EXHIBIT 10.5
REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT dated Jan. 31, 1997 (the "Effective
Date") between Exigent Diagnostics, Inc., a Delaware corporation (the
"Company"), and each Investor executing a copy hereof (each a "Stockholder";
collectively, are the "Stockholders").
W I T N E S S E T H:
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WHEREAS, the Company intends to effect a 7,422.775 for one stock split
and, thereafter, offer for sale to the Stockholders up to 7,500,000 shares of
common stock, $.01 par value per share (the "Common Stock"), plus, at the option
of the Company, up to an additional 1,125,000 shares of Common Stock solely to
cover over subscriptions;
WHEREAS, the Stockholders desire to purchase from the Company, and the
Company desires to issue and sell to the Stockholders, up to an aggregate of 75
Units (plus, at the option of the Company, an additional 11.25 Units solely to
cover oversubscriptions, if any), each Unit consisting of 100,000 shares of
Common Stock, all upon the terms set forth in the Company's Confidential Private
Placement Memorandum dated December 4, 1996 (the "Memorandum") (the "Purchase
Shares");
WHEREAS, to induce the Stockholders to purchase Units, the Company has
agreed to register shares of Common Stock pursuant to the terms and conditions
set forth below;
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.
"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.
"Initial Public Offering" means the first offering of securities registered
with the Commission under the Securities Act.
"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 the securities registered with
the Commission under the Securities Act.
"Registrable Common Securities" means the Purchase Shares.
"Registrable Securities" means collectively the Registrable Common
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 ("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.
"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
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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.
2. Registration Rights.
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2.1. Initial Registration and Registration on Demand.
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2.1.1. Initial Registration. In the event the Company shall
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complete an Initial Public Offering of its securities prior to the fifth (5th)
anniversary of the Final Closing Date (as defined in the Memorandum), the
Company shall, subject to and in accordance with the terms, conditions,
procedures and requirements set forth herein, cause to be filed and take all
commercially reasonable efforts to effect the registration under the Securities
Act of all Registrable Securities not later than 180 days after the closing of
such Initial Public Offering (or such later date as determined by the terms
hereof); provided, however, that a holder of Registrable Securities may inform
the Company in writing that it wishes to exclude all or a portion of its
Registrable Securities from such registration.
2.1.2. Demand. In the event that by the fifth (5th) anniversary
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of the Effective Date the Company has not yet completed an Initial Public
Offering, 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 Stockholders, within 120 days after the
Demand is received from the Stockholders, the registration under the Securities
Act, of the Registrable Securities which the Company has been so requested to
register by the Stockholders. Whenever the Company shall effect a registration
pursuant to Section 2.1 in connection with an underwritten Public Offering by
the Stockholders of Registrable Securities, 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 Public 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 Stockholders to be included in such
registration would materially and adversely affect the underwritten Public
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 Public Offering, first, all of the Registrable
Securities specified by the Stockholders in the Demand and second, for each
holder of the Company's securities other than the Stockholders, 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 Stockholders.
Prior to such registration being declared effective, the Stockholders holding a
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majority of the Registrable Securities requesting such Demand registration may
withdraw such Demand registration, subject to the provisions of Section 2.1.4
below.
2.1.3. Registration Statement Form. Registrations under this Section 2.1
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shall be on such appropriate registration form of the Commission as shall be
selected by the 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 any registration effected pursuant to this Section 2.1, other
than underwriting discounts and selling commissions relating to the sale or
disposition of Registrable Securities. if the registration pursuant to Section
2.1.2 is withdrawn at the request of a majority of the Stockholders requesting
registration and if such Stockholders elect not to have such registration count
as its Demand registration under Section 2.1.2, the Stockholders shall pay all
the Registration Expenses of such registration, other than the fees and expenses
of counsel to the Company or of any other holder of Common Stock participating
in the registration (a "Participating Holder"). At no time shall the
Stockholders 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 Participating Holder's 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 Public 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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Public Offering, (a) the Company shall promptly select the managing underwriter
subject to the approval of the Stockholders (by the holders of a majority of the
Registrable Securities sought to be registered by the Participating Holders),
which approval shall not be unreasonably withheld, delayed or conditioned by the
Stockholders, and (b) if they so desire, the Stockholders 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. The Company shall not be required to
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file a registration statement pursuant to this Section 2.1 which would become
effective within (i) 180 days, or such shorter period as agreed to by the lead
managing underwriter for the
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Company's Initial Public Offering, following the effective date of a
registration statement filed by the Company with the Commission pertaining to an
Initial Public Offering for the account of the Company, provided that no other
holder of the Company's securities shall have been permitted to participate in
such Initial Public Offering, or (ii) 120 days following 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 Stockholders were afforded the opportunity to include all
of its Registrable Securities in such subsequent registration pursuant to
Section 2.2, or (b) if it would violate any restriction or prohibition requested
by any managing underwriter for the Company's Initial Public Offering. In no
event shall the Company be required to effect more than one (1) registration
pursuant to Section 2.1.1 and one (1) registration pursuant to Section 2.1.2.
