rights and obligations hereunder to any Person to which the applicable
Registrable Securities are assigned, subject to compliance, as applicable, with
the terms of the Shareholders' Agreement. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns including any person to whom Registrable
Securities are transferred and any person with whom the Company may merge and no
other Person shall have any right, benefit or obligation hereunder.
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The Company shall be given written notice by the applicable Holder of
Registrable Securities at the time of any such transfer of such securities by
such Holder permitted by the Shareholders' Agreement stating the name and
address of the transferee, including a writing by such transferee to the effect
that such transferee agrees to be bound by the terms hereof and identifying the
securities with respect to which the rights hereunder are being transferred.
Section 12. Miscellaneous.
(a) Remedies.
Each Holder of Registrable Securities, in addition to being entitled
to exercise all rights provided herein and granted by law, including recovery of
damages, shall be entitled to specific performance of its rights under this
Agreement. 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
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements.
The Company shall not, on or after the date of this Agreement, enter
into any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders of Registrable Securities in this Agreement, or
conflicts with the provisions hereof. For so long as the holders of the
Company's Series C Preferred Stock own at least 25% of the outstanding Series C
Preferred Stock, the Company shall not grant any holder of securities of the
Company registration rights that are prior to the rights granted to the Holders
in this Agreement.
(c) 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 unless the Company has
obtained the prior written consent of each Holder. The foregoing
notwithstanding, a waiver or consent to departure from the provisions hereof
that relates exclusively to the rights of Holders of Registrable Securities
whose shares are being sold pursuant to a Registration Statement and that does
not directly or indirectly affect the rights of other Holders of Registrable
Securities may be given by the Holders of two-thirds of the shares of
Registrable Securities being sold pursuant to such Registration Statement.
(d) Notices.
Unless otherwise provided herein, any notice, request, instruction or
other document to be given hereunder by any party to the other shall be in
writing and delivered by hand-delivery, registered first-class mail, return
receipt requested, facsimile or air courier guaranteeing overnight delivery, as
follows:
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If to the Company: MortgageIT, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chief Executive Officer
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
With a copy to: Jenkens & ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
The Chrysler Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
If to a Holder: To the address for such Holder set forth on Schedule A
to the Purchase Agreement
or to such other place and with such other copies as any party may designate as
to itself by written notice to the other. All such notices, requests,
instructions or other documents shall be deemed to have been duly given at the
time delivered by hand, if personally delivered, four (4) business days after
being deposited in the mail, postage prepaid, if mailed as aforesaid, when
receipt is acknowledged by addressee, if by facsimile, or on the next business
day, if timely delivered to an air courier guaranteeing overnight delivery.
(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) Headings.
The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law.
This Agreement shall be governed by and construed, interpreted and the
rights of the parties determined in accordance with the internal laws of the
State of New York, without regard to the conflict of law principles thereof
(other than the choice of law principles set forth in Section 5-1401 of the
General Obligation Law of the State of New York), except with respect to matters
of law concerning the internal corporate affairs of any corporate entity which
is a party to or the subject of this Agreement, and as to those matters the law
of the jurisdiction under which the respective entity derives its powers shall
govern.
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(h) Severability.
In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
(i) Forms.
All references in this Agreement to particular forms of Registration
Statements are intended to include all successor forms which are intended to
replace, or to apply to similar transactions as, the forms herein referenced.
(j) Entire Agreement.
This Agreement is intended by the parties as the final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein or therein with
respect to the registration rights granted by the Company with respect to the
securities sold pursuant to the Purchase Agreement. This Agreement supersedes
all prior agreements and understandings between the parties with respect to such
subject matter (including any prior agreements and understandings with respect
to registration rights regarding the Preferred Stock), other than agreements
that grant registration rights with respect to Other Registrable Securities.
[The next page is the signature page]
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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed as of the day and year first written above.
MORTGAGEIT, INC.
By:
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman, Chief Executive Officer
and Secretary
ING (U.S.) CAPITAL LLC
By:
-----------------------------------------
Name:
Title:
[Additional signature pages follow]
MortgageIT, Inc. -- Registration Rights Agreement -- Signature Page
S-1