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Exhibit 4.2
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REGISTRATION RIGHTS AGREEMENT
Dated October 30, 1997
among
CONTINUCARE CORPORATION
and
LOEWENBAUM & CO. INCORPORATED,
as Placement Agent
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of October 30, 1997 among CONTINUCARE CORPORATION, a
Florida corporation (the "Company"), and LOEWENBAUM & CO. INCORPORATED, as
placement agent (the "Placement Agent").
This Agreement is made pursuant to the Placement Agreement
dated October 27, 1997 (the "Placement Agreement"), among the Company, as
issuer of the 8% Convertible Subordinated Notes due 2002 (the "Notes") and the
common stock, par value $.0001 per share, of the Company issuable upon
conversion thereof (the "Common Stock"), the Placement Agent and each purchaser
who is a signatory thereto (the "Purchasers"), which provides for among other
things, the sale by the Company to the Purchasers of the Notes (together with
the Common Stock, the "Securities"). In order to induce the Purchasers to enter
into the Placement Agreement, the Company has agreed to provide to the
Purchasers and their direct and indirect transferees the registration rights
set forth in this Agreement. The execution and delivery of this Agreement is a
condition to the closing under the Placement Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the
following initially capitalized terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"Business Day" shall mean a day that is not a Saturday, a Sunday, or a
day on which banking institutions in New York, New York are authorized or
required to be closed.
"Closing Time" shall mean the Closing Time as defined in the Placement
Agreement.
"Common Stock" shall have the meaning set forth in the preamble to
this Agreement.
"Company" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company; provided, however, that such depositary
must have an address in the Borough of Manhattan, in the City of New York.
"Effectiveness Period" shall have the meaning set forth in Section
2(a) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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"Holder" shall mean any Purchaser, for so long as it owns any
Registrable Securities, and each of its respective successors, assigns and
direct and indirect transferees who become registered owners of Registrable
Securities under the Indenture.
"Indenture" shall mean the Indenture relating to the Notes dated as of
October 30, 1997 among the Company, as issuer, and American Stock Transfer &
Trust Company, a New York corporation, as trustee, as the same may be amended
from time to time in accordance with the terms thereof.
"Inspectors" shall have the meaning set forth in Section 3(m) hereof.
"Issue Date" shall mean the date of the last Closing Time.
"Liquidated Damages" shall have the meaning set forth in Section 2(d)
hereof.
"Majority Holders" shall mean the Holders of a majority in aggregate
principal amount of the outstanding Registrable Securities (considering, for
purposes of this definition, each share of Common Stock which is a Registrable
Security as equivalent to the aggregate principal amount of Notes in respect of
the conversion of which each such share was issued).
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof.
"Placement Agent" shall have the meaning set forth in the preamble of
this Agreement.
"Placement Agreement" shall have the meaning set forth in the preamble
to this Agreement.
"Prospectus" shall mean the prospectus included in the Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by the Registration Statement, and by all other
amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"Records" shall have the meaning set forth in Section 3(m) hereof.
"Registrable Securities" shall mean the Securities; provided, however,
that a Security shall cease to be a Registrable Security when (i) a
Registration Statement with respect to such Security shall have been declared
effective under the Securities Act and such Security shall have been disposed
of pursuant to such Registration Statement, (ii) such Security shall have been
sold to the public pursuant to Rule 144(k) (or any similar provision then in
force, but not Rule 144A) under the Securities Act, or (iii) such Security
shall have ceased to be outstanding.
