EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of May 1,
1998 by and among Paragon Health Network, Inc., a Delaware corporation (the
"Company") and Xxxxxx X. Xxxxxxx III (the "Investor").
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The following terms shall have the meanings
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ascribed to them below:
"Closing Date" means the date of the closing under the Agreement of
Purchase and Plan of Reorganization (the "Exchange Agreement"), dated as of
March 24, 1998, among the Company, Acquisition Sub, Inc., a Delaware
corporation, Professional Rehabilitation, Inc., a South Carolina corporation,
and the Investor.
"Commission" means the Securities and Exchange Commission.
"Demand Registration" means a registration of Registrable Securities
under the Securities Act pursuant to a request made under Section 2.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Permitted Transferee" means any member of Investor's "immediate
family" as such term currently is used in Instruction to Item 4.4(a) of
Regulation S-K under the Securities Act, and any trust established for the
benefit of such persons or Investor.
"Person" means any individual or a corporation, partnership, joint
venture, association, trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance on Rule 430A under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and all other
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amendments and supplements to the Prospectus, including post-effective
amendments, and all materials incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
"Registrable Security" means each Share issued to the Investor in the
transactions described in the Exchange Agreement (the "Transaction") until (i)
it has been effectively registered under the Securities Act and disposed of
pursuant to an effective registration statement, (ii) it is sold under
circumstances in which all of the applicable conditions of Rule 144 (or any
similar provisions then in force) under the Securities Act are met, including a
sale pursuant to the provisions of Rule 144(k) or (iii) it is otherwise
transferred in accordance with the terms of this Agreement to any person other
than a Permitted Transferee; it being understood that Shares transferred to any
Permitted Transferee shall be "Registrable Securities".
"Registration Statement" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Selling Holder" means any person who sells or proposes to sell Shares
pursuant to a registration statement under the Securities Act.
"Shares" means the shares of common stock, par value $.01 per share of
the Company.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal in an underwritten offering and not as part of such
dealer's market-making activities.
ARTICLE II
REGISTRATION RIGHTS
Section 2.1 Demand Registration.
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(a) Request for Registration. During the period commencing on the day
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immediately following the Closing Date and ending 18 months thereafter (the
"Demand Period"), the Investor may make one written request for a Demand
Registration of not less than 50% of the Registrable Securities received by the
Investor in the transaction. The Investor will specify the number of
Registrable Securities proposed to be sold and will also specify the intended
method of disposition thereof.
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If the Investor requests that such Demand Registration be a "shelf"
registration pursuant to Rule 415 under the Securities Act, the Company shall
file such Demand Registration under Rule 415 and shall keep the Registration
Statement filed in respect thereof effective for a period which shall terminate
on the earlier of (i) six months from the date on which the Commission declares
such Registration Statement effective, (ii) the date on which all Registrable
Securities covered by such Registration Statement have been sold pursuant to
such Registration Statement or (iii) the expiration of the Demand Period.
(b) Effective Registration. A registration will not be deemed to have
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been effected as a Demand Registration unless it has been declared effective by
the Commission and the Company has complied in all material respects with its
obligations under this Agreement with respect thereto; provided that if after
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such Demand Registration has become effective, the offering of Registrable
Securities pursuant to such registration is or becomes the subject of any stop
order, injunction or other order or requirement of the Commission or any other
governmental or administrative agency, or if any court prevents or otherwise
limits the sale of Registrable Securities pursuant to the registration (for any
reason other than the acts or omissions of the Holders), such registration will
be deemed not to have been effected. If (i) a registration requested pursuant
to this Section 2.1 is deemed not to have been effected or (ii) the registration
requested pursuant to this Section 2.1 does not remain effective for a period of
at least 120 days, or six months with respect to a "shelf" registration, beyond
the effective date thereof (or earlier upon the consummation of the distribution
by the Investor of the Registrable Securities included in such registration
statement), then such registration statement shall not count as the Demand
Registration that may be requested by the Investor and the Company shall
continue to be obligated to effect a registration pursuant to this Section 2. 1.
The Investor may withdraw all of the Registrable Securities from a
Demand Registration at any time (whether before or after the filing or effective
date of such Demand Registration), provided that if the Investor bears the
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expenses associated with such withdrawn Registration Statement, such
Registration Statement will not count as a Demand Registration and the Company
shall continue to be obligated to effect a registration pursuant to this Section
2.1. The Investor may, with the consent of the Company (and the Underwriter in
the case of a Demand Registration pursuant to Section 2.1(c)), withdraw part of
the Registrable Securities from a Demand Registration provided that such Demand
Registration shall continue to count as the Demand Registration that the Company
is required to effect pursuant to this Section 2.1.
(c) Selection of Underwriter. If the Investor so elects, the offering
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of Registrable Securities pursuant to a Demand Registration shall be in the form
of an underwritten offering. The Company shall select one or more nationally
recognized firms of investment bankers to act as the book-running managing
Underwriter or Underwriters in connection with such offering and shall select
any additional investment bankers and managers to be used in connection with the
offering.
