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EXHIBIT 10.54
SERIES D WARRANT HOLDERS REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of August , 1996, by and among ▇▇▇▇▇▇▇▇▇▇ HEALTHCARE CORPORATION, a
California corporation (together with its permitted successors and assigns, the
"Company"), and the persons whose signatures appear on the execution pages of
this Agreement (collectively, and with any subsequent holders of Registrable
Shares (as defined below), the "Holders").
WHEREAS, in connection with that certain Amended and Restated Merger
Agreement dated as of May 29, 1996 (as further amended from time to time in
accordance with the terms thereof (the "Merger Agreement"), by and among the
Company, Champion Healthcare Corporation, a Delaware corporation, and PC Merger
Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company,
the Company has agreed to provide the Holders with the registration rights set
forth in this Agreement;
NOW, THEREFORE, the parties hereto, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, intending to be
bound hereby, agree as follows:
SECTION 1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
Affiliate: With respect to any specified person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this
definition, "control" when used with respect to any specified person means the
power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "con trolled" have meanings
correlative to the foregoing.
Agreement: See the introductory clauses hereof.
Business Day: Any day that is not a Saturday, a Sunday, a legal holiday
or a day on which banking institutions in the States of New York or Texas are
not required to be open.
Company: See the introductory clauses hereof.
Company Common Stock: The common stock, no stated value per share, of the
Company or any other shares of capital stock of the Company into which such
stock shall be reclassified or changed. After the date hereof, if the Company
Common Stock has been so reclassified or
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changed, or if the Company pays a dividend or makes a distribution of the
Company Common Stock in shares of capital stock, or subdivides (or combines)
its outstanding shares of the Company Common Stock into a greater (or smaller)
number of shares of the Company Common Stock, a share of the Company Common
Stock shall be deemed to be such number of shares of capital stock and amount
of other securities to which a holder of a share of the Company Common Stock
outstanding immediately prior to such reclassification, exchange, dividend,
distribution, subdivision or combination would be entitled.
Delay Period: See Section 2(c) hereof.
Demand Notice: See Section 2(a) hereof.
Demand Registration: See Section 2(b) hereof.
Effectiveness Period: See Section 2(c) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Holders: See the introductory clauses hereof.
indemnified party: See Section 8(c) hereof.
indemnifying party: See Section 8(c) hereof.
Losses: See Section 8(a) hereof.
Merger Agreement: See the introductory clauses hereof.
person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Piggyback Registration: See Section 3(a) hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A or any term sheet meeting the requirements
of Rule 434), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable Shares
covered by such Registration Statement and all other amendments and supplements
to the prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such
Prospectus.
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Registrable Shares: Each Share until (i) a registration statement (other
than the Registration Statement on Form S-4 effective prior to the date hereof)
covering such Share has been declared effective by the SEC and such Share has
been disposed of pursuant to such effective registration statement, (ii) such
Shares can be sold under circumstances in which all of the applicable
conditions of Rule 144 (or any similar provisions then in force, but not Rule
144A) under the Securities Act are met or (iii) such Share is otherwise freely
transferable under the Securities Act.
Registration Statement: Any registration statement of the Company under
the Securities Act that covers any of the Registrable Shares pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective
amendments, all exhibits, and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
Rule 144: Rule 144 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.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
Shares: The shares of Company Common Stock issued or issuable upon
exercise of warrants to purchase such shares, which warrants are held by the
Holders as of the date of this Agreement as set forth on the signature
pages hereto.
underwritten registration or underwritten offering: A registration or
offering in which securities of the Company are sold to an underwriter for
reoffering to the public.
SECTION 2. Demand Registration.
(a) The Holders of 50% or more of the then existing Registrable Shares
shall have the right, by written notice (the "Demand Notice") given to the
Company so long as this Agreement has not been terminated in accordance with
Section 9.1 hereof, to request that the Company register under and in
accordance with the provisions of the Securities Act all or part of the
Registrable Shares designated by such holders. The Demand Notice shall specify
shall specify the amount of Registrable Shares to be registered and the
intended methods of disposition thereof. The Holders shall be entitled in the
aggregate to one Demand Registration pursuant to this Section 2 unless a Demand
Registration did not become effective or was not maintained effective for a
period
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(whether or not continuous) of at least 120 days or such shorter period
at the end of which all Registrable Shares covered by such Demand Registration
have been sold pursuant thereto, in which case the Holders will be entitled in
the aggregate to one additional Demand Registration pursuant hereto for each
instance in which the condition set forth above had not been satisfied.
(b) The Company shall file with, and shall use reasonable best efforts to
cause to be declared effective by, the SEC within 90 days of the date on which
the Company first receives the Demand Notice given by the Holders pursuant to
Section 2 hereof, a Registration Statement under the Securities Act relating to
the number of Registrable Shares specified in such Demand Notice (a "Demand
Registration"); provided, that the Company shall have the right for a
reasonable period of time not in excess of 90 days (exercisable by delivery of
reasonable notice to the Holders of Registrable Shares included in such
Registration Statement) to delay the filing of such Registration Statement if,
in the Company's good faith exercise of its reasonable business judgment, (i)
such registration and offering would adversely affect or interfere with a
pending bona fide corporate transaction involving, or any bona fide financing
by, the Company, (ii) the Company is in possession of material information that
it determines, if disclosed in a registration statement, would have a material
adverse effect on the business or operations of the Company and would not
otherwise be required under law to be publicly disclosed or (iii) the Company
is engaged in a program for the purchase of any shares of Company Common Stock,
unless such repurchase program and the requested registration may proceed
concurrently pursuant to an exemption from Rule 10b6 under the Exchange Act;
provided, that the Company may so delay the filing of such Registration
Statement with respect to any one Demand Registration twice, but no more than
twice, in any twelve-month period.
(c) The Company agrees to use reasonable best efforts to keep any
Registration Statement filed pursuant to this Section 2 continuously effective
and usable for the resale of Registrable Shares for a period of 120 days from
the date on which the SEC declares such Registration Statement effective or
such shorter period which will terminate when all the Registrable Shares
covered by such Registration Statement have been sold pursuant to such
Registration Statement. The foregoing notwithstanding, the Company shall have
the right to suspend the use of the Registration Statement for a reasonable
length of time not exceeding with respect to any one Demand Registration an
aggregate of 90 days (a "Delay Period") if and only if in the good faith
exercise of the Company's reasonable business judgment (i) such use would
adversely affect or interfere with a pending bona fide corporate transaction
involving, or any bona fide financing by, the Company, (ii) the Company is in
possession of material information that it determines, if disclosed in a
registration statement, would have a material adverse effect on the business or
operations of the Company and would not
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otherwise be required under law to be publicly disclosed or (iii) the Company
is engaged in a program for the purchase of any shares of Company Common Stock,
unless such repurchase program and the requested registration may proceed
concurrently pursuant to an exemption from Rule 10b6 under the Exchange Act;
provided, that the Company may so suspend sales with respect to any one Demand
Registration twice, but no more than twice, in any twelve month period. The
Company shall provide written notice to the Holders of the beginning and end of
each Delay Period and the Holders shall cease all disposition efforts with
respect to Registrable Shares held by them immediately upon receipt of notice
of the beginning of any Delay Period. The period for which the Company is
required to maintain the effectiveness of the Registration Statement shall be
extended by the aggregate number of days of all Delay Periods. Such period,
including the extension thereof required by the preceding sentence, is
hereafter referred to as the "Effectiveness Period."
(d) In the case of a proposed offering pursuant to a Demand Registration,
the Company may, in its sole discretion, include shares of Company Common Stock
in such Demand Registration (whether for the account of the Company or
otherwise, including without limitation shares of Company Common Stock held by
security holders, if any, who have piggyback registration rights with respect
thereto) on the same terms and conditions as the Registrable Shares.
Notwithstanding the foregoing, if the Company or, in case of any underwritten
public offering, the managing underwriter or underwriters participating in such
offering conclude that the total amount of shares of Company Common Stock
requested to be included in such Demand Registration exceeds the amount which
can be sold without materially and adversely delaying or affecting the success
of the offering, then the amount of securities to be offered for the account of
all holders other than the Company and the Holders shall be reduced (to zero if
necessary) pro rata on the basis of the number of shares of Company Common
Stock requested to be registered by each such Holder. If, after such cut back,
the Company or such underwriter concludes that the total amount of securities
to be included in such Demand Registration still materially and adversely
affects the success of such offering, then the amount of securities to be
offered for the account of the Company shall be reduced (to zero if necessary).
(e) If at any time the Holders of two-thirds of the Registrable Shares
which were requested to be included pursuant to Section 2(a) shall, by written
notice to the Company, request the Registration Statement not be declared
effective or otherwise request a termination or withdrawal of the Registration
Statement, and no Shares included in such Registration Statement have been sold
pursuant thereto, then provided such requesting Holders reimburse the Company
for its out of picket costs incurred in connection with complying with the
request to register such Shares, the Company shall terminate such registration
statement and the Company's obligation under paragraph 2(a) shall continue as
though such request to file a Registration Statement
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thereunder shall not have been made; provided, that the holders may not give a
Demand Notice within six months of the date the Company terminates or withdraws
such Registration Statement.
SECTION 3. Piggyback Registration.
(a) Right to Piggyback. If at any time the Company proposes to file a
registration statement under the Securities Act with respect to an offering of
Company Common Stock (other than a registration statement (i) on Form S-4 or S-
8 or any successor forms thereto, or (ii) filed solely in connection with an
exchange offer or dividend reinvestment plan) whether or not for its own
account, then the Company shall give written notice of such proposed filing to
the Holders at least twenty five days before the anticipated filing date. Such
notice shall offer the Holders the opportunity to register such amount of
Registrable Shares as they may request (a "Piggyback Registration"). Subject
to Section 3(b) hereof, the Company shall include in each such Piggyback
Registration all Registrable Shares with respect to which the Company has
received written requests for inclusion therein within twenty days after notice
has been given to the applicable holder. The Holders shall be permitted to
withdraw all or part of the Registrable Shares from a Piggyback Registration by
giving written notice to the Company at least one Business Day prior to the
expected or actual effective date of such Piggyback Registration.
(b) Priority on Piggyback Registrations. The Company shall permit the
Holders to include all such Registrable Shares on the same terms and conditions
as any similar securities, if any, of the Company included therein.
Notwithstanding the foregoing, if the Company or an underwriter participating
in such offering concludes in good faith that the total amount of securities
requested to be included in such Piggyback Registration exceeds the amount
which can be sold without materially and adversely delaying or affecting the
success of the offering, then the amount of securities to be offered for the
account of the Holders shall be reduced in the following manner:
(i) if such Piggyback Registration was initiated as a result of a
primary registration on behalf of the Company, (and not a secondary on behalf
of holders of securities of the Company pursuant to a holders demand
registration right), the amount of securities to be offered for the account of
the Holders and other holders of securities who have piggyback registration
rights with respect thereto shall be reduced (to zero if necessary) pro rata on
a basis of the number of capital stock equivalents requested to be registered
by each such older participating in such offering; and
(ii) if such Piggyback Registration was initiated by a stockholder
demand for an underwritten secondary registration on behalf of holders of
securities of the Company other than the Holders, the
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Company shall include in such registration: (x) first, up to the full number of
common stock equivalents of such persons exercising "demand" registration
rights, and (y) second, the number of securities to be offered for the account
of the Holders and other holders of securities who have piggyback registration
rights with respect thereto in excess of the amount of securities such persons
exercising "demand" registration rights propose to sell (allocated pro rata on
the basis of the number of common stock equivalents requested to be registered
by such holders).
SECTION 4. Hold-Back Agreements.
The Holders agree, if requested by the Company or the managing underwriter
in connection with a public offering of equity securities of the Company
(whether for the account of the Company or otherwise), not to effect any public
sale or distribution of any shares of Company Common Stock, including a sale
pursuant to Rule 144 (except as part of such underwritten registration), during
a period equivalent to that requested by the Company or such underwriter,
provided that such period shall not exceed 120 days in the first such offering
by the Company and 90 days in all such offerings thereafter.
SECTION 5. Registration Procedures.