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"Registration" shall mean a registration effected pursuant to Section
2(a) hereof.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky laws
(including reasonable fees and disbursements of counsel referred to in Section
2(b) hereof for any underwriters or Holders in connection with blue sky
qualification of any of the Registrable Securities) and compliance with the
rules of the NASD, (iii) all expenses of any Persons in preparing or assisting
in preparing, word processing, printing and distributing any Registration
Statement, any Prospectus and any amendments or supplements thereto, and in
preparing or assisting in preparing, printing and distributing any underwriting
agreements, securities sales agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) the fees and
disbursements of counsel for the Company and of the independent certified
public accountants of the Company, including the expenses of any "cold comfort"
letters required by or incident to such performance and compliance, (v) all
fees and expenses incurred in connection with the listing, if any, of any of
the Registrable Securities on any securities exchange or exchanges and (vi) the
reasonable fees and expenses of any special experts retained by the Company in
connection with any Registration Statement. Notwithstanding anything in this
Agreement to the contrary, each Holder shall pay all underwriting discounts and
brokerage commissions with respect to any Registrable Securities sold by it.
"Registration Statement" shall mean a "shelf" registration statement
of the Company, on an appropriate form, pursuant to the provisions of Section
2(a) hereof which covers the resale of all of the Registrable Securities under
Rule 415 under the Securities Act, or any similar rule that may be adopted by
the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Rule 144(k) Period" shall mean the period of two years (or such
shorter or longer period as may hereafter be referred to in Rule 144(k) under
the Securities Act (or similar successor rule)) commencing on the Closing Time
(as defined in the Placement Agreement).
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble to this
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"TIA" shall have the meaning set forth in Section 3(k) hereof.
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2. Registration Under the Securities Act.
(a) Shelf Registration. The Company shall, at its sole
expense, (i) within 60 days after the Issue Date, file the Registration
Statement providing for the resale by the Holders of all of the Registrable
Securities, (ii) shall use its best efforts to cause the Registration Statement
to be declared effective by the SEC under the Securities Act within 120 days
after the Issue Date and (iii) use its reasonable best efforts to keep
effective the Registration Statement until the earlier of the expiration of the
Rule 144(k) Period or such time as all of the Registrable Securities have been
sold thereunder or otherwise cease to be Registrable Securities (the
"Effectiveness Period"). No Holder of Registrable Securities shall be entitled
to include any of its Registrable Securities in the Registration pursuant to
this Agreement unless and until such Holder furnishes to the Company in
writing, within 15 days after receipt of a written request therefor, such
information as the Company may (after conferring with counsel and counsel to
the Placement Agent with regard to information relating to Holders that would
be required by the SEC to be included in such Registration Statement or the
Prospectus included therein) reasonably request for inclusion in the
Registration Statement or the Prospectus included therein. Each Holder as to
which the Registration is being effected agrees to furnish to the Company all
information with respect to such Holder necessary to make the information
previously furnished to the Company by such Holder not materially misleading.
The Company shall not permit any securities other than
Registrable Securities to be included in the Registration Statement. The
Company will provide to each Holder a reasonable number of copies of the
Prospectus that is a part of the Registration Statement, notify each such
Holder when the Registration has become effective and take all other actions as
are reasonably requested to permit unrestricted resales of the Registrable
Securities. The Company further agrees, if necessary, to supplement or amend
the Registration Statement, if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Registration Statement or by the Securities Act or by any other rules and
regulations thereunder for shelf registrations, and to furnish to the Holders
of Registrable Securities copies of any such supplement or amendment promptly.
Any Holder that sells Registrable Securities pursuant to the
Registration Statement shall, if required by the staff of the SEC, be named as
a selling security holder in the Prospectus, shall deliver a Prospectus to
purchasers, shall be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales and shall be bound by the
provisions of this Registration Rights Agreement that are applicable to such
holder (including certain indemnification rights and obligations).
The Holders of Registrable Securities covered by the
Registration Statement who desire to do so may sell the securities covered by
such Registration in an underwritten offering. In any such underwritten
offering, the underwriter or underwriters and manager or managers that will
administer the offering will be investment bankers of recognized national
standing, including, but not limited to, Loewenbaum & Co. Incorporated,
selected by the Majority
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Holders; provided, however, that such underwriters and managers must be
reasonably satisfactory to the Company.