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Section 2.2 Piggy-Back Registration. If at any time during the five
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(5) year period commencing the day immediately following the Closing Date, the
Company proposes to file a Registration Statement under the Securities Act with
respect to an offering of equity securities by the Company for its own account
or for the account of any security holders of any class of its equity securities
(other than (i) a registration statement on Form S-4 or S-8 (or any substitute
form that may be adopted by the Commission) or (ii) a registration statement
filed in connection with an exchange offer or offering of securities solely to
the Company's existing security holders), then the Company shall give written
notice of such proposed filing to the Investor as soon as practicable (but in no
event less than 20 days before the anticipated filing date), and such notice
shall offer the Investor and the Permitted Transferees, the opportunity to
register such number of shares of Registrable Securities as the Investor may
request, (which request shall specify the Registrable Securities intended to be
disposed of by such Holder and the intended method of distribution thereof) (a
"Piggy-Back Registration") .
The Company shall use its reasonable efforts to cause the managing
Underwriter or Underwriters of a proposed underwritten offering to permit the
Registrable Securities requested by the Investor to be included in a Piggy-Back
Registration (the "Piggy-Back Holders") to be included on the same terms and
conditions as any similar securities of the Company or any other security holder
included therein and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method of distribution thereof. The
Investor shall have the right to withdraw its request for inclusion of its
Registrable Securities in any registration statement pursuant to this Section
2.2 by giving written notice to the Company of its request to withdraw. Subject
to the provisions of Section 2.1, the Company may withdraw a Registration
Statement for its own account at any time prior to the time it becomes
effective, provided that the Company shall reimburse the Investor for all
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reasonable out-of-pocket expenses (including counsel fees and expenses) incurred
by Investor prior to such withdrawal.
No registration effected under this Section 2.2, and no failure to
effect a registration under this Section 2.2, shall relieve the Company of its
obligations pursuant to Section 2.1, and no failure to effect a registration
under this Section 2.2 and to complete the sale of Shares in connection
therewith shall relieve the Company of any other obligation under this Agreement
(including, without limitation, the Company's obligations under Sections 3.2 and
5.1).
Section 2.3 Reduction of Offering.
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(a) Demand Registration. The Company may include in a Demand
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Registration, Shares for the account of the Company, Registrable Securities for
the account of the Investor (which for purposes of this Agreement "account of
the Investor" includes all Permitted Transferees) and Shares for the account of
other holders thereof exercising contractual piggyback rights, on the same terms
and conditions as the Registrable Securities to be included therein for the
account of the Investor and the Permitted Transferees; provided, however, that
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(i) if the managing Underwriter or Underwriters of any underwritten offering
described in Section 2.1 have informed the Company in writing that it is their
opinion that the total number of Shares which the Investor, the Company, and
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any such other holders intend to include in such offering is such as to
materially and adversely affect the success of such offering, then (x) the
number of Shares to be offered for the account of such other holders shall be
reduced (to zero, if necessary), in the case of this clause (x) pro rata in
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proportion to the respective number of Shares requested to be registered and (y)
thereafter, if necessary, the number of Shares to be offered for the account of
the Company (if any) shall be reduced (to zero, if necessary), to the extent
necessary to reduce the total number of Shares requested to be included in such
offering to the number of Shares, if any, recommended by such managing
Underwriters (and if the number of Shares to be offered for the account of each
such Person has been reduced to zero, and the number of Shares requested to be
registered by the Investor exceeds the number of Shares recommended by such
managing Underwriters, then the number of Shares to be offered for the account
of the Investor and the Permitted Transferees shall be reduced) and (ii) if the
offering is not underwritten, no other party (other than other holders
exercising contractual piggyback rights), including the Company, shall be
permitted to offer securities under any such Demand Registration unless the
Investor consents to the inclusion of such shares therein.
(b) Piggy-Back Registration.
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(i) Notwithstanding anything contained herein, if the managing
Underwriter or Underwriters of any underwritten offering described in Section
2.2 have informed, in writing, the Company that it is their opinion that the
total number of Shares that the Company and any other Persons desiring to
participate in such registration intend to include in such offering is such as
to materially and adversely affect the success of such offering, then the number
of Shares to be offered for the account of the Investor and all such other
Persons (other than the Company) participating in such registration shall be
reduced (to zero, if necessary) or limited pro rata in proportion to the
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respective number of Shares requested to be registered to the extent necessary
to reduce the total number of Shares requested to be included in such offering
to the number of Shares, if any, recommended by such managing Underwriters;
provided, however, that if such offering is effected for the account of any an
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Apollo Holder (as defined in the Registration Rights Agreement dated November 4,
1997 between Paragon and the signatories thereto (the "Apollo Registration
Rights Agreement")) or transferee of an Apollo Holder pursuant thereto, then (x)
the number of Shares to be offered for the account of the Investor and any other
holders that have requested to include Shares in such registration (other than
parties to the Apollo Registration Rights Agreement) shall be reduced (to zero,
if necessary), in the case of this clause (x) pro rata in proportion to the
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respective number of Shares requested to be registered and (y) thereafter, if
necessary, the number of Shares to be offered for the account of the Company (if
any) shall be reduced (to zero, if necessary), to the extent necessary to reduce
the total number of Shares requested to be included in such offering to the
number of Shares, if any, recommended by such managing Underwriters and (z)
thereafter, if necessary, the Shares to be offered for the accounts of the
parties to the Apollo Registration Rights Agreement shall be reduced as provided
therein.
(ii) If the managing Underwriter or Underwriters of any underwritten
offering described in Section 2.2 notify the Company that the kind of securities
that the Investor, the Company or any other Persons desiring to participate in
such registration intend to include in
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such offering is such as to materially and adversely affect the success of such
offering, then the Shares to be included in such offering by the Investor shall
be reduced as described in clause (i) above or if such reduction would, in the
judgment of the managing Underwriter or Underwriters, be insufficient to
substantially eliminate the adverse effect that inclusion of the Shares
requested to be included would have on such offering, such Shares will be
excluded from such offering.
