EXHIBIT 10.4
REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT dated December 4, 1996 (the "Effective
Date") between Exigent Diagnostics, Inc., a Delaware corporation (the
"Company"), and Xxxxxxx Xxxxx Securities Incorporated, a Delaware corporation
(the "Placement Agent").
W I T N E S S E T H:
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WHEREAS, the Company intends to undertake a 7,257.258 for one stock
split and, thereafter, the offer and sale of an additional 7,500,000 shares of
common stock, par value $.01 per share (the "Common Stock"), exclusive of an
option by the Company to offer and sell an additional 1,125,000 shares of Common
Stock solely to cover over subscriptions, pursuant to a private placement
memorandum contemplated by a Placement Agency Agreement with the Placement Agent
(the "Memorandum");
WHEREAS, as part of the consideration to be paid to the Placement
Agent pursuant to the Placement Agency Agreement, the Company has agreed to
issue to the Placement Agent warrants to purchase shares of Common Stock of the
Company equal to 20% of the number of shares of Common Stock sold pursuant to
the Memorandum (the "Warrants");
WHEREAS, in order to induce the Placement Agent to enter into the
Placement Agency Agreement, the Company has agreed to provide the Placement
Agent with certain registration rights respecting both the Warrants and the
shares of Common Stock issuable upon exercise of the Warrants (the "Covered
Securities"), on and subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements made herein, and other good valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and accepted, the parties hereto
agree as follows:
1. Definitions. As used herein, unless the context otherwise requires,
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the following terms have the following respective meanings:
"Affiliate" has the meaning set forth in Rule 12b-2 under the Exchange
Act.
"Commission" means the United States Securities and' Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"Common Stock" has the meaning set forth in the first WHEREAS clause
of the Recitals.
"Covered Securities" has the meaning set forth in the third WHEREAS
clause of the Recitals.
"Demand" has the meaning set forth in Section 2.1.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal statute, and the rules and regulations of the Commission
promulgated thereunder, as the same shall be in effect at the time. Reference
to a particular section of the Securities Exchange Act of 1934, as amended,
shall include reference to the comparable section, if any, of any such
subsequent similar federal statute.
"Participating Holder" has the meaning set forth in Section 2.1.4.
"Person" means any individual, partnership, joint venture, corporation,
trust, unincorporated organization, government or department or agency of a
government.
"Public Offering" means a public offering of securities registered with the
Commission under the Securities Act.
"Registrable Common Securities" means the Purchase Agreement Shares, the
Antidilution Shares and the Partnership Shares.
"Registrable Securities" means collectively the Covered Securities and any
other securities issuable in connection therewith or in replacement thereof by
way of a dividend, distribution, recapitalization, exchange, merger,
consolidation or other reorganization. As to any particular Registrable
Securities, once issued such securities shall cease to be Registrable Securities
when (a) a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement, (b) they
shall have been sold as permitted by, and in compliance with, Rule 144 (or any
successor provision) promulgated under the Securities Act or (c) they shall have
ceased to be outstanding.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Section 2, including, without limitation, all
registration, filing and National Association of Securities Dealers, Inc. fees,
all listing fees, all fees and expenses of complying with securities or blue sky
laws (including, without limitation, reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Registrable Securities), all word processing, duplicating and printing expenses,
messenger and delivery expenses, the fees and disbursements of counsel for the
Company and counsel for the Participating Holders comprising not more than one
outside law firm which shall be selected by the Participating Holders of a
majority of the Registrable Securities sought to be registered in such
registration (the "Selling Stockholder Counsel") and of the Company's
independent public accountants, including the expenses of "comfort" letters
required by or incident to such performance and compliance, and any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities.
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"Securities Act" means the Securities Act of 1933, as amended, or any
subsequent similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
References to a particular section of the Securities Act of 1933, as amended,
shall include a reference to the comparable section, if any, of any such
subsequent similar federal statute.
"Warrants" has the meaning set forth in the third WHEREAS clause of
the Recitals.