(b) Expenses. The Company shall pay all Registration
Expenses in connection with the registration pursuant to Section 2(a) hereof
and will reimburse the Holders for the reasonable fees and disbursements of not
more than one firm of attorneys representing the selling Holders, which firm
shall be Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP or any such other counsel
designated in writing by the Majority Holders to act as counsel for the Holders
of the Registrable Securities in connection with the Registration Statement,
which other counsel shall be reasonably satisfactory to the Company. Except as
provided herein, each Holder shall pay all expenses of its counsel,
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to the
Registration Statement.
(c) Effective Registration Statement. The Registration
Statement referred to in Section 2(a) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC; provided, however,
that, (i) if, after it has been declared effective, the offering of Registrable
Securities pursuant to the Registration Statement is interfered with by any
stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court or (ii) upon the occurrence of any event which
makes any statement in the Prospectus which is part of the Registration
Statement untrue in any material respect or which requires the making of any
changes in the Prospectus in order to make the statements therein not
misleading, such Registration Statement will be deemed not to have been
effective during the period of such interference or occurrence, until (x) the
offering of Registrable Securities pursuant to such Registration Statement may
legally resume or (y) the Company has amended or supplemented such prospectus
to correct such misstatement or omission and has furnished copies of the
amended or supplemented Prospectus to the Holders, as the case may be. If the
Registration Statement is deemed not to have been effective for any period of
time pursuant to this Section 2(c), the Effectiveness Period shall be extended
by the number of days during the period from and including the date of the
occurrence of an event described in the foregoing clause (i) or (ii), as the
case may be, to and including the date of the occurrence of the event described
in the foregoing clause (x) or (y), as the case may be.
The Company shall be deemed not to have used its reasonable
best efforts to cause the Registration Statement to become, or to remain,
effective during the requisite period if it voluntarily takes any action that
would result in the Registration Statement not being declared effective or in
the Holders of Registrable Securities covered thereby not being able to offer
and sell such Registrable Securities during that period unless (i) such action
is required by applicable law, including, but not limited to, reasonable
periods necessary to prepare appropriate disclosure, or (ii) such action is
taken by the Company in good faith and for business reasons, including, without
limitation, the acquisition or divestiture of assets or the offering or sale of
securities, so long as the Company promptly thereafter prepares a
post-effective amendment to the Registration Statement or a supplement to the
related prospectus so that, as thereafter
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delivered to purchasers of the Notes, the prospectus will not contain an untrue
statement of a material fact necessary to make the statements therein not
misleading.
(d) Liquidated Damages. In the event that (A) the Company
fails to file the Registration Statement with the SEC on or prior to the 60th
day after the Issue Date, (B) the Registration Statement is not declared
effective by the SEC on or prior to the 120th day after the Issue Date or (C) a
filed and effective Registration Statement ceases to be effective at any time
during the Effectiveness Period, the Company shall pay liquidated damages (the
"Liquidated Damages") to each holder of Registrable Securities as follows:
(i) if the Registration Statement is not filed with the SEC on
or prior to the 60th day after the Issue Date, then commencing on the
day after such required filing date, Liquidated Damages shall be
payable in an amount equal to $.05 per week per $1,000 principal
amount of Notes then outstanding and $.01 per week per share (subject
to adjustment as described below) of Common Stock theretofore issued
upon the conversion of the Notes; or
(ii) if the Registration Statement is not declared effective
by the SEC on or prior to the 120th day after the Issue Date,
commencing on the 121st day after the Issue Date, additional
Liquidated Damages shall be payable in an amount equal to $.05 per
week per $1,000 principal amount of Notes then outstanding and $.01
per week per share (subject to adjustment as described below) of
Common Stock theretofore issued upon the conversion of the Notes; or
(iii) if the Registration Statement has been declared
effective and such Registration Statement ceases to be effective at
any time during the Effectiveness Period (other than after such time
as all Notes then outstanding or Common Stock theretofore issued
pursuant to the conversion thereof have been disposed of thereunder or
otherwise cease to be Registrable Securities), then additional
Liquidated Damages shall be payable in an amount equal to $.05 per
week per $1,000 principal amount of Notes then outstanding and $.01
per week per share (subject to adjustment as described below) of
Common Stock theretofore issued upon conversion of the Notes,
commencing on the date such Registration Statement ceases to be
effective;
provided, however, that the Liquidated Damages rate on the Notes then
outstanding or Common Stock theretofore issued upon the conversion thereof may
not exceed in the aggregate $.10 per week per $1,000 principal amount of Notes
then outstanding and $.02 per week per share (subject to adjustment as
described below) of Common Stock theretofore issued upon the conversion of the
Notes; provided, further, however, that (1) upon the filing of the Registration
Statement (in the case of clause (i) above), (2) upon the effectiveness of the
Registration Statement (in the case of clause (ii) above), or (3) upon the
effectiveness of the Registration Statement which had ceased to remain
effective (in the case of clause (iii) above), the obligation to pay Liquidated
Damages as a result of such clause, as the case may be, shall cease to accrue.