ARTICLE III
REGISTRATION PROCEDURES
Section 3.1 Filings; Information. Whenever the Company is required
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to effect or cause the registration of Registrable Securities pursuant to
Section 2.1, the Company will use its best efforts to effect the registration
and the sale of such Registrable Securities in accordance with the intended
method of disposition thereof as quickly as practicable, and in connection with
any such request:
(a) The Company will as expeditiously as possible prepare and file
with the Commission a Registration Statement on any form for which the Company
then qualifies or which counsel for the Company shall deem appropriate and which
form shall be available for the sale of the Registrable Securities to be
registered thereunder in accordance with the intended method of distribution
thereof, and use its best efforts to cause such filed Registration Statement to
become and remain effective for a period of not less than 120 days, or six
months with respect to a "shelf" registration (or such shorter period as is
required to complete the distribution of the shares); provided that the Company
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may postpone, not more than three (3) times during the Demand Right period, the
filing of a Registration Statement for a period of not more than 90 days from
the date of receipt of the request in accordance with Section 2.1 if the Company
reasonably determines that such a filing would adversely affect any proposed
financing or acquisition by the Company which is material to the Company, and
furnishes to the Investor a certificate signed by an executive officer of the
Company to such effect. If the Company postpones the filing of a Registration
Statement, it shall promptly notify the Investor in writing when the events or
circumstances permitting such postponement have ended.
(b) The Company will as expeditiously as possible 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 continuously effective (subject to the second
to last paragraph of this Section 3.1) for a period of not less than 120 days,
or six months with respect to a "shelf" registration, or such shorter period
which will terminate when all securities covered by such Registration Statement
have been sold or the Demand Period has expired (but not before the expiration
of the 90-day period referred to in Section 4(3) of the Securities Act and Rule
174 thereunder, if applicable) and comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
Registration Statement during such period in accordance with the intended
methods of disposition by each Selling Holder thereof set forth in such
Registration Statement.
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(c) The Company will, prior to filing a Registration Statement or
prospectus or any amendment or supplement thereto (including documents that
would be incorporated or deemed to be incorporated therein by reference),
furnish to the Investor, counsel representing the Investor, and each
Underwriter, if any, of the Registrable Securities covered by such Registration
Statement copies of such Registration Statement as proposed to be filed,
together with exhibits thereto, which documents will be subject to review and
comment by the foregoing within five days after delivery, and thereafter furnish
to the Investor, counsel and Underwriter, if any, for their review and comment
such number of copies of such Registration Statement, each amendment and
supplement thereto (in each case including all exhibits thereto and documents
incorporated by reference therein), the Prospectus included in such Registration
Statement and such other documents or information as the Investor, counsel or
Underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by the Investor.
(d) After the filing of the Registration Statement, the Company will
promptly notify the Investor, (i) when a Prospectus or any supplement thereto or
post-effective amendment has been filed and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the Commission or any other Federal or state governmental
authority for amendments or supplements to a Registration Statement or related
Prospectus or for additional information, (iii) of the issuance by the
Commission or any other Federal or state governmental authority of any stop
order suspending the effectiveness of a Registration Statement or the initiation
of any proceedings for that purpose, (iv) if at any time when a prospectus is
required by the Securities Act to be delivered in connection with sales of the
Registrable Securities, the representations and warranties of the Company
contained in any agreement contemplated by Section 3.1(h) (including any
underwriting agreement) cease to be true and correct in all material respects,
(v) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (vi) of the happening of any
event which makes any statement made in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires the making of any
changes in a Registration Statement, Prospectus or documents incorporated
therein by reference so that, in the case of the Registration Statement, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (vii) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be necessary.
(e) The Company will use its best efforts to (i) register or qualify
the Registrable Securities under such other securities or blue sky laws of such
jurisdictions in the United States as the Investor reasonably (in light of the
Investor's intended plan of distribution) requests, and (ii)
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cause such Registrable Securities to be registered with or approved by such
other governmental agencies or authorities in the United States as may be
necessary by virtue of the business and operations of the Company and do any and
all other acts and things that may be reasonably necessary or advisable to
enable the Investor to consummate the disposition of the Registrable Securities
then owned by the Investor and the Permitted Transferee; provided that the
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Company will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (e), (B) subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction.
(f) The Company will take all reasonable actions required to prevent
the entry, or obtain the withdrawal, of any order suspending the effectiveness
of a Registration Statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of any Registrable Securities
for sale in any jurisdiction, at the earliest moment.
(g) Upon the occurrence of any event contemplated by paragraph
3.1(d)(vi) or 3.1(d)(vii) above, the Company will (i) prepare a supplement or
post-effective amendment to such Registration Statement or a supplement to the
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder, such Prospectus will not
contain 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, in
light of the circumstances under which they were made, not misleading, and (ii)
promptly make available to the Investor any such supplement or amendment.
(h) The Company will enter into customary agreements (including, if
applicable, an underwriting agreement in customary form and which is reasonably
satisfactory to the Company) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Registrable
Securities (the Investor may, at his option, require that any or all of the
representations, warranties and covenants of the Company to or for the benefit
of such Underwriters also be made to and for the benefit of the Investor).
