Execution Copy
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into May 29, 1998, by and among MEDIQ Incorporated, a Delaware corporation (the
"Company"), Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P., a Delaware limited
partnership ("BRS"), the co-investors listed on Schedule A hereto (the
"Co-Investors"), the management investors listed on Schedule B hereto (the
"Management Investors") and the persons listed on Schedule C hereto (the "Xxxxx
Investors"). BRS, the Co-Investors, the Management Investors and the Xxxxx
Investors are sometimes referred to herein collectively as the "Investors" and
each individually as the "Investor".
This Agreement is made pursuant to that certain Securities Purchase and
Holders Agreement of even date herewith among the parties hereto (the
"Shareholders Agreement"). In order to induce the Investors to enter into such
stockholders agreements, the Company has agreed to provide the registration
rights set forth in this Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following capitalized terms shall have the
following meanings:
"Affiliate" has the meaning set forth in Rule 12b-2 of the Rules
promulgated by the Commission under the Exchange Act.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Common Stock, par value $.01 per share, of the
Company, as adjusted for any stock dividend or distribution payable thereon or
stock split, reverse stock split, recapitalization, reclassification,
reorganization, exchange, subdivision or combination thereof.
"Demand Registration" has the meaning set forth is Section 4(a) of this
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"HCCP Entities" means Health Care Capital Partners, L.P. together with
Health Care Executive Partners, L.P. and their Controlled Affiliates (as defined
in the Shareholders Agreement).
"Xxxxx Entities" means Xxxxx Partners III, L.P. together with Xxxxx
International III, L.P. and Xxxxx Employee Trust III, L.P. and their Controlled
Affiliates (as defined in the Shareholders Agreement).
"Long Form Registration has the meaning set forth in Section 4(a) of this
Agreement.
"Person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.
"Registration Expenses" means the costs and expenses of all registrations
and qualifications under the Securities Act and any state's securities laws, and
of all other actions the Company is required to take in order to effect the
registration of Registrable Securities under the Securities Act pursuant to this
Agreement (including all federal and state registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company and the
fees and expenses of the Company's independent public accountants (including the
expenses of any special audit and "cold comfort" letters required by or incident
to such registration)) other than the costs and expenses of any Investors whose
Registrable Securities are to be registered pursuant to this Agreement
comprising underwriters' commissions, brokerage fees, transfer taxes or the fees
and expenses of any accountants or other representatives retained by any
Investor.
"Registration Statement" means any registration statement of the Company
which covers any of the Registrable Securities 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 in such Registration Statement.
"Registrable Securities" has the meaning set forth in Section 2 of this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Short Form Registration" has the meaning set forth in Section 4(a) of this
Agreement.
"Special Registration Statement" means (i) a registration statement on
Forms S-8 or S-4 or any similar or successor form or any other registration
statement relating to an exchange offer or an offering of securities solely to
the Company's employees or security holders; (ii) a registration statement
registering a Unit Offering or (iii) a registration statement to register either
the warrants or the underlying Common Stock issued in connection with the
financing transactions described on Schedule 2.1(f) to the Shareholders
Agreement.
"Unit Offering" means a public offering of a combination of debt and equity
securities of the Company in which (i) not more than 20% of the gross proceeds
received for the sale of such securities is attributed to such equity
securities, and (ii) after giving effect to such offering, the Company does not
have a class of equity securities required to be registered under the Exchange
Act.
"underwritten registration" or "underwritten offering" means a registration
in which securities of the Company are sold to an underwriter or group of
underwriters for reoffering to the public.
2. Registrable Securities. The securities entitled to the benefits of this
Agreement are the Registrable Securities. As used herein, "Registrable
Securities" means the shares of Common Stock and Preferred Stock that are issued
and outstanding on the date hereof and the shares of Common Stock and Preferred
Stock that become issued and outstanding after the date hereof, in each such
case, held by the parties hereto; provided, however, that Purchased Securities
(as defined in the Shareholder Agreement) issued to Management Investors which
are subject to the Purchase Option (as defined in the Shareholder Agreement)
shall be deemed not to be Registrable Securities until after the Lapse Date (as
defined in the Shareholders Agreement); and provided, further, that each share
of Common Stock and Preferred Stock shall cease to be a Registrable Security
when (i) it has been effectively registered under the Securities Act and
disposed of in accordance with the registration statement covering it; (ii) it
is distributed to the public pursuant to Rule 144 (or any similar provisions
then in force) under the Securities Act; or (iii) it has otherwise been
transferred and a new certificate or other evidence of ownership for it not
bearing a legend as set forth in the Shareholder Agreement (or other legend of
similar import) and not subject to any stop transfer order has been delivered by
or on behalf of the Company and no other restriction on transfer exists under
the Securities Act.