In connection with the registration obligations of the Company and in
accordance with Sections 2 and 3 hereof, the Company will use its best efforts
to effect such registrations to permit the sale of such Registrable Shares in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company shall:
(a) Prepare and file with the SEC a Registration Statement or Registration
Statements on such form which shall be available for the sale of the
Registrable Shares by the Holders thereof in accordance with the intended
method or methods of distribution thereof, and use reasonable best efforts to
cause such Registration Statement to become effective as soon as practicable
after such filing and to remain effective as provided herein; provided,
however, that before filing a Registration Statement or Prospectus or any
amendments or supplements thereto (including documents that would be
incorporated or deemed to be incorporated therein by reference), the Company
shall, upon the written request of participating Holders, furnish or otherwise
make available to such holders of the Registrable Shares covered by such
Registration Statement, their counsel and the managing underwriters, if any,
copies of all such documents proposed to be filed, which documents will be
subject to the review of such holders, their counsel and such underwriters, if
any, provided, however, that the Company shall not be required to deliver to
such holders a copy of any such document that has not been materially changed
from a copy of such document that was previously delivered to such holders. The
Company shall not file any such Registration Statement or Prospectus or any
amendments or
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supplements thereto (including such documents that, upon filing, would be
incorporated or deemed to be incorporated by reference therein) to which the
holders of a majority of the Registrable Shares covered by such Registration
Statement, their counsel or the managing underwriters, if any, shall reasonably
object in writing on a timely basis unless, in the opinion of the Company, such
filing is necessary to comply with applicable law.
(b) Prepare and file with the SEC such amendments (including post-
effective amendments) to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective during the period
provided herein with respect to the disposition of all securities covered by
such Registration Statement; and cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provision then in force) under
the Securities Act.
(c) Notify the Holders registering Registrable Shares as part of such
Registration Statement, their counsel and the managing underwriters, if any,
promptly and (if requested by any such person) confirm such notice in writing,
(i) when a Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and, with respect to a Registration Statement or any post-
effective amendment, when the same has become effective, (ii) of any request by
the SEC for amendments or supplements to a Registration Statement or related
Prospectus or for additional information regarding the Holders registering
shares as part of such Registration Statement, (iii) of the issuance by the SEC
of any stop order suspending the effectiveness of a Registration Statement or
the initiation of any proceedings for that purpose, (iv) if at any time the
representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated by Section 5(j) below cease
to be true and correct, (v) 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 (vi) of
the happening of any event that requires the making of any changes in such
Registration Statement, Prospectus or documents incorporated or deemed to be
incorporated therein by reference so that in the case of the Registration
Statement 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 not misleading, and that in the case of the Prospectus
it will not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(d) Use reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the
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lifting of any suspension of the qualification or exemption from qualification
of any of the Registrable Shares for sale in any jurisdiction.
(e) If requested by a Holder, furnish to counsel for the Holders and each
managing underwriter, if any, without charge, one conformed copy of each
Registration Statement as declared effective by the SEC and of each post-
effective amendment thereto, in each case including financial statements and
schedules and all exhibits and reports incorporated or deemed to be
incorporated therein by reference; and deliver, without charge, such number of
copies of the preliminary prospectus, each amended preliminary prospectus, each
final Prospectus and each post-effective amendment or supplement thereto, as
the Holder may reasonably request in order to facilitate the disposition of the
Registrable Shares covered by each Registration Statement in conformity with
the requirements of the Securities Act.
(f) Prior to any public offering of Registrable Shares, use reasonable
best efforts to register or qualify such Registrable Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions in the United
States as the holders of a majority of the Registrable Shares to which such
public offering relates shall reasonably request in writing; and do any and all
other reasonable acts or things necessary or advisable to enable the Holders to
consummate the disposition in such jurisdictions of such Registrable Shares
covered by the Registration Statement, provided, however, that the Company
shall in no event be required to qualify generally to do business as a foreign
corporation or as a dealer in any jurisdiction where it is not at the time so
qualified or to execute or file a consent to general service of process in any
such jurisdiction where it has not theretofore done so or to take any action
that would subject it to service of process or taxation in any such
jurisdiction where it is not then subject.
(g) Except during any Delay Period, upon the occurrence of any event
contemplated by Sections 5(c)(ii) or 5(c)(vi) above, prepare a supplement or
post-effective amendment to each Registration Statement or related Prospectus
or any document incorporated or deemed to be incorporated therein by reference,
or file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Shares being sold thereunder, such Prospectus
will not contain an 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 light of the circumstances under which they were made, not
misleading.
(h) Use its best efforts to cause all Registrable Shares covered by such
Registration Statement to be listed on each securities exchange or quoted on
each automated interdealer quotation system, if any, on which the shares of
Company Common Stock are then listed or quoted.
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(i) On or before the effective date of the Registration Statement, provide
the transfer agent of the Company for the Registrable Shares with printed
certificates for the Registrable Shares, which are in a form eligible for
deposit with The Depository Trust Company.
(j) If requested by the Holders of a majority of the Registrable Shares
being sold, enter into one or more customary "firm commitment" or "best
efforts" underwriting agreements, engagement letters, agency agreements or
similar agreements, as appropriate, and in such connection, whether or not any
such agreement is entered into and whether or not the Registration is an
underwritten registration, the Company shall (i) make such representations and
warranties to the holders of such Registrable Shares and the underwriters, if
any, with respect to the business of the Company and its subsidiaries, and the
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings, and if true, confirm the same if and when requested,
(ii) use its reasonable efforts to obtain opinions of counsel to the Company
and updates thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriters, if any, and
counsel to such Holders of the Registrable Shares being sold), addressed to
each such selling Holder of Registrable Shares and each of the underwriters, if
any, covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such counsel and underwriters, (iii) use its reasonable efforts to obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each such
selling Holder of Registrable Shares (unless such accountants shall be
prohibited from so addressing such letters by applicable standards of the
accounting profession) and each of the underwriters, if any, such letters to be
in customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings, and (iv) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures substantially to the effect set forth in Section 8
hereof with respect to all parties to be indemnified pursuant to said Section.
The above shall be done at each closing under such underwriting or similar
agreement, or as and to the extent required thereunder.
(k) Comply with all applicable rules and regulations of the SEC and make
generally available to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder, or
any similar rule promulgated under the
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Securities Act, no later than forty-five (45) days after the end of any twelve
(12) month period (or ninety (90) days after the end of any twelve (12) month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Shares are sold to underwriters in a "firm
commitment" or "best efforts" underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said twelve (12) month periods.
The Company may require each seller of Registrable Shares as to which any
registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such Registrable Shares as the
Company may, from time to time, request in writing and as, in the opinion of
counsel for the Company, is required by law to effect such registration. If
any such information with respect to a seller or such distribution of
Registrable Shares is not furnished within a reasonable period of time after
receipt of such request, the Company may exclude such Shareholder's Registrable
Shares from such Registration Statement. Each seller of Registrable Shares
agrees to notify the Company as promptly as practicable following its discovery
of any material inaccuracy or material change in information so furnished by
such seller to the Company or of the occurrence of any event that causes any
prospectus relating to such registration to contain an untrue statement of a
material fact or omit to state any material fact regarding such seller or such
distribution of Registrable Shares that is required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made.
Each holder of Registrable Shares agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
5(c)(ii), 5(c)(iii), 5(c)(v) or 5(c)(vi) hereof, that such Holder shall
forthwith discontinue disposition of such Registrable Shares covered by such
Registration Statement or Prospectus until receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(g) hereof, or
until such Holder is advised in writing by the Company that the use of the
applicable Prospectus may be resumed, and has received copies of any amended or
supplemented Prospectus or any additional or supplemental filings which are
incorporated, or deemed to be incorporated, by reference in such Prospectus
and, if requested by the Company, such Holder shall deliver to the Company (at
the expense of the Company) all copies then in its possession, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Shares at the time of receipt of such request.
Each holder of Registrable Shares further agrees not to utilize any
material other than the applicable current Prospectus in connection
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with the offering of Registrable Shares pursuant to a Demand Registration or
otherwise hereunder.
SECTION 6. Registration Expenses.
(a) Whether or not any Registration Statement becomes effective, the
Company shall pay all costs, fees and expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation
(i) all registration and filing fees, (ii) fees and expenses of compliance with
securities or Blue Sky laws, (iii) printing expenses (including without
limitation expenses of printing certificates for Registrable Shares and of
printing prospectuses if the printing of prospectuses is requested by the
managing underwriter, if any, or by the Holders of a majority of the
Registrable Shares included in any Registration Statement), (iv) messenger,
telephone and delivery expenses, (v) fees and disbursements of counsel for the
Company and one special counsel for the sellers of Registrable Shares (subject
to the provisions of Section 6(b) hereof), and (vi) fees and disbursements of
all independent certified public accountants of the Company (including without
limitation expenses of any "cold comfort" letters required in connection with
this Agreement) and all other persons retained by the Company in connection
with the Registration Statement. In addition, the Company shall 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 and the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange on which
similar securities issued by the Company are then listed. Notwithstanding the
foregoing, each participating Holder shall pay all commissions, fees or
discounts payable to brokers, dealers or underwriters and all transfer taxes in
connection with the sale of its Registrable Shares.
(b) In connection with any Demand Registration or Piggyback Registration
(including any "shelf" registration in connection therewith) hereunder, the
Company shall reimburse the Holders of the Registrable Shares being registered
in such registration for the reasonable fees and disbursements of not more than
one counsel (together with appropriate local counsel, if required) chosen by
the Holders of a majority of all of such Registrable Shares.
SECTION 7. Underwritten Registrations.
(a) Subject to Section 7(b) hereof, the Holders shall have the right, by
written notice, to request that any Demand Registration be made pursuant to an
underwritten offering.
(b) In the case of any underwritten registration, the Company shall select
(with the consent of the participating Holders) the institution or institutions
that shall manage or lead the offering or
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placement. The Holders shall not be entitled to participate unless and until it
or they shall enter into an underwriting or other agreement with such lead
institutions for such offering in such form as the Company and such lead
institutions shall reasonably determine.
SECTION 8. Indemnification.
(a) Indemnification by the Company. The Company shall, without limitation
as to time, indemnify and hold harmless, to the full extent permitted by law,
each Holder of Registrable Shares whose Registrable Shares are covered by a
Registration Statement or Prospectus, the officers, directors and agents and
employees of each of them, each Person who controls each such holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, agents and employees of each such controlling
person, to the fullest extent lawful, from and against any and all losses,
claims, damages, liabilities, costs (including, without limitation, reasonable
costs of preparing, investigating or defending such claim and reasonable
attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising
out of or based upon any untrue or alleged untrue statement of a material fact
contained in such Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same arise out of or are based upon information furnished in
writing to the Company by such holder expressly for use therein or any
violation or alleged violation by the Company of the Securities Act, Exchange
Act or any other federal or state securities laws, rule or regulation
applicable to the Company and relating to the action or inaction by the Company
in connection with any such registration or qualification; provided, however,
that the Company shall not be liable to any Holder of Registrable Shares to the
extent that any such Losses arise out of or are based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
preliminary prospectus if (i) such Holder failed to send or deliver a copy of
the Prospectus with or prior to the delivery of written confirmation of the
sale by such Holder of a Registrable Security to the person asserting the claim
from which such Losses arise and (ii) the Prospectus would have corrected in
all material respects such untrue statement or alleged untrue statement or such
omission or alleged omission; and provided further, that the Company shall not
be liable in any such case to the extent that any such Losses arise out of or
are based upon an untrue statement or alleged untrue statement or omission or
alleged omission in the Prospectus, if (x) such untrue statement or alleged
untrue statement, omission or alleged omission is corrected in all material
respects in an amendment or supplement to the Prospectus and (y) having
previously been furnished by or on behalf of the Company with copies of the
Prospectus as so amended or supplemented, such Holder
14
thereafter fails to deliver such Prospectus as so amended or supplemented,
prior to or concurrently with the sale of a Registrable Security to the person
asserting the claim from which such Losses arise.
(b) Indemnification by Holder of Registrable Securities. In connection
with any Registration Statement in which a Holder of Registrable Securities is
participating, such holder of Registrable Securities shall furnish to the
Company in writing such information as the Company reasonably requests for use
in connection with any Registration Statement or Prospectus and agrees to
indemnify, to the full extent permitted by law (but in no event in an amount to
exceed the gross proceeds received by such Holder upon the sale of its Shares
pursuant to such Registration Statement), the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and
the directors, officers, agents or employees of such controlling persons, from
and against all Losses arising out of or based upon any untrue or alleged
untrue statement of a material fact contained in any Registration Statement or
Prospectus or any amendment or supplement thereto, or any preliminary
prospectus, or arising out of or based upon any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, to the extent, but only to the extent, that
such untrue or alleged untrue statement or omission or alleged omission is
contained in any information so furnished in writing by such holder to the
Company expressly for use in such Registration Statement or Prospectus and that
such information was relied upon by the Company in preparation of such
Registration Statement or Prospectus or amendment, supplement or preliminary
prospectus.