(i) The Company will make available to the Investor (and will deliver
to his counsel) and each Underwriter, if any, subject to restrictions imposed by
the United States federal government or any agency or instrumentality thereof,
copies of all correspondence between the Commission and the Company, its counsel
or auditors and will also make available for inspection by the Investor, any
Underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or other professional retained by the
Investor or Underwriter, all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records") as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers and employees to supply all
information reasonably requested by any inspectors in connection with such
Registration Statement. The Investor agrees that information obtained by it
solely as a result of such inspections (not including any information obtained
from a third party who, insofar as is known to the Investor after reasonable
inquiry, is not prohibited from providing such information by a contractual,
legal or
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fiduciary obligation to the Company) shall be deemed confidential and shall not
be used by it as the basis for any market transactions in the securities of the
Company or its affiliates unless and until such information is made generally
available to the public. The Investor further agrees that it will, upon learning
that disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential.
(j) The Company will furnish to the Investor and to each Underwriter,
(i) an opinion or opinions of counsel to the Company, and (ii) a comfort letter
or comfort letters from the Company's independent public accountants, each in
customary form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as the Investor or the managing
Underwriter therefor reasonably requests.
(k) In connection with an underwritten offering, the Company will
participate, to the extent reasonably requested by the managing Underwriter for
the offering or the Investor, in customary efforts to sell the securities under
the offering, including, without limitation, participating in "road shows."
The Company may require the Investor and each Permitted Transferee to
promptly furnish in writing to the Company such information regarding the
distribution of the Registrable Securities by the Investor and each Permitted
Transferee as the Company may from time to time reasonably request and such
other information as may be legally required in connection with such
registration including, without limitation, all such information as may be
requested by the Commission or the NASD. The Company may exclude from such
registration any Holder who fails to provide such information.
The Investor and each Permitted Transferee agrees that, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Sections 3.1(d)(iii), (v), (vi) and (vii) hereof, the Investor will
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until the Investor's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3.1(g) hereof, and, if so directed by the Company, the Investor will
deliver to the Company all copies, other than permanent file copies, then in
such Selling Holder's possession of the most recent Prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event the
Company shall give such notice, the Company shall extend the period during which
such Registration Statement shall be maintained effective (including the period
referred to in Section 3.1(a) hereof) by the number of days during the period
from and including the date of the giving of notice pursuant to Section
3.1(d)(iii), (v), (vi) or (vii) hereof to the date when the Company shall make
available to the Investor a Prospectus supplemented or amended to conform with
the requirements of Section 3.1(g) hereof.
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In connection with any registration of Registrable Securities pursuant
to Section 2.2, the Company will take the actions contemplated by paragraphs
(c), (d), (e), (g), (h), (i) and (j) above.
Section 3.2 Registration Expenses. In connection with the Demand
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Registrations pursuant to Section 2.1 hereof, and any Registration Statement
filed pursuant to Section 2.2 hereof, the Company shall pay the following
registration expenses incurred in connection with the registration hereunder
(the "Registration Expenses"): (i) all registration and filing fees, (ii) fees
and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) printing expenses, (iv) the
Company's internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties)
and all fees and expenses incident to the performance of or compliance with this
Agreement by the Company, (v) the fees and expenses incurred in connection with
the listing of the Registrable Securities, (vi) reasonable fees and
disbursements of counsel for the Company and customary fees and expenses for
independent certified public accountants retained by the Company (including the
expenses of any comfort letters or costs associated with the delivery by
independent certified public accountants of a comfort letter or comfort
letters), (vii) the reasonable fees and expenses of any special experts retained
by the Company in connection with such registration, and (viii) reasonable fees
and expenses of one firm of counsel for the Investor (together with necessary
local counsel fees and expenses), which counsel shall be chosen by the Investor.
The Company shall have no obligation to pay any underwriting fees, discounts or
commissions attributable to the sale of Registrable Securities.
Section 3.3 Financial Statements. Anything in this Article III to
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the contrary notwithstanding, the Company shall not be obligated to effect any
registration pursuant to Section 2.1 or 2.2 if such registration would require
the Company (i) to furnish any financial statements other than as of the end of
a fiscal quarter or (ii) to furnish any certified financial statements other
than as of the end of a fiscal year unless the Investor agrees to bear the
expenses of furnishing such financial statements.
ARTICLE IV
TRANSFER
Section 4.1 Transfer of Registrable Securities and Legend.
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(a) The Investor acknowledges that the Registrable Securities will
not be, except as otherwise provided herein, registered under the Securities
Act, and the Investor agrees, until such Registrable Securities are registered,
not to offer, sell, pledge or otherwise dispose of any Registrable Securities or
any interest therein, unless done pursuant to the terms contained in this
Article IV.
(b) The Investor acknowledges that each certificate representing
Registrable
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Securities shall bear the following legend:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE BLUE SKY LAWS OF ANY STATE AND MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO A REGISTRATION
STATEMENT UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
THEREUNDER. TRANSFER OF THIS SECURITY IS ALSO SUBJECT TO RESTRICTIONS
CONTAINED IN THAT CERTAIN REGISTRATION RIGHTS AGREEMENT DATED AS OF
____________, 1998, AMONG THE ISSUER HEREOF AND A SHAREHOLDER OF THE
ISSUER."
