Exhibit 10.2

EXECUTION COPY

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT is made as of January 31, 2007, between
Affordable Residential Communities Inc., a Maryland corporation (the “Company”),
and the Investors (the “Investors”) listed on the Schedule of Investors attached
hereto.

The parties to this Agreement are parties to a Stock Purchase Agreement, dated
October 6, 2006 (the “Purchase Agreement”).  In order to induce the Investors to
enter into the Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement.  The execution and delivery of
this Agreement is a condition to the closing under the Purchase Agreement. 
Unless otherwise provided in this Agreement, capitalized terms used herein shall
have the meanings set forth in Section 8 hereof.

The parties hereto agree as follows:

1.  Mandatory and Demand Registrations.

(a)  Mandatory Registration.  The Company shall use its commercially reasonable
efforts to file with the SEC a registration statement on the applicable SEC form
with respect to the resale, whether underwritten or otherwise, of the
Registrable Securities by the holders thereof within 60 calendar days, but in no
event more than 90 calendar days, of the closing date of purchase of Registrable
Securities pursuant to the Purchase Agreement (the “Closing Date”).  The Company
shall use its commercially reasonable efforts to respond to all SEC comments
related to such registration statement within 10 calendar days of the receipt
thereof, and shall use its commercially reasonable efforts to cause such
registration statement to be declared effective by the SEC within 150 days of
the Closing Date.  The Company shall use its commercially reasonable efforts to
maintain the effectiveness of the registration effected pursuant to this Section
1(a) at all times, subject only to the limitations on effectiveness set forth in
Section 4 below.  The registration contemplated by this Section 1(a) is referred
to herein as the “Mandatory Registration.”

(b)  Demand Registration.  The holders of at least a majority of the Registrable
Securities then outstanding may request up to two registrations under the
Securities Act of all or any portion of their Registrable Securities on Form S-1
or any similar long-form registration as the Company may elect (“Long-Form
Registrations”), and the holders of at least 25% of the Registrable Securities
then outstanding may request an unlimited number of registrations under the
Securities Act of all or any portion of their Registrable Securities on Form S-3
or any similar short-form registration as the Company may elect (“Short-Form
Registrations”), if available; provided that to the extent the registration
statement contemplated by Section 1(a) is available for use with respect to the
transaction contemplated by such registration request, the Company may require
the requesting holders to use such registration statement in lieu of filing an
additional registration statement pursuant to this Section 1(b), and provided
further that the aggregate offering value of the Registrable Securities
requested to be registered in any registration under this Section 1(b) must
equal at least $10 million in any Long-Form

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Registration and at least $5 million in any Short-Form Registration.  Any
registration contemplated by this Section 1(b) is referred to herein as a
“Demand Registration.”

All requests for Demand Registrations shall be made by giving written notice
thereof to the Company (a “Demand Notice”).  Each Demand Notice shall specify
the approximate number of Registrable Securities requested to be registered. 
Within ten business days after receipt of any Demand Notice, the Company shall
give written notice of such requested registration to all other holders of
Registrable Securities and, subject to the terms of Section 1(f) hereof, shall
include in such registration (and in all related registrations and
qualifications under state blue sky laws or in compliance with other
registration requirements and in any related underwriting) all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 15 business days after the delivery of the Company’s
notice in accordance with Section 11(k) hereof.

(c)  Short-Form Registrations.  The Mandatory Registration and any Demand
Registrations shall be Short-Form Registrations whenever the Company is
permitted to use any applicable short form and, if applicable, the managing
underwriters agree to the use of a Short-Form Registration, and the Company
shall use its commercially reasonable efforts to make Short-Form Registrations
on Form S-3 available for the sale of Registrable Securities.  The holders of at
least a majority of the Registrable Securities requested to be included in the
Mandatory Registration or any Demand Registration that is a Short-Form
Registration may require the Company to file such Short-Form Registration with
the SEC in accordance with and pursuant to Rule 415 promulgated under the
Securities Act (or any successor rule then in effect) (a “Shelf Registration”). 
The Mandatory Registration shall be filed as a Shelf Registration.  So long as
any such Shelf Registration is effective as required herein and in compliance
with the Securities Act and usable for resale of Registrable Securities, the
holders of at least 25% of the Registrable Securities shall be entitled to
demand any number of draw-downs (including underwritten draw-downs, provided
that the aggregate offering value of the Registrable Securities requested to be
included in such underwritten draw-down must equal at least $2 million) from the
shelf and, in connection with any such draw-down, the Company shall take all
customary and reasonable actions that the Company would take in connection with
an underwritten Demand Registration pursuant to this Section 1 (including,
without limitation, all actions referred to in Section 4 necessary to effectuate
such sale in the manner determined by the holders of at least a majority of the
Registrable Securities to be included in such underwritten draw-dawn) as any
holder reasonably requests.  The Company shall use its reasonable efforts to
cause the registration statement or statements filed pursuant to a Short-Form
Registration to remain effective until such date as is the earlier of (i) the
date on which all Registrable Securities included in the registration statement
shall have been sold or shall have otherwise ceased to be Registrable Securities
and (ii) the date on which all remaining Registrable Securities may be sold
during any three month period without any restriction pursuant to Rule 144(k)
promulgated under the Securities Act after taking into account any holders’
status as an affiliate of the Company as determined by the counsel to the
Company pursuant to a written opinion letter addressed to the Company’s transfer
agent to such effect.

(d)  Long-Form Registrations.  A registration shall not be deemed to have been
effected for purposes of Section 1 and shall not count as one of the Demand
Registrations permitted as a Long-Form Registration if the applicable
registration statement has not been

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declared effective and kept effective until the earlier of (i) six months
following the date on which such registration statement was declared effective
and (ii) the sale pursuant to such registration statement of all Registrable
Securities covered thereby; provided that in any event the Company shall pay all
Registration Expenses in connection with any registration initiated as a Demand
Registration whether or not it has become effective and whether or not such
registration has counted as one of the permitted Long-Form Registrations.  All
Demand Registrations that are Long-Form Registrations shall be underwritten
registrations unless otherwise requested by the holders of at least a majority
of the Registrable Securities included in the applicable Long-Form
Registration.  In the event the Mandatory Registration must be effected as a
Long-Form Registration, such registration shall nonetheless be filed a Shelf
Registration and the Company shall use its commercially reasonable efforts to
keep such registration current and effective, including by filing periodic
post-effective amendments to update the financial statements contained in such
registration statement in accordance with Regulation S-X promulgated under the
Securities Act until the date on which all Registrable Securities included in
the registration statement shall have been sold.

(e)  Expenses.  The Registration Expenses (as defined in Section 5(a) hereof) in
the Mandatory Registration and all Demand Registrations shall be paid by the
Company.

(f)  Priority.  The Company shall not include in the Mandatory Registration or
any Demand Registration any securities which are not Registrable Securities
without the prior written consent of the holders of at least a majority of the
Registrable Securities included in such registration.  If a Demand Registration
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in an orderly manner in such offering within a price range
acceptable to the holders of at least a majority of the Registrable Securities
requested to be included in such offering, the Company shall include in such
registration, prior to the inclusion of any securities which are not Registrable
Securities, the number of Registrable Securities requested to be included which
in the opinion of such underwriters can be sold in an orderly manner within the
price range of such offering, pro rata among the respective holders thereof on
the basis of the amount of Registrable Securities owned by each such holder.

(g)  Restrictions on Demand Registrations.  The Company shall not be obligated
to effect any Demand Registration within 180 days after the effective date of
the Mandatory Registration or a previous Demand Registration or a previous
registration in which the holders of Registrable Securities were given piggyback
rights pursuant to Section 2.

