REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT, dated as of April 7, 2020 (this Agreement), is entered into by and among (i) Velocity Financial, Inc., a Delaware corporation (the Company), (ii) Snow Phipps Group AIV L.P. (SP AIV) and Snow Phipps Group (RPV), L.P. (SP RPV), and (iii) TOBI III SPE I LLC (TOBI) (such parties, together with the Snow Phipps Group and the TOBI Group, the Initial Equity Holders).
WHEREAS, the Company and Initial Equity Holders are parties to the Securities Purchase Agreement, dated as of April 5, 2020 (the Purchase Agreement), pursuant to which the Company has sold to the Initial Equity Holders, and the Initial Equity Holders have purchased from the Company, an aggregate of 45,000 shares of the Series A Convertible Preferred Stock (the Series A Convertible Preferred Stock), which is convertible into shares of the Common Stock, and warrants to purchase shares of outstanding Common Stock (Warrants);
WHEREAS, the Company and the Initial Equity Holders are entering into this Agreement for the purpose of granting certain registration and other rights to the Initial Equity Holders on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants and obligations hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the parties hereto hereby agree as follows:
SECTION 1. Definitions. In addition to the terms defined elsewhere in this Agreement, as used herein, the following terms shall have the following respective meanings. Unless the context otherwise requires, the singular shall include the plural and the masculine gender shall include the feminine and neuter, and vice versa, and the word or shall be inclusive.
Adverse Disclosure means public disclosure of material non-public information which, in the Boards good faith judgment, after consultation with outside counsel to the Company, (i) would be required to be made in any report or registration statement filed with the SEC by the Company so that such report or registration statement would not contain any untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) would not be required to be made at such time but for the filing, effectiveness or continued use of such report or registration statement and (iii) is not in the best interests of the Company or would materially interfere with a bona fide financing transaction, disposition or acquisition or similar transaction by the Company and/or its subsidiaries that is material to the Company and its subsidiaries (on a consolidated basis).
Affiliate means, when used with reference to any specified Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person; provided that none of the Company nor any of its subsidiaries shall be deemed an Affiliate of any Equity Holder; provided, further, that no portfolio company of any Equity Holder or of any Affiliate of such Equity Holder shall be considered an Affiliate of such Equity Holder.
Board means the board of directors of the Company.
Common Stock means the common stock of the Company (or any successor of the Company by merger, consolidation, or other reorganization) and any stock into which any such common stock shall have been changed or any stock resulting from any reclassification of any such common stock.
Eligible Holders means the Equity Holders and holders of Other Shares.
Eligible Shares means the Registrable Shares and the Other Shares.
Equity Holders means (i) each of the Initial Equity Holders and (ii) any Affiliate of the Initial Equity Holders or any third party, in each case to whom any of the Initial Equity Holders has assigned its rights under this Agreement in accordance with Section 15; provided that a Person shall cease to be an Equity Holder at the time such Person ceases to hold Registrable Shares.