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Any amounts of Liquidated Damages due pursuant to clause (i),
(ii) or (iii) above shall be payable in cash on April 30 and October 31 of each
year to the Holders of record on the first day of the month in which the
relevant payment date falls.
In the event of any stock split, stock dividend, reverse stock
split, reclassification, share exchange or similar transaction with respect to
the Common Stock such that an adjustment to the amount of Liquidated Damages
payable in respect of each share of Common Stock theretofore issued upon
conversion of the Notes is appropriate as an equitable matter, then the
Company, in consultation with each Purchaser, shall in good faith make such
equitable adjustment to the amount of Liquidated Damages per share as it deems
necessary or appropriate to achieve such equitable result.
(e) Specific Enforcement. Without limiting the remedies
available to the Holders, the Company acknowledges that any failure by the
Company to comply with its obligations under Section 2(a) hereof may result in
material irreparable injury to the Holders for which there is no adequate
remedy at law, that it would not be possible to measure damages for such
injuries precisely and that, in the event of any such failure, any Holder may
obtain such relief as may be required to specifically enforce the Company's
obligations under Section 2(a) hereof.
3. Registration Procedures. The Company shall use its
reasonable best efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Section 2(a) hereof within
the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which (i) shall be
available for the sale of the Registrable Securities by the selling
Holders thereof, (ii) shall comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith and (iii) include
a generic and broad plan of distribution which is reasonably
satisfactory to the Majority Holders and their counsel; and use its
best efforts to cause such Registration Statement to become effective
and remain effective in accordance with Section 2 hereof; before
filing any Registration Statement or Prospectus or any amendments or
supplements thereto, the Company shall furnish to and afford the
Holders of the Registrable Securities covered by such Registration
Statement, their counsel and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed.
(b) subject to the provisions of Section 2(c) hereof, prepare
and file with the SEC such amendments and post-effective amendments to
each Registration Statement as may be necessary to keep such
Registration Statement effective for the Effectiveness Period; and
cause each Prospectus to be supplemented, if so determined by the
Company or requested by the SEC, by any required prospectus supplement
and as so supplemented to be filed pursuant to Rule 424 (or any
similar provision then in force) under the Securities
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Act, and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder
applicable to it with respect to the disposition of all securities
covered by the Registration Statement during the Effectiveness Period
in accordance with the intended method or methods of distribution by
the selling Holders.
(c) (i) notify each Holder of Registrable Securities included
in the Registration Statement, within a reasonable time prior to
filing, that a Registration Statement with respect to the Registrable
Securities is being filed and advise such Holder that the distribution
of Registrable Securities will be made in accordance with the method
selected by such Holders; and (ii) furnish to each Holder of
Registrable Securities included in the Registration Statement and to
each underwriter of an underwritten offering of Registrable
Securities, if any, without charge, as many copies of each Prospectus,
including each preliminary Prospectus, and any amendment or supplement
thereto and such other documents as such Holder or underwriter may
reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) subject to the
provisions of this Agreement, consent to the use of the Prospectus or
any amendment or supplement thereto by each of the selling Holders of
Registrable Securities included in the Registration Statement in
connection with the offering and sale of the Registrable Securities
covered by the Prospectus or any amendment or supplement thereto.
