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EXHIBIT 4.2
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
This
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT (this "Agreement"),
dated
as of May 13, 2004, is by and between Manufactured Home
Communities, Inc., a
Maryland corporation (the "Company"), MHC Operating Limited
Partnership, an
Illinois limited partnership (the "Partnership"), and Monte Vista,
LLC (the
"Investor"). For the purposes of this Agreement, the term Investor
shall be
deemed to include any Holder.
RECITALS
A.
Pursuant to that certain Subscription Agreement dated as of the
date
hereof and executed by the Investor (the "Subscription Agreement"),
Investor is
acquiring limited partnership interests in the Partnership known
as, and
hereinafter referred to as, "OP Units", which are in turn
exchangeable for
either common shares of the Company, par value $.01 per share (the
"Common
Shares" or "Shares") or cash; and
B. The
Investor is willing to enter into the agreements contained
herein
as a condition to the Partnership's issuance of the OP Units to
Investor.
THEREFORE,
in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto agree as follows:
1.
Registration Rights.
In connection with the issuance of Registrable Shares (as defined
in
Section 10 below) of the Company upon exchange by Investor of the
OP Units
pursuant to the terms of the Second Amended and Restated MHC
Operating Limited
Partnership Agreement of Limited Partnership dated as of March 15,
1996 (as
amended from time to time in accordance thereof, the "OP
Partnership
Agreement"), Investor shall be entitled to registration of the
Registrable
Shares under the Securities Act of 1933, as amended (the
"Securities Act"),
subject to the terms and conditions set forth herein (the
"Registration
Rights").
(a) Shelf Registration. Subject to Section 1(c) below, at any
time
after the
date which is ninety days prior to the expiration of the
Lock-up
Period (as
defined in Section 6 hereof), upon written request of the
Investor
(the "Demand Date"), the Company shall file with the Securities
and
Exchange Commission (the "SEC") a shelf registration statement
("Registration Statement") and related prospectus ("Prospectus")
that
comply in
all material respects with applicable SEC rules providing for
registration under the Securities Act of the total number of
Registrable
Shares
that the Investor would own if it were to redeem all OP Units
issuable
to it (a "Shelf Registration"). The Company shall use its best
efforts to
cause the Registration Statement to be declared effective under
the
Securities Act not later than ninety (90) days after the Demand
Date
(including
filing with the Commission a request for acceleration of
effectiveness in accordance with Rule 461 promulgated under the
Securities
Act within
five (5) business days of the date that the Company is notified
(orally or
in writing, whichever is earlier) by the Commission that a
Registration Statement will not be "reviewed," or not be
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subject to
further review. The Company will use its best efforts to keep
the
Registration Statement continuously effective until the earlier of
(i)
the date
when all Registrable Shares covered by the Registration
Statement
have been
sold, or (ii) if the Investor has exchanged its OP Units for
Shares or
cash, the later of (A) the date on which the Investor has
received
registered Shares or cash in exchange for OP Units, and (B) the
date on
which the Investor consummates the sale of all unregistered
Shares
it
received in exchange for OP Units or is eligible to sell its
unregistered Shares pursuant to Rule 144(k). Such Registration
Statement
also shall
cover, to the extent allowable under the Securities Act and the
Rules
promulgated thereunder (including Securities Act Rule 416),
such
indeterminate number of additional shares of Common Stock resulting
from
stock
splits, stock dividends or similar transactions with respect to
the
Registrable Shares.
(b) Shelf Registration Expenses All fees and expenses in
connection
with
registering the Registrable Shares in a Shelf Registration,
including,
without limitation SEC filing fees, fees of legal counsel to
the
Company, fees of the Company's accountants and printing fees
(the
"Shelf
Registration Expenses") will be borne by the Company.
