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EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of _____________, 19__ between QK Healthcare, Inc., a Delaware
corporation (the "Company"), and those entities whose names appear on the
signature pages hereof (the "Holders").
This Agreement is made in connection with the Agreement and Plan of
Corporate Separation dated the date hereof (the "Reorganization Agreement")
between the Company and the Holders, pursuant to which the Holders are acquiring
Common Stock of the Company.
The parties hereby agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the following
respective meanings:
(a) "Business Day" means any day, other than a Saturday, Sunday or legal
holiday, on which banks in the State of New York are open for business.
(b) "Commission" means the Securities and Exchange Commission.
(c) "Common Stock" means the Common Stock, par value $.001 per share, of
the Company, as constituted on the date hereof, any shares into which such
Common Stock shall have been changed, or any shares resulting from any
reclassification of such Common Stock.
(d) "Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute thereto, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
(e) "Holders" means the Holders referred to in the Preamble and any other
person holding Registrable Securities to whom these registration rights have
been assigned pursuant to Section 9(f) of this Agreement.
(f) "Lock-Up Period" shall mean the period of time, as specified in the
underwriting agreement or related lock-up agreements entered into in connection
with a public offering of the Company's equity securities, during which there
are restrictions on transfers of shares of Common Stock by the Company or any of
the Holders.
(g) "Person" shall mean an individual, partnership, corporation,
association, trust, joint venture, unincorporated organization and any
government, governmental department or agency or political subdivision thereof.
(h) "Registrable Securities" means (i) the Common Stock issued to the
Holders; and (ii) any shares of capital stock of the Company issued or issuable
with respect to the securities referred to in clause (i) by way of a stock split
or stock dividend or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. For
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purposes of this Agreement, a Person will be deemed to be a holder of
Registrable Securities upon conversion or exercise in connection with a transfer
of securities or otherwise, but disregarding any restrictions or limitations
upon the exercise of such right, whether or not such acquisition has actually
been effected. Such securities will cease to be Registrable Securities when sold
pursuant to Rule 144 or any offering registered under the Securities Act.
(i) "Registration Expenses" means all expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
all registration, filing, listing and National Association of Securities
Dealers, Inc. ("NASD") fees, all fees and expenses of complying with securities
or blue sky laws, all word processing, duplicating and printing expenses, all
messenger and delivery expenses, any transfer taxes, the fees and expenses of
the Company's legal counsel and independent public accountants, including the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance, fees and disbursements of one counsel for
all of the Holders, and any fees and disbursements of underwriters customarily
paid by insurers or sellers of securities; provided, however, that Registration
Expenses shall not include underwriting discounts and commissions.
(j) "Securities Act" means the Securities Act of 1933, as amended, or any
successor statute thereto, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect at the time.
2. Registration.
(a) Requested Registration. At any time after the earlier to occur of (A)
the first anniversary of the date hereof and (B) the Company's initial public
offering of equity securities, so long as no Lock-Up Period is then in effect,
upon written request by the Holders of at least 20% of the Registrable
Securities outstanding at the time of the request to the Company, that the
Company effect the registration under the Securities Act of all or part of the
Registrable Securities (a "Requested Registration"), the Company will use its
best efforts to effect the registration under the Securities Act of the
Registrable Securities which the Company has been so requested to register by
the Holders within sixty (60) days after receipt of such request or within
thirty (30) days after receipt of such request if the Company is qualified to
file a registration statement on Commission Form S-3 or any successor or similar
short-form registration statement (collectively, "Form S-3")); provided,
however, that the Company shall not be obligated to effect a Requested
Registration pursuant to this subdivision during the 180 day period immediately
following the commencement of the Company's public offering of equity securities
or during any Lock-Up Period. The Company must effect an unlimited number of
registrations pursuant to this subdivision (a) to the extent such registrations
may be effected on Form S-3, but the Company shall not be obligated to effect
more than five Requested Registrations in the aggregate for the Holders
hereunder other than on Form S-3. The Company shall not be obligated to effect
more than one Registration Statement every six months. Subject to subdivision
(f), the Company may include in such Requested Registration other securities of
the Company for sale, for the Company's account or for the account of any other
person, if and to the extent that the managing underwriter determines that the
inclusion of such additional shares will not interfere with the orderly sale of
the underwritten securities at a price range acceptable to
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the requesting Holders. Upon receipt of a written request pursuant to this
subdivision (a), the Company shall promptly give written notice of such request
to all Holders, and all Holders shall be afforded the opportunity to participate
in such request. The Company will be obligated to include in the Requested
Registration such number of Registrable Securities of any Holder joining in such
request as are specified in a written request by the Holder received by the
Company within 20 days after receipt of such written notice from the Company.