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3. Incidental Registration.
(a) Right to Include Common Stock. If the Company at any time following
the date which is six months after the date of consummation of a Public Offering
(as defined in the Shareholders Agreement) of the Common Stock proposes to
register any of its Common Stock under the Securities Act (other than on a
Special Registration Statement), whether or not for sale for its own account, it
will at each such time give at least 30 days prior written notice (the "Common
Stock Notice") to all holders of Registrable Securities of its intention to file
a registration statement under the Securities Act and of such holders' rights
under this Section 3. Upon the written request of any such holders of
Registrable Securities made within 15 days of the date of the Common Stock
Notice (which request shall specify the aggregate number of the Registrable
Securities to be registered and will also specify the intended method of
disposition thereof), the Company will effect the registration under the
Securities Act of all Registrable Securities which the Company has been so
requested to register by the holders thereof (a "Common Incidental
Registration"), to the extent required to permit the public disposition (in
accordance with such intended methods thereof) of the Registrable Securities to
be so registered; provided, that (i) if, any time after giving written notice of
its intention to register shares of Common Stock and prior to the effective date
of the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register the Company's Common
Stock, the Company shall give written notice of such determination to each
holder of Registrable Securities and, thereupon, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith); (ii) if a registration requested pursuant to this Section
3 shall involve an underwritten public offering, any holder of Registrable
Securities requesting to be included in such registration may elect, in writing
at least 20 days prior to the effective date of the registration statement filed
in connection with such registration, not to register such securities in
connection with such registration; and (iii) if, at any time after 180-days or
such shorter period as may be determined by the Board of Directors, the sale of
the securities has not been completed, the Company may withdraw from the
registration on a pro rata basis (based on the number of Registrable Securities
requested by each holder of Registrable Securities to be so registered) the
Registrable Securities which the Company has been requested to register and
which have not been sold.
(b) Right to Include Preferred Stock. If the Company at any time
proposes to register any series of Preferred Stock under the Securities Act
(other than on a Special Registration Statement), whether or not for sale for
its own account, it will at each such time give at least 30 days prior written
notice (the "Preferred Stock Notice") to all holders of Registrable Securities
of its intention to file a registration statement under the Securities Act and
of such holders' rights under this Section 3. Upon the written request of any
such holders of Registrable Securities made within 15 days of the date of the
Preferred Stock Notice (which request shall specify the aggregate number of the
Registrable Securities of such series of Preferred Stock to be registered and
will also specify the intended method of disposition thereof), the Company will
effect the registration under the Securities Act of all Registrable Securities
of such series of Preferred Stock which the Company has been so requested to
register by the holders thereof (a "Preferred Incidental Registration"), to the
extent required to permit the public disposition (in accordance with such
intended methods thereof) of the Registrable Securities to be so registered;
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provided, that (i) if, any time after giving written notice of its intention to
register shares of Preferred Stock and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register the Company's Preferred Stock,
the Company shall give written notice of such determination to each holder of
Registrable Securities and, thereupon, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection
therewith); (ii) if a registration requested pursuant to this Section 3 shall
involve an underwritten public offering, any holder of Registrable Securities of
such series of Preferred Stock requesting to be included in such registration
may elect, in writing at least 20 days prior to the effective date of the
registration statement filed in connection with such registration, not to
register such securities in connection with such registration; and (iii) if, at
any time after 180 days or shorter period as may be determined by the Board of
Directors of the Company, the sale of the securities has not been completed, the
Company may withdraw from the registration on a pro rata basis (based on the
number of Registrable Securities of such series of Preferred Stock requested by
each holder of Registrable Securities to be so registered) the Registrable
Securities which the Company has been requested to register and which have not
been sold. Each of a Common Incidental Registration and a Preferred Incidental
Registration are referred to herein as "Incidental Registration."