Notwithstanding the foregoing, the Company may postpone for up to 180 days the
filing or the effectiveness of a registration statement for a Demand
Registration (but not, for the avoidance of doubt, the Mandatory Registration)
if the Company’s board of directors determines in its reasonable good faith
judgment that such Demand Registration would reasonably be expected to have a
material adverse effect on any proposal or plan of the Company or any of its
Subsidiaries to engage in any acquisition of assets or any merger,
consolidation, tender offer, reorganization or other material transaction;
provided that in such event, the holders of Registrable Securities initially
requesting such Demand Registration shall be entitled to

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withdraw such request and, if such request is withdrawn with respect to a
Long-Form Registration, such Demand Registration shall not count as one of the
permitted Long-Form Registrations hereunder and the Company shall pay all
Registration Expenses in connection with such registration.  The Company may
delay a Demand Registration hereunder only once in any twelve-month period.

(h)  Selection of Underwriters.  The holders of amajority of the Registrable
Securities included in any Demand Registration or any underwritten takedown off
the registration statement filed pursuant to the Mandatory Registration shall
have the right to select the investment banker(s) and manager(s) to administer
the offering; provided, however, that such banker(s) and manager(s) must be
reasonably acceptable to the Company (its acceptance not to be unreasonably
withheld or delayed).

2.  Piggyback Registrations.

(a)  Right to Piggyback.  Whenever the Company proposes to register any of its
securities under the Securities Act other than pursuant to a Demand Registration
and other than in connection with the registration of equity securities issued
or issuable pursuant to an employee equity option, purchase, bonus or similar
plan or pursuant to a merger, exchange offer or transaction of the type
specified in Rule 145(a) under the Securities Act, and the registration form to
be used may be used for the registration of Registrable Securities (a “Piggyback
Registration”), the Company shall give prompt written notice to all holders of
Registrable Securities of its intention to effect such a registration and shall
(subject to Sections 2(c) and 2(d)) include in such registration (and in all
related registrations or qualifications under blue sky laws or in compliance
with other registration requirements and in any related underwriting) all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 20 days after the receipt of the Company’s
notice.

(b)  Piggyback Expenses.  The Registration Expenses in all Piggyback
Registrations shall be paid by the Company.

(c)  Priority on Primary Registrations.  If a Piggyback Registration is an
underwritten primary registration on behalf of the Company, and 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 Company, the Company shall include in such registration
(i) first, the securities the Company proposes to sell, (ii) second, the
Registrable Securities requested to be included in such registration, pro rata
among the holders of such Registrable Securities on the basis of the number of
shares requested to be included therein by each such holder, and (iii) the Other
Securities requested to be included in such registration.

(d)  Priority on Secondary Registrations.  If a Piggyback Registration is an
underwritten secondary registration on behalf of holders of the Company’s
securities, and 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

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an orderly manner in such offering within a price range acceptable to the
holders initially requesting such registration, the Company shall include in
such registration (i) first, the securities requested to be included therein by
the holders requesting such registration and the Registrable Securities
requested to be included in such registration, pro rata among the holders of
such securities on the basis of the number of securities so requested to be
included therein, and (ii) second, the Other Securities requested to be included
in such registration.

(e)  Selection of Underwriters.  If any Piggyback Registration is an
underwritten offering, the selection of investment banker(s) and manager(s) for
the offering by the Company must be approved by the holders of at least a
majority of the Registrable Securities included in such Piggyback Registration,
which such approval shall not be unreasonably withheld or delayed.

(f)  Other Registrations.  If the Company has previously filed a registration
statement with respect to Registrable Securities pursuant to Section 1 or
pursuant to this Section 2, and if such previous registration has not been
withdrawn or abandoned, the Company shall not file or cause to be effected any
other registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (except pursuant to a registration on Form S-4, Form S-8 or any successor
form), whether on its own behalf or at the request of any holder or holders of
such securities, until a period of at least 90 days has elapsed from the
effective date of such previous registration.

3. Holdback Agreements; Cooperation.

(A)  EACH HOLDER OF REGISTRABLE SECURITIES SHALL NOT EFFECT ANY PUBLIC SALE OR
DISTRIBUTION (INCLUDING SALES PURSUANT TO RULE 144 PROMULGATED UNDER THE
SECURITIES ACT) OF EQUITY SECURITIES OF THE COMPANY, OR ANY SECURITIES
CONVERTIBLE INTO OR EXCHANGEABLE OR EXERCISABLE FOR SUCH SECURITIES, DURING
(I) WITH RESPECT TO ANY UNDERWRITTEN DEMAND REGISTRATION OR ANY UNDERWRITTEN
PIGGYBACK REGISTRATION IN WHICH REGISTRABLE SECURITIES ARE INCLUDED, THE SEVEN
DAYS PRIOR TO AND THE 90-DAY PERIOD BEGINNING ON THE EFFECTIVE DATE OF SUCH
REGISTRATION (OR SUCH SHORTER PERIOD AS AGREED TO BY THE MANAGING UNDERWRITERS),
AND (II) UPON NOTICE FROM THE COMPANY OF THE COMMENCEMENT OF AN UNDERWRITTEN
DISTRIBUTION IN CONNECTION WITH ANY SHELF REGISTRATION, THE SEVEN DAYS PRIOR TO
AND THE 90-DAY PERIOD BEGINNING ON THE DATE OF COMMENCEMENT OF SUCH DISTRIBUTION
(OR SUCH SHORTER PERIOD AS AGREED TO BY THE MANAGING UNDERWRITERS), IN EACH CASE
EXCEPT AS PART OF SUCH UNDERWRITTEN REGISTRATION AND IN EACH CASE UNLESS THE
UNDERWRITERS MANAGING THE REGISTERED PUBLIC OFFERING OTHERWISE AGREE.

(B)  THE COMPANY (I) SHALL NOT EFFECT ANY PUBLIC SALE OR DISTRIBUTION OF ITS
EQUITY SECURITIES, OR ANY SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE OR
EXERCISABLE FOR SUCH SECURITIES (EXCEPT PURSUANT TO REGISTRATION ON FORM S-4,
FORM S-8 OR ANY SUCCESSOR FORM), DURING (A) WITH RESPECT TO ANY UNDERWRITTEN
DEMAND REGISTRATION OR ANY UNDERWRITTEN PIGGYBACK REGISTRATION IN WHICH
REGISTRABLE SECURITIES ARE INCLUDED, THE SEVEN DAYS PRIOR TO AND THE 90-DAY
PERIOD (OR SUCH SHORTER PERIOD AS AGREED TO BY THE UNDERWRITERS) BEGINNING ON
THE EFFECTIVE DATE OF SUCH REGISTRATION, AND (B) UPON NOTICE FROM ANY HOLDER(S)
OF REGISTRABLE SECURITIES SUBJECT TO A SHELF REGISTRATION THAT SUCH HOLDER(S)
INTEND TO EFFECT AN UNDERWRITTEN DISTRIBUTION OF REGISTRABLE SECURITIES PURSUANT
TO SUCH SHELF REGISTRATION (UPON RECEIPT OF WHICH, THE COMPANY WILL PROMPTLY
NOTIFY ALL OTHER HOLDERS OF REGISTRABLE SECURITIES OF THE DATE OF COMMENCEMENT
OF SUCH