(c) Timing of Registrations. The Company shall be entitled to
postpone
the filing of a Registration Statement if the Company
reasonably
determines
that such filing (y) would require disclosure of material
information the Company has a bona fide business purpose for
retaining as
confidential or (z) have a material adverse effect on the Company
or its
shareholders in relation to any financing, acquisition,
corporate
reorganization or other material transaction contemplated by the
Board of
Directors
of the Company, involving the Company or any of its Affiliates,
in each
case as determined by the Company in its reasonable judgment;
provided
that the Company may only postpone such filing or suspend the
effectiveness of a Registration Statement for a period not to
exceed
thirty
(30) consecutive days, provided that the Company may not
postpone
or suspend
its obligations under this Section 1 for more than sixty (60)
days in
the aggregate during any twelve (12) month period. Upon receipt
of
any notice
from the Company of the happening of any event during the
period a
Registration Statement is effective which is of a type
specified
in the
preceding sentence or as a result of which the Registration
Statement
or related Prospectus contains any untrue statement of a
material
fact or omits to state any material fact required to be stated
therein or
necessary to make the statements therein, in light of the
circumstances under which they were made (in the case of the
Prospectus)
not
misleading, Investor agrees that it will immediately
discontinue
offers and
sales of the Registrable Shares under the Registration
Statement
until the Investor receives copies of a supplemented or amended
Prospectus
that corrects the misstatement(s) or omission(s) referred to
above and
receives notice that any post-effective amendment has become
effective.
The Company agrees to promptly file with the SEC such
supplemental or amended prospectus. If so directed by the Company,
the
Investor
will deliver to the Company any copies of the Prospectus
covering
the
Registrable Shares in their possession at the time of receipt of
such
notice.
2.
Piggyback Registrations.
(a) Right to Piggyback. Following the Lock-up Period (as defined
in
Section 6
hereof) and until the second anniversary of the date of
conversion
of the OP
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Units to
Common Shares (but in no event later than the sixth anniversary
of the
date of this Agreement), if the Company proposes to register any
of
its
securities under the Securities Act (other than pursuant to (i)
a
Shelf
Registration (subject to the provisions of Section 1(a) hereof)
or
(ii) a
registration on Form S-4 or any successor form) and the
registration form to be used may be used for the registration
of
Registrable Shares, the Company will give prompt written notice to
the
Investor
of its intention to effect such a registration (each a
"Piggyback
Notice")
and, subject to subparagraph 2(c) below, the Company will
include
in such
registration all Registrable Shares with respect to which the
Company
has received written requests for inclusion therein within ten
(10) days
after the date of sending the Piggyback Notice (a "Piggyback
Registration"), unless the Company, in its reasonable discretion,
deems
that the
inclusion of Registrable Shares would adversely interfere with
such
offering, affect the Company's securities in the public markets,
or
otherwise
adversely affect the Company, provided that other similarly
situated
holders of Common Stock are similarly cut back. Nothing herein
shall
affect the right of the Company to withdraw any such
registration,
or the
Investor to withdraw its shares in any such registration, in
their
sole
discretion.
(b) Piggyback Registration Expenses. The Company's expenses in
connection
with registering the Registrable Shares in a Piggyback
Registration, including without limitation SEC filing fees, fees of
legal
counsel to
the Company, fees of the Company's accountants and printing
fees, will
be paid by the Company ("Piggyback Expenses").
(c) Priority on Primary Registrations. If a Piggyback
Registration
is a
primary registration on behalf of the Company and the Company
determines
that, or in the case of an underwritten registration, the
managing
underwriters advise the Company in writing that in their
opinion,
the number
of securities requested to be included in such registration
exceeds
the number which can be sold in an orderly manner within a
price
range
acceptable to the Company, the Company will include in such
registration (i) first, the securities the Company proposes to sell
and
(ii)
second, the Registrable Shares requested to be included in such
Registration and any other securities requested to be included in
such
registration, pro rata among the holders of Registrable Shares
requesting
such
registration and the holders of such other securities on the basis
of
the number
of Shares requested for inclusion in such registration by each
such
holder.
(d) Priority on Secondary Registrations. If a Piggyback
Registration
is a
secondary registration on behalf of holders of the Company's
securities
other than the holders of Registrable Shares, and the Company
determines
that, or in the case of an underwritten offering, the managing
underwriters advise the Company in writing that in their opinion,
the
number of
securities requested to be included in such registration
exceeds
the number
which can be sold in an orderly manner in such offering within
a price
range acceptable to the holders initially requesting such
registration, the Company will include in such registration the
securities
requested
to be included therein by the holders requesting such
registration and the Registrable Shares requested to be included in
such
registration, pro rata among the holders of securities requesting
such
registration on the basis of the number of Shares requested for
inclusion
in such
registration by each such holder.