In the event any of the Registrable Securities are registered under the
Securities Act, the legends set forth in this subsection (b) shall be removed
from the certificates representing such Registrable Securities, and the Company
shall promptly, after presentation by the Investor of any certificates held by
it, cause its transfer agent to issue new certificates without such legends;
provided, however, that if such Registrable Securities are not sold or otherwise
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transferred by the Investor holding such certificates substantially in
accordance with the plan of distribution set forth in the registration statement
and during the time period that the registration statement with respect thereto
is effective under the Securities Act, the Investor shall surrender the
certificates without such legend to the Company and shall receive in exchange
therefor replacement certificates containing the legend set forth above. In
addition, if any Registrable Securities shall be saleable at any time without
restriction under the Securities Act, and the Company receives an opinion of the
Investor's counsel, if requested by the Company and at the Company's cost and
expense, to such effect, with which the Company's counsel reasonably agrees, the
Company shall promptly, after presentation of certificates for such Registrable
Securities by the Investor, issue new certificates without the legend required
by this Section 4.1; provided, however, that no such opinion shall be required
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with respect to Registrable Securities that are eligible for sale under
paragraph (k) of Rule 144 or any similar or successor rule.
(c) The Company is hereby authorized to, and shall, issue to its
transfer agent, and shall note upon its books, "stop transfer" instructions with
respect to all of the Registrable Securities.
Section 4.2 Transfer Procedure. The Investor will not sell, pledge,
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transfer or otherwise dispose of any Registrable Securities, other than a
transfer pursuant to Rule 144, or to a Permitted Transferee until the same shall
have been registered under the Securities Act pursuant to Article II or the
Company shall have received the following: (i) written notice describing in
reasonable detail the proposed sale, pledge,
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transfer or other disposition, (ii) a legal opinion in form and substance
reasonably satisfactory to the Company, to the effect that the proposed sale,
pledge, transfer or other disposition may be legally effected without
registration under the Securities Act; and (iii) such supporting documents and
supplementary assurances, if any, as the Company reasonably and promptly may
request in order to assure compliance with the Securities Act. Upon receipt by
the Company of any such notice and opinion, and any information reasonably
requested in connection therewith, the Investor and each Permitted Transferee
shall thereupon be entitled to transfer such Registrable Securities in
accordance with the terms of the notice delivered by the Investor and each
Permitted transferee to the Company, subject to the requirements of Section 4.3.
Each certificate evidencing the Registrable Securities issued upon the transfer
of any such Registrable Securities (and each certificate evidencing any
untransferred balance of such Registrable Securities) shall bear the legend set
forth in Section 4.1(b) unless in the opinion of the Company's counsel such
legend is not necessary.
ARTICLE V
INDEMNIFICATION AND CONTRIBUTION
Section 5.1 Indemnification by the Company. The Company agrees to
------------------------------
indemnify and hold harmless the Investor and each Permitted Transferee and each
person who contracts such Permitted Transferee within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against any
loss, claim, damage, liability, reasonable attorneys' fee, cost or expense and
costs and expenses of investigating and defending any such claim (collectively,
the "Damages"), joint or several, and any action in respect thereof to which the
Investor and each Permitted Transferee may become subject under the Securities
Act or otherwise, insofar as such Damages (or proceedings in respect thereof)
arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus relating to the Registrable Securities or any preliminary Prospectus,
or arises out of, or are based upon, any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are based upon
information furnished in writing to the Company by the Investor and each
Permitted Transferee or Underwriter expressly for use therein, and shall
reimburse the Investor and each Permitted Transferee for any legal and other
expenses reasonably incurred by the Investor and each Permitted Transferee in
investigating or defending or preparing to defend against any such Damages or
proceedings; provided, however, that the Company shall not be liable to the
-------- -------
Investor and each Permitted Transferee to the extent that (a) any such Damages
arise out of or are based upon an untrue statement or omission made in any
preliminary prospectus if (i) the Investor failed to send or deliver a copy of
the final Prospectus with or prior to the delivery of written confirmation of
the sale by the Investor and each Permitted Transferee to the Person asserting
the claim from which such Damages arise, and (ii) the final Prospectus would
have corrected such untrue statement or such omission; or (b) any such Damages
arise out of or are based upon an untrue statement or omission in any Prospectus
if (x) such untrue statement or omission is corrected in an amendment or
supplement to such Prospectus, and (y) having previously been furnished by or on
behalf of the Company with copies of such Prospectus as so amended or
supplemented, the Investor and each Permitted Transferee thereafter fails to
deliver such Prospectus as so amended or supplemented prior
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to or concurrently with the sale of a Registrable Security to the Person
asserting the claim from which such Damages arise.
Section 5.2 Indemnification by Investor and each Permitted
----------------------------------------------
Transferee. The Investor and each Permitted Transferee agrees, jointly and
----------
severally, to indemnify and hold harmless the Company, its officers, directors,
employees and agents 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, together with the partners, officers, directors, employees and agents of
such controlling Person, to the same extent as the foregoing indemnity from the
Company to the Investor, but only with reference to information related to the
Investor and each Permitted Transferee, or its plan of distribution, furnished
in writing by the Investor and each Permitted Transferee or on the Investor's
and each Permitted Transferee's behalf expressly for use in any Registration
Statement or Prospectus relating to the Registrable Securities, or any amendment
or supplement thereto, or any preliminary Prospectus. In case any action or
proceeding shall be brought against the Company or its officers, directors,
employees or agents or any such controlling Person or its partners, officers,
directors, employees or agents, in respect of which indemnity may be sought
against the Investor and each Permitted Transferee, the Investor and each
Permitted Transferee shall have the rights and duties given to the Company, and
the Company or its officers, directors, employees or agents, controlling Person,
or its partners, officers, directors, employees or agents, shall have the rights
and duties given to the Investor, under Section 5.1. The Investor and each
Permitted Transferee also agrees to indemnify and hold harmless each other
Selling Holder and any Underwriters of the Registrable Securities, and their
respective officers and directors and each Person who controls each such other
Selling Holder or Underwriter on substantially the same basis as that of the
indemnification of the Company provided in this Section 5.2. The Company shall
be entitled to receive indemnities from Underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above, with respect to information
so furnished in writing by such Persons specifically for inclusion in any
Prospectus or Registration Statement. In no event shall the liability of the
Investor and each Permitted Transferee be greater in amount than the dollar
amount of the proceeds (net of payment of all expenses) received by the Investor
upon the sale of the Registrable Securities giving rise to such indemnification
obligation.