(c) Conduct of Indemnification Proceedings. If any Person shall be
entitled to indemnity hereunder (an "indemnified party"), such indemnified
party shall give prompt written notice to the party from which such indemnity
is sought (the "indemnifying party") of any claim or of the commencement of any
proceeding with respect to which such indemnified party seeks indemnification
or contribution pursuant hereto; provided, however, that the delay or failure
to so notify the indemnifying party shall not relieve the indemnifying party
from any obligation or liability except to the extent that the indemnifying
party has been prejudiced materially by such delay or failure. The indemnifying
party shall have the right, exercisable by giving written notice to an
indemnified party promptly after the receipt of written notice from such
indemnified party of such claim or proceeding, to assume, at the indemnifying
party's expense, the defense of any such claim or proceeding, with counsel
reasonably satisfactory to such indemnified party; provided, however, that an
indemnified party shall have the right to employ separate counsel in any such
claim or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified
15
party unless: (l) the indemnifying party agrees in writing to pay such fees
and expenses, (2) the indemnifying party fails promptly to assume the defense
of such claim or proceeding or fails to employ counsel reasonably satisfactory
to such indemnified party, or (c) in the judgment of counsel to such
indemnified party a conflict of interest is reasonably likely to exist between
such indemnified party and any other of such indemnified parties with respect
to such proceeding (in which case the indemnified party shall have the right to
employ counsel and to assume the defense of such claim or proceeding);
provided, however, that the indemnifying party shall not, in connection with
any one such claim or proceeding or separate but substantially similar or
related claims or proceedings in the same jurisdiction, arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one firm of attorneys (together with appropriate local counsel) at
any time for all of the indemnified parties, or for fees and expenses that are
not reasonable. Whether or not such defense is assumed by the indemnifying
party, such indemnified party will not be subject to any liability for any
settlement made without its consent (but such consent will not be unreasonably
withheld). The indemnifying party shall not, without the written consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release, in form and
substance reasonably satisfactory to the indemnified party, from all liability
in respect of such claim or litigation for which such indemnified party would
be entitled to indemnification hereunder.
(d) Contribution. If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any Losses (other than in
accordance with its terms) or is insufficient to hold such indemnified party
harmless, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and such indemnified party, on the other hand, in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such
indemnifying party, on the one hand, and indemnified party, on the other hand,
shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact, has been taken by, or
relates to information supplied by, such indemnifying party or indemnified
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent any such action, statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed to
include any legal or other fees or expenses incurred by such party in
connection with any investigation or proceeding.
16
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provision of this Section 8(d), an indemnifying
party that is a selling holder of Registrable Securities shall not be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities sold by such indemnifying party exceeds the
amount of any damages that such indemnifying party has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (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.
SECTION 9. Miscellaneous.
9.1 Termination. This Agreement and the obligations of the Company
hereunder shall terminate on the earliest of (i) the tenth anniversary of the
date hereof and (ii) the first date on which all Registrable Shares shall
exist.
9.2 Notices. All notices or communications hereunder shall be in writing
(including telecopy or similar writing), addressed to the Holders as set forth
on the signature pages hereto, and to the Company as follows:
To the Company:
▇▇▇▇▇▇▇▇▇▇ Healthcare Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Senior Vice President and General Counsel
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice or communication shall be deemed given (i) when made, if
made by hand delivery, (ii) one business day after being deposited with a next-
day courier, postage prepaid, or (iii) three business days after being sent
certified or registered mail, return
17
receipt requested, postage prepaid, in each case addressed as above (or to such
other address as such party may designate in writing from time to time).
9.3 Separability. If any provision of this Agreement shall be declared to
be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect.
9.4 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns; provided, however, that neither this
Agreement nor any rights hereunder shall be assignable or otherwise subject to
hypothecation by the Holder so long as such assignee becomes a party to and
fully bound by this Agreement prior to or concurrently with such assignment.
9.5 Entire Agreement. This Agreement represents the entire agreement of
the parties and shall supersede any and all previous contracts, arrangements or
understandings between the parties hereto with respect to the subject matter
hereof. This Agreement may be amended at any time by mutual written agreement
of the parties hereto.
9.6 Publicity. Each of the Holders and the Company agree that no public
release or announcement concerning the transactions contemplated hereby shall
be issued by either party without the prior consent of the other party, except
to the extent that the Holders or the Company is advised by counsel that such
release or announcement is necessary or advisable under applicable law or the
rules or regulations of any securities exchange, in which case the party
required to make the release or announcement shall provide the other party with
an opportunity to review and comment on such release or announcement in advance
of its issuance.
9.7 Expenses. Except as otherwise specifically provided in Section 6
hereof, whether or not the transactions contemplated hereby are consummated,
except as otherwise provided herein, all costs and expenses incurred in
connection with ▇▇▇▇▇ Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs or expenses.
9.8 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.9 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts
18
have been signed by each of the parties and delivered to the other party.
9.10 Governing Law; Venue. This Agreement shall be construed,
interpreted, and governed in accordance with the laws of the State of
Incorporation of ▇▇▇▇▇▇▇▇▇▇, without reference to rules relating to conflicts
of law.
9.11 Calculation of Time Periods. Except as otherwise indicated, all
periods of time referred to herein shall include all Saturdays, Sundays and
holidays; provided, that if the date to perform the act or give any notice with
respect to this Agreement shall fall on a day other than a Business Day, such
act or notice may be timely performed or given if performed or given on the
next succeeding Business Day.
9.12 No Inconsistent Agreements. The Company has not, as of the date
hereof, and shall not, on or after the date of this Agreement, enter into any
agreement with respect to its securities which is inconsistent with the rights
granted to the holders of Registrable Shares in this Agreement or otherwise
conflicts with the provisions hereof.
9.13 Participation by Holders. Each Holder hereby agrees that it may not
participate in any offering hereunder unless it (i) agrees to sell the
Registrable Shares to be included by it therein in the manner and upon the
terms and conditions provided in any underwriting or other agreement approved
by the persons entitled hereunder to determine the method of distribution
thereof and (ii) completes and executes such questionnaires, powers of
attorney, indemnities, underwriting agreements or other similar documents
reasonably required in accordance with the terms hereof or any agreement
contemplated by the foregoing clause (i).
9.14 Amendment. This Agreement, as to any amendment of rights, may be
amended, and the Company may take any action herein prohibited or omit to
perform any act herein required to be performed by it, if the Company shall
obtain the written consent to such amendment action or omission to act given by
the Holders of at lease a majority of the then existing Registrable Shares.
This Agreement may not be changed orally, but only by an agreement in writing
signed by the party against whom enforcement is sought.
19
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
▇▇▇▇▇▇▇▇▇▇ HEALTHCARE CORPORATION
By: \s\ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President & COO
BAHRAIN INTERNATION BANK E.C.
Metro Center
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: \s\ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
\s\ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
20
COMMON SHAREHOLDERS REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of August , 1996, by and among ▇▇▇▇▇▇▇▇▇▇ HEALTHCARE CORPORATION, a
California corporation (together with its permitted successors and assigns, the
"Company"), and the persons whose signatures appear on the execution pages of
this Agreement (collectively, and with any subsequent holders of Registrable
Shares (as defined below) pursuant to the terms hereof, the "Holders").
WHEREAS, in connection with that certain Amended and Restated Merger
Agreement dated as of May 29, 1996 (as further amended from time to time in
accordance with the terms thereof (the "Merger Agreement"), by and among the
Company, Champion Healthcare Corporation, a Delaware corporation, and PC Merger
Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company,
the Company has agreed to provide the Holders, including the holders of
Registrable Shares representing the right to acquire 1% or more of the shares
of the Company Common Stock (as defined below) (the "Major Holders" as
identified on the signature pages hereto) and certain of their affiliates (the
"affiliated holders" as identified on the signature pages hereto, who together
with the Major Holders, constitute the Holders) with the registration rights
set forth in this Agreement;
NOW, THEREFORE, the parties hereto, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, intending to be
bound hereby, agree as follows:
SECTION 1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
Affiliate: With respect to any specified person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this
definition, "control" when used with respect to any specified person means the
power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "con trolled" have meanings
correlative to the foregoing.
Agreement: See the introductory clauses hereof.
Business Day: Any day that is not a Saturday, a Sunday, a legal holiday
or a day on which banking institutions in the States of New York or Texas are
not required to be open.
Company: See the introductory clauses hereof.
21
Company Common Stock: The common stock, no stated value per share, of the
Company or any other shares of capital stock of the Company into which such
stock shall be reclassified or changed. After the date hereof, if the Company
Common Stock has been so reclassified or changed, or if the Company pays a
dividend or makes a distribution of the Company Common Stock in shares of
capital stock, or subdivides (or combines) its outstanding shares of the
Company Common Stock into a greater (or smaller) number of shares of the
Company Common Stock, a share of the Company Common Stock shall be deemed to be
such number of shares of capital stock and amount of other securities to which
a holder of a share of the Company Common Stock outstanding immediately prior
to such reclassification, exchange, dividend, distribution, subdivision or
combination would be entitled.
Delay Period: See Section 2(c) hereof.
Demand Notice: See Section 2(a) hereof.
Demand Registration: See Section 2(b) hereof.
Effectiveness Period: See Section 2(c) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Holders: See the introductory clauses hereof.
indemnified party: See Section 8(c) hereof.
indemnifying party: See Section 8(c) hereof.
Losses: See Section 8(a) hereof.
Merger Agreement: See the introductory clauses hereof.
person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Piggyback Registration: See Section 3(a) hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A or any term sheet meeting the requirements
of Rule 434), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable Shares
covered by such Registration Statement
22
and all other amendments and supplements to the prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
Registrable Shares: Each Share until (i) a registration statement (other
than the Registration Statement on Form S-4 effective prior to the date hereof)
covering such Shares has been declared effective by the SEC and such Share has
been disposed of pursuant to such effective registration statement, (ii) such
Shares can be sold pursuant to Rule 145((d)(3) (or any successor provision
then in force) under the Securities Act or (iii) such Share is otherwise freely
transferable under the Securities Act.
Registration Statement: Any registration statement of the Company under
the Securities Act that covers any of the Registrable Shares pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective
amendments, all exhibits, and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
Rule 144: Rule 144 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.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
Shares: The shares of Company Common Stock beneficially owned immediately
after the effective time of the merger contemplated by the Merger Agreement by
the Holders set forth on the signature pages hereto.
underwritten registration or underwritten offering: A registration or
offering in which securities of the Company are sold to an underwriter for
reoffering to the public.
SECTION 2. Demand Registration.
(a ) The Holders of 25% or more of the then existing Registrable Shares
held by all Major Holders shall have the right, by written notice (the "Demand
Notice") given to the Company so long as this Agreement has not been terminated
in accordance with Section 9.1 hereof, to request that the Company register
under and in accordance with the provisions of the Securities Act all or part
of the Registrable Shares designated by such holders; provided, that the Demand
Notice may not be exercised prior to 180 days after the date of this Agreement.
The Demand Notice shall specify shall specify the amount of Registrable Shares
to be
23
registered and the intended methods of disposition thereof. The Major Holders
shall be entitled in the aggregate to one Demand Registration pursuant to this
Section 2 unless a Demand Registration did not become effective or was not
maintained effective for a period (whether or not continuous) of at least 120
days or such shorter period at the end of which all Registrable Shares covered
by such Demand Registration have been sold pursuant thereto, in which case the
Holders will be entitled in the aggregate to one additional Demand Registration
pursuant hereto for each instance in which the condition set forth above had
not been satisfied.
(b ) The Company shall file with, and shall use reasonable best efforts to
cause to be declared effective by, the SEC within 90 days of the date on which
the Company first receives the Demand Notice given by the Major Holders
pursuant to Section 2 hereof, a Registration Statement under the Securities Act
relating to the number of Registrable Shares specified in such Demand Notice (a
"Demand Registration"); provided, that the Company shall have the right for a
reasonable period of time not in excess of 90 days (exercisable by delivery of
reasonable notice to the Major Holders of Registrable Shares included in such
Registration Statement) to delay the filing of such Registration Statement if,
in the Company's good faith exercise of its reasonable business judgment, (i)
such registration and offering would adversely affect or interfere with a
pending bona fide corporate transaction involving, or any bona fide financing
by, the Company, (ii) the Company is in possession of material information that
it determines, if disclosed in a registration statement, would have a material
adverse effect on the business or operations of the Company and would not
otherwise be required under law to be publicly disclosed or (iii) the Company
is engaged in a program for the purchase of any shares of Company Common Stock,
unless such repurchase program and the requested registration may proceed
concurrently pursuant to an exemption from Rule 10b6 under the Exchange Act;
provided, that the Company may so delay the filing of such Registration
Statement with respect to any one Demand Registration twice, but no more than
twice, in any twelve-month period.