2. Registration Rights.
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2.1. Registration on Demand.
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2.1.1. Demand. After the earlier of the effective date of the
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initial Public Offering of Common Stock and the fifth (5th) anniversary of the
Final Closing (as defined in the Memorandum), subject to Section 2.1.7, upon the
written request (the "Demand") of the holders of a majority of Registrable
Securities that the Company effect the registration under the Securities Act of
all or part of the Registrable Securities, the Company shall cause to be filed,
and shall take all commercially reasonable actions to effect, as soon as
practicable and in any event, subject to the reasonable cooperation of the
holders of Registrable Securities, within 120 days after the Demand is received,
the registration under the Securities Act, of the Registrable Securities which
the Company has been so requested to register. Prior to such registration being
declared effective, the holders of a majority of the Registrable Securities
requesting such Demand registration may withdraw such Demand registration,
subject to the provisions of Section 2.1.4 below.
2.1.2. Registration of Other Securities. Whenever the Company
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shall effect a registration pursuant to this Section 2.1 in connection with an
underwritten offering, holders of securities of the Company who have "piggyback"
registration rights may include all or a portion of such securities in such
registration, offering or sale. If the managing underwriter of any such
offering shall inform the Company by letter of its belief that the number or
type of securities of the Company requested by holders of the securities of the
Company other than the holders of Registrable Securities to be included in such
registration would materially and adversely affect the underwritten offering,
then the Company shall include in such registration, to the extent of the number
and type of securities which the Company is so advised can be sold in (or during
the time of) such offering, first, all of the Registrable Securities specified
by the Placement Agent in the Demand and second, for each holder of the
Company's securities other than the Placement Agent, the fraction of each
holder's securities proposed to be registered which is obtained by dividing (i)
the number of the securities of the Company that such holder proposes to include
in such registration by (ii) the total number of securities proposed to be
included in such registration by all holders other than the Placement Agent.
2.1.3. Registration Statement Form. Registrations under this
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Section 2.1 shall be on such appropriate registration form of the Commission as
shall be selected by the
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Company. The Company shall include in any such registration statement all
information which, in the opinion of counsel to the Company, is required to be
included.
2.1.4. Expenses. The Company shall pay the Registration Expenses in
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connection with the first Demand registration effected pursuant to this Section
2.1, other than underwriting discounts and selling commissions relating to the
sale or disposition of Registrable Securities, and the holders of Registrable
Securities the securities of which are the subject of the second Demand
registration effected pursuant to this Section 2.1 (the "Participating
Holders"), shall pay all Registration Expenses in connection with the second
Demand registration effected pursuant to this Section 2.1. If the registration
pursuant to a Demand is withdrawn at the request of the Placement Agent and if
the Placement Agent elect not to have such registration count as its Demand
registration under this Section 2.1, the Placement Agent shall pay all the
Registration Expenses of such registration. At no time shall the Placement
Agent be required to pay the underwriting discounts or selling commissions
relating to the sale or disposition of shares of Common Stock by other Persons,
or the fees and expenses of any other Person or the Company's counsel, except as
required by Section 2.6.2 below.
2.1.5. Effective Registration Statement. A registration requested
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pursuant to this Section 2.1 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has become effective, (ii)
if after it has become effective, such registration is interfered with by any
stop order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason and has not thereafter become
effective, or (iii) in the case of an underwritten offering, if the conditions
to closing specified in the underwriting agreement, if any, entered into in
connection with such registration are not satisfied or waived.
2.1.6. Selection of Underwriters. In connection with each underwritten
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offering, (a) the Company shall promptly select the managing underwriter subject
to the approval of the Placement Agent (which approval shall not be unreasonably
withheld, delayed or conditioned by the Placement Agent) and (b) if they so
desire, the Placement Agent shall promptly (by the holders of a majority of the
Registrable Securities sought to be registered by the Participating Holders in
such Demand) select the co-managing underwriter subject to the approval of the
Company (which approval shall not be unreasonably withheld, delayed or
conditioned by the Company).