(c) Priority in Incidental Registrations. If a registration pursuant to
Section 3(a) involves an underwritten offering and the managing underwriter
advises the Company in writing that, in its opinion, the total number of shares
of Common Stock or Preferred Stock, as the case may be, to be included in such
registration, including the Registrable Securities requested to be included
pursuant to this Section 3, exceeds the maximum number of shares of Common Stock
or Preferred Stock, as the case may be, specified by the managing underwriter
that may be distributed without adversely affecting the price, timing or
distribution of such shares of Common Stock, or Preferred Stock, as the case may
be, then the Company shall include in such registration only such maximum number
of Registrable Securities which, in the reasonable opinion of such underwriter
or underwriters, can be sold in the following order of priority: (i) first, all
of the shares of Common Stock that the Company proposes to sell for its own
account, if any, and (ii) second, the Registrable Securities of the other
holder(s) of Registrable Securities requested to be included in such Incidental
Registration. To the extent that shares of Common Stock or Preferred Stock, as
the case may be, to be included in the Incidental Registration must be allocated
among the holders(s) of Registrable Securities pursuant to clause (ii) above,
such shares shall be allocated pro rata among the holders(s) of Registrable
Securities based on the number of shares of Common Stock or Preferred Stock, as
the case may be, that such holders(s) of Registrable Securities shall have
requested to be included therein.
(d) Expenses. The Company will pay all Registration Expenses in
connection with any registration of Registrable Securities requested pursuant to
this Section 3.
(e) Liability for Delay. The Company shall not be held responsible for
any delay in the filing or processing of a registration statement which includes
any Registrable Securities due to requests by holders of Registrable Securities
pursuant to this Section 3 nor for any delay in requesting the effectiveness of
such registration statement.
(f) Participation in Underwritten Registrations. No holder of
Registrable Securities may participate in any underwritten registration
hereunder unless such holder (i) agrees to sell his or its Common Stock or
Preferred Stock, as the case may be, on the basis provided in any underwriting
arrangements approved by the persons who have selected the underwriter and (ii)
accurately completes in a timely manner and executes all questionnaires, powers
of attorney, underwriting agreements and other documents customarily required
under the terms of such underwriting arrangements.
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4. Demand Registration.
(a) Right to Demand Registration. Subject to the provisions hereof, (i)
BRS may request an unlimited number of registrations with the Commission under
and in accordance with the provisions of the Securities Act of all or part of
their Common Stock included in the Registrable Securities on (x) Form S-1 or any
similar or successor long-form registration ("Long-Form Registrations") and (y)
on Form S-2 or S-3 or any similar or successor short-form registration following
a Public Offering (as defined in the Shareholders Agreement) of Common Stock
("Short Form Registrations" and, together with Long Form Registrations, "Demand
Registrations"), if available; (ii) the HCCP Entities in the aggregate may
request three Short Form Registrations; (iii) the Xxxxx Entities in the
aggregate may request three Short Form Registrations; and (iv) the Xxxxx
Investors in the aggregate may request three Short Form Registrations; provided
in each case that the aggregate proceeds reasonably expected from the sale of
Registrable Securities (including Registrable Securities being sold by holders
of Registrable Securities other than the party making the Demand Registration,
as well as any sales by the Company for its own account) (i) pursuant to a Long
Form Registration are $10 million or more and (ii) pursuant to a Short Form
Registration are $2 million or more and; provided further that (i) the Company
may, if the Board of Directors so determines in the exercise of its reasonable
judgment that due to a pending or contemplated acquisition or disposition or
public offering or other similar occurrence it would be inadvisable to effect
such Demand Registration at such time, defer such Demand Registration for a
single period not to exceed 180 days, and (ii) if the Company elects not to
effect the Demand Registration pursuant to the terms of this sentence, no Demand
Registration shall be deemed to have occurred for purposes of this Agreement.
Notwithstanding the foregoing, the Company shall have no obligation to effect
any Short Form Registration except to the extent the Company is able to effect
such Short Form Registration on Forms S-2 or S-3 or any similar or successor
Short Form Registration. In addition, the Company shall have no obligation to
effect any Demand Registration within one year of the date the Company shall
have effected any other Demand Registration. Demand Registrations shall be Short
Form Registrations whenever the Company is permitted to use any applicable Short
Form. The Registration Expenses shall be borne by the Company.