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DISTRIBUTION), THE SEVEN DAYS PRIOR TO AND THE 90-DAY PERIOD (OR SUCH SHORTER
PERIOD AS AGREED TO BY THE UNDERWRITERS) BEGINNING ON THE DATE OF COMMENCEMENT
OF SUCH DISTRIBUTION, AND (II) SHALL CAUSE EACH HOLDER OR GROUP OF AFFILIATED
HOLDERS WHO PURCHASES FROM THE COMPANY AT ANY TIME AFTER THE DATE OF THIS
AGREEMENT AT LEAST 10% OF ITS COMMON STOCK, OR ANY SECURITIES CONVERTIBLE INTO
OR EXCHANGEABLE OR EXERCISABLE FOR AT LEAST 10% OF ITS COMMON STOCK, (OTHER THAN
PURCHASES IN A REGISTERED PUBLIC OFFERING OR PURSUANT TO AN UNDERWRITTEN
OFFERING UNDER RULE 144A OR PURSUANT TO EQUITY SUBSCRIPTION AGREEMENTS, STOCK
OPTION AGREEMENTS, STOCK APPRECIATION RIGHTS, PHANTOM STOCK PLANS OR SIMILAR
RIGHTS OR PLANS IN EFFECT ON THE DATE OF THIS AGREEMENT) (A “PRIVATE PURCHASER”)
TO AGREE NOT TO EFFECT ANY PUBLIC SALE OR DISTRIBUTION (INCLUDING SALES PURSUANT
TO RULE 144) OF ANY SUCH SECURITIES DURING SUCH 90 DAY PERIODS (OR SUCH SHORTER
OR LONGER PERIODS AS PROVIDED BELOW) SO LONG AS (X) THE HOLDERS OF REGISTRABLE
SECURITIES CONTINUE TO HOLD AT LEAST 50% OF THE REGISTRABLE SECURITIES HELD AS
OF THE DATE HEREOF (PROVIDED THAT A PRIVATE PURCHASER SHALL BE SUBJECT TO SUCH
PERIODS ONLY TWICE IN ANY TWELVE-MONTH PERIOD) AND (Y) SUCH PRIVATE PURCHASER
HAS ENTERED INTO AN AGREEMENT WITH THE COMPANY LIMITING SUCH PRIVATE PURCHASER’S
RIGHT OR ABILITY TO EFFECTUATE A PUBLIC SALE OR DISTRIBUTION DURING AN
UNDERWRITTEN REGISTERED OFFERING BY THE COMPANY (PROVIDED THAT SUCH PRIVATE
PURCHASER SHALL BE LIMITED FOR THE SAME PERIOD OF TIME THAT IT IS LIMITED BY
WITH RESPECT TO AN UNDERWRITTEN REGISTERED OFFERING BY THE COMPANY (WHICH MAY BE
GREATER OR LESS THAN THE 90 DAY PERIOD SET FORTH ABOVE), IN EACH CASE EXCEPT AS
PART OF SUCH UNDERWRITTEN REGISTRATION AND IN EACH CASE UNLESS THE UNDERWRITERS
MANAGING THE REGISTERED PUBLIC OFFERING OTHERWISE AGREE.

(C)  EACH HOLDER OF REGISTRABLE SECURITIES AGREES TO COOPERATE WITH THE COMPANY
AS REASONABLY REQUESTED BY THE COMPANY IN CONNECTION WITH THE PREPARATION AND
FILING HEREUNDER OF ANY REGISTRATION STATEMENT, PROSPECTUS OR PRELIMINARY
PROSPECTUS OR ANY AMENDMENT THEREOF OR SUPPLEMENT THERETO.

4.  Registration Procedures.  In the Mandatory Registration and whenever the
holders of Registrable Securities have requested that any Registrable Securities
be registered pursuant to this Agreement, the Company shall use its reasonable
efforts to effect the registration and the sale of such Registrable Securities
in accordance with the intended method of disposition thereof, and pursuant
thereto the Company shall as expeditiously as practicable:

(A)  SUBJECT TO SECTION 1(A) IN THE CASE OF THE MANDATORY REGISTRATION, PREPARE
AND FILE WITH THE SEC A REGISTRATION STATEMENT, AND ALL AMENDMENTS AND
SUPPLEMENTS THERETO AND RELATED PROSPECTUSES AS MAY BE NECESSARY TO COMPLY WITH
APPLICABLE SECURITIES LAWS, WITH RESPECT TO SUCH REGISTRABLE SECURITIES AND USE
ITS BEST EFFORTS TO CAUSE SUCH REGISTRATION STATEMENT TO BECOME EFFECTIVE
(PROVIDED THAT BEFORE FILING A REGISTRATION STATEMENT OR PROSPECTUS OR ANY
AMENDMENTS OR SUPPLEMENTS THERETO, THE COMPANY SHALL FURNISH TO THE COUNSEL
SELECTED BY THE HOLDERS OF A MAJORITY OF THE REGISTRABLE SECURITIES COVERED BY
SUCH REGISTRATION STATEMENT COPIES OF ALL SUCH DOCUMENTS PROPOSED TO BE FILED,
AND THE COMPANY SHALL IN GOOD FAITH CONSIDER ANY COMMENTS OF SUCH COUNSEL);

(B)  NOTIFY EACH HOLDER OF REGISTRABLE SECURITIES OF THE EFFECTIVENESS OF EACH
REGISTRATION STATEMENT FILED HEREUNDER AND PREPARE AND FILE WITH THE SEC SUCH
AMENDMENTS AND SUPPLEMENTS TO SUCH REGISTRATION STATEMENT AND THE PROSPECTUS
USED IN CONNECTION THEREWITH AS MAY BE NECESSARY TO KEEP SUCH REGISTRATION
STATEMENT EFFECTIVE FOR A PERIOD OF NOT LESS THAN 180 DAYS (OR, IN THE CASE OF A
SHELF REGISTRATION, A PERIOD ENDING ON SUCH DATE AS IS THE EARLIER OF

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(I) THE DATE ON WHICH ALL REGISTRABLE SECURITIES INCLUDED IN THE REGISTRATION
STATEMENT SHALL HAVE BEEN SOLD OR SHALL HAVE OTHERWISE CEASED TO BE REGISTRABLE
SECURITIES AND (II) THE DATE ON WHICH ALL REMAINING REGISTRABLE SECURITIES MAY
BE SOLD DURING ANY THREE MONTH PERIOD WITHOUT ANY RESTRICTION PURSUANT TO RULE
144(K) PROMULGATED UNDER THE SECURITIES ACT AFTER TAKING INTO ACCOUNT ANY
HOLDERS’ STATUS AS AN AFFILIATE OF THE COMPANY AS DETERMINED BY THE COUNSEL TO
THE COMPANY PURSUANT TO A WRITTEN OPINION LETTER ADDRESSED TO THE COMPANY’S
TRANSFER AGENT TO SUCH EFFECT) 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 SELLERS THEREOF SET FORTH IN SUCH REGISTRATION
STATEMENT;

(C)  FURNISH TO EACH SELLER OF REGISTRABLE SECURITIES SUCH NUMBER OF COPIES OF
THE PROSPECTUS INCLUDED IN SUCH REGISTRATION STATEMENT (INCLUDING EACH
PRELIMINARY PROSPECTUS), EACH AMENDMENT AND SUPPLEMENT THERETO AND SUCH OTHER
DOCUMENTS AS SUCH SELLER MAY REASONABLY REQUEST IN ORDER TO FACILITATE THE
DISPOSITION OF THE REGISTRABLE SECURITIES OWNED BY SUCH SELLER;

(D)  USE ITS BEST EFFORTS TO REGISTER OR QUALIFY SUCH REGISTRABLE SECURITIES
UNDER SUCH OTHER SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTIONS AS ANY SELLER
REASONABLY REQUESTS AND DO ANY AND ALL OTHER ACTS AND THINGS WHICH MAY BE
REASONABLY NECESSARY OR ADVISABLE TO ENABLE SUCH SELLER TO CONSUMMATE THE
DISPOSITION IN SUCH JURISDICTIONS OF THE REGISTRABLE SECURITIES OWNED BY SUCH
SELLER (PROVIDED THAT THE COMPANY SHALL 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 OR (III) CONSENT TO GENERAL SERVICE OF PROCESS IN ANY SUCH
JURISDICTION);