Section 5.3 Conduct of Indemnification Proceedings. Promptly after
--------------------------------------
receipt by any Person in respect of which indemnity may be sought pursuant to
Section 5.1 or 5.2 (an "Indemnified Party") of notice of any claim or the
commencement of any action, the Indemnified Party shall, if a claim in respect
thereof is to be made against the Person against whom such indemnity may be
sought (an "Indemnifying Party") notify the Indemnifying Party in writing of the
claim or the commencement of such action, provided that the failure to notify
--------
the Indemnifying Party shall not relieve it from any liability except to the
extent of any material prejudice resulting therefrom. If any such claim or
action shall be brought against an Indemnified Party, and it shall notify the
Indemnifying Party thereof, the Indemnifying Party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified Indemnifying Party, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party; provided, that the
--------
Indemnifying Party acknowledges, in a writing in form and substance reasonably
satisfactory to such
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Indemnified Party, such Indemnifying Party's liability for all Damages of such
Indemnified Party to the extent specified in, and in accordance with, this
Article V. After notice from the Indemnifying Party to the Indemnified Party of
its election to assume the defense of such claim or action, the Indemnifying
Party shall not be liable to the Indemnified Party for any legal or other
expenses subsequently incurred by the Indemnified Party in connection with the
defense thereof other than reasonable costs of investigation; provided that the
--------
Indemnified Party shall have the right to employ separate counsel to represent
the Indemnified Party and its controlling Persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Indemnified Party against the Indemnifying Party, but the fees and
expenses of such counsel shall be for the account of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) in the reasonable judgment of
such Indemnified Party, representation of both parties by the same counsel would
be inappropriate due to actual or potential conflicts of interest between them,
it being understood, however, that the Indemnifying Party shall not, in
connection with any one such claim or action or separate but substantially
similar or related claims or actions in the same jurisdiction arising out of the
same general allegations or claims, be liable for the fees and expenses of more
than one separate firm of attorneys (together with appropriate local counsel) at
any time for all Indemnified Parties, or for fees and expenses that are not
reasonable. No Indemnifying Party shall, without the prior written consent of
the Indemnified Party, effect any settlement of any claim or pending or
threatened proceeding in respect of which the Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such claim or proceeding.
Whether or not the defense of any claim or action is assumed by the Indemnifying
Party, such Indemnifying Party will not be subject to any liability for any
settlement made without its consent, which consent will not be unreasonably
withheld.
Section 5.4 Contribution. If the indemnification provided for in
------------
this Article V is unavailable to the Indemnified Parties in respect of any
Damages referred to herein, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Damages (i) as between the
Company and the Investor and/or each Permitted Transferee on the one hand and
the Underwriters on the other, in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Investor and/or each
Permitted Transferee on the one hand and the Underwriters on the other from the
offering of the Registrable Securities, or if such allocation is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits but also the relative fault of the Company and the Investor on
the one band and of the Underwriters on the other in connection with the
statements or omissions which resulted in such Damages, as well as any other
relevant equitable considerations, and (ii) as between the Company on the one
hand and the Investor and/or each Permitted Transferee on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
the Investor and/or each Permitted Transferee in connection with such statements
or omissions, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Investor on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total proceeds from
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the offering (net of underwriting discounts and Commissions but before deducting
expenses) received by the Company and the Investor bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page or underwriting section of the
prospectus. The relative fault of the Company and the Investor and/or each
Permitted Transferee on the one hand and of the Underwriters on the other 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 and the Investor
and/or each Permitted Transferee or by the Underwriters. The relative fault of
the Company on the one hand and of each Selling Holder on the other 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 such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Investor agree that it would not be just and
equitable if contribution pursuant to this Section 5.4 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Party as a result of the Damages
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5.4, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Registrable Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and the Investor and each Permitted Investor shall be
required to contribute, jointly and severally, any amount in excess of the
amount by which the total price at which the Registrable Securities of the
Investor and each Permitted Investor and each Permitted Investor were offered to
the public (less underwriting discounts and commissions) exceeds the amount of
any damages which the Investor and each Permitted Investor has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
The indemnity, contribution and expense reimbursement obligations
contained in this Article V are in addition to any liability any Indemnifying
Party may otherwise have to an Indemnified Party or otherwise. The provisions
of this Article V shall survive, notwithstanding any termination of this
Agreement.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1 Representations and Warranties of Investor. The Investor
------------------------------------------
for himself and on behalf of any Permitted Transferee hereby represents and
warrants to the Company as follows:
(a) The Investor understands that the Registrable Securities will not
be registered under the Securities Act and will be, until registered,
"restricted securities" as defined in Rule 144 promulgated under the Securities
Act ("Rule 144").