(c ) The Company agrees to use reasonable best efforts to keep any
Registration Statement filed pursuant to this Section 2 continuously effective
and usable for the resale of Registrable Shares for a period of 120 days from
the date on which the SEC declares such Registration Statement effective or
such shorter period which will terminate when all the Registrable Shares
covered by such Registration Statement have been sold pursuant to such
Registration Statement. The foregoing notwithstanding, the Company shall have
the right to suspend the use of the Registration Statement for a reasonable
length of time not exceeding with respect to any one Demand Registration an
aggregate of 90 days (a "Delay Period") if and only if in the good faith
exercise of the Company's reasonable business judgment (i) such use would
adversely affect or interfere with a pending bona fide corporate transaction
24
involving, or any bona fide financing by, the Company, (ii) the Company is in
possession of material information that it determines, if disclosed in a
registration statement, would have a material adverse effect on the business or
operations of the Company and would not otherwise be required under law to be
publicly disclosed or (iii) the Company is engaged in a program for the
purchase of any shares of Company Common Stock, unless such repurchase program
and the requested registration may proceed concurrently pursuant to an
exemption from Rule 10b-6 under the Exchange Act; provided, that the Company
may so suspend sales with respect to any one Demand Registration twice, but no
more than twice, in any twelvemonth period. The Company shall provide written
notice to the Major Holders of the beginning and end of each Delay Period and
the Major Holders shall cease all disposition efforts with respect to
Registrable Shares held by them immediately upon receipt of notice of the
beginning of any Delay Period. The period for which the Company is required to
maintain the effectiveness of the Registration Statement shall be extended by
the aggregate number of days of all Delay Periods. Such period, including the
extension thereof required by the preceding sentence, is hereafter referred to
as the "Effectiveness Period."
(d ) In the case of a proposed offering pursuant to a Demand Registration,
the Company may, in its sole discretion, include shares of Company Common Stock
in such Demand Registration (whether for the account of the Company or
otherwise, including without limitation shares of Company Common Stock held by
security holders, if any, who have piggyback registration rights with respect
thereto) on the same terms and conditions as the Registrable Shares.
Notwithstanding the foregoing, if the Company or, in case of any underwritten
public offering, the managing underwriter or underwriters participating in such
offering conclude that the total amount of shares of Company Common Stock
requested to be included in such Demand Registration exceeds the amount which
can be sold without materially and adversely delaying or affecting the success
of the offering, then the amount of securities to be offered for the account of
all holders other than the Company and the Major Holders shall be reduced (to
zero if necessary) pro rata on the basis of the number of shares of Company
Common Stock requested to be registered by each such Holder. If, after such cut
back, the Company or such underwriter concludes that the total amount of
securities to be included in such Demand Registration still materially and
adversely affects the success of such offering, then the amount of securities
to be offered for the account of the Company shall be reduced (to zero if
necessary).
(e ) If at any time the Major Holders of two-thirds of the Registrable
Shares which were requested to be included pursuant to Section 2(a) shall, by
written notice to the Company, request the Registration Statement not be
declared effective or otherwise request a termination or withdrawal of the
Registration Statement, and no Shares included in such Registration Statement
have been sold pursuant thereto,
25
then provided such requesting Major Holders reimburse the Company for its out
of picket costs incurred in connection with complying with the request to
register such Shares, the Company shall terminate such registration statement
and the Company's obligation under paragraph 2(a) shall continue as though such
request to file a Registration Statement thereunder shall not have been made;
provided, that the holders may not give a Demand Notice within six months of
the date the Company terminates or withdraws such Registration Statement.
SECTION 3. Piggyback Registration.
(a ) Right to Piggyback. If at any time the Company proposes to file a
registration statement under the Securities Act with respect to an offering of
Company Common Stock (other than a registration statement (i) on Form S-4 or S-
8 or any successor forms thereto, or (ii) filed solely in connection with an
exchange offer or dividend reinvestment plan) whether or not for its own
account, then the Company shall give written notice of such proposed filing to
the Holders at least twenty five days before the anticipated filing date. Such
notice shall offer the Holders the opportunity to register such amount of
Registrable Shares as they may request (a "Piggyback Registration"). Subject
to Section 3(b) hereof, the Company shall include in each such Piggyback
Registration all Registrable Shares with respect to which the Company has
received written requests for inclusion therein within ten Business days after
notice has been given to the applicable holder. The Holders shall be permitted
to withdraw all or part of the Registrable Shares from a Piggyback Registration
by giving written notice to the Company at least one Business Day prior to the
expected or actual effective date of such Piggyback Registration.
(b ) Priority on Piggyback Registrations. The Company shall permit the
Holders to include all such Registrable Shares on the same terms and conditions
as any similar securities, if any, of the Company included therein.
Notwithstanding the foregoing, if the Company or an underwriter participating
in such offering concludes in good faith that the total amount of securities
requested to be included in such Piggyback Registration exceeds the amount
which can be sold without materially and adversely delaying or affecting the
success of the offering, then the amount of securities to be offered for the
account of the Holders shall be reduced in the following manner:
(i) if such Piggyback Registration was initiated as a result of a
primary registration on behalf of the Company, (and not a secondary on behalf
of holders of securities of the Company pursuant to a holders demand
registration right), the amount of securities to be offered for the account of
the Holders and other holders of securities who have piggyback registration
rights with respect thereto shall be reduced (to zero if necessary) pro rata on
a basis of the number of capital stock
26
equivalents requested to be registered by each such older participating in such
offering; and
(ii) if such Piggyback Registration was initiated by a stockholder
demand for an underwritten secondary registration on behalf of holders of
securities of the Company other than the Holders, the Company shall include in
such registration: (x) first, up to the full number of common stock equivalents
of such persons exercising "demand" registration rights, and (y) second, the
number of securities to be offered for the account of the Holders and other
holders of securities who have piggyback registration rights with respect
thereto in excess of the amount of securities such persons exercising "demand"
registration rights propose to sell (allocated pro rata on the basis of the
number of common stock equivalents requested to be registered by such holders).
SECTION 4. Hold-Back Agreements.
The Holders agree, if requested by the Company or the managing underwriter
in connection with a public offering of equity securities of the Company
(whether for the account of the Company or otherwise), not to effect any public
sale or distribution of any shares of Company Common Stock, including a sale
pursuant to Rule 144 (except as part of such underwritten registration), during
a period equivalent to that requested by the Company or such underwriter,
provided that such period shall not exceed 120 days in the first such offering
by the Company and 90 days in all such offerings thereafter.
SECTION 5. Registration Procedures.
In connection with the registration obligations of the Company and in
accordance with Sections 2 and 3 hereof, the Company will use its best efforts
to effect such registrations to permit the sale of such Registrable Shares in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company shall:
(a) Prepare and file with the SEC a Registration Statement or Registration
Statements on such form which shall be available for the sale of the
Registrable Shares by the Holders thereof in accordance with the intended
method or methods of distribution thereof, and use reasonable best efforts to
cause such Registration Statement to become effective as soon as practicable
after such filing and to remain effective as provided herein; provided,
however, that before filing a Registration Statement or Prospectus or any
amendments or supplements thereto (including documents that would be
incorporated or deemed to be incorporated therein by reference), the Company
shall, upon the written request of participating Holders, furnish or otherwise
make available to such holders of the Registrable Shares covered by such
Registration Statement, their counsel and the managing underwriters, if any,
copies of all such documents proposed to be filed, which documents will be
27
subject to the review of such holders, their counsel and such underwriters, if
any, provided, however, that the Company shall not be required to deliver to
such holders a copy of any such document that has not been materially changed
from a copy of such document that was previously delivered to such holders. The
Company shall not file any such Registration Statement or Prospectus or any
amendments or supplements thereto (including such documents that, upon filing,
would be incorporated or deemed to be incorporated by reference therein) to
which the holders of a majority of the Registrable Shares covered by such
Registration Statement, their counsel or the managing underwriters, if any,
shall reasonably object in writing on a timely basis unless, in the opinion of
the Company, such filing is necessary to comply with applicable law.
(b) Prepare and file with the SEC such amendments (including post-
effective amendments) to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective during the period
provided herein with respect to the disposition of all securities covered by
such Registration Statement; and cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provision then in force) under
the Securities Act.
(c) Notify the Holders registering Registrable Shares as part of such
Registration Statement, their counsel and the managing underwriters, if any,
promptly and (if requested by any such person) confirm such notice in writing,
(i) when a Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and, with respect to a Registration Statement or any post-
effective amendment, when the same has become effective, (ii) of any request by
the SEC for amendments or supplements to a Registration Statement or related
Prospectus or for additional information regarding the Holders registering
shares as part of such Registration Statement, (iii) of the issuance by the SEC
of any stop order suspending the effectiveness of a Registration Statement or
the initiation of any proceedings for that purpose, (iv) if at any time the
representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated by Section 5(j) below cease
to be true and correct, (v) 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 (vi) of
the happening of any event that requires the making of any changes in such
Registration Statement, Prospectus or documents incorporated or deemed to be
incorporated therein by reference so that in the case of the Registration
Statement 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 not misleading, and that in the case of the Prospectus
it will not contain any untrue statement of a material fact
28
or omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(d) Use reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification or exemption from qualification of any of the
Registrable Shares for sale in any jurisdiction.
(e ) If requested by a Holder, furnish to counsel for the Holders and each
managing underwriter, if any, without charge, one conformed copy of each
Registration Statement as declared effective by the SEC and of each post-
effective amendment thereto, in each case including financial statements and
schedules and all exhibits and reports incorporated or deemed to be
incorporated therein by reference; and deliver, without charge, such number of
copies of the preliminary prospectus, each amended preliminary prospectus, each
final Prospectus and each post-effective amendment or supplement thereto, as
the Holder may reasonably request in order to facilitate the disposition of the
Registrable Shares covered by each Registration Statement in conformity with
the requirements of the Securities Act.
(f ) Prior to any public offering of Registrable Shares, use reasonable
best efforts to register or qualify such Registrable Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions in the United
States as the holders of a majority of the Registrable Shares to which such
public offering relates shall reasonably request in writing; and do any and all
other reasonable acts or things necessary or advisable to enable the Holders to
consummate the disposition in such jurisdictions of such Registrable Shares
covered by the Registration Statement, provided, however, that the Company
shall in no event be required to qualify generally to do business as a foreign
corporation or as a dealer in any jurisdiction where it is not at the time so
qualified or to execute or file a consent to general service of process in any
such jurisdiction where it has not theretofore done so or to take any action
that would subject it to service of process or taxation in any such
jurisdiction where it is not then subject.
(g) Except during any Delay Period, upon the occurrence of any event
contemplated by Sections 5(c)(ii) or 5(c)(vi) above, prepare a supplement or
post-effective amendment to each Registration Statement or related Prospectus
or any document incorporated or deemed to be incorporated therein by reference,
or file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Shares being sold thereunder, such Prospectus
will not contain an 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 light of the circumstances under which they were made, not
misleading.
29
(h) Use its best efforts to cause all Registrable Shares covered by such
Registration Statement to be listed on each securities exchange or quoted on
each automated interdealer quotation system, if any, on which the shares of
Company Common Stock are then listed or quoted.
(i) On or before the effective date of the Registration Statement, provide
the transfer agent of the Company for the Registrable Shares with printed
certificates for the Registrable Shares, which are in a form eligible for
deposit with The Depository Trust Company.
(j) If requested by the Holders of a majority of the Registrable Shares
being sold, enter into one or more customary "firm commitment" or "best
efforts" underwriting agreements, engagement letters, agency agreements or
similar agreements, as appropriate, and in such connection, whether or not any
such agreement is entered into and whether or not the Registration is an
underwritten registration, the Company shall (i) make such representations and
warranties to the holders of such Registrable Shares and the underwriters, if
any, with respect to the business of the Company and its subsidiaries, and the
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings, and if true, confirm the same if and when requested,
(ii) use its reasonable efforts to obtain opinions of counsel to the Company
and updates thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriters, if any, and
counsel to such Holders of the Registrable Shares being sold), addressed to
each such selling Holder of Registrable Shares and each of the underwriters, if
any, covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such counsel and underwriters, (iii) use its reasonable efforts to obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each such
selling Holder of Registrable Shares (unless such accountants shall be
prohibited from so addressing such letters by applicable standards of the
accounting profession) and each of the underwriters, if any, such letters to be
in customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings, and (iv) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures substantially to the effect set forth in Section 8
hereof with respect to all parties to be indemnified pursuant to said Section.
The above shall be done at each
30
closing under such underwriting or similar agreement, or as and to the extent
required thereunder.