(E)  NOTIFY EACH SELLER OF SUCH REGISTRABLE SECURITIES, 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 FACT NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING, AND,
AT THE REQUEST OF ANY SUCH SELLER, THE COMPANY SHALL PREPARE A SUPPLEMENT OR
AMENDMENT TO SUCH PROSPECTUS SO THAT, AS THEREAFTER DELIVERED TO THE PURCHASERS
OF SUCH REGISTRABLE SECURITIES, SUCH PROSPECTUS SHALL NOT CONTAIN AN UNTRUE
STATEMENT OF A MATERIAL FACT OR OMIT TO STATE ANY FACT NECESSARY TO MAKE THE
STATEMENTS THEREIN NOT MISLEADING;

(F)  CAUSE ALL SUCH REGISTRABLE SECURITIES TO BE LISTED ON EACH SECURITIES
EXCHANGE ON WHICH SIMILAR SECURITIES ISSUED BY THE COMPANY ARE THEN LISTED AND,
IF NOT SO LISTED, TO BE LISTED ON THE NASD AUTOMATED QUOTATION SYSTEM AND, IF
LISTED ON THE NASD AUTOMATED QUOTATION SYSTEM, USE ITS REASONABLE EFFORTS TO
SECURE DESIGNATION OF ALL SUCH REGISTRABLE SECURITIES COVERED BY SUCH
REGISTRATION STATEMENT AS A NASDAQ “NATIONAL MARKET SYSTEM SECURITY” WITHIN THE
MEANING OF RULE 11AA2-1 OF THE SEC OR, FAILING THAT, TO SECURE NASDAQ
AUTHORIZATION FOR SUCH REGISTRABLE SECURITIES AND, WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, USE ITS REASONABLE EFFORTS TO ARRANGE FOR AT LEAST
TWO MARKET MAKERS TO REGISTER AS SUCH WITH RESPECT TO SUCH REGISTRABLE
SECURITIES WITH THE NASD;

(G)  PROVIDE A TRANSFER AGENT AND REGISTRAR FOR ALL SUCH REGISTRABLE SECURITIES
NOT LATER THAN THE EFFECTIVE DATE OF SUCH REGISTRATION STATEMENT;

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(H)  ENTER INTO SUCH CUSTOMARY AGREEMENTS (INCLUDING UNDERWRITING AGREEMENTS IN
CUSTOMARY FORM) AND TAKE ALL SUCH OTHER ACTIONS AS THE HOLDERS OF A MAJORITY OF
THE REGISTRABLE SECURITIES BEING SOLD OR THE UNDERWRITERS, IF ANY, REASONABLY
REQUEST IN ORDER TO EXPEDITE OR FACILITATE THE DISPOSITION OF SUCH REGISTRABLE
SECURITIES (INCLUDING PREPARING FOR AND PARTICIPATING IN SUCH NUMBER OF “ROAD
SHOWS” AS THE UNDERWRITERS MANAGING SUCH OFFERING MAY REASONABLY REQUEST);

(I)  MAKE AVAILABLE FOR INSPECTION BY ANY SELLER OF REGISTRABLE SECURITIES, ANY
UNDERWRITER PARTICIPATING IN ANY DISPOSITION PURSUANT TO SUCH REGISTRATION
STATEMENT AND ANY ATTORNEY, ACCOUNTANT OR OTHER AGENT RETAINED BY ANY SUCH
SELLER OR UNDERWRITER, ALL FINANCIAL AND OTHER RECORDS, PERTINENT CORPORATE
DOCUMENTS AND PROPERTIES OF THE COMPANY, AND CAUSE THE COMPANY’S OFFICERS,
DIRECTORS, EMPLOYEES AND INDEPENDENT ACCOUNTANTS TO SUPPLY ALL INFORMATION
REASONABLY REQUESTED BY ANY SUCH SELLER, UNDERWRITER, ATTORNEY, ACCOUNTANT OR
AGENT IN CONNECTION WITH SUCH REGISTRATION STATEMENT (UNLESS THE COMPANY CAN
DEMONSTRATE THAT SUCH PERSON ALREADY POSSESSES THE REQUESTED INFORMATION);

(J)  OTHERWISE USE ITS BEST EFFORTS TO COMPLY WITH ALL APPLICABLE RULES AND
REGULATIONS OF THE SEC, AND MAKE AVAILABLE TO ITS SECURITY HOLDERS, AS SOON AS
REASONABLY PRACTICABLE, AN EARNINGS STATEMENT COVERING THE PERIOD OF AT LEAST
TWELVE MONTHS BEGINNING WITH THE FIRST DAY OF THE COMPANY’S FIRST FULL CALENDAR
QUARTER AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT, WHICH EARNINGS
STATEMENT SHALL SATISFY THE PROVISIONS OF SECTION 11(A) OF THE SECURITIES ACT
AND RULE 158 THEREUNDER;

(K)  PERMIT ANY HOLDER OF REGISTRABLE SECURITIES WHICH HOLDER, IN ITS SOLE AND
EXCLUSIVE 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 IN A TIMELY MANNER, WHICH IN THE REASONABLE JUDGMENT
OF SUCH HOLDER AND ITS COUNSEL SHOULD BE INCLUDED;

(L)  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 STOCK
INCLUDED IN SUCH REGISTRATION STATEMENT FOR SALE IN ANY JURISDICTION, THE
COMPANY SHALL USE ITS REASONABLE EFFORTS PROMPTLY TO OBTAIN THE WITHDRAWAL OF
SUCH ORDER;

(M)  USE ITS REASONABLE EFFORTS TO CAUSE SUCH REGISTRABLE SECURITIES COVERED BY
SUCH REGISTRATION STATEMENT TO BE REGISTERED WITH OR APPROVED BY SUCH OTHER
GOVERNMENTAL AGENCIES OR AUTHORITIES AS MAY BE NECESSARY TO ENABLE THE SELLERS
THEREOF TO CONSUMMATE THE DISPOSITION OF SUCH REGISTRABLE SECURITIES; AND

(N)  IN THE CASE OF AN UNDERWRITTEN OFFERING, USE REASONABLE EFFORTS TO OBTAIN A
COLD COMFORT LETTER FROM THE COMPANY’S INDEPENDENT PUBLIC ACCOUNTANTS IN
CUSTOMARY FORM AND COVERING SUCH MATTERS OF THE TYPE CUSTOMARILY COVERED BY COLD
COMFORT LETTERS AS THE HOLDERS OF AT LEAST A MAJORITY OF THE REGISTRABLE
SECURITIES BEING SOLD REASONABLY REQUEST.

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5.  REGISTRATION EXPENSES.

(A)  ALL EXPENSES INCIDENT TO THE COMPANY’S PERFORMANCE OF OR COMPLIANCE WITH
THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ALL REGISTRATION AND FILING FEES,
FEES AND EXPENSES OF COMPLIANCE WITH SECURITIES OR BLUE SKY LAWS, PRINTING
EXPENSES, MESSENGER AND DELIVERY EXPENSES, FEES AND DISBURSEMENTS OF CUSTODIANS,
AND FEES AND DISBURSEMENTS OF COUNSEL FOR THE COMPANY AND, TO THE EXTENT
PROVIDED IN SECTION 5(B), FEES AND DISBURSEMENTS OF COUNSEL FOR ANY HOLDER OF
REGISTRABLE SECURITIES AND ALL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS,
UNDERWRITERS (EXCLUDING DISCOUNTS AND COMMISSIONS) AND OTHER PERSONS RETAINED BY
THE COMPANY (ALL SUCH EXPENSES BEING HEREIN CALLED “REGISTRATION EXPENSES”),
SHALL BE BORNE BY THE COMPANY AS PROVIDED IN THIS AGREEMENT, EXCEPT THAT THE
COMPANY SHALL, 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 OR QUARTERLY
REVIEW, THE EXPENSE OF ANY LIABILITY INSURANCE WHICH THE COMPANY HAS AGREED TO
OBTAIN IN ITS REASONABLE DISCRETION AND THE EXPENSES AND FEES FOR LISTING THE
SECURITIES TO BE REGISTERED ON EACH SECURITIES EXCHANGE ON WHICH SIMILAR
SECURITIES ISSUED BY THE COMPANY ARE THEN LISTED OR ON THE NASD AUTOMATED
QUOTATION SYSTEM.