(b) Demand Registration Request. A party making a Demand Registration
shall make a written request (a "Demand Registration Request") to the Company,
which Demand Registration Request shall specify the intended number of
Registrable Securities to be disposed of by such holder and the intended method
of disposition thereof.
(c) Priority on Demand Registration. If any of the Registrable
Securities proposed to be registered pursuant to a Demand Registration are to be
sold in a firm commitment underwritten offering and the managing underwriter or
underwriters of a Demand Registration advise the Company and the holders of such
Registrable Securities in writing that in its or their reasonable opinion the
number of shares of Common Stock proposed to be sold in such Demand Registration
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exceeds the maximum number of shares specified by the managing underwriter that
may be distributed without adversely affecting the price, timing or distribution
of the Common Stock, the Company shall include in such registration only such
maximum number of Registrable Securities which, in the reasonable opinion of
such underwriter or underwriters can be sold in the following order of priority:
(i) except as provided in clause (ii) below, first, the Registrable Securities
requested to be included in such Demand Registration by the party who delivered
the Demand Registration Request to the Company (the "Requesting Party"); (ii)
second, shares of Common Stock held by other holders requested to be included in
such Demand Registration pursuant to Section 3 hereof, provided that such amount
shall be allocated among such other holders on a pro rata basis based upon their
respective percentage of ownership of the total number of shares of Common Stock
then outstanding and, if the Requesting Party is BRS and such Demand
Registration Request is made at any time when neither the HCCP Entities, the
Xxxxx Entities nor the Xxxxx Investors would be entitled to make a Demand
Registration Request, the number of shares of the Requesting Party and of each
holder requesting to be included in such Demand Registration pursuant to Section
3 shall be allocated among all such holders pro rata based upon their respective
ownership of the total number of shares of Common Stock then outstanding and
(iii) third, shares of Common Stock to be offered by the Company in such Demand
Registration.
5. Registration Procedures. If and whenever the Company is required to
effect or cause the registration of any Registrable Securities under the
Securities Act as provided in this Agreement, the Company will, as expeditiously
as reasonably possible:
(a) prepare and file with the Commission a registration statement with
respect to such Registrable Securities, and use its best efforts to cause such
registration statement to become effective, provided, however, that the Company
may discontinue any registration of its securities which is being effected
pursuant to Section 3 herein at any time prior to the effective date of the
registration statement relating thereto;
(b) 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 for a period
of not less than 180 days or such shorter period which will terminate when all
Registrable Securities covered by such registration statement have been sold
(but not before the expiration of the 90-day period referred to in Section 4(3)
of the Securities Act and Rule 174 thereunder, if applicable) and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement;
(c) furnish to each seller of such Registrable Securities such number of
copies of such registration statement and of each such amendment and supplement
thereof (in each case including all exhibits), such number of copies of the
prospectus included in such registration statement (including each preliminary
prospectus and summary prospectus), in conformity with the requirements of the
Securities Act, and such other documents as such seller may reasonably request
in order to facilitate the disposition of the Registrable Securities by such
seller;
(d) use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as each seller shall request, and do any and
all other acts and things which may be necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller; provided, however, that the Company shall not
be required to qualify generally to do business in any jurisdiction where it is
not then so qualified or to take any action which would subject it to general
service of process in any such jurisdiction where it is not then so subject or
subject itself to general taxation in any jurisdiction where it is not then so
subject;
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(e) immediately notify each seller of any Registrable Securities covered
by such registration statement, at any time when a prospectus relating thereto
is required to be delivered under the Act within the appropriate period
mentioned in clause (b) of this Section 5, of the Company becoming aware that
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits 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 then existing, and within ten
days prepare and furnish to all sellers a reasonable number of copies of an
amended or supplemental prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable 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 then existing;
(f) use its best efforts to list such Registrable Securities on any
securities exchange on which the Common Stock is then listed or NASDAQ if the
Common Stock is then quoted on NASDAQ, if such Registrable Securities are not
already so listed or quoted and if such listing is then permitted under the
rules of such exchange or NASDAQ, and provide an independent transfer agent and
registrar for such Registrable Securities covered by such registration statement
not later than the effective date of such registration statement;
(g) furnish to each seller of Registrable Securities covered by such
registration statement a signed counterpart, addressed to such seller (and the
underwriters, if any) of:
(i) an opinion of counsel for the Company, dated the effective
date of such registration statement (or, if such registration involves
an underwritten public offering, dated the date of the closing under the
underwriting agreement), reasonably satisfactory in form and substance