2.1.7. Limitations on Registration on Demand. The Company shall not be
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required to file a registration statement pursuant to this Section 2.1 which
would become effective within (a) 180 days following the effective date of a
registration statement filed by the Company with the Commission pertaining to an
initial underwritten Public Offering of convertible debt securities or equity
securities for cash (a "Public Offering") for the account of the Company, or
such other period as may be required or requested by any managing underwriter of
such initial Public Offering so long as Exigent Partners, L.P., X. Xxxxxxx
Stoughton and Xxxxxx Xxxxx are subject to a similar restriction period; provided
that no other holder of the Company's securities shall have been permitted to
participate in such initial Public Offering, or (b) 120 days following
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the effective date of a registration statement (other than a registration
statement filed on Form S-4 or S-8) filed by the Company with the Commission
pertaining to any subsequent Public Offering for the account of the Company or
another holder of securities of the Company if the Placement Agent were afforded
the opportunity to include all of its Registrable Securities in such subsequent
registration pursuant to Section 2.2. In no event shall the Company be required
to effect more than two (2) registrations pursuant to this Section 2.1.
Notwithstanding the foregoing, if, in the good faith determination of the
Company's Board of Directors, a registration would adversely affect certain
activities of the Company to the material detriment of the Company, then the
Company may at its option direct that such Demand be delayed for a period not in
excess of 90 days in the aggregate from the date of the Company's receipt of the
Demand. The rights of the Placement Agent to cause a Demand registration to be
effected hereunder are subject to the prior rights of the investors in the
private offering contemplated by the Memorandum (the "Offering") to effect a
registration pursuant to the last sentence of Section 2.1.7 of the Registration
Rights Agreement to be entered into by the Company in connection with the
Private Offering Memorandum, the form of which is attached to the Memorandum.
2.2. Piggyback Registration.
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2.2.1. Right to Include Registrable Securities. If the Company
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at any time proposes to register any of its securities under the Securities Act
by registration on Forms X-0, X-0, X-0 or any successor or similar form(s)
(except registrations on such Forms or similar forms solely for registration of
securities in connection with (i) an employee benefit plan or dividend
reinvestment plan or a merger or consolidation or (ii) debt securities which are
not convertible into Common Stock), whether or not for sale for its own account,
it shall each such time give written notice to the Placement Agent of its
intention to do so at least 30 days prior to the anticipated filing date of a
registration statement with respect to such registration with the Commission.
Upon the written request of the Placement Agent made as promptly as practicable
and in any event within 10 business days after the receipt of any such notice,
which request shall specify the Registrable Securities intended to be disposed
of by the Placement Agent, the Company shall use commercially reasonable efforts
to effect the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by the Placement
Agent; provided, however, that if, at any time after giving written notice of
its intention to register any securities 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 or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to the Placement Agent and (i) in the case of a determination not
to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from any obligation of
the Company to pay the Registration Expenses in connection therewith), without
prejudice, (provided, however, that the Placement Agent may request that such
registration be effected as a registration under Section 2.1 hereof) and (ii) in
the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities.
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2.2.2. Priority in Piggyback Registrations. Notwithstanding anything in
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Section 2.2.1 above to the contrary, if the managing underwriter of any
underwritten offering shall inform the Company by letter of its belief that the
number or type of Registrable Securities requested to be included in such
registration would materially and adversely affect such offering, then the
Company shall promptly notify the Placement Agent of such fact. If the managing
underwriter does not agree to include all (or such lesser amount as the
Placement Agent shall, in their discretion, agree to) of the number of the
Registrable Securities initially requested by the Placement Agent to be included
in such registration, then the Company shall include in such registration, to
the extent of the number and type which the Company is so advised can be sold in
(or during the time of) such offering first, all securities proposed by the
Company to be sold for its own account, if the Company initiated such
registration, or by the holder of securities who initiated such demand
registration, if any, second, for Placement Agent, Exigent Partners, L.P., such
members of management who have been provided with registration rights pursuant
to the agreement in which the Company provided registration rights to Exigent
Partners, L.P., SmithKline Xxxxxxx Corporation (and its affiliates), and the
purchasers of Common Stock offered pursuant to the Memorandum (and the
respective successors and assigns of any of the foregoing), other than the
holder of the securities who initiated such demand registration, if any, the
fraction of such holder's securities proposed to be registered which is obtained
by dividing (I) the number of the securities of the Company that such holder
proposes to include in such registration by (ii) the total number of securities
proposed to be sold in such offering by such holders, and third, for each
remaining holder of the Company's securities, other than the holder of the
securities who initiated such demand registration and the holders listed above,
if any, the fraction of such holder's securities proposed to be registered which
is obtained by dividing (I) the number of the securities of the Company that
such holder proposes to include in such registration by (ii) the total number of
securities proposed to be sold in such offering by such holders.