(b) This Agreement is made with the Investor in reliance upon the
Investor's representations and warranties to the Company that the Registrable
Securities received by the Investor will be acquired for investment for the
Investor's own account, and not with a view to the resale or distribution of any
part thereof, and that the Investor has no present intention of selling,
granting participations in, or otherwise distributing the same. By executing
this Agreement, the Investor further represents and warrants that the Investor
does not have presently any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participations to any such person, or to
any third person, with respect to any Registrable Securities.
(c) The Investor understands that the Registrable Securities will not
be registered as of the date hereof under the Securities Act and will be exempt
from registration pursuant to Section 4(2) thereof, and that the Company's
reliance on such exemption is predicated in part on each of the Investor's
representations and warranties set forth herein.
(d) The Investor is experienced in evaluating and investing in
securities issued by companies such as the Company, is able to fend for itself
in the transactions contemplated by this Agreement, has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the Investor's investment, and has the ability to bear the
economic risks of the Investor's investment. The Investor further represents
and warrants that the Investor has had, during the course of this transaction
and prior to the issuance of the Registrable Securities, the opportunity to ask
questions of, and receive answers from, the Company and its management and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of any information furnished to the Investor or
to which the Investor had access. Without limiting the generality of the
foregoing, the Investor acknowledges that it has received a copy of all of the
SEC Reports (as defined below).
Section 6.2 Representations and Warranties of the Company. The
---------------------------------------------
Company hereby represents and warrants to the Investor as follows:
(a) The Registrable Securities have been duly authorized and are
validly issued, fully paid, nonassessable and free of preemptive rights.
-16-
(b) Exhibit A hereto sets forth a list of each registration
---------
statement, report, proxy statement or other filings filed by the Company with
the Commission within the previous three fiscal years ended September 30, 1997
and from such date through the date hereof, accurate and complete copies of
which have been delivered to the Investor, other than registration statements on
Form S-8. The Company has filed all registration statements, proxy statements,
reports and other filings and all amendments thereto which it was required to
file with the Commission. As of its date, none of said filings contained any
untrue statement of a material fact or omitted any material fact necessary to
make the statements therein not misleading, except to the extent any such
statement or omission has been modified or superseded in a document subsequently
filed with the appropriate authority.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Participation in Underwritten Registrations. The
-------------------------------------------
Investor and the Permitted Transferees may not participate in any underwritten
registration hereunder unless the Investor and the Permitted Transferees (a)
agrees to sell the 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 questionnaires,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements and these registration rights;
provided that (i) the Investor and each Permitted Transferee shall not be
--------
required to make any representations or warranties except those which relate
solely to the Investor and each Permitted Transferee and its intended method of
distribution, and (ii) the liability of the Investor and each Permitted
Transferee to any Underwriter under such underwriting agreement will be limited
to liability arising from misstatements or omissions regarding the Investor and
its intended method of distribution and any such liability shall not exceed an
amount equal to the amount of net proceeds the Investor and each Permitted
Transferee derives from such registration; provided, however, that in an
--------
offering by the Company in which the Investor and each Permitted Transferee
requests to be included in a Piggy-Back Registration, the Company shall use its
best efforts to arrange the terms of the offering such that the provisions set
forth in clauses (i) and (ii) of this Section 7.1 are true; provided further,
----------------
that if the Company fails in its best efforts to so arrange the terms, the
Investor and each Permitted Transferee may withdraw all or any part of its
Registrable Securities from the Piggy-Back Registration and the Company shall
reimburse the Investor and each Permitted Transferee for all reasonable out-of-
pocket expenses (including counsel fees and expenses) incurred prior to such
withdrawal.
Section 7.2 Rules 144 and 144A. The Company covenants that it will
------------------
file any reports required to be filed by it under the Securities Act and the
Exchange Act and that it will take such further action as the Investor may
reasonably request, all to the extent required from time to time to enable the
Investor to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
or Rule 144A under the Securities Act, as such Rules may be amended from time to
time, or (b) any similar rule or regulation hereafter
-17-
adopted by the Commission. Upon the request of the Investor, the Company will
deliver to the Investor a written statement as to whether it has complied with
such requirements.
Section 7.3 Holdback Agreements.
-------------------
(a) Restrictions on Public Sale by Holder of Registrable Securities. The
---------------------------------------------------------------
Investor agrees not to effect any public sale or distribution of the issue being
registered or of a similar security of the Company, or any securities
convertible into or exchangeable or exercisable for such securities, including a
sale pursuant to Rule 144 or Rule 144A under the Securities Act, during the 14
days prior to, and during the 90-day period beginning on, the effective date of
any registration statement filed by the Company (except as part of such
registration), in the case of an underwritten public offering, if, and to the
extent, requested by the managing Underwriter or Underwriters.
(b) Restrictions on Sale by the Company and Others. The Company agrees and
----------------------------------------------
shall use its commercially reasonable best efforts to cause its Affiliates to
agree (i) not to effect any public sale or distribution of any securities
similar to those being registered in accordance with Section 2.1 hereof, or any
securities convertible into or exchangeable or exercisable for such securities,
during the 14 days prior to, and during the 90-day period beginning on, the
effective date of any Registration Statement (except as part of such
Registration Statement), in the case of an underwritten offering, if, and to the
extent, reasonably requested by the managing Underwriter or Underwriters, and
(ii) to use its best efforts to ensure that any agreement entered into after the
date hereof pursuant to which the Company issues or agrees to issue any
privately placed securities (other than to officers or employees) shall contain
a provision under which holders of such securities agree not to effect any sale
or distribution of any such securities during the periods described in (i)
above, in each case including a sale pursuant to Rule 144 or Rule 144A under the
Securities Act (except as part of any such registration, if permitted);
provided, however, that the provisions of this paragraph (b) shall not prevent
-------- -------
(x) the conversion or exchange of any securities pursuant to their terms into or
for other securities or (y) the issuance of any securities to employees of the
Company or pursuant to any employee plan.