(d) use its reasonable best efforts to register or qualify
the Registrable Securities under all applicable state securities or
"blue sky" laws of such jurisdictions as any Holder of Registrable
Securities covered by the Registration Statement and each underwriter
of an underwritten offering of Registrable Securities shall reasonably
request, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder and
underwriter to consummate the disposition in each such jurisdiction of
such Registrable Securities owned by such Holder; provided,
however, that the Company shall not be required to (i) qualify as a
foreign corporation in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(d), (ii) file any
general consent to service of process in any jurisdiction where it
would not otherwise be subject to such service of process or (iii)
subject itself to taxation in any such jurisdiction if it is not then
so subject;
(e) if requested, notify each Holder of Registrable
Securities promptly (i) when a Registration Statement has become
effective and when any post-effective amendments and supplements
thereto become effective, (ii) of any request by the SEC or any state
securities authority for amendments and supplements to the
Registration Statement or Prospectus or for additional information,
(iii) of the issuance by the SEC or any state securities authority of
any stop order suspending the effectiveness of a Registration
Statement or the qualification of the Registrable Securities or the
initiation of any proceedings for that purpose, (iv) if any of the
representations and warranties of the Company contained in any
purchase or underwriting agreement cease to be true and correct in any
material respects, and (v) of the happening of any event or the
failure of
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any event to occur or the discovery of any facts or otherwise, during
the Effectiveness Period which makes any statement made in the
Registration Statement or the related Prospectus untrue in any
material respect or which causes the Registration Statement or
Prospectus to omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, and (vi) when a post-effective amendment to
the Registration Statement would be required;
(f) make every commercially reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of a Registration
Statement at the earliest possible moment;
(g) furnish to each Holder of Registrable Securities
included within the coverage of the Registration Statement, without
charge, at least one conformed copy of each Registration Statement
relating to such Registration and any post-effective amendment thereto
(without documents incorporated therein by reference or exhibits
thereto, unless requested);
(h) cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not
bearing any restrictive legends and in such denominations (consistent
with the provisions of the Indenture) and registered in such names as
the selling Holders or the underwriters may reasonably request within
a reasonable period prior to the closing of any sale of Registrable
Securities pursuant to the Registration Statement;
(i) upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its
reasonable best efforts to prepare a supplement or post-effective
amendment to the Registration Statement and the related Prospectus or
any document incorporated therein by reference and/or file any other
required document so that, as thereafter delivered to the purchasers
of the Registrable Securities, such Prospectus will not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(j) cause the Indenture to be qualified under the Trust
Indenture Act of 1939 (the "TIA") in connection with the registration
of the Registrable Securities and effect such changes to the Indenture
as may be required for it to be so qualified in accordance with the
terms of the TIA and execute, and use its best efforts to cause the
trustee under the Indenture to execute, all documents as may be
required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner;
(k) if requested by the Majority Holders, enter into such
agreements (including underwriting agreements) as are customary in
underwritten offerings and take all such other appropriate actions as
are reasonably requested in order to expedite or facilitate the
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registration or the disposition of such Registrable Securities, and in
such connection, whether or not an underwriting agreement is entered
into and whether or not the registration is an underwritten
registration, if requested by Holders of Securities covered thereby:
(i) make such representations and warranties to Holders of such
Registrable Securities and the underwriters (if any), with respect to
the business of the Company and its subsidiaries as then conducted and
the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in
each case, as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested;
(ii) use its reasonable best efforts to obtain opinions of counsel to
the Company and updates thereof (which may be in the form of a
reliance letter) in form and substance reasonably satisfactory to the
managing underwriters (if any) and the Holders of a majority in
principal amount or majority of shares, as the case may be, of the
Registrable Securities being sold, addressed to each selling Holder
and the underwriters (if any) covering the matters customarily covered
in opinions requested in underwritten offerings and such other matters
as may be reasonably requested by such underwriters (it being agreed
that the matters to be covered by such opinion may be subject to
customary qualifications and exceptions); (iii) use its reasonable