2.3. Registration Procedures.
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2.3.1. In connection with the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2, the
Company shall as promptly as practicable:
(i) prepare and file with the Commission the requisite
registration statement to effect such registration and thereafter use
commercially reasonable efforts to cause such registration statement to become
and remain effective;
(ii) 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 provisions of the Securities Act with respect to
the disposition of all Registrable Securities covered by such registration
statement for 180 days or such shorter period as may be required for the
disposition of all of such Registrable Securities by the underwriters;
(iii) furnish to the Placement Agent such number of
conformed copies of such registration statement and of each such amendment and
supplement thereto (in
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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 number of copies of such other documents as the Placement Agent may
reasonably request;
(iv) use commercially reasonable efforts (x) to register or
qualify all Registrable Securities and other securities covered by such
registration statement under such other securities or Blue Sky laws of such
States of the United States of America where an exemption is not available and
as the Placement Agent shall reasonably request, (y) to keep such registration
or qualification in effect for so long as such registration statement remains in
effect, and (z) to take any other action which may reasonably be necessary or
advisable to enable the Placement Agent to consummate the disposition in such
jurisdictions of the Registrable Securities to be sold by the Placement Agent,
except that the Company shall not for any such purpose be required to qualify
generally to do business as a foreign Company in any jurisdiction wherein it
would not, but for the requirements of this paragraph (iv), be obligated to be
so qualified or to consent to general service of process in any such
jurisdiction;
(v) use commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or authorities as
may be necessary in the opinion of counsel to the Company and counsel to the
Placement Agent to consummate the disposition of such Registrable Securities in
accordance with their intended method of disposition;
(vi) furnish to the Placement Agent, (x) an opinion of outside
counsel for the Company, and (y) a copy of a "comfort" letter addressed to the
Company and/or any managing underwriter signed by the certified independent
public accountants who have certified the Company's financial statements
included or incorporated by reference in such registration statement, each
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountant's comfort letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountant's comfort letters delivered to the underwriters in
underwritten Public Offerings of securities (and dated the dates such opinions
and comfort letters are customarily dated);
(vii) notify the Placement Agent when a prospectus relating
thereto is required to be delivered under the Securities Act, upon discovery
that, or upon 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 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, and at the request of
the Placement Agent to use its best efforts to promptly prepare and furnish to
the Placement Agent such 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
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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;
(viii) 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
meeting the requirements of Section 11(a) of the Securities Act, which the
Company shall be entitled to satisfy by complying with the requirements of Rule
158 promulgated thereunder, and promptly furnish a copy of the same to the
Placement Agent;
(ix) provide and cause to be maintained a transfer agent
and registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement; and
(x) use commercially reasonable efforts to list all
Registrable Securities covered by such registration statement on any national
securities exchange or over-the-counter market, if any, on which Registrable
Securities of the same class, and if applicable, series, covered by such
registration statement are then listed.
The Placement Agent agree that upon receipt of any notice from the Company
of the happening of an event of the kind described in Section 2.3.1(vii), the
Placement Agent shall forthwith discontinue its disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until the Placement Agent' receipt of the copies of the supplemented
or amended prospectus contemplated by Section 2.3.1(vii).