(k) Comply with all applicable rules and regulations of the SEC and make
generally available to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder, or
any similar rule promulgated under the Securities Act, no later than forty-five
(45) days after the end of any twelve (12) month period (or ninety (90) days
after the end of any twelve (12) month period if such period is a fiscal year)
(i) commencing at the end of any fiscal quarter in which Registrable Shares are
sold to underwriters in a "firm commitment" or "best efforts" underwritten
offering and (ii) if not sold to underwriters in such an offering, commencing
on the first day of the first fiscal quarter of the Company after the effective
date of a Registration Statement, which statements shall cover said twelve (12)
month periods.
The Company may require each seller of Registrable Shares as to which any
registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such Registrable Shares as the
Company may, from time to time, request in writing and as, in the opinion of
counsel for the Company, is required by law to effect such registration. If
any such information with respect to a seller or such distribution of
Registrable Shares is not furnished within a reasonable period of time after
receipt of such request, the Company may exclude such Shareholder's Registrable
Shares from such Registration Statement. Each seller of Registrable Shares
agrees to notify the Company as promptly as practicable following its discovery
of any material inaccuracy or material change in information so furnished by
such seller to the Company or of the occurrence of any event that causes any
prospectus relating to such registration to contain an untrue statement of a
material fact or omit to state any material fact regarding such seller or such
distribution of Registrable Shares that is required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made.
Each holder of Registrable Shares agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
5(c)(ii), 5(c)(iii), 5(c)(v) or 5(c)(vi) hereof, that such Holder shall
forthwith discontinue disposition of such Registrable Shares covered by such
Registration Statement or Prospectus until receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(g) hereof, or
until such Holder is advised in writing by the Company that the use of the
applicable Prospectus may be resumed, and has received copies of any amended or
supplemented Prospectus or any additional or supplemental filings which are
incorporated, or deemed to be incorporated, by reference in such Prospectus
and, if requested by the Company, such Holder shall deliver
31
to the Company (at the expense of the Company) all copies then in its
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Shares at the time of receipt of
such request.
Each holder of Registrable Shares further agrees not to utilize any
material other than the applicable current Prospectus in connection with the
offering of Registrable Shares pursuant to a Demand Registration or otherwise
hereunder.
SECTION 6. Registration Expenses.
(a) Whether or not any Registration Statement becomes effective, the
Company shall pay all costs, fees and expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation
(i) all registration and filing fees, (ii) fees and expenses of compliance with
securities or Blue Sky laws, (iii) printing expenses (including without
limitation expenses of printing certificates for Registrable Shares and of
printing prospectuses if the printing of prospectuses is requested by the
managing underwriter, if any, or by the Holders of a majority of the
Registrable Shares included in any Registration Statement), (iv) messenger,
telephone and delivery expenses, (v) fees and disbursements of counsel for the
Company and one special counsel for the sellers of Registrable Shares (subject
to the provisions of Section 6(b) hereof), and (vi) fees and disbursements of
all independent certified public accountants of the Company (including without
limitation expenses of any "cold comfort" letters required in connection with
this Agreement) and all other persons retained by the Company in connection
with the Registration Statement. In addition, the Company shall 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 and the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange on which
similar securities issued by the Company are then listed. Notwithstanding the
foregoing, each participating Holder shall pay all commissions, fees or
discounts payable to brokers, dealers or underwriters and all transfer taxes in
connection with the sale of its Registrable Shares.
(b) In connection with any Demand Registration or Piggyback Registration
(including any "shelf" registration in connection therewith) hereunder, the
Company shall reimburse the Holders of the Registrable Shares being registered
in such registration for the reasonable fees and disbursements of not more than
one counsel (together with appropriate local counsel, if required) chosen by
the Holders of a majority of all of such Registrable Shares.
SECTION 7. Underwritten Registrations.
32
(a) Subject to Section 7(b) hereof, the Holders shall have the right, by
written notice, to request that any Demand Registration be made pursuant to an
underwritten offering.
(b) In the case of any underwritten registration, the Company shall select
(with the consent of the participating Holders) the institution or institutions
that shall manage or lead the offering or placement. The Holders shall not be
entitled to participate unless and until it or they shall enter into an
underwriting or other agreement with such lead institutions for such offering
in such form as the Company and such lead institutions shall reasonably
determine.
SECTION 8. Indemnification.
(a) Indemnification by the Company. The Company shall, without limitation
as to time, indemnify and hold harmless, to the full extent permitted by law,
each Holder of Registrable Shares whose Registrable Shares are covered by a
Registration Statement or Prospectus, the officers, directors and agents and
employees of each of them, each Person who controls each such holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, agents and employees of each such controlling
person, to the fullest extent lawful, from and against any and all losses,
claims, damages, liabilities, costs (including, without limitation, reasonable
costs of preparing, investigating or defending such claim and reasonable
attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising
out of or based upon any untrue or alleged untrue statement of a material fact
contained in such Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same arise out of or are based upon information furnished in
writing to the Company by such holder expressly for use therein or any
violation or alleged violation by the Company of the Securities Act, Exchange
Act or any other federal or state securities laws, rule or regulation
applicable to the Company and relating to the action or inaction by the Company
in connection with any such registration or qualification; provided, however,
that the Company shall not be liable to any Holder of Registrable Shares to the
extent that any such Losses arise out of or are based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
preliminary prospectus if (i) such Holder failed to send or deliver a copy of
the Prospectus with or prior to the delivery of written confirmation of the
sale by such Holder of a Registrable Security to the person asserting the claim
from which such Losses arise and (ii) the Prospectus would have corrected in
all material respects such untrue statement or alleged untrue statement or such
omission or alleged omission; and provided further, that the Company shall not
be liable in
33
any such case to the extent that any such Losses arise out of or are based upon
an untrue statement or alleged untrue statement or omission or alleged omission
in the Prospectus, if (x) such untrue statement or alleged untrue statement,
omission or alleged omission is corrected in all material respects in an
amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such Holder thereafter fails to deliver such
Prospectus as so amended or supplemented, prior to or concurrently with the
sale of a Registrable Security to the person asserting the claim from which
such Losses arise.
(b) Indemnification by Holder of Registrable Securities. In connection
with any Registration Statement in which a Holder of Registrable Securities is
participating, such holder of Registrable Securities shall furnish to the
Company in writing such information as the Company reasonably requests for use
in connection with any Registration Statement or Prospectus and agrees to
indemnify, to the full extent permitted by law (but in no event in an amount to
exceed the gross proceeds received by such Holder upon the sale of its Shares
pursuant to such Registration Statement), the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and
the directors, officers, agents or employees of such controlling persons, from
and against all Losses arising out of or based upon any untrue or alleged
untrue statement of a material fact contained in any Registration Statement or
Prospectus or any amendment or supplement thereto, or any preliminary
prospectus, or arising out of or based upon any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, to the extent, but only to the extent, that
such untrue or alleged untrue statement or omission or alleged omission is
contained in any information so furnished in writing by such holder to the
Company expressly for use in such Registration Statement or Prospectus and that
such information was relied upon by the Company in preparation of such
Registration Statement or Prospectus or amendment, supplement or preliminary
prospectus.
(c) Conduct of Indemnification Proceedings. If any Person shall be
entitled to indemnity hereunder (an "indemnified party"), such indemnified
party shall give prompt written notice to the party from which such indemnity
is sought (the "indemnifying party") of any claim or of the commencement of any
proceeding with respect to which such indemnified party seeks indemnification
or contribution pursuant hereto; provided, however, that the delay or failure
to so notify the indemnifying party shall not relieve the indemnifying party
from any obligation or liability except to the extent that the indemnifying
party has been prejudiced materially by such delay or failure. The indemnifying
party shall have the right, exercisable by giving written notice to an
indemnified party promptly after the receipt of written
34
notice from such indemnified party of such claim or proceeding, to assume, at
the indemnifying party's expense, the defense of any such claim or proceeding,
with counsel reasonably satisfactory to such indemnified party; provided,
however, that an indemnified party shall have the right to employ separate
counsel in any such claim or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless: (l) the indemnifying party agrees in writing to
pay such fees and expenses, (2) the indemnifying party fails promptly to assume
the defense of such claim or proceeding or fails to employ counsel reasonably
satisfactory to such indemnified party, or (c) in the judgment of counsel to
such indemnified party a conflict of interest is reasonably likely to exist
between such indemnified party and any other of such indemnified parties with
respect to such proceeding (in which case the indemnified party shall have the
right to employ counsel and to assume the defense of such claim or proceeding);
provided, however, that the indemnifying party shall not, in connection with
any one such claim or proceeding or separate but substantially similar or
related claims or proceedings in the same jurisdiction, arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one firm of attorneys (together with appropriate local counsel) at
any time for all of the indemnified parties, or for fees and expenses that are
not reasonable. Whether or not such defense is assumed by the indemnifying
party, such indemnified party will not be subject to any liability for any
settlement made without its consent (but such consent will not be unreasonably
withheld). The indemnifying party shall not, without the written consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release, in form and
substance reasonably satisfactory to the indemnified party, from all liability
in respect of such claim or litigation for which such indemnified party would
be entitled to indemnification hereunder.
(d) Contribution. If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any Losses (other than in
accordance with its terms) or is insufficient to hold such indemnified party
harmless, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and such indemnified party, on the other hand, in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such
indemnifying party, on the one hand, and indemnified party, on the other hand,
shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material
35
fact, has been taken by, or relates to information supplied by, such
indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent any such
action, statement or omission. The amount paid or payable by a party as a
result of any Losses shall be deemed to include any legal or other fees or
expenses incurred by such party in connection with any investigation or
proceeding. Notwithstanding the foregoing, any parties' contribution
obligation pursuant to this Section 8(d) shall be subject to all limitations
applicable to such parties' indemnification obligations as set forth in this
Section 8, including without limitation, the maximum liability of any Holder
set forth in Section 8(b).
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provision of this Section 8(d), an indemnifying
party that is a selling holder of Registrable Securities shall not be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities sold by such indemnifying party exceeds the
amount of any damages that such indemnifying party has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (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.
SECTION 9. Miscellaneous.
9.1 Termination. This Agreement and the obligations of the Company
hereunder shall terminate on the earliest of (i) the tenth anniversary of the
date hereof and (ii) the first date on which all Registrable Shares shall
exist.
9.2 Notices. All notices or communications hereunder shall be in writing
(including telecopy or similar writing), addressed to the Holders as set forth
on the signature pages hereto, and to the Company as follows:
To the Company:
▇▇▇▇▇▇▇▇▇▇ Healthcare Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Senior Vice President and General Counsel
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
36
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice or communication shall be deemed given (i) when made, if
made by hand delivery, (ii) one business day after being deposited with a next-
day courier, postage prepaid, or (iii) three business days after being sent
certified or registered mail, return receipt requested, postage prepaid, in
each case addressed as above (or to such other address as such party may
designate in writing from time to time).
9.3 Separability. If any provision of this Agreement shall be declared to
be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect.
9.4 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns; provided, however, that neither this
Agreement nor any rights hereunder shall be assignable or otherwise subject to
hypothecation by the Holder so long as such assignee becomes a party to and
fully bound by this Agreement prior to or concurrently with such assignment.
9.5 Entire Agreement. This Agreement represents the entire agreement of
the parties and shall supersede any and all previous contracts, arrangements or
understandings between the parties hereto with respect to the subject matter
hereof. This Agreement may be amended at any time by mutual written agreement
of the parties hereto.
9.6 Publicity. Each of the Holders and the Company agree that no public
release or announcement concerning the transactions contemplated hereby shall
be issued by either party without the prior consent of the other party, except
to the extent that the Holders or the Company is advised by counsel that such
release or announcement is necessary or advisable under applicable law or the
rules or regulations of any securities exchange, in which case the party
required to make the release or announcement shall provide the other party with
an opportunity to review and comment on such release or announcement in advance
of its issuance.
9.7 Expenses. Except as otherwise specifically provided in Section 6
hereof, whether or not the transactions contemplated hereby are consummated,
except as otherwise provided herein, all costs and
37
expenses incurred in connection with the performance of this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
costs or expenses.
9.8 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.9 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other party.
9.10 Governing Law; Venue. This Agreement shall be construed,
interpreted, and governed in accordance with the laws of the State of
Incorporation of ▇▇▇▇▇▇▇▇▇▇, without reference to rules relating to conflicts
of law. The parties hereby irrevocably submit to the jurisdiction of the
courts of the State of incorporation of ▇▇▇▇▇▇▇▇▇▇ and the Federal courts of
the United States of America located in the State of incorporation of
▇▇▇▇▇▇▇▇▇▇ Solely in respect of the interpretation and enforcement of the
provisions of this Agreement, and in respect of the transactions contemplated
hereby, and hereby waive and agree not to assert, as a defense in any action,
suite or proceeding for the interpretation or enforcement hereof or of any such
document, that it is not subject thereto or that such action, suite or
proceedings may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in a State or Federal court in the State of
incorporation of ▇▇▇▇▇▇▇▇▇▇. The parties hereby consent to and grant any such
court jurisdiction over the person of such parties and over the subject matter
of such dispute and agree that mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section 9.2 hereof
shall be valid and sufficient service hereof.