(B)  IN CONNECTION WITH EACH DEMAND REGISTRATION AND EACH PIGGYBACK
REGISTRATION, THE COMPANY SHALL REIMBURSE THE HOLDERS OF REGISTRABLE SECURITIES
INCLUDED IN SUCH REGISTRATION FOR THE REASONABLE FEES AND DISBURSEMENTS OF ONE
COUNSEL CHOSEN BY THE HOLDERS OF A MAJORITY OF THE REGISTRABLE SECURITIES
INCLUDED IN SUCH REGISTRATION FOR WORK CUSTOMARILY PERFORMED BY COUNSEL FOR
SELLING SHAREHOLDERS.

(C)  TO THE EXTENT ANY EXPENSES RELATING TO A REGISTRATION HEREUNDER ARE NOT
REQUIRED TO BE PAID BY THE COMPANY, EACH HOLDER OF SECURITIES INCLUDED IN ANY
REGISTRATION HEREUNDER SHALL PAY THOSE EXPENSES ALLOCABLE TO THE REGISTRATION OF
SUCH HOLDER’S SECURITIES SO INCLUDED, AND ANY EXPENSES NOT SO ALLOCABLE SHALL BE
BORNE BY ALL SELLERS OF SECURITIES INCLUDED IN SUCH REGISTRATION IN PROPORTION
TO THE AGGREGATE SELLING PRICE OF THE SECURITIES TO BE SO REGISTERED.

(D)  ANY OBLIGATION TO PAY REGISTRATION EXPENSES OR OTHER EXPENSES PROVIDED FOR
IN THIS AGREEMENT SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.

6.  Indemnification.

(A)  THE COMPANY AGREES TO INDEMNIFY, TO THE EXTENT PERMITTED BY LAW, EACH
HOLDER OF REGISTRABLE SECURITIES, ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
AFFILIATES AND EACH PERSON WHO CONTROLS SUCH HOLDER (WITHIN THE MEANING OF THE
SECURITIES ACT AND THE SECURITIES EXCHANGE ACT) AGAINST ALL LOSSES, CLAIMS,
ACTIONS, DAMAGES, LIABILITIES AND EXPENSES CAUSED BY (I) ANY UNTRUE OR ALLEGED
UNTRUE STATEMENT OF MATERIAL FACT CONTAINED IN ANY REGISTRATION STATEMENT,
PROSPECTUS OR PRELIMINARY PROSPECTUS OR ANY AMENDMENT THEREOF OR SUPPLEMENT
THERETO OR ANY OMISSION OR ALLEGED OMISSION OF A MATERIAL FACT REQUIRED TO BE
STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING OR
(II) ANY VIOLATION BY THE COMPANY OF ANY RULE OR REGULATION PROMULGATED UNDER
THE SECURITIES ACT APPLICABLE TO THE COMPANY AND RELATING TO ACTION OR INACTION
REQUIRED OF THE COMPANY IN CONNECTION WITH ANY SUCH REGISTRATION, QUALIFICATION
OR COMPLIANCE, AND TO PAY TO EACH HOLDER OF REGISTRABLE SECURITIES, ITS OFFICERS
AND DIRECTORS AND EACH PERSON WHO CONTROLS SUCH HOLDER (WITHIN THE MEANING OF
THE SECURITIES ACT), AS INCURRED, ANY LEGAL AND ANY OTHER EXPENSES REASONABLY
INCURRED IN CONNECTION WITH INVESTIGATING, PREPARING OR DEFENDING ANY SUCH
CLAIM, LOSS, DAMAGE, LIABILITY OR ACTION, EXCEPT INSOFAR AS THE SAME ARE

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CAUSED BY OR CONTAINED IN ANY INFORMATION FURNISHED IN WRITING TO THE COMPANY BY
SUCH HOLDER EXPRESSLY FOR USE THEREIN OR BY SUCH HOLDER’S FAILURE TO DELIVER A
COPY OF THE REGISTRATION STATEMENT OR PROSPECTUS OR ANY AMENDMENTS OR
SUPPLEMENTS THERETO AFTER THE COMPANY HAS FURNISHED SUCH HOLDER WITH SUCH NUMBER
OF COPIES OF THE SAME AS WAS PREVIOUSLY REQUESTED BY SUCH HOLDER.  IN CONNECTION
WITH AN UNDERWRITTEN OFFERING, THE COMPANY SHALL INDEMNIFY SUCH UNDERWRITERS,
THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND EACH PERSON WHO CONTROLS SUCH
UNDERWRITERS (WITHIN THE MEANING OF THE SECURITIES ACT AND THE SECURITIES
EXCHANGE ACT) TO THE SAME EXTENT AS PROVIDED ABOVE WITH RESPECT TO THE
INDEMNIFICATION OF THE HOLDERS OF REGISTRABLE SECURITIES, BUT THE PROVISIONS OF
THE UNDERWRITING AGREEMENT WITH SUCH UNDERWRITERS, IF DIFFERENT, SHALL GOVERN.

(B)  IN CONNECTION WITH ANY REGISTRATION STATEMENT IN WHICH A HOLDER OF
REGISTRABLE SECURITIES IS PARTICIPATING, EACH SUCH HOLDER SHALL FURNISH TO THE
COMPANY IN WRITING SUCH INFORMATION AND AFFIDAVITS AS THE COMPANY REASONABLY
REQUESTS FOR USE IN CONNECTION WITH ANY SUCH REGISTRATION STATEMENT OR
PROSPECTUS AND, TO THE EXTENT PERMITTED BY LAW, SHALL INDEMNIFY THE COMPANY, ITS
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, AFFILIATES AND EACH PERSON WHO CONTROLS
THE COMPANY (WITHIN THE MEANING OF THE SECURITIES ACT AND THE SECURITIES
EXCHANGE ACT) AGAINST ANY LOSSES, CLAIMS, DAMAGES, LIABILITIES AND EXPENSES
RESULTING FROM ANY UNTRUE OR ALLEGED UNTRUE STATEMENT OF MATERIAL FACT CONTAINED
IN THE REGISTRATION STATEMENT, PROSPECTUS OR PRELIMINARY PROSPECTUS OR ANY
AMENDMENT THEREOF OR SUPPLEMENT THERETO OR ANY OMISSION OR ALLEGED OMISSION OF A
MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS
THEREIN NOT MISLEADING, BUT ONLY TO THE EXTENT THAT SUCH UNTRUE STATEMENT OR
OMISSION IS CONTAINED IN ANY INFORMATION OR AFFIDAVIT SO FURNISHED IN WRITING BY
SUCH HOLDER; PROVIDED THAT THE OBLIGATION TO INDEMNIFY SHALL BE INDIVIDUAL AND
RATABLE, NOT JOINT AND SEVERAL, FOR EACH HOLDER AND SHALL BE LIMITED TO THE NET
AMOUNT OF PROCEEDS RECEIVED BY SUCH HOLDER FROM THE SALE OF REGISTRABLE
SECURITIES PURSUANT TO SUCH REGISTRATION STATEMENT.