2.4. Underwritten Offerings.
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2.4.1. Requested Underwritten Offerings. If requested by the
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underwriters for any underwritten offering by the Placement Agent pursuant to a
registration requested under Section 2.1, the Company shall enter into an
underwriting agreement with such underwriters for such offering, such agreement
to be reasonably satisfactory in substance and form to the Company, the
Placement Agent and the underwriters, and to contain such representations and
warranties by the Company and the Placement Agent and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2.6 or as are
generally prevailing in agreements of that type. The Placement Agent shall
cooperate with the Company in the negotiation of the underwriting agreement and
shall give consideration to the reasonable suggestions of the Company regarding
the form and substance thereof. The Placement Agent shall be a party to such
underwriting agreement. The Placement Agent shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding the
Placement Agent, the Placement Agent' Registrable Securities, the Placement
Agent' intended method of distribution and any other representations or
warranties
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required by law or customarily given by selling shareholders in an underwritten
Public Offering or as reasonably required by the managing underwriter of the
offering of Registrable Securities.
2.4.2. Piggyback Underwritten Offerings. If the Company proposes to
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register any of its securities under the Securities Act as contemplated by
Section 2.2 and such securities are to be distributed by or through one or more
underwriters, subject to the priority and other provisions of Section 2.2.2 the
Company shall, if requested by the Placement Agent, arrange for such
underwriters to include all the Registrable Securities to be offered and sold by
the Placement Agent among the securities of the Company to be distributed by
such underwriters. The Placement Agent shall become a party to the underwriting
agreement negotiated between the Company and such underwriters. The Placement
Agent shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding the Placement Agent, the Placement Agent'
Registrable Securities and the Placement Agent' intended method of distribution
or any other representations or warranties required by law or customarily given
by selling shareholders in an underwritten Public Offering or as reasonably
required by the managing underwriter of the offering of Registrable Securities.
2.4.3. Holdback Agreements.
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(i) In connection with the initial Public Offering or any
registration of Registrable Securities in connection with an underwritten Public
Offering, the Placement Agent agree if required by the underwriter or
underwriters not to effect any public sale or distribution, including any sale
pursuant to Rule 144 under the Securities Act, of any Registrable Securities,
and not to effect any such public sale or distribution of any other equity
security of the Company or of any security convertible into or exchangeable or
exercisable for any equity security of the Company (in each case, other than as
part of such underwritten Public Offering) during the 15 days prior to, and
during the 180-day period, or such shorter period set forth in the underwriting
agreement with respect to such offering as the managing underwriter of such
offering shall reasonably require, beginning on, the effective date of such
registration statement.
(ii) If any registration of Registrable Securities shall be
in connection with an underwritten Public Offering, the Company agrees (x) if
required by the underwriter or underwriters, not to effect any public sale or
distribution of any of its equity securities or of any security convertible into
or exchangeable or exercisable for any equity security of the Company (other
than in connection with any employee stock option or other benefit plan which
has been duly adopted by the Company and which provides for the distribution to
participants in the plan of equity securities of the Company or securities
convertible or exchangeable or exercisable for equity securities of the Company,
or in connection with a merger or acquisition approved by the Board of Directors
of the Company) during the 180-day period, or such other period as the managing
underwriter of such offering shall reasonably require, beginning on the
effective date of such registration statement (except as part of such
registration) and (y) that any agreement entered into after the date of this
Agreement pursuant to which the
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Company issues or agrees to issue any privately placed equity securities shall
contain a provision under which holders of such securities agree that, if
required by the underwriter or underwriters, they will not effect any public
sale or distribution of any such securities during the period referred to in the
foregoing clause (x), including any sale pursuant to Rule 144 under the
Securities Act (except as part of such registration, if permitted), if such
holder is participating in the offering pursuant to such registration.