best efforts to obtain customary "cold comfort" letters and updates
thereof in form and substance reasonably satisfactory to the managing
underwriters from the independent certified public accountants of the
Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business
acquired or to be acquired by the Company for which financial
statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each of the underwriters,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as reasonably requested
by such underwriters in accordance with Statement on Auditing
Standards No. 72; and (iv) if an underwriting agreement is entered
into, the same shall contain indemnification provisions and procedures
no less favorable than those set forth in Section 4 hereof (or such
other provisions and procedures acceptable to Holders of a majority in
aggregate principal amount or majority of shares, as the case may be,
of Registrable Securities covered by such Registration Statement and
the managing underwriters or agents) with respect to all parties to be
indemnified pursuant to said Section (including, without limitation,
such underwriters and selling Holders); provided, however, that the
Company is not required to facilitate an underwritten public offering
unless a request therefor shall have been made by the holders of a
majority in the aggregate principal amount of the Registrable
Securities being sold and, in any event, the Company is not required
to effect more than two underwritten offerings. The above shall be
done at each closing under such underwriting agreement, or as and to
the extent required thereunder;
(l) make reasonably available for inspection by any selling
Holder of such Registrable Securities being sold, any underwriter
participating in any such disposition of Registrable Securities, if
any, and any attorney, accountant or other agent retained by any such
selling Holder or underwriter (collectively, the "Inspectors"), at the
offices
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where normally kept, during reasonable business hours, all financial
and other records, pertinent corporate documents and properties the
Company and its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and
employees of the Company and its subsidiaries to supply all relevant
information in each case reasonably requested by any such Inspector in
connection with such Registration Statement provided, however, that
the foregoing inspection and information gathering shall be
coordinated on behalf of such parties, by one counsel designated by
the Majority Holders on behalf of such parties as described in Section
2(a) hereof. Records which the Company determines, in good faith, to
be confidential and any records which it notifies the Inspectors are
confidential shall be disclosed subject to the execution of
confidentiality agreements that are reasonably satisfactory to the
Company and shall not be disclosed by the Inspectors unless (i) the
disclosure of such Records is necessary to avoid or correct a material
misstatement or omission in such Registration Statement, (ii) the
release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction or is necessary in
connection with any action, suit or proceeding or (iii) the
information in such Records has been made generally available to the
public;
(m) comply with all applicable rules and regulations of the
SEC so long as any provision of this Agreement shall be applicable and
make generally available to its securityholders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Company after the effective date of
the Registration Statement, which statements shall cover said 12-month
periods;
(n) cooperate with each seller of Registrable Securities
covered by the Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be
made with the NASD;
(o) use its reasonable best efforts to take all other steps
necessary to effect the registration of the Registrable Securities
covered by the Registration Statement contemplated hereby;
(p) The Company may require each seller of Registrable
Securities as to which a registration is being effected to furnish to
the Company, as applicable, such information regarding such seller as
may be required by the staff of the SEC to be included in a
Registration Statement. The Company may exclude from such
registration the Regis-
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trable Securities of any seller who unreasonably fails to furnish such
information within a reasonable time after receiving such request.
Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant
to a Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 3(i)
hereof or until it is advised in writing (the "Advice") by the Company
that the use of the applicable Prospectus may be resumed, and, if so
directed by the Company, such Holder will deliver to the Company (at
the Company's expense, as the case requires) all copies in such
Holder's possession, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice. If the
Company shall give any such notice to suspend the disposition of
Registrable Securities pursuant to the Registration Statement, the
Company shall use its best efforts to file and have declared effective
(if an amendment) as soon as practicable an amendment or supplement to
the Registration Statement and shall extend the period during which
such Registration Statement shall be maintained effective pursuant to
this Agreement by the number of days in the period from and including
the date of the giving of such notice to and including the date when
the Company shall have made available to the Holders (x) copies of the
supplemented or amended Prospectus necessary to resume such
dispositions or (y) the Advice.