9.11 Calculation of Time Periods. Except as otherwise indicated, all
periods of time referred to herein shall include all Saturdays, Sundays and
holidays; provided, that if the date to perform the act or give any notice with
respect to this Agreement shall fall on a day other than a Business Day, such
act or notice may be timely performed or given if performed or given on the
next succeeding Business Day.
9.12 No Inconsistent Agreements. The Company has not, as of the date
hereof, and shall not, on or after the date of this Agreement, enter into any
agreement with respect to its securities which is inconsistent with the rights
granted to the holders of Registrable
38
Shares in this Agreement or otherwise conflicts with the provisions hereof.
9.13 Participation by Holders. Each Holder hereby agrees that it may not
participate in any offering hereunder unless it (i) agrees to sell the
Registrable Shares to be included by it therein in the manner and upon the
terms and conditions provided in any underwriting or other agreement approved
by the persons entitled hereunder to determine the method of distribution
thereof and (ii) completes and executes such questionnaires, powers of
attorney, indemnities, underwriting agreements or other similar documents
reasonably required in accordance with the terms hereof or any agreement
contemplated by the foregoing clause (i).
9.14 Amendment. This Agreement, as to any amendment of rights, may be
amended, and the Company may take any action herein prohibited or omit to
perform any act herein required to be performed by it, if the Company shall
obtain the written consent to such amendment action or omission to act given by
the Holders of at lease a majority of the then existing Registrable Shares.
This Agreement may not be changed orally, but only by an agreement in writing
signed by the party against whom enforcement is sought.
39
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
▇▇▇▇▇▇▇▇▇▇ HEALTHCARE CORPORATION
By: \s\ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President & COO
FRONTENAC VI LIMITED PARTNERSHIP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: Frontenac Company,
its General Partner
By: \s\ ▇▇▇▇▇ ▇. PEARL
------------------------------------
Name: ▇▇▇▇▇ ▇. Pearl
Title: General Partner
FRONTENAC DIVERSIFIED III LIMITED
PARTNERSHIP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: Frontenac Company,
its General Partner
By: \s\ ▇▇▇▇▇ ▇. PEARL
------------------------------------
Name: ▇▇▇▇▇ ▇. Pearl
Title: General Partner
EQUITY-LINKED INVESTORS - II*
c/o DESAI CAPITAL MANAGEMENT INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
40
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Associates - II
its General Partner
By:
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Partner
EQUITY-LINKED INVESTORS - LP*
c/o DESAI CAPITAL MANAGEMENT INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Associates
its General Partner
By:
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Partner
OLYMPUS PRIVATE PLACEMENT FUND, L.P.*
Metro Center, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: OGP Partners, L.P.
its General Partner
By: \s\ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: General Partner of
the General Partner
EQUUS II INCORPORATED
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
41
By: \s\ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
EQUUS CAPITAL PARTNERS
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: Equus Capital Partners
its General Partner
By: \s\ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
WPG CORPORATE DEVELOPMENT
ASSOCIATES III, L.P.
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: WPG CDA III, L.P.
By: \s\ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
WPG CORPORATE DEVELOPMENT
ASSOCIATES III, (OVERSEAS) L.P.
Bank America House, Fort Street
▇▇▇▇▇▇ Town, Grand Cayman, BWI
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: \s\ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: Norcon Associates
its General Partner
By: \s\ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: General Partner
RFE INVESTMENT PARTNERS IV, L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: RFE Associates IV, L.P.
its General Partner
By: \s\ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: General Partner
▇▇▇▇▇▇▇ ▇▇▇▇▇ VENTURE PARTNERS III*
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 06840
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Venture
Management, its General Partner
By:
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
▇▇▇▇▇▇▇ VENTURE PARTNERS III, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
43
By: Back Bay Partners V.L.P.
its General Partner
By: ▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital
Management, Inc.
By:
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Officer
▇▇▇▇ ▇▇▇▇▇▇▇ VENTURE CAPITAL
FUND LIMITED PARTNERSHIP II*
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: Back Bay Partners V.L.P.
its General Partner
By: ▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital
Management, Inc.
By:
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Officer
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY*
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By:
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
VIRGINIA RETIREMENT SYSTEM*
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ or 3146
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
44
By: \s\ ▇▇▇▇▇ ▇. WILL, JR.
------------------------------------
Name: ▇▇▇▇▇ ▇. Will, Jr.
Title: Chief Investment Officer
SPROUT GROWTH II, L.P.*
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: DLJ Capital Corporation
its Managing General Partner
By:
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
SPROUT CAPITAL VI, L.P.*
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: DLJ Capital Corporation
its Managing General Partner
By:
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
SPROUT GROWTH, L.P.*
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By: DLJ Capital Corporation
its Managing General Partner
By:
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
45
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇, INC.*
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By:
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
DLJ CAPITAL CORPORATION*
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By:
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
FIRST INTERSTATE BANK OF
CALIFORNIA, Trustee*
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇ ▇▇-▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
By:
------------------------------------
Name:
Title:
----------------
* - a Major Holder
46
SERIES E WARRANT HOLDERS REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of August , 1996, by and among ▇▇▇▇▇▇▇▇▇▇ HEALTHCARE CORPORATION, a
California corporation (together with its permitted successors and assigns, the
"Company"), and the persons whose signatures appear on the execution pages of
this Agreement (collectively, and with any subsequent holders of Registrable
Shares (as defined below), the "Holders").
WHEREAS, in connection with that certain Amended and Restated Merger
Agreement dated as of May 29, 1996 (as further amended from time to time in
accordance with the terms thereof (the "Merger Agreement"), by and among the
Company, Champion Healthcare Corporation, a Delaware corporation, and PC Merger
Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company,
the Company has agreed to provide the Holders with the registration rights set
forth in this Agreement;
NOW, THEREFORE, the parties hereto, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, intending to be
bound hereby, agree as follows:
SECTION 1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
Affiliate: With respect to any specified person, any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "con trolled" have meanings correlative to the
foregoing.
Agreement: See the introductory clauses hereof.
Business Day: Any day that is not a Saturday, a Sunday, a legal holiday
or a day on which banking institutions in the States of New York or Texas are
not required to be open.
Company: See the introductory clauses hereof.
Company Common Stock: The common stock, no stated value per share, of the
Company or any other shares of capital stock of the Company into which such
stock shall be reclassified
47
or changed. After the date hereof, if the Company Common Stock has been so
reclassified or changed, or if the Company pays a dividend or makes a
distribution of the Company Common Stock in shares of capital stock, or
subdivides (or combines) its outstanding shares of the Company Common Stock
into a greater (or smaller) number of shares of the Company Common Stock, a
share of the Company Common Stock shall be deemed to be such number of shares
of capital stock and amount of other securities to which a holder of a share of
the Company Common Stock outstanding immediately prior to such
reclassification, exchange, dividend, distribution, subdivision or combination
would be entitled.
Delay Period: See Section 2(c) hereof.
Demand Notice: See Section 2(a) hereof.
Demand Registration: See Section 2(b) hereof.
Effectiveness Period: See Section 2(c) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Holders: See the introductory clauses hereof.
indemnified party: See Section 8(c) hereof.
indemnifying party: See Section 8(c) hereof.
Losses: See Section 8(a) hereof.
Merger Agreement: See the introductory clauses hereof.
person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Piggyback Registration: See Section 3(a) hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A or any term sheet meeting the requirements
of Rule 434), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable Shares
covered by such Registration Statement and all other amendments and supplements
to the prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such
Prospectus.
48
Registrable Shares: The Shares until (i) a registration statement (other
than the Registration Statement on Form S-4 effective prior to the date hereof)
covering such Shares has been declared effective by the SEC and such Shares has
been disposed of pursuant to such effective registration statement, (ii) such
Shares can be sold under circumstances in which all of the applicable
conditions of Rule 144 (or any similar provisions then in force, but not Rule
144A) under the Securities Act are met or (iii) such Share is otherwise freely
transferable under the Securities Act.
Registration Statement: Any registration statement of the Company under
the Securities Act that covers any of the Registrable Shares pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective
amendments, all exhibits, and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
Rule 144: Rule 144 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.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
Shares: The shares of Company Common Stock issued or issuable upon
exercise of warrants to purchase such shares, which warrants are held by the
Holders as of the date of this Agreement as set forth on the signature pages
hereto.
underwritten registration or underwritten offering: A registration or
offering in which securities of the Company are sold to an underwriter for
reoffering to the public.
SECTION 2. Demand Registration.
(a ) The Holders of 50% or more of the then existing Registrable Shares
shall have the right, by written notice (the "Demand Notice") given to the
Company so long as this Agreement has not been terminated in accordance with
Section 9.1 hereof, to request that the Company register under and in
accordance with the provisions of the Securities Act all or part of the
Registrable Shares designated by such holders. The Demand Notice shall specify
shall specify the amount of Registrable Shares to be registered and the
intended methods of disposition thereof. The Holders shall be entitled in the
aggregate to one Demand Registration pursuant to this Section 2 unless a Demand
Registration did not become effective or was not maintained effective for a
period
49
(whether or not continuous) of at least 120 days or such shorter period
at the end of which all Registrable Shares covered by such Demand Registration
have been sold pursuant thereto, in which case the Holders will be entitled in
the aggregate to one additional Demand Registration pursuant hereto for each
instance in which the condition set forth above had not been satisfied.
(b ) The Company shall file with, and shall use reasonable best efforts to
cause to be declared effective by, the SEC within 90 days of the date on which
the Company first receives the Demand Notice given by the Holders pursuant to
Section 2 hereof, a Registration Statement under the Securities Act relating to
the number of Registrable Shares specified in such Demand Notice (a "Demand
Registration"); provided, that the Company shall have the right for a
reasonable period of time not in excess of 90 days (exercisable by delivery of
reasonable notice to the Holders of Registrable Shares included in such
Registration Statement) to delay the filing of such Registration Statement if,
in the Company's good faith exercise of its reasonable business judgment, (i)
such registration and offering would adversely affect or interfere with a
pending bona fide corporate transaction involving, or any bona fide financing
by, the Company, (ii) the Company is in possession of material information that
it determines, if disclosed in a registration statement, would have a material
adverse effect on the business or operations of the Company and would not
otherwise be required under law to be publicly disclosed or (iii) the Company
is engaged in a program for the purchase of any shares of Company Common Stock,
unless such repurchase program and the requested registration may proceed
concurrently pursuant to an exemption from Rule 10b6 under the Exchange Act;
provided, that the Company may so delay the filing of such Registration
Statement with respect to any one Demand Registration twice, but no more than
twice, in any twelve-month period.
(c ) The Company agrees to use reasonable best efforts to keep any
Registration Statement filed pursuant to this Section 2 continuously effective
and usable for the resale of Registrable Shares for a period of 120 days from
the date on which the SEC declares such Registration Statement effective or
such shorter period which will terminate when all the Registrable Shares
covered by such Registration Statement have been sold pursuant to such
Registration Statement. The foregoing notwithstanding, the Company shall have
the right to suspend the use of the Registration Statement for a reasonable
length of time not exceeding with respect to any one Demand Registration an
aggregate of 90 days (a "Delay Period") if and only if in the good faith
exercise of the Company's reasonable business judgment (i) such use would
adversely affect or interfere with a pending bona fide corporate transaction
involving, or any bona fide financing by, the Company, (ii) the Company is in
possession of material information that it determines, if disclosed in a
registration statement, would have a material adverse effect on the business or
operations of the Company and would not
50
otherwise be required under law to be publicly disclosed or (iii) the Company
is engaged in a program for the purchase of any shares of Company Common Stock,
unless such repurchase program and the requested registration may proceed
concurrently pursuant to an exemption from Rule 10b6 under the Exchange Act;
provided, that the Company may so suspend sales with respect to any one Demand
Registration twice, but no more than twice, in any twelvemonth period. The
Company shall provide written notice to the Holders of the beginning and end of
each Delay Period and the Holders shall cease all disposition efforts with
respect to Registrable Shares held by them immediately upon receipt of notice
of the beginning of any Delay Period. The period for which the Company is
required to maintain the effectiveness of the Registration Statement shall be
extended by the aggregate number of days of all Delay Periods. Such period,
including the extension thereof required by the preceding sentence, is
hereafter referred to as the "Effectiveness Period."
