REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"),
dated December 31, 1996, is made by and between Homeplex Mortgage Investments
Corporation, a Maryland corporation (the "Company"), and William W. Cleverly
(the "Holder").
The Company and the Holder agree as follows:
1. Shares. As used herein, the term "Shares" shall mean the
shares of common stock, $.01 par value, of the Company, acquired by the Holder
pursuant to that certain Agreement and Plan of Reorganization (the "Merger
Agreement") among the Company, Monterey Homes Construction II, Inc.; Monterey
Homes Arizona II, Inc. and the Monterey Shareholders (as defined therein) dated
September 13, 1996 (including the Contingent Stock (as defined in the Merger
Agreement) and underlying that certain Stock Option Agreement by and between the
Company and the Holder dated December 31, 1996 (the "Option Shares") and any
securities issued to Holder as a dividend or distribution in respect of or in
exchange for such shares, whether by reclassification, stock split, reverse
stock split or otherwise) until their sale under this Agreement or in accordance
with Rule 144 (or any similar provision then in force) under the Securities Act
of 1933, as amended (the "Securities Act").
2. Demand Registration. (a) Subject to the provisions of
Section 2(b)
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hereof, the Holder may at any time after the first anniversary of the date of
this Agreement make up to two written requests to the Company for registration
under Form S-3 (or such other appropriate or successor form if Form S-3 is not
available) and in accordance with the provisions of Rule 415 promulgated under
the Securities Act of all or a portion of his Shares. The Company shall prepare
and file with the Securities and Exchange Commission (the "SEC") a registration
statement on Form S-3 (or such other appropriate or successor form if Form S-3
is not available) under the Securities Act covering such Shares, shall use its
best efforts to cause such registration statement to become effective within
ninety (90) days of the Holder's request and shall file such post-effective
amendments to such registration statement in order for it to remain effective
without lapse until the sale of all the Shares and shall qualify such offering
under applicable blue sky or state securities laws.
(b) Notwithstanding delivery of any written request referred
to in Section 2(a), the Company will have the prior right at any time to conduct
public offerings of its common stock for its corporate purposes and may preempt
any pending demand registration, in which case Section 3 will apply to the
offering. Under these circumstances, the Company will not be obligated to effect
the requested demand registration under this Section 2 and such previously
requested registration will not count as a demand registration under Section
2(a). In addition, if, prior to the time a written request is delivered under
Section 2(a), the Company has given written notice pursuant to Section 3(a) of
its intention to file a registration statement, the Company shall not be
obligated to cause the requested
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demand registration to become effective until 120 days after the effective date
of such registration statement or until the Company ceases to diligently pursue
the preparation, filing and effectiveness of such registration statement.
(c) The Company shall file a registration statement on Form
S-8 with respect to the Option Shares promptly after the date hereof and shall
use its best efforts to cause such registration statement to remain effective
until the related stock options have been exercised or expired.
(d) The Company shall pay the expenses described in Section 6
for the registration pursuant to this Section 2.
3. Incidental Registration Rights. (a) If at any time the
Company shall determine to proceed with the preparation and filling of a
registration statement under the Securities Act in connection with the proposed
offer and sale of any of its securities by it or any of its security holders
(other than a registration statement on Form S-4, S-8 or other limited purpose
form), the Company will give written notice of its determination to the Holder.
Upon the written request from the Holder, within ten (10) days after receipt of
any such notice from the Company, the Company will, subject to the provisions of
Section 3(b), include all Shares requested by the Holder in such registration
statement (and any related qualification under blue sky or state securities
laws); provided, however, that nothing herein shall prevent the Company from, at
any time, abandoning or delaying any registration under
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this Section 3. If any registration pursuant to this Section 3 shall be
underwritten in whole or in part, the Company shall require that the Shares
requested for inclusion pursuant to this Section 3 be included in the
underwriting on the same terms and conditions, including lock-up provisions, as
the securities otherwise being sold through the underwriters.
(b) Notwithstanding the foregoing, if the managing underwriter
determines and advises that the inclusion of the Shares proposed to be included
in the underwritten public offering, together with any other issued and
outstanding securities proposed to be included therein by holders of securities
other than the Holder who have registration rights which are pari passu to the
Holder, would interfere with the successful marketing of such securities, then
the number of such Shares that the managing underwriter believes may be sold in
such underwritten public offering shall be allocated for inclusion in the
registration statement in the following order of priority: (i) first, the
securities being offered by the Company, and (ii) secondly, the number of Shares
then owned by the Holder and other holders entitled to participate therein who
have registration rights which are pari passu to the Holder on a pro rata basis
or such other basis as they shall have agreed.
