REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of February
6, 2002 by and between RTIN Holdings, Inc., a Texas corporation (the "Company"),
and Xxxxxxxx Xxxxx and Xxx X. Xxx (collectively, "Founders").
WHEREAS, the Company and Founders have entered into that certain Stock
Purchase Agreement, dated as of December 5, 2001 (the "Stock Purchase
Agreement"), providing for, among other things, the issuance to Founders and
their designated assignees, in the aggregate, 3,521,127 shares of the Company's
common stock, par value $0.01 per share ("Common Stock"); and
WHEREAS, the Section 7.2 of the Stock Purchase Agreement provides that
Founders shall have the right to rescind the Stock Purchase Agreement if the
Company fails to fulfill its funding obligations as set forth in Sections 5.1
and 5.2 therein in accordance with the timetables set forth in Schedules 5.1 and
5.2 therein;
WHEREAS, in exchange for the execution and delivery of this Agreement
by and between the Company and the Founders, the Founders have agreed to grant
the Company an extension until February 28, 2002 to fulfill its above-referenced
funding obligations under the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. Definitions. For the purposes of this Agreement, the following terms
shall have the following meanings:
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities
Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute and the rules and
regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"Holder" shall mean Founders and those Persons designated
under Section 2.2 of the Stock Purchase Agreement.
"Person" shall mean any individual, corporation, partnership,
limited liability company or partnership, association, trust or other
entity or organization, including a government or a political
subdivision or an agency or instrumentality thereof.
"Registrable Securities" shall mean the Common Stock issued or
issuable under the Stock Purchase Agreement and any securities issued
by the Company in respect of such shares of Common Stock. As to any
particular Registrable Securities, once issued such securities shall
cease to be Registrable Securities on the earlier of (i) the date on
which a registration statement with respect to the sale of such
securities has been declared effective under the Securities Act and
such securities have been disposed of in accordance with such
registration statement, (ii) the date on which they have been otherwise
transferred, new certificates for them not bearing a legend restricting
further transfer having been delivered by the Company and subsequent
disposition of them not requiring registration or qualification of them
under the Securities Act or any state securities or blue sky law then
in force, or (iii) the date on which they have ceased to be
outstanding.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance with this Agreement,
including, without limitation, (i) all Commission and stock exchange or
National Association of Securities Dealers, Inc. registration and
filing fees, (ii) all fees and expenses of complying with securities or
blue sky laws, (iii) all printing, messenger and delivery expenses,
(iv) all fees and expenses incurred in connection with the listing of
the Registrable Securities on any securities exchange pursuant to
paragraph (viii) of Section 4, (v) the fees and disbursements of
counsel for the Company and of its independent public accountants,
including the expenses of any special audits required by or incident to
such performance and compliance and the reasonable fees of any special
experts retained in connection with the requested registration, but
excluding the expenses of counsel to the Holder and (vi) any fees and
disbursements of underwriters customarily paid by the issuers or
sellers of securities and the reasonable fees and expenses of any
special experts retained in connection with the requested registration,
but excluding underwriting discounts and commissions and transfer
taxes, if any.
"Rule 144" shall mean Rule 144 as promulgated by the
Commission under the Securities Act, as such Rule may be amended from
time to time, or any similar successor rule that may be promulgated by
the Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the
time.
2. Registration on Request.
(a) Request by the Founders. At any time following the
execution of this Agreement, the Founders, on behalf of all Holders,
may, on not more than two (2) occasions, make a request to the Company
to effect the registration under the Securities Act on Form S-3 (or any
successor or similar short-form registration statement) of such
Holder's Registrable Securities, subject to the volume limits set forth
herein in this Section 2, and specifying the intended method of
disposition thereof. Upon receipt of such written request, the Company
thereupon will, as expeditiously as possible, effect on Form S-3 the
registration under the Securities Act of the Registrable Securities
that the Company has been so requested to register by the Holder.
(b) Expenses. In connection with the registration of
Registrable Securities pursuant to this Section 2, the Company will pay
all Registration Expenses.