(b) Incidental Registration. If the Company for itself or any of its
security holders shall at any time or times after the date hereof determine to
register under the Securities Act any shares of its capital stock or other
securities (other than: (i) the registration of an offer, sale or other
disposition of securities solely to employees of, or other persons providing
services to, the Company, or any subsidiary pursuant to an employee or similar
benefit plan; or (ii) relating to a merger, acquisition or other transaction of
the type described in Rule 145 under the Securities Act or a comparable or
successor rule, registered on Form S-4 or similar or successor forms), on each
such occasion the Company will notify each Holder of such determination at least
thirty (30) days prior to the filing of such registration statement, and upon
the request of any Holder given in writing within twenty (20) days after the
receipt of such notice, the Company will use its best efforts as soon as
practicable thereafter to cause any of the Registrable Securities specified by
any such Holder to be included in such registration statement to the extent such
registration is permissible under the Securities Act and subject to the
conditions of the Securities Act (an "Incidental Registration").
(c) Registration Statement Form. The Company shall, if permitted by law,
effect any registration requested under Section 2 by the filing of a
registration statement on Form S-3 and shall use its best efforts to take any
action necessary to maintain its eligibility to utilize Form S-3 to permit
resales as requested by the Holders with respect to Transactions Involving
Secondary Offerings as described in General Instruction I.B.3 of Form S-3.
(d) Expenses. The Company shall pay all Registration Expenses incurred in
connection with any Incidental Registration and any Requested Registrations.
(e) Effective Registration Statement. A Requested Registration or an
Incidental Registration requested pursuant to Section 2(a) or Section 2(b),
respectively, shall not be deemed to have been effected unless it has been
declared effective by the Commission. Notwithstanding the foregoing, a
registration statement will not be deemed to have been effected if: (i) after it
has become effective with the Commission, such registration is interfered with
by any stop order, injunction, or other order or requirement of the Commission
or other governmental agency or any court proceeding for any reason other than a
misrepresentation or omission by any Holder; or (ii) the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied, other than solely by reason
of some act or omission by any Holder.
(f) Priority in Incidental Registration. If an Incidental Registration is
an underwritten registration initiated by the Company, and the managing
underwriters shall give written advice to the Company that, in their opinion,
market conditions dictate that no more than a specified
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maximum number of securities (the "Underwriter's Maximum Number") could
successfully be included in such Incidental Registration, then the Company will
include in such registration:
(i) first, that number of securities which the Company proposes to
offer and sell for its own account in such registration and which
does not exceed the Underwriter's Maximum Number; and
(ii) second, that number of Registrable Securities which shall have
been requested by the Holders thereof having registration rights
hereunder which does not exceed the difference between the
Underwriter's Maximum Number and that number of securities which the
Company is entitled to include therein pursuant to clause (i) above.
If less than all of the Registrable Securities requested to be included in
any such registration by the Holders can be so included due to these priority
requirements, then each requesting Holder's request shall be granted on an pro
rata basis with the other requesting Holders.
(g) Notwithstanding anything in paragraphs (a) and (b) of this Section 2,
the Company shall have the right to delay any registration of Registrable
Securities requested pursuant to paragraph (a) or (b) of this Section 2 for up
to ninety (90) days if such registration would, in the judgment of the Company's
Board of Directors, substantially interfere with any material transaction being
considered at the time of receipt of the request from the Holders.