4. Indemnification and Contribution.
(a) In connection with the Registration Statement, the Company
shall indemnify and hold harmless each Holder, each underwriter who
participates in an offering of the Registrable Securities, each Person, if any,
who controls any of such parties within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and each of their respective
directors, officers, employees and agents, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement thereto) or in
any Prospectus (or any amendment or supplement thereto), including all
documents incorporated therein by reference, or the omission or
alleged omission therefrom of a material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or
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omission, or any such alleged untrue statement or omission, provided
that any such settlement is effected with the prior written consent of
the Company; and
(iii) against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by such
Holder or any underwriter (except to the extent otherwise expressly
provided in Section 4(c) hereof)), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any court or governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) of this Section 4(a);
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made (i) in reliance upon and
in conformity with written information furnished in writing to the Company by
such Purchasers, any Holder or any underwriter with respect to such Purchasers,
any Holder or any underwriter, as the case may be, expressly for use in the
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto) or (ii) in a preliminary prospectus if a copy
of the Prospectus (as then amended or supplemented) was not sent or given by or
on behalf of such Holder or any underwriter, as the case may be, to the person
asserting any such loss, liability, claim, damage or expense, if required by
law so to have been delivered, at or prior to the written confirmation of the
sale of the Notes, and the Prospectus (as then amended or supplemented) would
have completely corrected such untrue statement or omission.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, any underwriter and the other selling
Holders and each of their respective directors, officers (including each
officer of the Company who signed the Registration Statement), employees and
agents and each Person, if any, who controls the Company, any underwriter or
any other selling Holder within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any and all loss,
liability, claim, damage and expense whatsoever described in the indemnity
contained in Section 4(a) hereof, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such selling Holder with
respect to such Holder expressly for use in the Registration Statement (or any
amendment thereto), or any such Prospectus (or any amendment or supplement
thereto); provided, however, that no such Holder shall be liable for any claims
hereunder in excess of the amount of net proceeds received by such Holder from
the sale of Registrable Securities pursuant to the Registration Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such
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indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of indemnification pursuant to Section 4(a)
above, the indemnifying parties shall select counsel which shall be reasonably
acceptable to the Placement Agent, and, in the case of indemnification pursuant
to Section 4(b) above, the indemnifying parties shall select counsel which
shall be reasonably acceptable to the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemni- fied party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their
own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4 (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim.
(d) Notwithstanding the last sentence of Section 4(c), if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel
pursuant to Section 4(a)(iii) above, such indemnifying party agrees that it
shall be liable for any settlement effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement; provided, however, that an indemnifying party
shall not be liable for any such settlement effected without its consent if
such indemnifying party (x) reimburses such indemnified party in accordance
with such request to the extent it considers such request to be reasonable and
(y) provides written notice to the indemnified party substantiating the unpaid
balance as unreasonable, in each case prior to the date of such settlement.
(e) In order to provide for just and equitable contribution
in circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, any underwriter
and the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company, any underwriter and the Holders, as incurred; provided
that no Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. As between
the Company and the Holders, such parties shall contribute to such
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aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion as shall be
appropriate to reflect the relative fault of the Company, on the one hand, and
the Holders, on the other hand, with respect to the statements or omissions
which resulted in such loss, liability, claim, damage or expense, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative fault of the Company, on the one hand, and of the Holders, on the
other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company, on the one hand, or by or on behalf of the Holders, on the other,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Holders of the Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section 4 were to be determined by
pro rata allocation or by any other method of allocation that does not take
into account the relevant equitable considerations referred to above. For
purposes of this Section 4, each affiliate of a Holder, and each director,
officer, employee, agent and Person, if any, who controls a Holder or such
affiliate within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act shall have the same rights to contribution as such Holder,
and each director of the Company, each officer of the Company who signed the
Registration Statement, and each Person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Company.