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 registration 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 or from the first date upon which the Company is required to
effect the registration contemplated by Section 2.1.1, as applicable (the
"Period of Delay"); provided, however, if there shall occur any such delay in
the registration hereunder, then the holders of the Registrable Securities shall
be entitled, (i) for a period of thirty (30) days after the Period of Delay, to
effect a Demand registration under Section 2.1.2 prior to any other holder of
registration rights (other than SmithKline Xxxxxxx Corporation, its affiliates
and their permitted transferees, as to which the rights hereunder shall be pari
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pasu) or prior to a registered Public Offering by the Company (other than such a
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Public Offering by the Company on Form S-4 or S-8), and (ii) to effect a
registration under Section 2. 1.1 prior to any other holder of registration
rights (other than SmithKline Xxxxxxx Corporation, its affiliates and their
permitted transferees, as to which the rights hereunder shall be pari pasu) or
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prior to a registered Public Offering by the Company (other than such a Public
Offering by the Company on Form S-4 or S-8) .
2.2. Piggyback Registration.
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2.2.1. Right to Include Registrable Securities. If the Company at any
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time proposes to register any of its securities under the Securities Act by
registration on Forms X- 0, X-0, S-3) 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 Stockholders 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 Stockholders 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 Stockholders, the Company shall use commercially reasonable efforts to
effect the registration under the Securities Act of all
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Registrable Securities which the Company has been so requested to register by
the Stockholders; 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 Stockholders 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 Stockholders may
request that such registration be effected as a registration under Section 2.1.2
hereof if such registration right was then available to the Stockholders under
Section 2.1.2 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. The
Company shall pay all Registration Expenses in connection with registration of
Registrable Securities requested pursuant to Section 2.2, other than
underwriting discounts and selling commissions relating to the sale or
disposition of Registrable Securities.
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 Public 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 Public Offering,
then the Company shall promptly notify the Stockholders of such fact. If the
managing underwriter does not agree to include all (or such lesser amount as the
Stockholders shall, in their discretion, agree to) of the number of the
Registrable Securities initially requested by the Stockholders 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 Public 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 each of the Stockholders, Xxxxxxx Xxxxx
Securities Incorporated, SmithKline Xxxxxxx Corporation (and its affiliates),
Exigent Partners, L.P., and those individuals who were granted registration
rights pursuant to the same agreement as Exigent Partners, L.P. (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 Public 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 Public Offering by such holders.
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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 Stockholders such number of conformed
copies of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed under Rule
424 under the Securities Act, in conformity with the requirements of the
Securities Act, and such number of copies of such other documents as the
Stockholders 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 Stockholders 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 Stockholders to consummate the disposition in such
jurisdictions of the Registrable Securities to be sold by the Stockholders,
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 Stockholders to consummate the disposition of such Registrable
Securities in accordance with their intended method of disposition;
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(vi) furnish to the Stockholders, (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 Stockholders 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
Stockholders to use its best efforts to promptly prepare and furnish to the
Stockholders 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 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 famish a copy of the same to the
Stockholders;
(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 Stockholders 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
Stockholders shall forthwith discontinue its disposition of Registrable
Securities pursuant to the registration
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statement relating to such Registrable Securities until the Stockholders'
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 Public Offering by the Stockholders pursuant
to a registration requested under Section 2.1, the Company shall enter into an
underwriting agreement with such underwriters for such Public Offering, such
agreement to be reasonably satisfactory in substance and form to the Company,
the Stockholders and the underwriters, and to contain such representations and
warranties by the Company and the Stockholders 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 Stockholders 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 Stockholders shall be a party to such
underwriting agreement. The Stockholders 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
Stockholders, the Stockholders' Registrable Securities, the Stockholders'
intended method of distribution and 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
Public Offering of Registrable Securities.