3. Registration Procedures.
(a) If and whenever the Company is required to use its best efforts to
effect the registration of any Registrable Securities under the Securities Act
as provided in Section 2, the Company, as expeditiously as possible and subject
to the terms and conditions of Section 2, will:
(i) prepare and file with the Commission the requisite registration
statement to effect such registration and use its best efforts to cause such
registration to become and remain effective;
(ii) permit any Holder which, in the reasonable judgment of the
Holder, might be deemed to be an underwriter or a controlling person of the
Company, to participate in the preparation of such registration statement and to
require the insertion therein of material furnished to the Company in writing,
which in the reasonable judgment of such Holder and its counsel should be
included;
(iii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement until the
earlier of such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
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thereof set forth in such registration statement or the expiration of 180 days
after such registration statement becomes effective;
(iv) furnish to the Holders such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as the purchaser or any Holder of Registrable
Securities to be sold under such registration statement may reasonably request;
(v) use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under such other United States
state securities or blue sky laws of such jurisdictions as any Holder of
Registrable Securities to be sold under registration statement shall reasonably
request, to keep such registration or qualification in effect for so long as
such registration remains in effect, and take any other action which may be
reasonably necessary or advisable to enable the Holder of Registrable Securities
to be sold under such registration statement to consummate the disposition in
such jurisdictions of the securities owned by such Holder, except that the
Company shall not for any such purpose be required to (a) qualify generally to
do business as a foreign corporation in any jurisdiction wherein it would not
but for the requirements of this subdivision (v) be obligated to be so
qualified, or (b) subject itself to taxation in any such jurisdiction, or (c)
consent to general service of process in any such jurisdiction;
(vi) use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such other
United States state governmental agencies or authorities as may be necessary to
enable the Holder of Registrable Securities to be sold under such registration
statement to consummate the intended disposition of such Registrable Securities;
(vii) in the event of the issuance of any stop order suspending the
effectiveness of the registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Registrable Securities included in such registration statement for sale in
any jurisdiction, the Company shall use its best efforts promptly to obtain the
withdrawal of such order;
(viii) use it best efforts to furnish to the Holders of Registrable
Securities to be sold under such registration statement (1) an opinion, dated
the effective date of the registration statement, of the independent counsel
representing the Company for the purposes of such registration, addressed to the
underwriters, if any, and to the Holders making such request, stating that such
registration statement has become effective under the Securities Act and that
(i) to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Securities Act; (ii)
the
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registration statement, the related prospectus, and each amendment or supplement
thereto, comply as to form in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder (except that such counsel need express no opinion as to financial
statements contained therein); (iii) such counsel has no reason to believe that
either the registration statement or the prospectus, or any amendment or
supplement thereto, contains any untrue statement of a material fact or omits a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (iv) the descriptions
in the registration statement or the prospectus, or any amendment or supplement
thereto, of all legal and governmental matters and contracts and other legal
documents or instruments are accurate and fairly present the information
required to be shown; (v) such counsel does not know of any legal or
governmental proceedings, pending or contemplated, required to be described in
the registration statement or prospectus, or any amendment or supplement
thereto, which are not described as required nor of any contracts or documents
or instruments of a character required to be described in the registration
statement or prospectus, or any amendment or supplement thereto or to be filed
as exhibits to the registration statement which are not described and filed as
required; and (vi) such other legal matters with respect to the registration in
respect of which such opinion is being given as the Holders may reasonably
request; and (2) a letter, dated the effective date of the registration
statement, from the independent certified public accountants of the Company,
addressed to the underwriters, if any, and to the Holders making such request,
stating that they are independent certified public accountants within the
meaning of the Securities Act and that in the opinion of such accountants, the
financial statements and other financial data of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereto, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and such other financial matters
(including information as to the period ending not more than five business days
prior to the date of such letter) with respect to the registration in respect of
which such letter is being given as the Holders may reasonably request;
(ix) immediately notify the Holders of Registrable Securities
included in such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
under which they were made, and at the request of the Holders promptly prepare
and furnish to the Holders a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made;
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(x) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months, beginning
with the first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder, and not file any amendment
or supplement to such registration statement or prospectus to which any Holder
shall have reasonably objected in writing on the grounds that such amendment or
supplement does not comply in all material respects with the requirements of the
Securities Act or of the rules or regulations thereunder, having been furnished
with a copy thereof at least two business days prior to the filing thereof;
(xi) provide a transfer agent for all Registrable Securities covered
by such registration statement not later than the effective date of such
registration statement; and
(xii) use its best efforts to list all Registrable Securities covered
by such registration statement on any securities exchange on which any of the
Registrable Securities are then listed.