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(c) Effective Registration Statement. A registration requested
pursuant to this Section 2 will not be deemed to have been effected
unless it has become effective, provided that, if within 90 days after
it has become effective the offering of Registrable Securities pursuant
to such registration is interfered with by any stop order, injunction
or other order or requirement of the Commission or other governmental
agency or court, such registration will be deemed not to have been
effected.
(d) Limitation on Registration on Request. The parties agree
that the Holder shall only be entitled to two (2) demand registration
rights under this Section 2 to request the Company to effect the
registration of any Registrable Securities. The first demand
registration rights ( the "First Demand Rights") shall be limited to
the registration of not more than ten percent (10%) of the Registrable
Securities; there shall be no such volume limitations as to the second
demand registration rights (the "Second Demand Rights"). However, the
Second Demand Rights may not be exercised prior to January 1, 2003.
3. Registration Procedures. If and whenever the Company is required to
cause the registration of any Registrable Securities under the Securities Act as
provided in this Agreement, the Company will, as soon as practicable:
(i) prepare and, in any event within thirty (30) days after
the date of the Holder's request for registration, file with the
Commission a registration statement with respect to such Registrable
Securities and use commercially reasonable efforts to cause such
registration statement to become effective;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to (A) keep such registration
statement effective for a period not in excess of (1) 120 days with
regard to the First Demand Rights and (2) eighteen (18) months with
regard to the Second Demand Rights and (B) comply with the provisions
of the Securities Act with respect to the disposition of all securities
covered by such registration statement during such period in accordance
with the intended methods of disposition by the seller thereof set
forth in such registration statement;
(iii) furnish to the seller of Registrable Securities such
reasonable number of copies of such registration statement and of each
amendment and supplement thereto (in each case including all exhibits),
such reasonable number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and
summary prospectus), and such other documents as such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities by such seller but only while the Company shall
be required under the provisions hereof to cause the registration
statement to remain current;
(iv) promptly furnish the seller of Registrable Securities
notice of any stop-order or similar notice issued by the Commission or
any state agency charged with the regulation of securities;
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(v) register or qualify such Registrable Securities covered by
such registration statement under such other securities or blue sky
laws of such jurisdictions within the United States as the seller shall
reasonably request, and do any and all other acts and things which may
be reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller, except that the Company shall not for
any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction where, but for the requirements
of this paragraph (v), it would not be obligated to be so qualified, to
subject itself to taxation in any such jurisdiction, or to consent to
general service of process in any such jurisdiction;
(vi) cause such Registrable Securities covered by such
registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller to consummate the disposition of such Registrable Securities;
(vii) notify promptly the seller of any such Registrable
Securities covered by such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act within the appropriate period mentioned in paragraph
(ii) of this Section 3, of the Company's becoming aware that the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
then existing, and at the request of any such seller, prepare and
furnish to such seller, as soon as practicable, a reasonable number of
copies of an amended or supplemental prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing; and
(viii) use commercially reasonable efforts to list or admit
for trading such Registrable Securities on any securities exchange on
which the Common Stock is then listed, if such Registrable Securities
are not already so listed and if such listing is then permitted under
the rules of such exchange.
The Company may require the seller of Registrable Securities as to
which any registration is being effected to furnish the Company with such
information regarding such seller and pertinent to the disclosure requirements
relating to the registration and the distribution of such securities as the
Company may from time to time reasonably request in writing.
The Holder agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in paragraph (vii) of this
Section 3, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
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Securities until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by paragraph (vii) of this Section 3, and, if so
directed by the Company, the Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the period mentioned in paragraph (ii) of this Section 3
shall be extended by the number of days during the period from and including the
date of the giving of such notice pursuant to paragraph (vii) of this Section 3
and including the date when each seller of Registrable Securities covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by paragraph (vii) of this Section 3.
The Holder shall comply with the prospectus delivery requirements of
the Securities Act in connection with the offer and sale of Registrable
Securities.