to the sellers of not less than 50% of such Registrable Securities (and
the managing underwriter, if any); and
(ii) a "comfort" letter, dated the effective date of such
registration statement (or, if such registration involves an
underwritten public offering, dated the date of the closing under the
underwriting agreement), signed by the independent public accountants
who have certified the Company's financial statements included in such
registration statement, covering such matters with respect to such
registration statement as are customarily covered in accountants'
letters delivered to the underwriters in underwritten offerings of
securities as may reasonably be requested by the sellers of not less
than 50% of such Registrable Securities (and the managing underwriter,
if any); and
(h) make available for inspection by any seller of such Registrable
Securities covered by such registration statement, by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such underwriter (individually, an "Inspector" and collectively,
the "Inspectors"), all pertinent financial and other records, pertinent
corporate documents and properties of the Company as shall be reasonably
necessary to enable them to exercise their due diligence responsibility
(collectively, the "Records"), and cause all of the Company's officers,
directors and employees to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with such
registration statement; provided that any Records that are designated by the
Company in writing as confidential shall be kept confidential by the Inspectors
unless (A) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in such registration statement or (B) the release of
such Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or by any regulatory authority having jurisdiction. Each
Investor agrees that non-public information obtained by it as a result of such
Inspections shall be deemed confidential and acknowledges its obligations under
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the Federal securities laws not to trade any securities of the Company on the
basis of material non-public information.
The Company may require each seller of Registrable Securities as to
which any registration is being effected promptly to furnish to the Company (i)
an opinion of counsel for such seller dated the effective date of the
registration statement relating to such seller's Registrable Securities (or, if
such registration involves an underwritten public offering, dated the date of
the closing under the underwriting agreement) concerning such matters as are
customarily requested from selling shareholders in public offerings and
reasonably satisfactory in form and substance to the Company (and the managing
underwriter, if any) and (ii) such information regarding the distribution of
such Registrable Securities as may be legally required. Such information shall
be furnished in writing and shall state that it is being furnished for use in
the registration statement.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in clause (e) of this Section 5,
such holder will forthwith discontinue disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until such holder's receipt of the copies of the supplemented or amended
prospectus contemplated by clause (e) of this Section 5, and, if so directed by
the Company, such holder will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such holder's possession,
of the prospectus covering such Registrable Securities current at the time of
receipt of the Company's notice. In the event the Company shall give any such
notice, the period mentioned in clause (b) of this Section 5 shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to clause (e) of this Section 5 and including the
date when each seller of Registrable Securities covered by such registration
statement shall have received the copies of the supplemented or amended
prospectus contemplated by clause (e) of this Section 5.
6. Indemnification.
(a) Indemnification by the Company. The Company hereby agrees to
indemnify and hold harmless each holder of Registrable Securities which shall
have been registered under the Securities Act, and such holder's officers,
directors and agents and each other Person, if any, who controls such holder
within the meaning of the Securities Act and each other Person (including
underwriters) who participates in the offering of such Registrable Securities
against any losses, claims, damages, liabilities, reasonable attorneys' fees,
costs or expenses (collectively, the "Damages"), joint or several, to which such
holder or controlling Person or participating Person may become subject under
the Securities Act or otherwise, insofar as such Damages (or proceedings in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact made by the Company or its agents
contained in any registration statement under which such Registrable Securities
are registered under the Securities Act, in any preliminary prospectus or final
prospectus contained therein, or in any amendment or supplement thereof, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such holder of Registrable
Securities or such controlling Person or participating Person in connection with
investigating or defending any such Damages or proceeding; provided, however,
that the Company will not be liable in any such case to the extent that any such
Damages arise out of or are based upon (i) an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
said preliminary or final prospectus or said amendment or supplement in reliance
upon and in conformity with written information furnished to the Company by such
holder or such controlling or participating Person, as the case may be,
specifically for use in the preparation thereof; or (ii) an untrue statement or
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alleged untrue statement, omission or alleged omission in a prospectus if such
untrue statement or alleged untrue statement, omission or alleged omission is
corrected in an amendment or supplement to the prospectus which amendment or
supplement is delivered to such holder in a timely manner and such holder
thereafter fails to deliver such prospectus as so amended or supplemented prior
to or concurrently with the sale of such Registrable Securities to the Person
asserting such Damages.