(b) The Company may require each Holder of Registrable Securities to be
sold under such registration statement, at the Company's expense, to furnish the
Company with such information and undertakings as it may reasonably request
regarding such Holder and the distribution of such securities as the Company may
from time to time reasonably request in writing.
(c) Each Holder, by execution of this Agreement, agrees (A) that upon
receipt of any notice of the Company of the happening of any event of the kind
described in subdivision (a)(ix) of this Section 3, such Holder will forthwith
discontinue its disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until the receipt
by such Holder of the copies of the supplemented or amended prospectus
contemplated by subdivision (a)(ix) of this Section 3 and, if so directed by the
Company, will deliver to the Company all copies, other than permanent file
copies, then in possession of the Holders of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice and (B)
that it will immediately notify the Company, at any time when a prospectus
relating to the registration of such Registrable Securities is required to be
delivered under the Securities Act, of the happening of any event as a result of
which information previously furnished by such Holder to the Company for
inclusion in such prospectus contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
under which they were made. In the event the Company or any such Holder shall
give any such notice, the period referred to in subdivision (a)(iii) of this
Section 3 shall be extended by a number of days equal to the number of days
during the period from and including the giving of notice pursuant to
subdivision (a)(ix) of this Section 3 to and including the date when such Holder
shall have received the copies of the supplemented or amended prospectus
contemplated by subdivision (a)(ix) of this Section 3.
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(d) Each Holder, by execution of this Agreement, agrees that it will not
affect any sale or distribution of a Registrable Security during the Lock-Up
Period specified in the underwriting agreement entered into in connection with
the Company's public offering.
4. Underwritten Offerings.
(a) Underwritten Offering. In connection with any underwritten offering
pursuant to a registration requested under Section 2(a), the Company will enter
into an underwriting agreement with the underwriters for such offering, such
agreement to be in form and substance reasonably satisfactory to all Holders
requesting such registration and such Holders' underwriters in their reasonable
judgment and to contain such representations and warranties by the Company and
such other terms as are customarily contained in agreements of that type,
including, without limitation, indemnities to the effect and to the extent
provided in Section 6. Each such Holder shall be a party to such underwriting
agreement and may, at its or their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of each such Holder and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of each such Holder. No
Holder requesting such registration shall be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Holder and its intended method of distribution and any other representation
required by law.
(b) Selection of Underwriters. If a Requested Registration pursuant to
Section 2(a) involves an underwritten offering, then the Company shall select
the underwriter from underwriting firms of national reputation, subject to the
approval of the Holders of a majority of the Registrable Securities to be
included in such registration, which approval will not be unreasonably withheld.
(c) Holdback Agreements. Each Holder agrees, if so reasonably required by
the managing underwriter in a registration pursuant to Section 2, not to effect
any public sale or distribution of Registrable Securities or sales of such
Registrable Securities pursuant to Rule 144 or Rule 144A under the Securities
Act, during the seven (7) days prior to and the 180 days after any firm
commitment underwritten registration pursuant to Section 2 has become effective
(except as part of such underwritten registration) or, if the managing
underwriter advises the Company that, in its opinion, no such public sale or
distribution should be effected for a period of not more than 180 days after
such underwritten registration in order to complete the sale and distribution of
securities included in such registration and the Company gives notice to such
effect to such Holders of such advice, each Holder shall not effect any public
sale or distribution of Registrable Securities or sales of such Registrable
Securities pursuant to Rule 144 or Rule 144A under the Securities Act during
such period after such underwritten registration, except as part of such
underwritten registration, whether or not such Holder participates in such
registration.