4. Indemnification and Contribution.
(a) Indemnification by the Company. In the event of any registration of
any securities of the Company under the Securities Act pursuant to Section 2
herein, the Company will, and it hereby does, indemnify and hold harmless, to
the extent permitted by law, the seller of any Registrable Securities covered by
such registration statement, each affiliate of such seller and their respective
directors and officers or general and limited partners (and the directors,
officers, affiliates and controlling Persons thereof), and each other Person, if
any, who controls such seller within the meaning of the Securities Act
(collectively, the "Holder Indemnified Parties"), against any and all losses,
claims, damages or liabilities, joint or several, and expenses to which such
seller, any such director or officer or general or limited partner or affiliate
or any such controlling Person may become subject under the Securities Act,
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof, whether or not such Holder
Indemnified Party is a party thereto) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such securities were registered under the
Securities Act, any preliminary, final or summary prospectus contained therein,
or any amendment or supplement thereto, or (ii) 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 in the light of the circumstances
then existing, and the Company will reimburse the Holder Indemnified Party for
any legal or any other expenses reasonably incurred by such Holder Indemnified
Party in connection with investigating or defending any such loss, claim,
liability, action or proceeding, provided that the Company shall not be liable
to any Holder Indemnified Party in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
amendment or supplement thereto or in any such preliminary, final or summary
prospectus in reasonable reliance upon and in conformity with written
information furnished to the Company by such seller specifically for use in the
preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such seller or any
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such seller. Notwithstanding the foregoing, insofar as the foregoing indemnity
relates to any such untrue statement (or alleged untrue statement) or omission
(or alleged omission) made in the preliminary prospectus but eliminated or
remedied in an amended prospectus on file with the Commission or in the final
prospectus filed with the Commission, the indemnity agreement herein shall not
inure to the benefit of any seller if a copy of such amended prospectus or the
final prospectus was not furnished to the person or entity asserting the loss,
liability, claim or damage at or prior to the time such furnishing is required
by the Securities Act.
(b) Indemnification by the Seller. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed in accordance with Section 3 herein, that the Company shall have received
an undertaking reasonably satisfactory to it from the prospective seller of such
Registrable Securities to indemnify and hold harmless (in the same manner and to
the same extent as set forth in paragraph (a) of this Section 4) the Company and
all other prospective sellers, each of their respective affiliates and their
respective directors and officers or general and limited partners (and the
directors, officers, affiliates and controlling Persons thereof) and each other
Person, if any, who controls the Company or any such seller within the meaning
of the Securities Act (collectively, the "Company Indemnified Parties") with
respect to any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such seller
specifically for use in the preparation of such registration statement,
preliminary, final or summary prospectus or amendment or supplement, or a
document incorporated by reference into any of the foregoing. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any of the prospective sellers, or any of their
respective affiliates, directors, officers or controlling Persons and shall
survive the transfer of such securities by such seller.
(c) Notices of Claims, Etc. Promptly after receipt by a Holder
Indemnified Party or a Company Indemnified Party (collectively, the "Indemnified
Party") of written notice of the commencement of any action or proceeding with
respect to which a claim for indemnification may be made pursuant to this
Section 4, such Indemnified Party will, if a claim in respect thereof is to be
made against an indemnifying party, give written notice to the latter of the
commencement of such action, provided that the failure of the Indemnified Party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under the preceding paragraphs of this Section 4, except to the
extent that the indemnifying party is materially prejudiced by such failure to
give notice. In case any such action is brought against an Indemnified Party,
the indemnifying party will be entitled to participate in and to assume control
of the defense of such action, including any settlement thereof, provided that
the indemnifying party will not agree to any settlement without the prior
consent of the Indemnified Party (which consent shall not be unreasonably
withheld) unless (i) the terms of such settlement require no more than the
payment of money (i.e., such settlement does not require the Indemnified Party
to admit any wrongdoing or take or refrain from taking any action), (ii) the
full amount of such monetary compromise or settlement will be paid by the
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indemnifying party, and (iii) the Indemnified Party receives as part of such
settlement a legal, binding and enforceable unconditional satisfaction and/or
release, in form and substance reasonably satisfactory to it, providing that
such claim and any claimed liability of the Indemnified Party with respect
thereto is being satisfied by reason of such settlement and that the Indemnified
Party is being released from all obligations or liabilities it may have with
respect thereto. After notice has been provided by the indemnifying party to
such Indemnified Party of its election to assume the defense of any claim
pursuant to this Section 4(c), the indemnifying party will not be liable to such
Indemnified Party for any legal or other expenses subsequently incurred by the
latter in connection with the defense of such claim. In the event that the
indemnifying party does not assume the defense of a claim pursuant to this
Section 4(c), the Indemnified Party will have the right to defend such claim by
all appropriate proceedings, and will have control of such defense and
proceedings, provided that no Indemnified Party shall agree to any settlement
without the prior consent of the indemnifying party (which consent shall not be
unreasonably withheld) unless the Indemnified Party irrevocably waives its right
to indemnity under this Agreement with respect to such settlement. Each
Indemnified Party shall, and shall cause its legal counsel to, provide
reasonable cooperation to the indemnifying party and its legal counsel in
connection with its assuming the defense of any claim, including the furnishing
of the indemnifying party with all papers served in such proceeding.