(C)  ANY PERSON ENTITLED TO INDEMNIFICATION HEREUNDER SHALL (I) GIVE PROMPT
WRITTEN NOTICE TO THE INDEMNIFYING PARTY OF ANY CLAIM WITH RESPECT TO WHICH IT
SEEKS INDEMNIFICATION (PROVIDED THAT THE FAILURE TO GIVE PROMPT NOTICE SHALL NOT
IMPAIR ANY PERSON’S RIGHT TO INDEMNIFICATION HEREUNDER TO THE EXTENT SUCH
FAILURE HAS NOT PREJUDICED THE INDEMNIFYING PARTY) AND (II) UNLESS IN SUCH
INDEMNIFIED PARTY’S REASONABLE JUDGMENT A CONFLICT OF INTEREST BETWEEN SUCH
INDEMNIFIED AND INDEMNIFYING PARTIES MAY EXIST WITH RESPECT TO SUCH CLAIM,
PERMIT SUCH INDEMNIFYING PARTY TO ASSUME THE DEFENSE OF SUCH CLAIM WITH COUNSEL
REASONABLY SATISFACTORY TO THE INDEMNIFIED PARTY.  IF SUCH DEFENSE IS ASSUMED,
THE INDEMNIFYING PARTY SHALL NOT BE SUBJECT TO ANY LIABILITY FOR ANY SETTLEMENT
MADE BY THE INDEMNIFIED PARTY WITHOUT ITS CONSENT (BUT SUCH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD).  AN INDEMNIFYING PARTY WHO IS NOT ENTITLED TO, OR ELECTS
NOT TO, ASSUME THE DEFENSE OF A CLAIM SHALL NOT BE OBLIGATED TO PAY THE FEES AND
EXPENSES OF MORE THAN ONE COUNSEL FOR ALL PARTIES INDEMNIFIED BY SUCH
INDEMNIFYING PARTY WITH RESPECT TO SUCH CLAIM, UNLESS IN THE REASONABLE JUDGMENT
OF ANY INDEMNIFIED PARTY A CONFLICT OF INTEREST MAY EXIST BETWEEN SUCH
INDEMNIFIED PARTY AND ANY OTHER OF SUCH INDEMNIFIED PARTIES WITH RESPECT TO SUCH
CLAIM.  IN SUCH INSTANCE, THE CONFLICTING INDEMNIFIED PARTIES SHALL HAVE A RIGHT
TO RETAIN ONE SEPARATE COUNSEL, CHOSEN BY THE HOLDERS OF A MAJORITY OF THE
REGISTRABLE SECURITIES INCLUDED IN THE REGISTRATION, AT THE EXPENSE OF THE
INDEMNIFYING PARTY.  NO INDEMNIFYING PARTY, IN THE DEFENSE OF SUCH CLAIM OR
LITIGATION, SHALL, EXCEPT WITH THE CONSENT OF EACH INDEMNIFIED PARTY, CONSENT TO
THE ENTRY OF ANY JUDGMENT OR ENTER INTO ANY SETTLEMENT WHICH DOES NOT INCLUDE AS
AN UNCONDITIONAL TERM THEREOF THE GIVING BY THE CLAIMANT OR PLAINTIFF TO SUCH
INDEMNIFIED PARTY OF A RELEASE FROM ALL LIABILITY IN RESPECT TO SUCH CLAIM OR
LITIGATION.

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(D)  THE INDEMNIFICATION PROVIDED FOR UNDER THIS AGREEMENT SHALL REMAIN IN FULL
FORCE AND EFFECT REGARDLESS OF ANY INVESTIGATION MADE BY OR ON BEHALF OF THE
INDEMNIFIED PARTY OR ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT, AFFILIATE OR
CONTROLLING PERSON OF SUCH INDEMNIFIED PARTY AND SHALL SURVIVE THE TRANSFER OF
SECURITIES AND THE TERMINATION OF THIS AGREEMENT.  THE COMPANY ALSO AGREES TO
MAKE SUCH PROVISIONS, AS ARE REASONABLY REQUESTED BY ANY INDEMNIFIED PARTY, FOR
CONTRIBUTION TO SUCH PARTY IN THE EVENT THE COMPANY’S INDEMNIFICATION IS
UNAVAILABLE FOR ANY REASON.

7.  Participation in Underwritten Registrations.  No Person may participate in
any registration hereunder that is underwritten unless such Person (i) agrees to
sell such Person’s securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements in a timely manner; provided
that no holder of Registrable Securities included in any underwritten
registration shall be required to make any representations or warranties to the
Company or the underwriters (other than representations and warranties regarding
such holder, such holder’s title to the securities and such holder’s intended
method of distribution) or to undertake any indemnification obligations to the
Company or the underwriters with respect thereto, except as otherwise provided
in Section 6 hereof.

8.  Definitions.

“Affiliate” of any particular Person means (i) any other Person controlling,
controlled by or under common control with such particular Person, where
“control” means the possession, directly or indirectly, of the power to direct
the management and policies of a Person whether through the ownership of voting
securities, contract or otherwise and (ii) if such Person is a partnership or
limited liability company, any partner or member thereof.

“Company” has the meaning given to such term in the recitals.

“Demand Notice” has the meaning given to such term in Section 1(b).

“Demand Registration” has the meaning given to such term in Section 1(b).

“Governmental Entity” means a domestic (federal, state, municipal or local) or
foreign government or governmental, regulatory or administrative subdivision,
department, authority, agency, commission, board, bureau, court of
instrumentality or arbitrator of any kind.

“Investors” has the meaning given to such term in the recitals.

“Long-Form Registrations” has the meaning given to such term in Section 1(b).

“Other Securities” means any securities (other than Registrable Securities) as
to which the Company has granted contractual registration rights.

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“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a Governmental Entity.

“Piggyback Registration” has the meaning given to such term in Section 2(a).

“Private Purchaser” has the meaning given to such term in Section 3(b).

“Purchase Agreement” has the meaning given to such term in the recitals.

“Registration Expenses” has the meaning given to such term in Section 5(a).

“Registrable Securities” means (i) any Common Stock issued pursuant to the
Purchase Agreement and (ii) any Common Stock issued or issuable with respect to
any Registrable Securities by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization.  As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when they have been
distributed to the public pursuant to an offering registered under the
Securities Act, sold to the public through a broker, dealer or market maker in
compliance with Rule 144 under the Securities Act (or any similar rule then in
force) or repurchased by the Company or any Subsidiary.  For purposes of this
Agreement, including exercising any rights or meeting any threshold tests
hereunder, a Person shall be deemed to hold any Registrable Securities and such
Registrable Securities shall be deemed to be in existence, whenever such Person
has the right to acquire directly or indirectly such Registrable Securities
(upon conversion or exercise in connection with a transfer of securities or
otherwise, but disregarding any restrictions or limitations upon the exercise of
such right), whether or not such acquisition has actually been effected, and
such Person shall be entitled to exercise the rights of a holder of Registrable
Securities hereunder.

“Securities Act” means the Securities Act of 1933, as amended, or any similar
federal law then in force.

“SEC” includes any governmental body or agency succeeding to the functions
thereof.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended,
or any similar federal law then in force.

“Shelf Registration” has the meaning given to such term in Section 1(c).

“Short-Form Registrations” has the meaning given to such term in Section 1(b).

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company,

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partnership, association or other business entity, a majority of the partnership
or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more Subsidiaries of that
Person or a combination thereof.  Notwithstanding the foregoing, “Subsidiary”
also shall include each “significant subsidiary” of the Company, as such term is
defined in Rule 1-02 of Regulation S-X.  For purposes hereof, a Person or
Persons shall be deemed to have a majority ownership interest in a limited
liability company, partnership, association or other business entity if such
Person or Persons shall be allocated a majority of limited liability company,
partnership, association or other business entity gains or losses or shall be or
control any managing director or general partner of such limited liability
company, partnership, association or other business entity.  For purposes of
this Agreement, if the context does not otherwise specify in respect of which
Person the term “Subsidiary” is used, the term “Subsidiary” shall refer to a
Subsidiary of the Company.

Unless otherwise stated, other capitalized terms contained herein have the
meanings set forth in the Purchase Agreement.

9.  Termination.  Except as otherwise provided herein, this Agreement shall
terminate at such time as no holder of Registrable Securities has any rights
hereunder.