2.4.2. Piggyback Underwritten Offerings. If the Company proposes to
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Section 2.2 and such securities are to be distributed by or through one or more
underwriters, subject to the other provisions of Section 2.2.2 the Company
shall, if requested by the Stockholders such underwriters to include all the
Registrable Securities to be offered and sold by the Stockholders among the
securities of the Company to be distributed by such underwriters. The
Stockholders shall become a party to the underwriting agreement negotiated
between the Company and such underwriters. The Stockholders 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 Stockholders, the Stockholders' Registrable Securities and the
Stockholders' 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 Public 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 Stockholders agree if required by the underwriter or underwriters
not to effect any public sale or
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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 Public
Offering as the managing underwriter of such Public 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 shorter period as the
managing underwriter of such Public 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 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 Public 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 Stockholders are or may be a selling shareholder, the Company shall
give the Stockholders not less than 30 days prior written notice of the
preparation of such registration statement and give the Stockholders and its
counsel and accountants the opportunity to participate, at the Stockholders'
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 Stockholders 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 Stockholders' counsel,
to conduct a reasonable investigation within the meaning of the Securities Act.
Any expenses incurred by the Stockholders in connection with
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any such investigation shall be borne by the Stockholders other than the
reasonable fees and disbursements of Selling 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 Stockholders are selling shareholders, 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 Public 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 thy were made
not misleading, (b) any violation by the Company, its directors, officers,
employees or agents of this Agreement or any law applicable to and in connection
with such registration, and the Company shall reimburse the Stockholders and
each such director, officer, agent or affiliate and, to the extent required by
an underwriting agreement entered into by the Company, any 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) and (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, 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 Stockholders. 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 Public
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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
any Stockholder under this Section 2.6.2. exceed the proceeds obtained by the
sale of such Stockholder's Shares 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 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 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
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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 Stockholders 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
Stockholders 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 any Stockholder under this Section 2.6.4. exceed
the proceeds obtained by the sale of such Stockholder's Shares 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.
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 Stockholders 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
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(d) deliver a written statement as to whether it has complied
with such requirements of this Section, to the Stockholders upon the
Stockholders' request.
4. Remedies.
--------
(a) If the Company fails for any reason (other than reasons relating
to acts or omissions of any Shareholder) to register a Stockholder's Registrable
Securities subject and pursuant to the terms and conditions of this Agreement,
then, at the election of the Company, the Company shall (i) to the extent of
funds legally available therefor ("Available Funds"), repurchase all of the
Registrable Securities owned by all such Stockholders for an amount per share
equal to the sum of the average of the appraised values of the Common Stock
(which shall not include any discount for minority interest) calculated by each
of two independent appraisal firms, one of which shall be selected by the
Xxxxxxx Xxxxx Securities Incorporated and the other of which shall be selected
by the Company (the "Fair Market Value"), or (ii) provide such Stockholders with
the rights set forth in subsection (b) below. If the Company elects to purchase
Registrable Securities pursuant to clause (i) above and the aggregate Fair
Market Value of the Registrable Securities to e repurchased by the Company is
greater than the amount of Available Funds, then the number of Registrable
Securities that the Company shall so repurchase from each such Stockholder shall
equal the product obtained by multiplying the Available Funds by a fraction, the
numerator of which is the number of Registrable Securities owned by such
Stockholder and the denominator of which is the total number of Registrable
Securities owned by such Stockholders.
(b) If the Company elects not to repurchase all of the Registrable
Securities which may be purchased pursuant to subsection (a) above, then any
Stockholders who thereafter continue to own shares of Common Stock and whose
Registrable Securities have not been registered shall have the right to nominate
a majority of the Board of Directors of the Company (including the right to
remove directors as necessary to create vacancies for the election of such
nominees), and Exigent Partners, L.P. (the "Partnership"), X. Xxxxxxx Stoughton
and Xxxxxx X. Xxxxx (the "Management Stockholders") hereby agree to vote their
shares of Common Stock, and the Company will cause any future purchaser of 5% or
more of the Common Stock of the Company to vote such shares of Common Stock, in
favor of the directors nominated by such Stockholders at any meeting of
stockholders or pursuant to any written consent in which the election of
directors is submitted to the vote of the Company's stockholders (and to remove
directors as necessary to create vacancies therefor). The Company shall take all
steps necessary to cause a meeting of the Company's Stockholders for the purpose
of effecting the foregoing. The obligations of the Partnership and the
Management Stockholders under this Section 5(b) shall terminate upon the earlier
of (i) the redemption of each such Stockholder's Registrable Securities or (ii)
the registration of each such stockholder's Registrable Securities. Upon the
termination of all the Stockholder's rights set forth in this subsection (b),
all members of the Board of Directors of the Company who were nominated and
elected pursuant to the provisions of this subsection (b) shall, immediately
resign from the Board of Directors and the Company may remove any such
directors. The remaining members of the Board of Directors of the
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Company are hereby authorized to fill any vacancies created as a result of any
such resignation or removal.