(b) Indemnification by the Holders of Registrable Securities Which Are
Registered. It shall be a condition of the Company's obligations under this
Agreement to effect any registration under the Securities Act that there shall
have been delivered to the Company an agreement or agreements duly executed by
each holder of Registrable Securities to be so registered, whereby such holder
agrees to indemnify and hold harmless the Company, its directors, officers and
agents and each other Person, if any, which controls the Company within the
meaning of the Securities Act against any Damages, joint or several, to which
the Company, or such other Person or such Person controlling the Company may
become subject under the Securities Act or otherwise, but only to the extent
that such Damages (or proceedings in respect thereof) arise out of or are based
upon any untrue statements or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement under
which such Registrable Securities are registered under the Securities Act, in
any preliminary prospectus or final prospectus contained therein or in any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, which, in
each such case, has been made in or omitted from such registration statement,
said preliminary or final prospectus or said amendment or supplement in reliance
upon, and in conformity with, written information furnished to the Company by
such holder of Registrable Securities specifically for use in the preparation
thereof. The Company shall be entitled to receive indemnities from underwriters,
selling brokers, dealer managers and similar securities industry professionals
participating in the distribution, at least to the same extent as provided
above, with respect to information furnished in writing by such Persons
specifically for inclusion in any prospectus or registration statement.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (i) give prompt written notice to the
indemnifying party of the commencement of any action or proceeding involving a
claim referred to in the preceding paragraphs of this Section 6; and (ii) unless
the indemnified party has been advised by its counsel that a conflict of
interest exists between such indemnified and indemnifying parties under
applicable standards of professional responsibility, with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. Whether or not such defense is
assumed by the indemnifying party, the indemnifying party will not be subject to
any liability for any settlement made without its consent (but such consent will
not be unreasonably withheld). No indemnifying party will consent to the entry
of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation; provided, however, that no indemnifying party will consent to the
entry of any judgment or enter into any settlement (other than for the payment
of money only) without the consent of the indemnified party (which consent will
not be unreasonably withheld). An indemnifying party who is not entitled to, or
elects not to, assume the defense of the claim, will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other such indemnified parties with respect to such
claim, in which event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels.
-9-
(d) Contribution. If for any reason the indemnification provided for in
the preceding Sections 6(a) or 6(b) is unavailable to an indemnified party in
respect of any Damages referred to therein, the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
such Damages in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties 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 made by, or relates to information supplied by,
such indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action; provided, however, that in no event shall the liability of any
selling holder of Registrable Securities hereunder be greater in amount than the
difference between the dollar amount of the proceeds received by such holder
upon the sale of the Registrable Securities giving rise to such contribution
obligation and all amounts previously contributed by such holder with respect to
such Damages. 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 fraudulent misrepresentation.
7. Hold-Back Agreements.
(a) Restrictions on Public Sale by Holder of Registrable Securities.
Each holder of Registrable Securities whose Registrable Securities are eligible
for inclusion in a Registration Statement filed pursuant to Sections 3 or 4
agrees, if requested by the managing underwriter or underwriters in an
underwritten offering of any Registrable Securities, not to effect any public
sale or distribution of Registrable Securities, including a sale pursuant to
Rule 144 (or any similar provision then in force) under the Securities Act
(except as part of such underwritten registration), during the 10-day period
prior to, and during the 90-day period (or such shorter period as may be agreed
to by the parties hereto) beginning on the effective date of such Registration
Statement, to the extent timely notified in writing by the Company or the
managing underwriter or underwriters.
The foregoing provisions shall not apply to any holder of Registrable
Securities if such holder is prevented by applicable statute or regulation from
entering into any such agreement; provided, however, that any such holder shall
undertake, in its request to participate in any such underwritten offering, not
to effect any public sale or distribution of Registrable Securities (except as
part of such underwritten registration) during the period referred to in this
Section 7(a) unless it has provided 45 days prior written notice of such sale or
distribution to the managing underwriter or underwriters.