10.  Miscellaneous.

(A)  AGGREGATION.  FOR PURPOSES OF THIS AGREEMENT, ALL HOLDINGS OF REGISTRABLE
SECURITIES BY PERSONS WHO ARE AFFILIATES OF EACH OTHER SHALL BE AGGREGATED FOR
PURPOSES OF MEETING ANY THRESHOLD TESTS UNDER THIS AGREEMENT.  FOR PURPOSES OF
THIS SECTION 10(A), AN “AFFILIATE” SHALL INCLUDE ANY PERSONS WHICH HAVE RECEIVED
DISTRIBUTIONS OF SECURITIES FROM A PARTNERSHIP OR LIMITED LIABILITY COMPANY
HOLDING SUCH SECURITIES.

(B)                                 NO INCONSISTENT AGREEMENTS.  THE COMPANY
SHALL NOT HEREAFTER ENTER INTO ANY AGREEMENT WITH RESPECT TO ITS SECURITIES
WHICH IS INCONSISTENT WITH OR VIOLATES THE RIGHTS GRANTED TO THE HOLDERS OF
REGISTRABLE SECURITIES IN THIS AGREEMENT.

(C)                                  CURRENT PUBLIC INFORMATION.  THE COMPANY
SHALL FILE ALL REPORTS REQUIRED TO BE FILED BY IT UNDER THE SECURITIES ACT AND
THE SECURITIES EXCHANGE ACT AND THE RULES AND REGULATIONS ADOPTED BY THE SEC
THEREUNDER AND SHALL TAKE SUCH FURTHER ACTION AS ANY HOLDER OR HOLDERS OF
REGISTRABLE SECURITIES MAY REASONABLY REQUEST, ALL TO THE EXTENT REQUIRED TO
ENABLE SUCH HOLDERS TO SELL REGISTRABLE SECURITIES PURSUANT TO RULE 144 ADOPTED
BY THE SEC UNDER THE SECURITIES ACT (AS SUCH RULE MAY BE AMENDED FROM TIME TO
TIME) OR ANY SIMILAR RULE OR REGULATION HEREAFTER ADOPTED BY THE SEC.  UPON
REQUEST, THE COMPANY SHALL DELIVER TO ANY HOLDER OF REGISTRABLE SECURITIES A
WRITTEN STATEMENT AS TO WHETHER IT HAS COMPLIED WITH SUCH REQUIREMENTS.  THE
COMPANY SHALL AT ALL TIMES USE ITS BEST EFFORTS TO CAUSE THE COMMON STOCK TO BE
LISTED ON ONE OR MORE OF THE NEW YORK STOCK EXCHANGE, THE AMERICAN STOCK
EXCHANGE OR THE NASDAQ NATIONAL MARKET SYSTEM.

(D)                                 ADJUSTMENTS AFFECTING REGISTRABLE
SECURITIES.  THE COMPANY SHALL NOT TAKE ANY ACTION, OR PERMIT ANY CHANGE TO
OCCUR, WITH RESPECT TO ITS SECURITIES WHICH WOULD ADVERSELY AFFECT THE ABILITY
OF THE HOLDERS OF REGISTRABLE SECURITIES TO INCLUDE SUCH REGISTRABLE SECURITIES
IN A REGISTRATION UNDERTAKEN PURSUANT TO THIS AGREEMENT OR WHICH WOULD ADVERSELY

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AFFECT THE MARKETABILITY OF SUCH REGISTRABLE SECURITIES IN ANY SUCH REGISTRATION
(INCLUDING, WITHOUT LIMITATION, EFFECTING A STOCK SPLIT OR A COMBINATION OF
SHARES).

(E)                                  REMEDIES.  ANY PERSON HAVING RIGHTS UNDER
ANY PROVISION OF THIS AGREEMENT SHALL BE ENTITLED TO ENFORCE SUCH RIGHTS
SPECIFICALLY (WITHOUT POSTING A BOND OR OTHER SECURITY), TO RECOVER DAMAGES
CAUSED BY REASON OF ANY BREACH OF ANY PROVISION OF THIS AGREEMENT AND TO
EXERCISE ALL OTHER RIGHTS GRANTED BY LAW.  THE PARTIES HERETO AGREE AND
ACKNOWLEDGE THAT MONEY DAMAGES MAY NOT BE AN ADEQUATE REMEDY FOR ANY BREACH OF
THE PROVISIONS OF THIS AGREEMENT AND THAT, IN ADDITION TO ANY OTHER RIGHTS AND
REMEDIES EXISTING IN ITS FAVOR, ANY PARTY SHALL BE ENTITLED TO SPECIFIC
PERFORMANCE AND/OR OTHER INJUNCTIVE RELIEF FROM ANY COURT OF LAW OR EQUITY OF
COMPETENT JURISDICTION (WITHOUT POSTING ANY BOND OR OTHER SECURITY) IN ORDER TO
ENFORCE OR PREVENT VIOLATION OF THE PROVISIONS OF THIS AGREEMENT.

(F)                                    CONSENT TO AMENDMENTS.  EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED HEREIN, THE PROVISIONS OF THIS AGREEMENT MAY BE
AMENDED OR MODIFIED AND THE COMPANY MAY TAKE ANY ACTION HEREIN PROHIBITED, OR
OMIT TO PERFORM ANY ACT HEREIN REQUIRED TO BE PERFORMED BY IT, ONLY IF THE
COMPANY HAS OBTAINED THE WRITTEN CONSENT OF THE HOLDERS OF A MAJORITY OF THE
REGISTRABLE SECURITIES OUTSTANDING AT THE TIME THE AMENDMENT OR WAIVER BECOMES
EFFECTIVE; PROVIDED THAT IF ANY SUCH AMENDMENT, MODIFICATION OR WAIVER IS TO A
PROVISION IN THIS AGREEMENT THAT REQUIRES A SPECIFIC VOTE TO TAKE AN ACTION
THEREUNDER OR TO TAKE AN ACTION WITH RESPECT TO THE MATTERS DESCRIBED THEREIN,
SUCH AMENDMENT, MODIFICATION OR WAIVER SHALL NOT BE EFFECTIVE UNLESS SUCH VOTE
IS OBTAINED WITH RESPECT TO SUCH AMENDMENT, MODIFICATION OR WAIVER.  NO OTHER
COURSE OF DEALING BETWEEN THE COMPANY AND THE HOLDER OF ANY REGISTRABLE
SECURITIES OR ANY DELAY IN EXERCISING ANY RIGHTS HEREUNDER SHALL OPERATE AS A
WAIVER OF ANY RIGHTS OF ANY SUCH HOLDERS.  FOR PURPOSES OF THIS AGREEMENT,
REGISTRABLE SECURITIES HELD BY THE COMPANY OR ANY SUBSIDIARIES SHALL NOT BE
DEEMED TO BE OUTSTANDING.

(G)                                 SUCCESSORS AND ASSIGNS.  ALL COVENANTS AND
AGREEMENTS IN THIS AGREEMENT BY OR ON BEHALF OF ANY OF THE PARTIES HERETO SHALL
BIND AND INURE TO THE BENEFIT OF THE RESPECTIVE SUCCESSORS AND ASSIGNS OF THE
PARTIES HERETO WHETHER SO EXPRESSED OR NOT.  IN ADDITION, WHETHER OR NOT ANY
EXPRESS ASSIGNMENT HAS BEEN MADE, THE PROVISIONS OF THIS AGREEMENT WHICH ARE FOR
THE BENEFIT OF PURCHASERS OR HOLDERS OF REGISTRABLE SECURITIES ARE ALSO FOR THE
BENEFIT OF, AND ENFORCEABLE BY, ANY SUBSEQUENT HOLDER OF REGISTRABLE SECURITIES.