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5. Preparation, Reasonable Investigation.
In connection with the preparation and filing of each registration
statement under the Securities Act, the Company will give the Holders of
Registrable Securities to be sold under such registration statement, the
underwriters, if any, and their respective counsel and accountants, drafts and
final copies of such registration statement, each prospectus included therein or
filed with the Commission and each amendment thereof or supplement thereto, at
least 5 business days prior to the filing thereof with the Commission, and will
give each of them such access to its books and records and such opportunities to
discuss the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of such Holders and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.
6. Indemnification and Contribution.
(a) Indemnification by the Company. In the event of any registration under
the Securities Act pursuant to Section 2 of any Registrable Securities covered
by such registration, the Company will, and hereby does, indemnify and hold
harmless each Holder of Registrable Securities to be sold under such
registration statement, each such Holder's legal counsel, each other person who
participates as an underwriter in the offering or sale of such securities (if so
required by such underwriter as a condition to including the Registrable
Securities of the Holders in such registration) and each other person, if any,
who controls any such Holder or any such underwriter within the meaning of the
Securities Act (collectively, the "Indemnified Parties"), against any losses,
claims, damages or liabilities, joint or several, to which the Holders or
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein or any document
incorporated therein by reference, or any amendment or supplement thereto, or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
arise out of any violation by the Company of any rule or regulation promulgated
under the Securities Act or state securities law applicable to the Company and
relating to action or inaction required of the Company in connection with any
such registration, and the Company will reimburse the Indemnified Parties for
any legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; provided, however, that the Company shall not be liable to any
Indemnified Party in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by such Indemnified Party.
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(b) Indemnification by the Holders. The Company may require, as a condition
to including any Registrable Securities of any person or entity in any
registration statement filed pursuant to Section 2, that the Company shall have
received an undertaking reasonably satisfactory to it from such person or entity
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in subdivision (a) of this Section 6) the Company, each director of the
Company, each officer of the Company and each other person, if any, who controls
the Company within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, if, and
only if, such statement or alleged statement or omission or alleged omission was
made in reliance upon and in conformity with information furnished in writing to
the Company directly by such person or entity specifically for use therein;
provided, however, that the obligation of any Holder hereunder shall be limited
to an amount equal to the proceeds received by such Holder upon the sale of
Registrable Securities sold in the offering covered by such registration.
(c) Notices of Claims, etc. Promptly after receipt by an Indemnified Party
of notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section 6, such Indemnified
Party will, if a claim in respect thereof is to be made against a party required
to provide indemnification (an "Indemnifying Party"), give written notice to the
latter of the commencement of such action, provided, however, that the failure
of any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligation under the preceding subdivisions of this
Section 6, except to the extent that the Indemnifying Party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an Indemnified Party, unless in such Indemnified Party's reasonable
judgment a conflict of interest between such Indemnified and indemnifying
parties may exist in respect of such claim, the Indemnifying Party shall be
entitled to participate in and to assume the defense thereof, jointly with any
other Indemnifying Party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such Indemnified Party, and after notice from
the Indemnifying Party to such Indemnified Party of its election so to assume
the defense thereof, the Indemnifying Party shall not be liable to such
Indemnified Party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. No Indemnifying Party shall consent to entry of any judgment or
enter into any settlement without the consent of the Indemnified Party which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.
(d) Other Indemnification. Indemnification similar to that specified in the
preceding subdivisions of this Section 6 (with appropriate modifications) shall
be given by the Company and each Holder of Registrable Securities included in
any registration statement with respect to any required registration or other
qualification of securities under any Federal or state law or regulation of any
governmental authority, other than the Securities Act.