(b) Restrictions on Public Sale by the Company and Others. The Company
shall (i) not effect any public sale or distribution of any of its Common Stock
for its own account during the 10-day period prior to, and during the 90-day
period beginning on, the effective date of a Registration Statement filed
pursuant to Sections 3 or 4 (except as part of a Special Registration
Statement), and (ii) use reasonable efforts to cause each holder of Common Stock
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering) to agree not to effect any public sale or
distribution of any such securities during such period, including a sale
pursuant to Rule 144 under the Securities Act (except as part of such
underwritten registration, if permitted).
-10-
8. Underwritten Registration.
If any of the Registrable Securities covered by any Incidental
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will administer the offering
will be selected by the Company and, in the case of a Demand Registration, by
the Requesting Party.
Notwithstanding anything herein to the contrary, no Person may
participate in any underwritten registration hereunder unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwritten arrangements approved by the Persons entitled hereunder to approve
such arrangement and (b) accurately completes and executes all questionnaires,
powers of attorney, indemnities, custody agreements, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
9. Miscellaneous.
(a) Amendment and Modification. This Agreement may be amended or
modified, or any provision hereof may be waived, provided that such amendment or
waiver is set forth in a writing executed by (i) the Company, (ii) BRS (so long
as BRS and its Affiliates, officers, directors and employees own in the
aggregate at least 25% of the outstanding Common Stock on a fully diluted
basis), (iii) the holders of a majority of the shares of Common Stock included
in the Registrable Securities held by Investors other than BRS (or, if BRS and
its Affiliates, officers, directors and employees own in the aggregate less than
25% of the outstanding Common Stock on a fully diluted basis, the holders of a
majority of the shares of the Common Stock included in the Registrable
Securities held by all Investors), and (iv) in the case of any amendment which
materially and adversely affects any Investor differently from any other
Investor, such Investor. No course of dealing between or among any persons
having any interest in this Agreement will be deemed effective to modify, amend
or discharge any part of this Agreement or any rights or obligations of any
person under or by reason of this Agreement.
(b) Survival of Representations and Warranties. All representations,
warranties, covenants and agreements set forth in this Agreement will survive
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, regardless of any investigation made by an
Investor or on its behalf.
(c) Successors and Assigns; Entire Agreement. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns (other than
Permitted Transferees by virtue of Section 5.4(e)(iv) of the Shareholders
Agreement) and executors, administrators and heirs; provided that no rights to
Demand Registrations under Section 4(a) of this Agreement shall be assigned
except by a written instrument signed by the assignor specifically acknowledging
the assignment of such rights. This Agreement sets forth the entire agreement
and understandings among the parties as to the subject matter hereof and merges
and supersedes all prior discussions and understandings of any and every nature
among them.
(d) Separability. In the event that any provision of this Agreement or
the application of any provision hereof is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall not be affected except to the extent necessary to delete
such illegal, invalid or unenforceable provision unless that provision held
invalid shall substantially impair the benefits of the remaining portions of
this Agreement.
(e) Notices. All notices provided for or permitted hereunder shall be
made in writing by hand-delivery, registered or certified first-class mail,
-11-
telex, telecopier or air courier guaranteeing overnight delivery to the other
party at the following addresses (or at such other address as shall be given in
writing by any party to the others):
If to the Company to:
MEDIQ Incorporated
Xxx Xxxxx Xxx
Xxxxxxxxxx, XX 00000
with required copies to:
If to BRS, to:
Bruckmann, Xxxxxx, Xxxxxxxx & Co., L.P.
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
with a required copy to:
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
If to a Co-Investor, a Management Investor or a Xxxxx Investor, at the most
current address given by such Co-Investor, Management Investor or Xxxxx Investor
to the Company in accordance with this Section 10(e), which address initially
is, with respect to each Co-Investor, each Management Investor, and each Xxxxx
Investor the address set forth on Schedule A, Schedule B or Schedule C hereto.
All such notices shall be deemed to have been duly given: when delivered
by hand, if personally delivered; five business days after being deposited in
the mail, postage prepaid, if mailed; when answered back, if telexed; when
receipt acknowledged, if telecopied; and on the next business day, if timely
delivered to an air courier guaranteeing overnight delivery.
(f) Governing Law. The validity, performance, construction and effect of
this Agreement shall be governed by and construed in accordance with the
internal law of Delaware, without giving effect to principles of conflicts of
law.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they
affect their meaning, construction or effect.