5. Participation in Underwritten Registrations. No
Holder may participate in any underwritten registration hereunder unless such
Holder (a) agrees to sell such Holder's Registrable Securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents reasonably required under the
terms of such underwriting arrangements.
6. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Company is
subject to the reporting requirements of Section 13 or 15 of the Exchange Act
and any Registrable Securities remain outstanding, the Company will file the
reports required to be filed by it under the Securities Act and Section 13(a)
or 15(d) of the Exchange Act and the rules and regulations adopted by the SEC
thereunder. If it ceases to be so required to file such reports, the Company
will, upon the request of any Holder of Registrable Securities (a) make
publicly available such information as is necessary to permit sales of their
securities pursuant to Rule 144 under the Securities Act, (b) deliver such
information to a prospective purchaser as is necessary to permit sales of their
securities pursuant to Rule 144A under the Securities Act and it will take such
further action as any Holder of Registrable Securities may reasonably request,
and (c) take such further action that is reasonable in the circumstances, in
each case, to the extent required from time to time to enable such Holder to
sell its Registrable Securities without registration under
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the Securities Act within the limitation of the exemptions provided by (i) Rule
144 under the Securities Act, as such rule may be amended from time to time,
(ii) Rule 144A under the Securities Act, as such rule may be amended from time
to time, or (iii) any similar rules or regulations hereafter adopted by the
SEC. Upon the request of any Holder of Registrable Securities, the Company
will deliver to such Holder a written statement as to whether it has complied
with such requirements.
(b) No Inconsistent Agreements. The Company has not entered
into nor will the Company on or after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The Company represents and warrants that the rights granted
to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given unless the Company has obtained the written
consent of the Majority Holders; provided no amendment, modification or
supplement or waiver or consent to the departure with respect to the provisions
of Section 4 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder of Registrable
Securities. Notwithstanding the foregoing sentence, (i) this Agreement may be
amended, without the consent of any Holder of Registrable Securities, by
written agreement signed by the Company and the Placement Agent, to cure any
ambiguity, correct or supplement any provision of this Agreement that may be
inconsistent with any other provision of this Agreement or to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with other provisions of this Agreement, (ii)
this Agreement may be amended, modified or supplemented, and waivers and
consents to departures from the provisions hereof may be given, by written
agreement signed by the Company and the Placement Agent to the extent that any
such amendment, modification, supplement, waiver or consent is, in their
reasonable judgment, necessary or appropriate to comply with applicable law
(including any interpretation of the Staff of the SEC) or any change therein
and (iii) to the extent any provision of this Agreement relates to the
Placement Agent, such provision may be amended, modified or supplemented, and
waivers or consents to departures from such provisions may be given, by written
agreement signed by the Placement Agent and the Company.
(d) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery (i) if to a Holder, at the most current address given by
such Holder to the Company by means of a notice given in accordance with the
provisions of this Section 6(d), which address initially is, with respect to
each Purchaser, the address set forth in the Placement Agreement; and (ii) if
to the Company, initially at the Company's
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address set forth in the Placement Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 6(d).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied;
and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the Person giving the same to the Trustee,
at the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors, assigns and transferees of
each Purchaser, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Placement Agreement or
the Indenture. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement and such Person shall be entitled
to receive the benefits hereof.
(f) Third Party Beneficiary. The Placement Agent and each of
the Purchasers shall be a third party beneficiary of the agreements made
hereunder between the Company, on the one hand, and the Holders, on the other
hand, and shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights
or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE
BEEN MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY PROVI-
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SIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE PARTIES HERETO AGREES TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Securities Held by the Company or its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by
the Company or its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
CONTINUCARE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
and President
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President
and General Counsel
Confirmed and accepted as of
the date first above
written:
ON BEHALF OF THE PURCHASERS
By: LOEWENBAUM & CO. INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