(c) The Company shall pay the expenses described in Section 6
for registration statements filed pursuant to this Section 3.
4. Registration Procedures. If and whenever the Company is
required by the provisions of Section 2 or 3 to effect the registration of
Shares under the Securities
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Act, the Company will:
(a) prepare and file with the SEC a registration statement
with respect to such securities, and use its best efforts to cause such
registration statement to become and remain effective for such period as may be
reasonably necessary to effect the sale of such securities (the "Effective
Period").
(b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective for the Effective
Period as may be reasonably necessary to effect the sale of such securities.
(c) furnish to the Holder and to the underwriters for the
securities being registered, such reasonable number of copies of the
registration statement, preliminary prospectus, final prospectus and such other
documents as the Holder and such underwriters may reasonably request in order to
facilitate the public offering of such securities.
(d) use its best efforts to register or qualify the Shares
covered by such registration statement under such state securities or blue sky
laws of such jurisdictions as the Holder may reasonably request in writing
within ten (10) days following the original filing of such registration
statement, except that the Company shall not for any purpose be required to
execute a general consent to service of process or to qualify to do business as
a foreign corporation in any jurisdiction wherein it is not so qualified or
subject itself to
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taxation in a jurisdiction where it had not previously been subject to taxation,
or take any other action that would subject the Company to service of process in
a lawsuit other than one arising out of the registration of the Shares.
(e) notify the Holder, promptly after it shall receive notice
thereof, of the time when such registration statement has become effective or a
supplement to any prospectus forming a part of such registration statement has
been filed.
(f) notify the Holder promptly of any request by the SEC for
the amending or supplementing of such registration statement or prospectus or
for additional information.
(g) prepare and promptly file with the SEC and promptly notify
the Holder of the filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at any time when a prospectus relating to such securities is
required to be delivered under the Securities Act, any event shall have occurred
as the result of which any such prospectus or any other prospectus as then in
effect would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading; and
(h) advise the Holder, promptly after it shall receive notice
or obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the
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effectiveness of such registration statement or the initiation or threatening of
any proceeding for that purpose and promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order should
be issued.
5. Underwriting. The Holder agrees that any demand
registration involving the issuance of Common Stock by the Company will, at the
Company's option, be effected pursuant to an underwritten public offering. The
Holder will select the book-running managing underwriter and any additional
investment bankers and managers to be used in connection with the demand
registration, provided that such underwriter and additional investment bankers
and managers are reasonably acceptable to the Company and that the underwriting
discounts, fees, discounts and any other compensation proposed to be charged by
such persons is competitive with that obtainable from other underwriters,
bankers and managers of comparable quality and reputation. The Holder may not
participate in an incidental registration hereunder unless such Holder (a)
agrees to sell the Shares on the basis provided in the underwriting
arrangements, if any, 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, if any, and these
registration rights.
6. Expenses. (a) With respect to any registration requested
pursuant to Section 2 hereof, and with respect to an inclusion of Shares in a
registration statement
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pursuant to Section_3 hereof, all fees, costs and expenses of such registration,
inclusion and public offering (as further specified in paragraph (b) below)
shall be borne by the Company; provided, however, that the Holder shall bear the
underwriting discounts and commissions and transfer taxes in respect of the sale
of his Shares.
(b) The fees, costs and expenses of registration to be borne
by the Company as provided in Section 6(a) above shall include, without
limitation, all registration, filing, and NASD fees, printing expenses, fees and
disbursements of legal counsel and accountants for the Company and all legal
fees and disbursements and other expenses of complying with state securities or
blue sky laws of any jurisdictions in which the securities to be offered are to
be registered and qualified.
7. Indemnification. (a) The Company will indemnify and hold
harmless the Holder and any underwriter (as defined in the Securities Act) for
the Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act, from and against and will reimburse
the Holder and each such underwriter and controlling person with respect to, any
and all loss, damage, liability, cost and expense to which the Holder or any
such underwriter or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, damages, liabilities, costs or
expenses are caused by any untrue statement or alleged untrue statement of any
material fact contained in such registration statement, any prospectus contained
therein or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to
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state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, damage, liability, cost or expenses
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission so made in conformity with information furnished
in writing by the Holder, such underwriter or such controlling person
specifically for use in the preparation thereof. The Company will not be subject
to any liability for any settlement made without its consent, which consent
shall not be unreasonably withheld.