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(e) Selection of Underwriters. In the case of an underwritten
Piggyback
Registration, the Company will have the right to select the
investment
banker(s) and manager(s) to administer the offering.
3.
Effectiveness. The registration rights granted by this Agreement
shall
not be effective until ninety (90) days prior to the expiration of
the Lock-up
Period; provided that the Investors may not use any Registration
Statement or
Prospectus until the expiration of the Lock-up Period.
4.
Registration Procedures. Whenever the Investor has requested that
any
Registrable Shares be registered pursuant to this Agreement, the
Company will
use its best efforts to effect the registration and facilitate the
sale and
distribution of all such Registrable Shares specified in such
Registration
Request in accordance with the intended method of disposition
thereof and
pursuant thereto the Company will as expeditiously as possible, but
subject to
the provisions of this Agreement:
(a) prepare and file with the SEC such amendments,
post-effective
amendments
and supplements to such Registration Statement and the
Prospectus
used in connection therewith as may be necessary to keep such
Registration Statement continuously effective for the period
required by
the
intended method of disposition or to describe the terms of any
offering
made from an effective Registration Statement, 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 by the
Holders
thereof
set forth in such Registration Statement;
(b) Notify Holders of Registrable Shares to be sold as promptly
as
possible
(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed
to be
filed (but
in no event in the case of this subparagraph (A), less than
three (3)
Business Days prior to date of such filing); (B) when the SEC
notifies
the Company whether there will be a "review" of such
Registration
Statement
and whenever the SEC comments in writing on such Registration
Statement;
and (C) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective, and
after
the
effectiveness thereof: (i) of any request by the SEC or any
other
Federal or
state governmental authority for amendments or supplements to
the
Registration Statement or Prospectus or for additional
information;
(ii) of
the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement covering any or all of
the
Registrable Shares or the initiation of any proceedings for that
purpose;
(iii) of
the receipt by the Company of any notification with respect to
the
suspension of the qualification or exemption from qualification of
any
of the
Registrable Shares for sale in any jurisdiction, or the
initiation
or
threatening of any proceeding for such purpose; and (iv) if the
financial
statements included in the Registration Statement become
ineligible
for inclusion therein or of the occurrence of any event that
makes any
statement made in the Registration Statement or Prospectus or
any
document incorporated or deemed to be incorporated therein by
reference
untrue in any material respect or that requires any revisions
to
the
Registration Statement, Prospectus or other documents so that, in
the
case of
the Registration
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Statement
or the Prospectus, as the case may be, it will not contain any
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,
in the
light of the circumstances under which they were made, not
misleading. Without limitation to any remedies to which the Holders
may be
entitled
under this Agreement, if any of the events described in this
Section
3(b) occur, the Company shall use its best efforts to respond
to
and
correct the event.