(c) For purposes of this Section 5, any Stockholder's Registrable
Securities shall be deemed to be so registered if such Stockholder elects not to
include his Registrable Securities in any registration statement in which such
Registrable Securities are eligible to be included pursuant to this Agreement.
(d) If Available Funds are insufficient to allow the Company to
repurchase all such Registrable Securities, each of the Management Stockholders,
the Partnership and the Investors shall perform such acts, execute such
instruments, and vote his or its shares in such manner as may be necessary to
increase such surplus to an amount sufficient to authorize such purchase,
including but not limited to the following: (i) a recapitalization of the
Company so as to reduce its stated capital and increase its surplus and (ii) a
reappraisal of the Company's assets (including goodwill, if any) to reflect the
market value of such assets, in the event such value exceeds the book value
thereof.
(e) The rights of the Stockholders pursuant to this Section 5 shall
be in addition to all other rights and remedies that such Stockholders may have
hereunder or at law or otherwise.
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 Company and the
holders of at least a majority of the Registrable Securities. 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 par-ties 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
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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.
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 facsimile set forth
below.
If to EXIGENT DIAGNOSTICS, INC. or a MANAGEMENT STOCKHOLDER:
0 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Attention: X. Xxxxxxx Stoughton
Facsimile: 610-270-6150
with a copy to:
Xxxxx X. Xxxxxxx, Esquire
Pepper, Xxxxxxxx & Xxxxxxx
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Facsimile: 000-000-0000
If to the Partnership:
c/o Xxxxxxx Xxxxx Securities Incorporated
000 Xxxxxxx Xxxxxx - 18th Floor
New York, New York 10022
Attention: Xx. Xxxxx Xxxxxxxxx
Facsimile: 000-000-0000
with a copy to:
Xxxx X. Xxxxxxx, Esquire
Xxxxxxx, Calamari & Xxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
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If to a Stockholder, to such address set forth on the Stockholder's
signature page hereto, or if to an assignee or successor of a Stockholder, to
such address appearing in the records of the Company.
(b) All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered or telecopied
(with written confirmation of receipt); and the next business day after timely
delivery to the courier, if sent by courier guaranteeing next day delivery.
9. Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and shall be binding upon the Company and the Stockholders and their respective
successors and permitted assigns. Each Stockholder may assign its rights under
this Agreement to any Person to whom the Stockholder 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
Stockholders and certain other holders of the Common Stock. In the event that a
Stockholder assigns its rights to a holder or holders of only a portion of the
Registrable Securities, then all references to the Stockholder herein shall also
be deemed to refer to such other holder or holders, but in such event the
Stockholder 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
Stockholder 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 Stockholders in this Agreement.
14. Recapitalization, 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
-17-
complete liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders 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. 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. 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
Company and the Stockholders consent 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.
16. Term. This Agreement shall continue in full force and effect with
----
respect to any Stockholder for nine (9) years from the Final Closing (as defined
in the Memorandum), or the first date on which the such Stockholder and their
affiliates may sell all of the Securities held by them in a ninety (90) day
period pursuant to Rule 144 under the Securities Act.
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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
As to Section 5 only:
EXIGENT PARTNERS, L.P.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------
Xxxxx Xxxxxxxxx
General Partner
/s/ W. Xxxxxx Xxxxxxxxx
------------------------------------
X. Xxxxxxx Stoughton
/s/ Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxx
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STOCKHOLDER SIGNATURE PAGE
TO REGISTRATION RIGHTS AGREEMENT
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of
_________ __, 199_.
If the Holder is an INDIVIDUAL:
________________________________________________
Print Name
________________________________________________
Signature
________________________________________________
________________________________________________
Print Address
If the Holder is a PARTNERSHIP,
CORPORATION or a TRUST:
_______________________________________________
Name of Partnership, Corporation or Trust
By:_____________________________________________
Signature
Print Name:________________________________
Print Title:_______________________________
________________________________________________
________________________________________________
Print Address
Accepted and agreed to this
____ day of _______________, 199_
EXIGENT DIAGNOSTICS, INC.
By: /s/ X. Xxxxxxx Stoughton
--------------------------------------------
X. Xxxxxxx Stoughton
Chairman & CEO
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