(b) The Holder will indemnify and hold harmless the Company,
its directors and officers, any controlling person and any underwriter thereof
from and against, and will reimburse the Company, its directors and officers,
any controlling person and any underwriter thereof with respect to, any and all
loss, damage, liability, cost or expense to which the Company or any controlling
person and/or any underwriter thereof may become subject under the Securities
Act or otherwise, insofar as such losses, damages, liabilities, cost or expenses
are caused by any untrue statement or alleged untrue statement of any material
fact contained in such registration statement, any prospectus contained therein
or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or
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necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was so made in reliance upon and in conformity with information
furnished in writing by or on behalf of the Holder specifically for use in the
preparation thereof. The Holder will not be subject to any liability for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
(c) Promptly after receipt by an indemnified party pursuant to
the provisions of paragraph (a) or (b) of this Section 6 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
(a) or (b), promptly notify the indemnifying party of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than
hereunder, except to the extent that such omission materially and adversely
affects the indemnifying party's ability to defend against or compromise such
claim. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that
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if the defendants in any action include both the indemnified party and the
indemnifying party and there are legal defenses available to the indemnified
party and/or other indemnified parties which are different from or in addition
to those available to the indemnifying party, or if there is a conflict of
interest which would prevent counsel for the indemnifying party from also
representing the indemnified party, the indemnified party or parties shall have
the right to select separate counsel to participate in the defense of such
action on behalf of such indemnified party or parties. After notice from the
indemnifying party to an indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party pursuant to the provisions of said paragraph (a) or (b) for any legal or
other expense subsequently incurred by such indemnified party in connection with
the defense thereof other than costs of investigation, unless (i) the
indemnified party shall have employed counsel in accordance with the provisions
of the preceding sentence, (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after the notice of the commencement of the action or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party.
(d) If for any reason the foregoing indemnification is
unavailable, or is insufficient to hold harmless an indemnified party, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses,
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claims, damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and the
indemnified party on the other in connection with the statement or omission
which resulted in the losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. No person guilty of fraudulent
misrepresentations (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.
8. Miscellaneous.
(a) Notices. Any notice or other communications required or
which may be given hereunder shall be in writing and shall be delivered
personally, or telegraphed, telexed or telecopied, or sent by certified,
registered or express mail postage prepaid, and shall be given when so delivered
personally, or telegraphed, telexed or telecopied, or if mailed, two days after
mailing, as follows (or to such other address as any party may from time to time
specify in writing pursuant to the notice provisions hereof):
If to the Company:
Homeplex Mortgage Investments Corporation
5333 North Seventh Street, Suite 219
Phoenix, Arizona 85014
Fax: (602) 230-1690
Attention: Corporate Secretary
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If to the Holder:
William W. Cleverly
5627 N. Casa Blanca Road
Paradise Valley, Arizona 85253
(b) Entire Agreement. This Agreement contains the entire
agreement between the Company and the Holder, in respect of the subject matter
hereof, and supersedes all prior agreements, written or oral, with respect
thereto.
(c) Amendment. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and any term or condition hereof may
be waived, only by a written instrument executed by the Company and the Holder,
in the case of a waiver, by the party waiving compliance. No delay by any party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any right, power or
privilege hereunder, nor any single or partial exercise of any right, power or
privilege hereunder, preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies that any party may otherwise have at law or in equity.
(d) Governing Law. This Agreement is made in, and shall be
governed by and construed in accordance with, the laws of the State of Arizona,
without
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giving effect to the provisions thereof pertaining to conflicts and choices of
law.
(e) Successors and Assigns. This agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties; notwithstanding the foregoing, neither party shall assign its rights,
duties or obligations under this Agreement to any other person, without the
other party's express written consent, except that the Holder may assign the
benefits of this Agreement to any member of the Holder's "immediate family" as
such term is defined in Rule 16a-1(e) or any trust, partnership or other entity
created for the benefit of such persons or to any other transferee of more than
150,000 shares prior to giving effect to the contemplated reverse stock split of
the Company as set forth in the Merger Agreement.
(f) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
HOMEPLEX MORTGAGE
INVESTMENTS CORPORATION
By: /s/ Jay R. Hoffman
......................................
Name: Jay R. Hoffman
Title: President
HOLDER
/s/ William W. Cleverly
.........................................
William W. Cleverly
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