(H)                                 SEVERABILITY.  WHENEVER POSSIBLE, EACH
PROVISION OF THIS AGREEMENT SHALL BE INTERPRETED IN SUCH MANNER AS TO BE
EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS AGREEMENT
IS HELD TO BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION
SHALL BE INEFFECTIVE ONLY TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY,
WITHOUT INVALIDATING THE REMAINDER OF THIS AGREEMENT.

(I)                                     COUNTERPARTS.  THIS AGREEMENT MAY BE
EXECUTED SIMULTANEOUSLY IN TWO OR MORE COUNTERPARTS (INCLUDING BY MEANS OF
TELECOPIED SIGNATURE PAGES), ANY ONE OF WHICH NEED NOT CONTAIN THE SIGNATURES OF
MORE THAN ONE PARTY, BUT ALL SUCH COUNTERPARTS TAKEN TOGETHER SHALL CONSTITUTE
ONE AND THE SAME AGREEMENT.

(J)                                     DESCRIPTIVE HEADINGS.  THE DESCRIPTIVE
HEADINGS OF THIS AGREEMENT ARE INSERTED FOR CONVENIENCE ONLY AND DO NOT
CONSTITUTE A SUBSTANTIVE PART OF THIS AGREEMENT.

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WHENEVER REQUIRED BY THE CONTEXT, ANY PRONOUN USED IN THIS AGREEMENT SHALL
INCLUDE THE CORRESPONDING MASCULINE, FEMININE OR NEUTER FORMS, AND THE SINGULAR
FORMS OF NOUNS, PRONOUNS, AND VERBS SHALL INCLUDE THE PLURAL AND VICE VERSA. 
REFERENCE TO ANY AGREEMENT, DOCUMENT, CERTIFICATE, OR INSTRUMENT MEANS SUCH
AGREEMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT AS THE SAME IS AMENDED, WAIVED OR
OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS THEREOF AND,
IF APPLICABLE, HEREOF.  EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, WORDS
SUCH AS “HEREIN,” “HEREUNDER,” “HEREOF” AND THE LIKE SHALL BE DEEMED TO REFER TO
THIS AGREEMENT AS A WHOLE AND NOT TO ANY PARTICULAR DOCUMENT OR ARTICLE,
SECTION, PARAGRAPH OR OTHER PORTION OF A DOCUMENT.  THE USE OF THE WORDS
“INCLUDE” OR “INCLUDING” IN THIS AGREEMENT SHALL BE BY WAY OF EXAMPLE RATHER
THAN BY LIMITATION.  THE USE OF THE WORDS “OR,” “EITHER” OR “ANY” SHALL NOT BE
EXCLUSIVE.

(K)                                  GOVERNING LAW.  ALL ISSUES AND QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF
THE STATE OF ILLINOIS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF ILLINOIS.

(L)                                     NOTICES.  ALL NOTICES, DEMANDS OR OTHER
COMMUNICATIONS TO BE GIVEN OR DELIVERED UNDER OR BY REASON OF THE PROVISIONS OF
THIS AGREEMENT SHALL BE IN WRITING AND SHALL BE DEEMED TO HAVE BEEN GIVEN WHEN
DELIVERED PERSONALLY TO THE RECIPIENT, TELECOPIED TO THE RECIPIENT (WITH HARD
COPY SENT BY OVERNIGHT COURIER IN THE MANNER PROVIDED HEREUNDER) IF SENT PRIOR
TO 4:00 P.M. CHICAGO TIME ON A BUSINESS DAY (AND OTHERWISE, ON THE IMMEDIATELY
SUCCEEDING BUSINESS DAY), ONE BUSINESS DAY AFTER BEING SENT TO THE RECIPIENT BY
REPUTABLE OVERNIGHT COURIER SERVICE (CHARGES PREPAID) OR THREE BUSINESS DAYS
AFTER BEING MAILED TO THE RECIPIENT BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED AND POSTAGE PREPAID.  SUCH NOTICES, DEMANDS AND OTHER
COMMUNICATIONS SHALL BE SENT TO EACH INVESTOR AT THE ADDRESS INDICATED ON THE
SCHEDULE OF INVESTORS AND TO THE COMPANY AT THE ADDRESS INDICATED BELOW:

 

Affordable Residential Communities, Inc.
7887 East Belleview Avenue, Suite 200
Englewood, CO 80111
Attn:  Larry D. Willard
Telecopy No.: (303) 749-3118

 

 

 

with a copy to:

 

 

 

Scott L. Gesell
ARC - 7887 East Belleview Avenue, Suite 200
Englewood, CO  80111
Telecopy No.: (303) 749-2073

 

or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.

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(M)                               BUSINESS DAYS.  IF ANY TIME PERIOD FOR GIVING
NOTICE OR TAKING ACTION HEREUNDER EXPIRES ON A DAY WHICH IS A SATURDAY, SUNDAY
OR LEGAL HOLIDAY IN THE STATE OF ILLINOIS OR THE JURISDICTION IN WHICH THE
COMPANY’S PRINCIPAL OFFICE IS LOCATED, THE TIME PERIOD SHALL AUTOMATICALLY BE
EXTENDED TO THE BUSINESS DAY IMMEDIATELY FOLLOWING SUCH SATURDAY, SUNDAY OR
LEGAL HOLIDAY.

(N)                                 DELIVERY BY FACSIMILE.  THIS AGREEMENT, THE
AGREEMENTS REFERRED TO HEREIN AND EACH OTHER AGREEMENT OR INSTRUMENT ENTERED
INTO IN CONNECTION HEREWITH OR THEREWITH OR CONTEMPLATED HEREBY OR THEREBY, AND
ANY AMENDMENTS HERETO OR THERETO, TO THE EXTENT SIGNED AND DELIVERED BY MEANS OF
A FACSIMILE MACHINE, SHALL BE TREATED IN ALL MANNER AND RESPECTS AS AN ORIGINAL
AGREEMENT OR INSTRUMENT AND SHALL BE CONSIDERED TO HAVE THE SAME BINDING LEGAL
EFFECT AS IF IT WERE THE ORIGINAL SIGNED VERSION THEREOF DELIVERED IN PERSON. 
AT THE REQUEST OF ANY PARTY HERETO OR TO ANY SUCH AGREEMENT OR INSTRUMENT, EACH
OTHER PARTY HERETO OR THERETO SHALL REEXECUTE ORIGINALS FORMS THEREOF AND
DELIVER THEM TO ALL OTHER PARTIES.  NO PARTY HERETO OR TO ANY SUCH AGREEMENT OR
INSTRUMENT SHALL RAISE THE USE OF A FACSIMILE MACHINE TO DELIVER A SIGNATURE OR
THE FACT THAT ANY SIGNATURE OR AGREEMENT OR INSTRUMENT WAS TRANSMITTED OR
COMMUNICATED THROUGH THE USE OF A FACSIMILE MACHINE AS A DEFENSE TO THE
FORMATION OR ENFORCEABILITY OF A CONTRACT AND EACH SUCH PARTY FOREVER WAIVES ANY
SUCH DEFENSE.

*     *     *     *    *

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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

AFFORDABLE RESIDENTIAL COMMUNITIES INC.

 

 

 

By:

/s/ Scott L. Gesell

 

 

Its:

Executive Vice President

 

 

 

 

FLEXPOINT FUND, L.P.

 

 

 

By:

Flexpoint Management, L.P

 

Its:

General Partner

 

 

 

 

 

By:

/s/ Donald J. Edwards

 

 

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SCHEDULE OF INVESTORS

Flexpoint Fund, L.P.

c/o Flexpoint Partners, LLC

676 North Michigan Avenue

Suite 3300

Chicago, Illinois 60611

Attention:  Donald J. Edwards

Telephone No.:  (312) 327-4520

Facsimile No.:  (312) 327-4525

with a copy to:

Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, IL  60601

Attention:  Sanford E. Perl, P.C.

Telephone No.:  (312) 861-2000

Facsimile No.:  (312) 861-2200

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