(h) Counterparts. This Agreement may be executed in two or more
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same instrument.
(i) Further Assurances. Each party shall cooperate and take such action
as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
-12-
(j) Termination. Unless sooner terminated in accordance with its terms,
this Agreement shall terminate on the fifteenth anniversary of the date of this
Agreement; provided that the indemnification rights and obligations set forth in
Section 6 hereof shall survive the termination of this Agreement.
(k) Remedies. In the event of a breach or a threatened breach by any
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement, it being
agreed by the parties that the remedy at law, including monetary damages, for
breach of such provision will be inadequate compensation for any loss and that
any defense in any action for specific performance that a remedy at law would be
adequate is waived.
(l) Party No Longer Owning Securities. If a party hereto ceases to own
any Securities, such party will no longer be deemed to be an Investor for
purposes of this Agreement; provided that the indemnification rights and
obligations set forth in Section 6 hereof shall survive any such cessation of
ownership.
(m) Pronouns. Whenever the context may require, any pronouns used herein
shall be deemed also to include the corresponding neuter, masculine or feminine
forms.
(n) No Effect on Employment. Nothing herein contained shall confer on
any Investor the right to remain in the employ of the Company or any of its
subsidiaries or Affiliates.
-13-
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
MEDIQ INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
BRUCKMANN, XXXXXX, XXXXXXXX & CO. L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director of BRSE Associates, Inc.
XXXXX X. XXXXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxxx
Attorney-in-Fact
XXXXXX X. XXXXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxxx
Attorney-in-Fact
BCB FAMILY PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxxx
Attorney-in-Fact
-14-
NAZ FAMILY PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx
Attorney-in-Fact
XXXXXX X. XXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx
Attorney-in-Fact
H. XXXXXX XXXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx
Attorney-in-Fact
XXXXX X. XXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx
Attorney-in-Fact
XXXX X. XXXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx
Attorney-in-Fact
XXXX X. XXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx
Attorney-In-Fact
-15-
XXXXX X. XXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx
Attorney-In-Fact
XXXXXX X. XXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx
Attorney-In-Fact
XXXXXXXX XXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Attorney-In-Fact
XXXXX INVESTORS
/s/ Xxxxxx X. Xxxxx
-----------------------
Xxxxxx X. Xxxxx
SS#:
Residence Address:
Residence Ph:
Business Address:
Business Ph:
/s/ Xxxxxx Xxxxxx
-----------------------
Xxxxxx Xxxxxx
SS#:
Residence Address:
Residence Ph:
Business Address:
Business Ph:
/s/ Xxxxxxx X. Xxxxx
-----------------------
Xxxxxxx X. Xxxxx
SS#:
Residence Address:
Residence Ph:
Business Address:
Business Ph:
-00-
X/X XXXXXXX X. XXXXX DATED
NOVEMBER 18, 1983
By: /s/ Xxxxxx X. Xxxxx
-------------------------
Xxxxxx X. Xxxxx, Trustee
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx, Trustee
By: /s/ Xxxxxxx X. Xxxxx
-------------------------
Xxxxxxx X. Xxxxx, Trustee
By: /s/ Xxxx X. Xxxxxxx
-------------------------
Xxxx X. Xxxxxxx, Trustee
By: PNC BANK, Trustee
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Vice President
Address:
Phone:
HEALTHCARE CAPITAL PARTNERS, LP
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------
HEALTHCARE EXECUTIVE PARTNERS, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------
-17-
XXXXX PARTNERS INTERNATIONAL III, L.P.
By: /s/ Xxxxx X. Xxxxxx
-------------------------
XXXXX PARTNERS III, L.P.
By: /s/ Xxxxx X. Xxxxxx
-------------------------
XXXXX EMPLOYEE FUND III, L.P.
By: /s/ Xxxxx X. Xxxxxx
-------------------------
/s/ Xxxxxx X. Xxxxxxx
-------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxx X. Xxxxxx
-------------------------
Xxx X. Xxxxxx
-------------------------
-18-
SCHEDULE A
----------
Name of Co-Investor Address
-------------------- -------
SCHEDULE B
----------
Name of Management Investor Address
--------------------------- -------
SCHEDULE C
----------
Name of Xxxxx Investor Address
---------------------- -------