2.5. Preparation; Reasonable Investigation. In connection with the
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preparation and filing of any registration statement under the Securities Act in
which the Placement Agent is a selling shareholder, the Company shall give the
Placement Agent not less than 30 days prior written notice of the preparation of
such registration statement and give the Placement Agent and its counsel and
accountants the opportunity to participate, at the Placement Agent's expense, in
the preparation of such registration statement, each prospectus included therein
or filed with the Commission, and each amendment thereof or supplement thereto
(provided that the Placement Agent shall furnish the Company with comments on
any such amendment or supplement as promptly as the Company shall reasonably
require), and give each of them such access to its books and records, such
opportunities to discuss the business of the Company with officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of the Placement Agent's counsel, to conduct
a reasonable investigation within the meaning of the Securities Act. Any
expenses incurred by the Placement Agent in connection with any such
investigation shall be borne by the Placement Agent, other than the reasonable
fees and disbursements of Seller Stockholder Counsel incurred in connection with
such investigation.
2.6. Indemnification.
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2.6.1. Indemnification by the Company. In the event of any
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registration of any securities of the Company under the Securities Act in which
the Placement Agent is or may be a selling shareholder, the Company shall, and
hereby does, indemnify and hold harmless, in the case of any registration
statement filed pursuant to Sections 2.1 or 2.2, the Participating Holders, its
directors, officers, employees, agents and affiliates and, to the extent
required by any underwriting agreement entered into by the Company, each other
Person who participates as an underwriter in the offering or sale of such
securities and each other Person who controls a Participating Holder or any such
underwriter within the meaning of the Securities Act, insofar as losses, claims,
damages, or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon (a) any untrue
statement or alleged untrue statement of any 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 amendment or supplement thereto, or any omission or alleged
omission to state therein a fact required to be stated therein or necessary to
make the statements therein in light of the circumstances in which they were
made not misleading, or (b) any violation by the Company, its directors,
officer, employees or agents of this Agreement or any law applicable to and in
connection with such registration, and the Company shall reimburse the Placement
Agent and each such director, officer, agent or affiliate, and, to the extent
required by
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any underwriting agreement entered into by the Company, underwriter and
controlling Person 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 described in clauses (a) or (b); provided,
however, that the Company shall not be liable 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 an 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 through an instrument duly
executed by the Participating Holders, specifically stating that it is for use
in the preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Participating
Holders or any such director, officer, agent or affiliate or controlling Person
and shall survive the transfer of such securities by the Participating Holders.
2.6.2. Indemnification by the Placement Agent. If any Registrable
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Securities are included in any registration statement, the Participating
Holders shall indemnify and hold harmless (in the same manner and to the same
extent as set forth in Section 2.6.1 above) the Company, each director of the
Company, each officer of the Company and each employee of the Company and, to
the extent required by any underwriting agreement entered into by the
Participating Holders, each other Person who participates as an underwriter in
the offering or sale of such securities and each other Person who controls any
such underwriter 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 such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by the Participating Holders
specifically stating that it is for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement; provided, however, in no event shall the liability of
the Placement Agent under this Section 2.6.2 exceed the proceeds from the sale
of the securities to be sold by the Placement Agent in any such registration.
2.6.3. Notice 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 paragraphs of this Section 2.6, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party, immediately 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 obligations under the preceding paragraphs of this
Section 2.6, except to the extent that the indemnifying party is materially
prejudiced by such failure. The indemnified party shall be entitled to receive
the indemnification payments described in Section 2.6.6 after providing such
written notice to the indemnifying party. 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
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participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that the indemnifying
parties may agree, 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 out of pocket costs related to the indemnified party's cooperation
with the indemnifying party, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties arises in respect of such claim after the assumption of the defense
thereof. No indemnifying party shall be liable for any settlement of any action
or proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Consent of the indemnified party
shall be required for the entry of any judgment or to enter into a settlement
only when such judgment or settlement 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 such claim or litigation.