(c) furnish to each Holder of Registrable Shares such number of
copies of
such Registration Statement, each amendment, post-effective
amendment
and supplement thereto, the Prospectus included in such
Registration Statement (including each preliminary Prospectus) and
such
other
documents as such Holder may reasonably request in order to
facilitate
the disposition of the Registrable Shares owned by such Holder;
the
Company consents to the use of the Prospectus for such
Registration
Statement,
including each preliminary Prospectus, by each such holder of
Registrable Shares in connection with the offering and sale of
the
Registrable Shares covered by the Prospectus or the preliminary
Prospectus;
(d) use its best efforts to register or qualify such
Registrable
Shares
under such other securities or blue sky laws of such
jurisdictions
as any
Holder reasonably requests and do any and all other acts and
things
which may
be reasonably necessary or advisable to enable such Holder to
consummate
the disposition in such jurisdictions of the Registrable Shares
owned by
such Holder (provided 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 subparagraph,
(ii)
subject
itself to taxation in any such jurisdiction, (iii) consent to
general
service of process in any such jurisdiction (unless the Company
is
subject to
service in such jurisdiction and except as may be required by
the
Securities Act), or (iv) qualify such Registrable Shares in a
given
jurisdiction where expressions of investment interest are not
sufficient
in such
jurisdiction to reasonably justify the expense of qualification
in
that
jurisdiction or where such qualification would require the Company
to
register
as a broker or dealer in such jurisdiction);
(e) notify each Holder of such Registrable Shares, at any time
when
a
Prospectus relating thereto is required to be delivered under
the
Securities
Act, of the happening of any event as a result of which the
Prospectus
included in such Registration Statement contains an untrue
statement
of a material fact or omits any material fact necessary to make
the
statements therein not misleading, and, at the request of any
such
Holder,
the Company will promptly prepare and furnish such Holders a
supplement
or amendment to such Prospectus so that, as thereafter
delivered
to the purchasers of such Registrable Shares, such Prospectus
will not
contain an untrue statement of a material fact or omit to state
any
material fact necessary to make the statements therein not
misleading;
(f) cause all such Registrable Shares to be listed on each
securities
exchange on which similar securities issued by the Company are
then
listed and to be qualified for trading on each system on which
similar
securities issued by the Company are from time
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to time
qualified;
(g) provide a transfer agent and registrar for all such
Registrable
Shares not
later than the effective date of such Registration Statement
and
thereafter maintain such a transfer agent and registrar; and
otherwise
cooperate
with the Holders and the managing underwriter to facilitate the
timely
preparation and delivery of certificates representing
Registrable
Shares to
be sold and not bearing any restrictive legends, other than as
provided
in the Company's By-laws or Articles of Incorporation
("Charter"), and enable such Registrable Shares to be in such
denominations and registered in such names as the Holder may
reasonably
request;
(h) use its reasonable efforts to comply with all applicable
rules
and
regulations of the SEC;
(i) permit any Holder of Registrable Shares which Holder, in
the
Company's
judgment, might be deemed to be an underwriter or a controlling
person of
the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion
therein
of
material, furnished to the Company in writing, which in the
reasonable
judgment
of such Holder and its counsel should be included;
(j) in the event of the issuance of any stop order suspending
the
effectiveness of a Registration Statement, or of any order
suspending or
preventing
the use of any related Prospectus or suspending the
qualification of any Common Shares included in such Registration
Statement
for sale
in any jurisdiction, the Company will use its reasonable best
efforts
promptly to obtain the withdrawal of such order; and
(k) use its best efforts to cause the Registrable Shares covered
by
a
Registration Statement 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 holders that have
delivered
registration requests to the Company to consummate the
disposition of such Registrable Shares.
The Investor agrees that, upon receipt of any notice from the
Company of the
happening of any event of the kind described in paragraphs 4(e) or
(j) hereof,
the Investor will forthwith discontinue disposition of Common
Shares pursuant to
a Shelf or Piggyback Registration until receipt of the copies of an
appropriate
supplement or amendment to the Prospectus under paragraph 4(e) or
until the
withdrawal of such order under paragraph 4(j). If any such
registration or
comparable statement refers to any Holder by name or otherwise as
the Holder of
any securities of the Company and if, in such Holder's reasonable
judgment, such
Holder is or might be deemed to be a controlling person of the
Company, such
Holder shall have the right to require (i) the insertion therein of
language, in
form and substance satisfactory to such Holder and presented to the
Company in
writing, to the effect that the holding by such Holder of such
securities is not
to be construed as a recommendation by such Holder of the
investment quality of
the Company's securities covered thereby and that such holding does
not imply
that such Holder will assist in meeting any future financial
requirements of the
Company, or (ii) in the event that such reference to such Holder by
name or
otherwise is not required by the Securities Act or any similar
Federal statute
then in force, the deletion of the reference to such Holder;
provided that
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with respect to this clause (ii) such Holder shall furnish to the
Company an
opinion of counsel to such effect, which opinion and counsel shall
be reasonably
satisfactory to the Company.
5. Listing
Requirement/Rule 144.
(a) The Company hereby agrees to use its best efforts to cause
all
Registrable Shares to be listed on each securities exchange on
which
similar
securities issued by the Company are listed and t