(d ) In the case of a proposed offering pursuant to a Demand Registration,
the Company may, in its sole discretion, include shares of Company Common Stock
in such Demand Registration (whether for the account of the Company or
otherwise, including without limitation shares of Company Common Stock held by
security holders, if any, who have piggyback registration rights with respect
thereto) on the same terms and conditions as the Registrable Shares.
Notwithstanding the foregoing, if the Company or, in case of any underwritten
public offering, the managing underwriter or underwriters participating in such
offering conclude that the total amount of shares of Company Common Stock
requested to be included in such Demand Registration exceeds the amount which
can be sold without materially and adversely delaying or affecting the success
of the offering, then the amount of securities to be offered for the account of
all holders other than the Company and the Holders shall be reduced (to zero if
necessary) pro rata on the basis of the number of shares of Company Common
Stock requested to be registered by each such Holder. If, after such cut back,
the Company or such underwriter concludes that the total amount of securities
to be included in such Demand Registration still materially and adversely
affects the success of such offering, then the amount of securities to be
offered for the account of the Company shall be reduced (to zero if necessary).
(e ) If at any time the Holders of two-thirds of the Registrable Shares
which were requested to be included pursuant to Section 2(a) shall, by written
notice to the Company, request the Registration Statement not be declared
effective or otherwise request a termination or withdrawal of the Registration
Statement, and no Shares included in such Registration Statement have been sold
pursuant thereto, then provided such requesting Holders reimburse the Company
for its out of picket costs incurred in connection with complying with the
request to register such Shares, the Company shall terminate such registration
statement and the Company's obligation under paragraph 2(a) shall continue as
though such request to file a Registration Statement
51
thereunder shall not have been made; provided, that the holders may not give a
Demand Notice within six months of the date the Company terminates or withdraws
such Registration Statement.
SECTION 3. Piggyback Registration.
(a ) Right to Piggyback. If at any time the Company proposes to file a
registration statement under the Securities Act with respect to an offering of
Company Common Stock (other than a registration statement (i) on Form S-4 or S-
8 or any successor forms thereto, or (ii) filed solely in connection with an
exchange offer or dividend reinvestment plan) whether or not for its own
account, then the Company shall give written notice of such proposed filing to
the Holders at least twenty five days before the anticipated filing date. Such
notice shall offer the Holders the opportunity to register such amount of
Registrable Shares as they may request (a "Piggyback Registration"). Subject to
Section 3(b) hereof, the Company shall include in each such Piggyback
Registration all Registrable Shares with respect to which the Company has
received written requests for inclusion therein within twenty days after notice
has been given to the applicable holder. The Holders shall be permitted to
withdraw all or part of the Registrable Shares from a Piggyback Registration by
giving written notice to the Company at least one Business Day prior to the
expected or actual effective date of such Piggyback Registration.
(b ) Priority on Piggyback Registrations. The Company shall permit the
Holders to include all such Registrable Shares on the same terms and conditions
as any similar securities, if any, of the Company included therein.
Notwithstanding the foregoing, if the Company or an underwriter participating
in such offering concludes in good faith that the total amount of securities
requested to be included in such Piggyback Registration exceeds the amount
which can be sold without materially and adversely delaying or affecting the
success of the offering, then the amount of securities to be offered for the
account of the Holders shall be reduced in the following manner:
(i) if such Piggyback Registration was initiated as a result of a
primary registration on behalf of the Company, (and not a secondary on behalf
of holders of securities of the Company pursuant to a holders demand
registration right), the amount of securities to be offered for the account of
the Holders and other holders of securities who have piggyback registration
rights with respect thereto shall be reduced (to zero if necessary) pro rata on
a basis of the number of capital stock equivalents requested to be registered
by each such older participating in such offering; and
(ii) if such Piggyback Registration was initiated by a stockholder
demand for an underwritten secondary registration on behalf of holders of
securities of the Company other than the Holders, the
52
Company shall include in such registration: (x) first, up to the full number of
common stock equivalents of such persons exercising "demand" registration
rights, and (y) second, the number of securities to be offered for the account
of the Holders and other holders of securities who have piggyback registration
rights with respect thereto in excess of the amount of securities such persons
exercising "demand" registration rights propose to sell (allocated pro rata on
the basis of the number of common stock equivalents requested to be registered
by such holders).
SECTION 4. Hold-Back Agreements.
The Holders agree, if requested by the Company or the managing underwriter
in connection with a public offering of equity securities of the Company
(whether for the account of the Company or otherwise), not to effect any public
sale or distribution of any shares of Company Common Stock, including a sale
pursuant to Rule 144 (except as part of such underwritten registration), during
a period equivalent to that requested by the Company or such underwriter,
provided that such period shall not exceed 120 days in the first such offering
by the Company and 90 days in all such offerings thereafter.
SECTION 5. Registration Procedures.
In connection with the registration obligations of the Company and in
accordance with Sections 2 and 3 hereof, the Company will use its best efforts
to effect such registrations to permit the sale of such Registrable Shares in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company shall:
(a) Prepare and file with the SEC a Registration Statement or Registration
Statements on such form which shall be available for the sale of the
Registrable Shares by the Holders thereof in accordance with the intended
method or methods of distribution thereof, and use reasonable best efforts to
cause such Registration Statement to become effective as soon as practicable
after such filing and to remain effective as provided herein; provided,
however, that before filing a Registration Statement or Prospectus or any
amendments or supplements thereto (including documents that would be
incorporated or deemed to be incorporated therein by reference), the Company
shall, upon the written request of participating Holders, furnish or otherwise
make available to such holders of the Registrable Shares covered by such
Registration Statement, their counsel and the managing underwriters, if any,
copies of all such documents proposed to be filed, which documents will be
subject to the review of such holders, their counsel and such underwriters, if
any, provided, however, that the Company shall not be required to deliver to
such holders a copy of any such document that has not been materially changed
from a copy of such document that was previously delivered to such holders. The
Company shall not file any such Registration Statement or Prospectus or any
amendments or
53
supplements thereto (including such documents that, upon filing,
would be incorporated or deemed to be incorporated by reference therein) to
which the holders of a majority of the Registrable Shares covered by such
Registration Statement, their counsel or the managing underwriters, if any,
shall reasonably object in writing on a timely basis unless, in the opinion of
the Company, such filing is necessary to comply with applicable law.
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) to each Registration Statement as may be necessary
to keep such Registration Statement continuously effective during the period
provided herein with respect to the disposition of all securities covered by
such Registration Statement; and cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provision then in force) under
the Securities Act.
(c) Notify the Holders registering Registrable Shares as part of such
Registration Statement, their counsel and the managing underwriters, if any,
promptly and (if requested by any such person) confirm such notice in writing,
(i) when a Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC for amendments or supplements to a Registration Statement or
related Prospectus or for additional information regarding the Holders
registering shares as part of such Registration Statement, (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iv) if at any time the representations and warranties of the Company contained
in any agreement (including any underwriting agreement) contemplated by Section
5(j) below cease to be true and correct, (v) 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 (vi) of the happening of any event that requires the making of any
changes in such Registration Statement, Prospectus or documents incorporated or
deemed to be incorporated therein by reference so that in the case of the
Registration Statement 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 not misleading, and that in the case
of the Prospectus it will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(d) Use reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the
54
lifting of any suspension of the qualification or exemption from qualification
of any of the Registrable Shares for sale in any jurisdiction.
(e ) If requested by a Holder, furnish to counsel for the Holders and each
managing underwriter, if any, without charge, one conformed copy of each
Registration Statement as declared effective by the SEC and of each
post-effective amendment thereto, in each case including financial statements
and schedules and all exhibits and reports incorporated or deemed to be
incorporated therein by reference; and deliver, without charge, such number of
copies of the preliminary prospectus, each amended preliminary prospectus, each
final Prospectus and each post-effective amendment or supplement thereto, as
the Holder may reasonably request in order to facilitate the disposition of the
Registrable Shares covered by each Registration Statement in conformity with
the requirements of the Securities Act.
(f ) Prior to any public offering of Registrable Shares, use reasonable
best efforts to register or qualify such Registrable Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions in the United
States as the holders of a majority of the Registrable Shares to which such
public offering relates shall reasonably request in writing; and do any and all
other reasonable acts or things necessary or advisable to enable the Holders to
consummate the disposition in such jurisdictions of such Registrable Shares
covered by the Registration Statement, provided, however, that the Company
shall in no event be required to qualify generally to do business as a foreign
corporation or as a dealer in any jurisdiction where it is not at the time so
qualified or to execute or file a consent to general service of process in any
such jurisdiction where it has not theretofore done so or to take any action
that would subject it to service of process or taxation in any such
jurisdiction where it is not then subject.
(g) Except during any Delay Period, upon the occurrence of any event
contemplated by Sections 5(c)(ii) or 5(c)(vi) above, prepare a supplement or
post-effective amendment to each Registration Statement or related Prospectus
or any document incorporated or deemed to be incorporated therein by reference,
or file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Shares being sold thereunder, such Prospectus
will not contain an 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 light of the circumstances under which they were made, not
misleading.
(h) Use its best efforts to cause all Registrable Shares covered by such
Registration Statement to be listed on each securities exchange or quoted on
each automated interdealer quotation system, if any, on which the shares of
Company Common Stock are then listed or quoted.
55
(i) On or before the effective date of the Registration Statement, provide
the transfer agent of the Company for the Registrable Shares with printed
certificates for the Registrable Shares, which are in a form eligible for
deposit with The Depository Trust Company.
(j) If requested by the Holders of a majority of the Registrable Shares
being sold, enter into one or more customary "firm commitment" or "best
efforts" underwriting agreements, engagement letters, agency agreements or
similar agreements, as appropriate, and in such connection, whether or not any
such agreement is entered into and whether or not the Registration is an
underwritten registration, the Company shall (i) make such representations and
warranties to the holders of such Registrable Shares and the underwriters, if
any, with respect to the business of the Company and its subsidiaries, and the
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings, and if true, confirm the same if and when requested,
(ii) use its reasonable efforts to obtain opinions of counsel to the Company
and updates thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriters, if any, and
counsel to such Holders of the Registrable Shares being sold), addressed to
each such selling Holder of Registrable Shares and each of the underwriters, if
any, covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such counsel and underwriters, (iii) use its reasonable efforts to obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each such
selling Holder of Registrable Shares (unless such accountants shall be
prohibited from so addressing such letters by applicable standards of the
accounting profession) and each of the underwriters, if any, such letters to be
in customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings, and (iv) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures substantially to the effect set forth in Section 8
hereof with respect to all parties to be indemnified pursuant to said Section.
The above shall be done at each closing under such underwriting or similar
agreement, or as and to the extent required thereunder.
(k) Comply with all applicable rules and regulations of the SEC and make
generally available to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder, or
any similar rule promulgated under the
56
Securities Act, no later than forty-five (45) days after the end of any twelve
(12) month period (or ninety (90) days after the end of any twelve (12) month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Shares are sold to underwriters in a "firm
commitment" or "best efforts" underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said twelve (12) month periods.
The Company may require each seller of Registrable Shares as to which any
registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such Registrable Shares as the
Company may, from time to time, request in writing and as, in the opinion of
counsel for the Company, is required by law to effect such registration. If any
such information with respect to a seller or such distribution of Registrable
Shares is not furnished within a reasonable period of time after receipt of
such request, the Company may exclude such Shareholder's Registrable Shares
from such Registration Statement. Each seller of Registrable Shares agrees to
notify the Company as promptly as practicable following its discovery of any
material inaccuracy or material change in information so furnished by such
seller to the Company or of the occurrence of any event that causes any
prospectus relating to such registration to contain an untrue statement of a
material fact or omit to state any material fact regarding such seller or such
distribution of Registrable Shares that is required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made.
Each holder of Registrable Shares agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
5(c)(ii), 5(c)(iii), 5(c)(v) or 5(c)(vi) hereof, that such Holder shall
forthwith discontinue disposition of such Registrable Shares covered by such
Registration Statement or Prospectus until receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(g) hereof, or
until such Holder is advised in writing by the Company that the use of the
applicable Prospectus may be resumed, and has received copies of any amended or
supplemented Prospectus or any additional or supplemental filings which are
incorporated, or deemed to be incorporated, by reference in such Prospectus
and, if requested by the Company, such Holder shall deliver to the Company (at
the expense of the Company) all copies then in its possession, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Shares at the time of receipt of such request.
Each holder of Registrable Shares further agrees not to utilize any
material other than the applicable current Prospectus in connection
57
with the offering of Registrable Shares pursuant to a Demand Registration or
otherwise hereunder.