2.6.4. Contribution. If the indemnification provided for in this
------------
Section 2.6 shall for any reason be held by a court to be unavailable to an
indemnified party under Section 2.6.1 or 2.6.2 hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, then, in lieu of
the amount paid or payable under Sections 2.6.1 or 2.6.2 hereof, the indemnified
party and the indemnifying party under Sections 2.6.1 or 2.6.2 hereof shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating the
same), (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on one hand and the Placement Agent on the
other or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect the relative
fault of the Company on one hand and the Placement Agent on the other that
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. No Person guilty of
fraudulent misrepresentation (within the meaning of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim,
effected without such Person's written consent, which consent shall not be
unreasonably withheld provided, however, in no event shall the liability of the
Placement Agent under this Section 2.6.4 exceed the proceeds from the sale of
the securities to be sold by the Placement Agent in any such registration.
2.6.5. Other Indemnification. Indemnification and contribution similar to
---------------------
that specified in the preceding paragraphs of this Section 2.6 (with appropriate
modifications) shall be given by the Company and the Participating Holders 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.
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3. Rule 144. With a view to making available the benefits of certain
--------
rules and regulations of the Commission that may permit the sale of the
Registrable Securities to the public without registration after an initial
Public Offering, the Company agrees to:
(a) provide information and such other assistance requested by the
Placement Agent as is customarily provided by issuers in connection with sales
of their common stock by directors or affiliates under Rule 144, promulgated
under the Securities Act;
(b) make and keep public information available, as those terms are
understood and defined in Rule 144 promulgated under the Securities Act at all
times;
(c) use its best efforts to 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; and
(d) deliver a written statement as to whether it has complied with such
requirements of this Section, to the Placement Agent upon the Placement Agent'
request.
4. Intentionally Blank.
-------------------
5. Modification; Waivers. This Agreement may be modified or amended only
---------------------
with the written consent of each party hereto. No party shall be released from
its obligations hereunder without the written consent of the other party. The
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) by the party
entitled to enforce such term, but any such waiver shall be effective only if in
a writing signed by the party against which such waiver is to be asserted.
Except as otherwise specifically provided herein, no delay on the part of any
party hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party hereto of any
right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any right, power or privilege hereunder.
6. Entire Agreement. This Agreement represents the entire understanding
----------------
and agreement between the parties hereto with respect to the subject matter
hereof and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.
7. Severability. If any provision of this Agreement, or the application
------------
of such provision to any Person or circumstance, shall be held invalid, the
remainder of this Agreement or the application of such provision to other
Persons or circumstances, to the extent permitted by law, shall not be affected
thereby; provided, that the parties shall negotiate in good faith with respect
to an equitable modification of the provision or application thereof held to be
invalid.
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8. Notices.
-------
(a) Any notice or communication to any party hereto shall be duly given
if in writing and delivered in person, receipt requested, or courier
guaranteeing next day delivery, or facsimile (with written confirmation of
receipt) to such other party's address or facsimile number set forth below.
If to EXIGENT DIAGNOSTICS, INC.:
0 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Attention: X. Xxxxxxx Stoughton
Facsimile: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxxx, Esquire
Pepper, Xxxxxxxx & Xxxxxxx
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
If to XXXXXXX XXXXX SECURITIES INCORPORATED:
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxx Xxxxxxxxx
with a copy to:
Xxxx X. Xxxxxxx, Esquire
Xxxxxxx, Calamari & Xxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 212-213-1199
(b) All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered or facsimiled
(with written confirmation of receipt); and the next business day after timely
delivery to the courier, if sent by courier guaranteeing next day delivery.
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9. Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and shall be binding upon the Company and the Placement Agent and their
respective successors and permitted assigns. The Placement Agent may assign its
rights under this Agreement to any Person to whom the Placement Agent transfers
any of the Registrable Securities or any interest therein without the necessity
of obtaining any consent to such assignment, provided that such Person becomes a
party to that certain Stockholders' Agreement, by and among the Company, the
Placement Agent and certain other holders of the Common Stock. In the event
that the Placement Agent assigns its rights to a holder or holders of only a
portion of the Registrable Securities, then all references to the Placement
Agent herein shall also be deemed to refer to such other holder or holders, but
in such event the Placement Agent shall have the sole right to make all
decisions by and give notices for such holder or holders under this Agreement;
provided, that if the Placement Agent no longer owns any Registrable Securities,
then all decisions and notices hereunder shall be made by the holders of not
less than a majority of the Registrable Securities outstanding and all other
holders of Registrable Securities shall be bound by any such decision.
10. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which for all purposes shall be deemed to be an original
and all of which together shall constitute the same agreement.
11. Headings. The Section headings in this Agreement are for convenience
--------
of reference only, and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.
12. Construction. This Agreement shall be governed, construed and
------------
enforced in accordance with the laws of the State of New York without regard to
its principles of conflict of laws.
13. No Inconsistent Agreements. The Company has not previously, and shall
--------------------------
not hereafter, enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Placement Agent in this Agreement.
14. Recapitalizations, Etc. In the event that any capital stock or other
-----------------------
securities are issued in respect of, in exchange for, or in substitution of, any
Registrable Securities by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to Placement
Agent or combination of the shares of Registrable Securities or any other
similar change in the Company's capital structure, appropriate adjustments shall
be made in this Agreement so as to fairly and equitably preserve, as far as
practicable, the original rights and obligations of the parties hereto under
this Agreement.
15. Arbitration. Any controversy or claim arising out of or relating to
-----------
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Rules of the American Arbitration Association in effect at
the time such arbitration is instituted. The arbitration panel shall be
composed of three arbitrators, one of whom shall be chosen by the Company, one
of
-15-
whom shall be chosen by the Placement Agent, and one of whom shall be chosen by
the two arbitrators previously designated. If both or either of the Company
and/or the Placement Agent fails to choose an arbitrator within fourteen (14)
calendar days after receiving notice of commencement of arbitration or if the
two arbitrators fail to choose a third arbitrator within fourteen (14) calendar
days of their appointment, such arbitrators shall be chosen by the American
Arbitration Association. Unless the parties to the arbitration shall otherwise
agree to a different place of arbitration, the place of arbitration shall be New
York, New York. The arbitration award shall be final and binding upon the
parties thereto and may be entered in any court having jurisdiction. Each party
shall bear (i) its own expenses in connection with such arbitration and (ii)
one-half of the fees and expenses of the American Arbitration Association and
all arbitrators unless any arbitration award shall otherwise provide.
16. Specific Performance. The parties hereto agree that the Registrable
--------------------
Securities of the Company cannot be purchased or sold in the open market and
that, for these reasons, among others, the holder or holders of the Registrable
Securities will be irreparably damaged in the event that this Agreement is not
specifically enforceable. Accordingly, in the event of any controversy
concerning the Registrable Securities which are the subject of this Agreement,
or any right or obligation to register such securities, such right or obligation
determined as part of an arbitration award described in Section 15 shall be
enforceable in a court of equity by specific performance. The rights granted in
this Section 16 shall be cumulative and not exclusive, and shall be in addition
to any and all other rights which the parties hereto may have hereunder, at law
or in equity. the Placement Agent consents to the jurisdiction of the federal
courts in the City of New York in any suit, action or proceeding brought
pursuant to this Section 16, waives any objection it may have to the laying of
venue in any such suit, action or proceeding in any of such court, and agrees
that service of any court paper may be made in such manner as may be provided
under applicable laws or court rules governing service of process.
17. Term. This Agreement shall continue in full force and effect for the
----
later of (i) the Warrant Exercise Term (as defined in the Warrants) or (ii) nine
(9) years from the Final Closing, or with respect to any holder of Registrable
Securities, the first date on which such holder of Registrable Securities and
its affiliates may sell all of the Registrable Securities held by them in a
ninety (90) day period pursuant to Rule 144 under the Securities Act.
-16-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the date first above written and delivered by their respective duly
authorized officers.
EXIGENT DIAGNOSTICS, INC.
By: /s/ X. Xxxxxxx Stoughton
-------------------------------
X. Xxxxxxx Stoughton
Chairman and Chief Executive Officer
XXXXXXX XXXXX SECURITIES INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
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