Section 7.4 Amendment and Modification. Any provision of this
--------------------------
Agreement may be waived, provided that such waiver is set forth in a writing
--------
executed by the party against whom the enforcement of such waiver is sought.
This Agreement may not be amended, modified or supplemented other than by a
written instrument signed by the parties hereto. No course of dealing between
or among any Persons having any interest in this Agreement will be deemed
effective to modify, amend or discharge any part of this Agreement or any rights
or obligations of any Person under or by reason of this Agreement.
Section 7.5 Successors and Assigns: Entire Agreement.
----------------------------------------
(a) This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns and executors,
-18-
administrators and heirs; provided, that except as otherwise specifically
permitted pursuant to this Agreement, neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by the Company
without the prior written consent of the Investor, provided, however, that this
-------- -------
provision shall not be construed so as to prohibit the Company from engaging in
any merger, other corporate reorganization or change in control without first
obtaining the consent of the Investor.
(b) This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter hereof and merges and supersedes
all prior discussions, agreements and understandings of any and every nature
among them.
Section 7.6 Separability. In the event that any provision of this
------------
Agreement or the application of any provision hereof is declared to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall not be affected except to the extent necessary
to delete such illegal, invalid or unenforceable provision unless that provision
held invalid shall substantially impair the benefits of the remaining portions
of this Agreement.
Section 7.7 Notices. All notices, demands, requests, consents or
-------
approvals (collectively, "Notices") required or permitted to be given hereunder
or which are given with respect to this Agreement shall be in writing and shall
be personally delivered or delivered by a reputable overnight courier service
with charges prepaid, or transmitted by hand delivery, telegram, telex or
facsimile, addressed as set forth below, or such other address as such party
shall have specified most recently by written notice. Notice shall be deemed
given or delivered on the date of service or transmission if personally served
or transmitted by telegram, telex or facsimile. Notice otherwise sent as
provided herein shall be deemed given or delivered on the next business day
following delivery of such notice to a reputable overnight courier service.
(a) if to Paragon or Acquisition Sub, to:
Paragon Health Network, Inc.
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Office of the Chief
Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Paragon Health Network, Inc.
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Sydney X. Xxxxx, Xx.
Vice President and Associate General Counsel
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(b) if to the JDBK or the Stockholder, to:
Xxxxxx X. Xxxxxxx, III
X.X. Xxx 0000
Xxxxxx, XX 00000
Delivery Address:
0 Xxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
with a copy to:
Xxxx X. Xxxxxx, Esq.
Mailing Address:
Xxxxxxx & Xxxxxx, P.A.
X.X. Xxx 00000
Xxxxxxxxxx, XX 00000
Overnight Delivery Address:
Xxxxxxx & Xxxxxx, P.A.
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Xxxxx Xxxxxxxx, Esq.
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Courtesy Notices to:
Xxxxxxx Xxxxxxx, CPA
Brigman, Holcomb, Weeks & Co., P.A.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
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Section 7.8 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal law of the State of Georgia, without
giving effect to principles of conflicts of law.
Section 7.9 Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not constitute a part of this Agreement,
nor shall they affect their meaning, construction or effect.
Section 7.10 Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which shall be deemed to be an original
instrument and all of which together shall constitute one and the same
instrument.
Section 7.11 Further Assurances. Each party shall cooperate and take
------------------
such action as may be reasonably requested by another party in order to carry
out the provisions and purposes of this Agreement and the transactions
contemplated hereby.
Section 7.12 Termination. Unless sooner terminated in accordance
-----------
with its terms or as otherwise herein provided, this Agreement shall terminate
upon the earlier to occur of (i) the mutual agreement by the parties hereto,
(ii) the date on which the Investor ceases to own any Registrable Securities or
(iii) the fifth anniversary of the date hereof, provided, however, that the
-------- -------
indemnification provisions of Article V and the expense provisions of Section
3.2 shall survive any such termination without limitation, and the provisions of
Article IV shall terminate 24 months from the date of this Agreement without
regard to any earlier termination of this Agreement.
Section 7.13 Remedies. In the event of a breach or a threatened
--------
breach by any party to this Agreement of its obligations under this Agreement,
any party injured or to be injured by such breach will be entitled to specific
performance of its rights under this Agreement or to injunctive relief, in
addition to being entitled to exercise all rights provided in this Agreement and
granted by law. The parties agree that the provisions of this Agreement shall
be specifically enforceable, it being agreed by the parties that the remedy at
law, including monetary damages, for breach of any such provision will be
inadequate compensation for any loss and that any defense or objection in any
action for specific performance or injunctive relief that a remedy at law would
be adequate is waived.
Section 7.14 Pronouns. Whenever the context may require, any
--------
pronouns used herein shall be deemed also to include the corresponding neuter,
masculine or feminine forms.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PARAGON HEALTH NETWORK, INC.
By: /s/ R. Xxxxxxx Xxxxxx
------------------------------------
Name: R. Xxxxxxx Xxxxxx
Title: Senior Vice President - Development
Investor
/s/ Xxxxxx Xxxxxxx
-----------------------------------
By: Xxxxxx Xxxxxxx
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