(e) Indemnification Payment. The indemnification required by this Section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
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(f) Survival of Obligations. The obligations of the Company and of the
Holders under this Section 6 shall survive the completion of any offering of
Registrable Securities under this Agreement.
(g) Contribution. If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an Indemnified Party, then each
Indemnifying Party shall contribute to the amount paid or payable to such
Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in this Section 6 an amount or additional amount, as the case may
be, in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party or parties on the one hand and the Indemnified Party on the
other in connection with the statements or omissions which resulted in such
losses, claims, demands or liabilities as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Indemnifying Party or parties on the one hand or the
Indemnified Party on the other and the parties' relative, intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid to an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this Section 6(g) shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any action or claim which is the subject of this Section 6. 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.
7. Covenants Relating to Rule 144.
With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of
securities of the Company to the public without registration after such time as
a public market exists for the Common Stock of the Company, the Company agrees:
(a) to make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date of the first registration under the Securities Act filed by
the Company for an offering of its securities to the general public;
(b) to use its best efforts to then file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act, as amended (at any time after it has become
subject to such reporting requirements); and
(c) so long as a Holder owns any Registrable Securities, to furnish
to the Holder forthwith upon request a written statement by the Company as to
its compliance with the reporting requirements of said Rule 144 (at any time
after 90 days after the effective date of the first registration statement filed
by the Company for an offering of its securities to the general public), and of
the Securities Act and the Exchange Act (at any
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time after it has become subject to such reporting requirements) a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents of the Company as a Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing a Holder to sell any
such securities without registration.
8. Other Registration Rights.
The Company represents and warrants that it has not granted any
registration rights to any Person other than as described on Exhibit A attached
hereto. The Company shall not grant to any Person any registration rights more
favorable than or inconsistent with any of those contained herein, so long as
any of the registration rights under this Agreement remain in effect.
9. Miscellaneous.
(a) Specific Performance. The parties hereto acknowledge that there may be
no adequate remedy at law if any party fails to perform any of its obligations
hereunder and that each party may be irreparably harmed by any such failure, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of any other party under this Agreement in
accordance with the terms and conditions of this Agreement.
(b) Notices. All demands, requests, notices and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered personally or sent by
United States first class mail, postage prepaid, and to the parties hereto at
the following address or at such other address as any party hereto shall
hereafter specify by notice to the other party hereto:
(i) if to the Company, addressed to:
QK Healthcare, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(ii) if to the Holders, to their addresses set forth on Schedule 1
attached hereto
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Except as otherwise provided herein, all such demands, requests, notices and
other communications shall be deemed to have been received on the date of
personal delivery thereof or on the third business day after the mailing
thereof.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of New York, without regard to conflicts of
law principles thereof.
(d) Headings. The descriptive headings of the several sections and
paragraphs of this Agreement are inserted for convenience only, and do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
(e) Entire Agreement; Amendments. This Agreement and the other writings
referred to herein or delivered pursuant hereto which form a part hereof contain
the entire understanding of the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter. This Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a written
instrument duly executed by the Company and those Holders holding a majority of
Registrable Securities. Each Holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by an amendment or waiver authorized by
this Section 9(e), whether or not any such Registrable Securities shall have
been marked to indicate such consent.
(f) Assignability. This Agreement and all of the provisions hereof will be
assigned, without the consent of the Company, by any Holder to, and shall inure
to the benefit of, any purchaser, transferee or assignee of any Registrable
Security, unless the Holder specifies otherwise in connection with particular
transfers of Registrable Securities. However, the Company shall not be required
to recognize any such purchaser, transferee or assignee as a Holder under this
Agreement unless and until either (i) such person becomes the holder of record
of Registrable Securities or (ii) the Company receives written notice of such
purchase, transfer or assignment.
(g) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
QK Healthcare, Inc.
By: ___________________________________
Name:
Title:
[ ]
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By: ___________________________________
Name:
Title:
[ ]
By: ___________________________________
Name:
Title:
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SCHEDULE 1
Names and Addresses of Each Shareholder