SECTION 6. Registration Expenses.
(a) Whether or not any Registration Statement becomes effective, the
Company shall pay all costs, fees and expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation
(i) all registration and filing fees, (ii) fees and expenses of compliance with
securities or Blue Sky laws, (iii) printing expenses (including without
limitation expenses of printing certificates for Registrable Shares and of
printing prospectuses if the printing of prospectuses is requested by the
managing underwriter, if any, or by the Holders of a majority of the
Registrable Shares included in any Registration Statement), (iv) messenger,
telephone and delivery expenses, (v) fees and disbursements of counsel for the
Company and one special counsel for the sellers of Registrable Shares (subject
to the provisions of Section 6(b) hereof), and (vi) fees and disbursements of
all independent certified public accountants of the Company (including without
limitation expenses of any "cold comfort" letters required in connection with
this Agreement) and all other persons retained by the Company in connection
with the Registration Statement. In addition, the Company shall 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 and the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange on which
similar securities issued by the Company are then listed. Notwithstanding the
foregoing, each participating Holder shall pay all commissions, fees or
discounts payable to brokers, dealers or underwriters and all transfer taxes in
connection with the sale of its Registrable Shares.
(b) In connection with any Demand Registration or Piggyback Registration
(including any "shelf" registration in connection therewith) hereunder, the
Company shall reimburse the Holders of the Registrable Shares being registered
in such registration for the reasonable fees and disbursements of not more than
one counsel (together with appropriate local counsel, if required) chosen by
the Holders of a majority of all of such Registrable Shares.
SECTION 7. Underwritten Registrations.
(a) Subject to Section 7(b) hereof, the Holders shall have the right, by
written notice, to request that any Demand Registration be made pursuant to an
underwritten offering.
(b) In the case of any underwritten registration, the Company shall select
(with the consent of the participating Holders) the institution or institutions
that shall manage or lead the offering or
58
placement. The Holders shall not be entitled to participate unless and until it
or they shall enter into an underwriting or other agreement with such lead
institutions for such offering in such form as the Company and such lead
institutions shall reasonably determine.
SECTION 8. Indemnification.
(a) Indemnification by the Company. The Company shall, without limitation
as to time, indemnify and hold harmless, to the full extent permitted by law,
each Holder of Registrable Shares whose Registrable Shares are covered by a
Registration Statement or Prospectus, the officers, directors and agents and
employees of each of them, each Person who controls each such holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, agents and employees of each such controlling
person, to the fullest extent lawful, from and against any and all losses,
claims, damages, liabilities, costs (including, without limitation, reasonable
costs of preparing, investigating or defending such claim and reasonable
attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising
out of or based upon any untrue or alleged untrue statement of a material fact
contained in such Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same arise out of or are based upon information furnished in
writing to the Company by such holder expressly for use therein or any
violation or alleged violation by the Company of the Securities Act, Exchange
Act or any other federal or state securities laws, rule or regulation
applicable to the Company and relating to the action or inaction by the Company
in connection with any such registration or qualification; provided, however,
that the Company shall not be liable to any Holder of Registrable Shares to the
extent that any such Losses arise out of or are based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
preliminary prospectus if (i) such Holder failed to send or deliver a copy of
the Prospectus with or prior to the delivery of written confirmation of the
sale by such Holder of a Registrable Security to the person asserting the claim
from which such Losses arise and (ii) the Prospectus would have corrected in
all material respects such untrue statement or alleged untrue statement or such
omission or alleged omission; and provided further, that the Company shall not
be liable in any such case to the extent that any such Losses arise out of or
are based upon an untrue statement or alleged untrue statement or omission or
alleged omission in the Prospectus, if (x) such untrue statement or alleged
untrue statement, omission or alleged omission is corrected in all material
respects in an amendment or supplement to the Prospectus and (y) having
previously been furnished by or on behalf of the Company with copies of the
Prospectus as so amended or supplemented, such Holder
59
thereafter fails to deliver such Prospectus as so amended or supplemented,
prior to or concurrently with the sale of a Registrable Security to the person
asserting the claim from which such Losses arise.
(b) Indemnification by Holder of Registrable Securities. In connection
with any Registration Statement in which a Holder of Registrable Securities is
participating, such holder of Registrable Securities shall furnish to the
Company in writing such information as the Company reasonably requests for use
in connection with any Registration Statement or Prospectus and agrees to
indemnify, to the full extent permitted by law (but in no event in an amount to
exceed the gross proceeds received by such Holder upon the sale of its Shares
pursuant to such Registration Statement), the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and
the directors, officers, agents or employees of such controlling persons, from
and against all Losses arising out of or based upon any untrue or alleged
untrue statement of a material fact contained in any Registration Statement or
Prospectus or any amendment or supplement thereto, or any preliminary
prospectus, or arising out of or based upon any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, to the extent, but only to the extent, that
such untrue or alleged untrue statement or omission or alleged omission is
contained in any information so furnished in writing by such holder to the
Company expressly for use in such Registration Statement or Prospectus and that
such information was relied upon by the Company in preparation of such
Registration Statement or Prospectus or amendment, supplement or preliminary
prospectus.
(c) Conduct of Indemnification Proceedings. If any Person shall be
entitled to indemnity hereunder (an "indemnified party"), such indemnified
party shall give prompt written notice to the party from which such indemnity
is sought (the "indemnifying party") of any claim or of the commencement of any
proceeding with respect to which such indemnified party seeks indemnification
or contribution pursuant hereto; provided, however, that the delay or failure
to so notify the indemnifying party shall not relieve the indemnifying party
from any obligation or liability except to the extent that the indemnifying
party has been prejudiced materially by such delay or failure. The indemnifying
party shall have the right, exercisable by giving written notice to an
indemnified party promptly after the receipt of written notice from such
indemnified party of such claim or proceeding, to assume, at the indemnifying
party's expense, the defense of any such claim or proceeding, with counsel
reasonably satisfactory to such indemnified party; provided, however, that an
indemnified party shall have the right to employ separate counsel in any such
claim or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (l) the indemnifying party agrees in writing to pay such fees and
expenses, (2) the indemnifying party fails promptly to assume the defense of
such claim or proceeding or fails to employ counsel reasonably satisfactory to
such indemnified party, or (c) in the judgment of counsel to such indemnified
party a conflict of interest is reasonably likely to exist between such
indemnified party and any other of such indemnified parties with respect to
such proceeding (in which case the indemnified party shall have the right to
employ counsel and to assume the defense of such claim or proceeding);
provided, however, that the indemnifying party shall not, in connection with
any one such claim or proceeding or separate but substantially similar or
related claims or proceedings in the same jurisdiction, arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one firm of attorneys (together with appropriate local counsel) at
any time for all of the indemnified parties, or for fees and expenses that are
not reasonable. Whether or not such defense is assumed by the indemnifying
party, such indemnified party will not be subject to any liability for any
settlement made without its consent (but such consent will not be unreasonably
withheld). The indemnifying party shall not, without the written consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified
60
party shall have the right to employ counsel and to assume the defense of such
claim or proceeding); provided, however, that the indemnifying party shall not,
in connection with any one such claim or proceeding or separate but
substantially similar or related claims or proceedings in the same
jurisdiction, arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one firm of attorneys (together
with appropriate local counsel) at any time for all of the indemnified parties,
or for fees and expenses that are not reasonable. Whether or not such defense
is assumed by the indemnifying party, such indemnified party will not be
subject to any liability for any settlement made without its consent (but such
consent will not be unreasonably withheld). The indemnifying party shall not,
without the written consent of the indemnified party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release, in form and substance reasonably satisfactory to the indemnified
party, from all liability in respect of such claim or litigation for which such
indemnified party would be entitled to indemnification hereunder.
(d) Contribution. If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any Losses (other than in
accordance with its terms) or is insufficient to hold such indemnified party
harmless, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and such indemnified party, on the other hand, in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such
indemnifying party, on the one hand, and indemnified party, on the other hand,
shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact, has been taken by, or
relates to information supplied by, such indemnifying party or indemnified
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent any such action, statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed to
include any legal or other fees or expenses incurred by such party in
connection with any investigation or proceeding.
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The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provision of this Section 8(d), an indemnifying
party that is a selling holder of Registrable Securities shall not be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities sold by such indemnifying party exceeds the
amount of any damages that such indemnifying party has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (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.
SECTION 9. Miscellaneous.
9.1 Termination. This Agreement and the obligations of the Company
hereunder shall terminate on the earliest of (i) the tenth anniversary of the
date hereof and (ii) the first date on which all Registrable Shares shall
exist.
9.2 Notices. All notices or communications hereunder shall be in writing
(including telecopy or similar writing), addressed to the Holders as set forth
on the signature pages hereto, and to the Company as follows:
To the Company:
▇▇▇▇▇▇▇▇▇▇ Healthcare Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Senior Vice President and General Counsel
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice or communication shall be deemed given (i) when made, if
made by hand delivery, (ii) one business day after being deposited with a
next-day courier, postage prepaid, or (iii) three business days after being
sent certified or registered mail, return
62
receipt requested, postage prepaid, in each case addressed as above (or to such
other address as such party may designate in writing from time to time).
9.3 Separability. If any provision of this Agreement shall be declared to
be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect.
9.4 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns; provided, however, that neither this
Agreement nor any rights hereunder shall be assignable or otherwise subject to
hypothecation by the Holder so long as such assignee becomes a party to and
fully bound by this Agreement prior to or concurrently with such assignment.
9.5 Entire Agreement. This Agreement represents the entire agreement of
the parties and shall supersede any and all previous contracts, arrangements or
understandings between the parties hereto with respect to the subject matter
hereof. This Agreement may be amended at any time by mutual written agreement
of the parties hereto.
9.6 Publicity. Each of the Holders and the Company agree that no public
release or announcement concerning the transactions contemplated hereby shall
be issued by either party without the prior consent of the other party, except
to the extent that the Holders or the Company is advised by counsel that such
release or announcement is necessary or advisable under applicable law or the
rules or regulations of any securities exchange, in which case the party
required to make the release or announcement shall provide the other party with
an opportunity to review and comment on such release or announcement in advance
of its issuance.
9.7 Expenses. Except as otherwise specifically provided in Section 6
hereof, whether or not the transactions contemplated hereby are consummated,
except as otherwise provided herein, all costs and expenses incurred in
connection with the performance of this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs or
expenses.
9.8 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.9 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts
63
have been signed by each of the parties and delivered to the other party.
9.10 Governing Law; Venue. This Agreement shall be construed, interpreted,
and governed in accordance with the laws of the State of Incorporation of
▇▇▇▇▇▇▇▇▇▇, without reference to rules relating to conflicts of law.
9.11 Calculation of Time Periods. Except as otherwise indicated, all
periods of time referred to herein shall include all Saturdays, Sundays and
holidays; provided, that if the date to perform the act or give any notice with
respect to this Agreement shall fall on a day other than a Business Day, such
act or notice may be timely performed or given if performed or given on the
next succeeding Business Day.
9.12 No Inconsistent Agreements. The Company has not, as of the date
hereof, and shall not, on or after the date of this Agreement, enter into any
agreement with respect to its securities which is inconsistent with the rights
granted to the holders of Registrable Shares in this Agreement or otherwise
conflicts with the provisions hereof.
9.13 Participation by Holders. Each Holder hereby agrees that it may not
participate in any offering hereunder unless it (i) agrees to sell the
Registrable Shares to be included by it therein in the manner and upon the
terms and conditions provided in any underwriting or other agreement approved
by the persons entitled hereunder to determine the method of distribution
thereof and (ii) completes and executes such questionnaires, powers of
attorney, indemnities, underwriting agreements or other similar documents
reasonably required in accordance with the terms hereof or any agreement
contemplated by the foregoing clause (i).
9.14 Amendment. This Agreement, as to any amendment of rights, may be
amended, and the Company may take any action herein prohibited or omit to
perform any act herein required to be performed by it, if the Company shall
obtain the written consent to such amendment action or omission to act given by
the Holders of at lease a majority of the then existing Registrable Shares.
This Agreement may not be changed orally, but only by an agreement in writing
signed by the party against whom enforcement is sought.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
▇▇▇▇▇▇▇▇▇▇ HEALTHCARE CORPORATION
By: \s\ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President & COO
THE NORTHWESTERN MUTUAL
LIFE INSURANCE COMPANY
By: \s\ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Number of Shares:
Address for Notice:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with copies to:
▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
INDOSUEZ CAPITAL ASSET ADVISORS, INC.
By: \s\ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: President
65
INDOSUEZ HIGH YIELD PARTNERS
By: \s\ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Partner
Number of Shares:
Address for Notice:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