(d) Other Indemnification. Indemnification similar to that specified in
the preceding paragraph of this Section 4 (with appropriate modifications) shall
be given by the Company and each seller of Registrable Securities with respect
to any required registration or other qualification of securities under any
federal or state law or regulation or governmental authority other than the
Securities Act.
(e) Contribution. If the indemnity provided for in the foregoing
paragraphs of this Section 4 is unavailable or insufficient for any reason to
hold harmless an Indemnified Party in respect of any losses, claims, damages or
liabilities referred to therein, then the indemnifying party, in lieu of
indemnifying such Indemnified Party, agrees to contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party on the one hand and the Indemnified
Party on the other hand from the sale of securities under such registration
statement, (ii) the relative fault of the indemnifying party on the one hand and
the Indemnified Party on the other hand in connection with the statements,
actions or omissions that resulted in such losses, claims, damages or
liabilities and (iii) any other relevant equitable considerations. The relative
fault of the indemnifying party on the one hand and of the Indemnified Party on
the other hand (i) in the case of an untrue or alleged untrue statement of a
material fact or an omission or alleged omission to state a material fact, shall
be determined by reference to, among other things, whether such statement or
omission relates to information supplied by the indemnifying party or by the
Indemnified Party respectively and the parties, relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission and (ii) in the case of any other action or omission, shall be
determined by reference to, among other things, whether such action or omission
was taken or omitted to be taken by the indemnifying party or the Indemnified
Party respectively and the parties' relative intent, knowledge, access to
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information and opportunity to prevent such action or omission. The parties
agree that it would not be just and equitable if contribution pursuant to this
Section 4(e) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding sentences. The amount paid or payable by the
Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in such sentences 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, preparing to defend or
defending any such action or claim.
(f) Non-Exclusivity. The obligations of the parties under this Section
4 shall be in addition to any liability that any party may otherwise have to any
other party.
5. Rule 144. For so long as the Registrable Securities are outstanding,
the Company covenants that it will file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder, and it will take such further action as
the Holder may reasonably request, all to the extent required, from time to time
to enable the Holder to sell shares of Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the Commission.
6. Miscellaneous.
(a) Amendments and Waivers. This Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
prior written consent to such amendment, action or omission to act, of the
Holder and such act or omission is not contrary to any applicable law. The
Holders of any Registrable Securities at the time or thereafter outstanding
shall be bound by any consent authorized by this Section 6(b), whether or not
such Registrable Securities shall have been marked to indicate such consent.
(b) Successors, Assigns and Transferees. This Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.
(c) Notices. All notices and other communications provided for
hereunder shall be in writing and shall be sent by first class mail, telecopier
or hand delivery:
(1) If to the Company, to:
RTIN Holdings, Inc.
Attention: Xxxxxx Xxxxxxx
0000 X. Xxxx 000
Xxxxxxxx, Xxxxx 00000
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(2) If to Founders:
MedEx Systems, Inc.
Attention: Xxxxxxxx Xxxxx and Xxx X. Xxx
000 Xxxxxxx Xxxx Xxxx.
Xxxxxxx, Xxxxxxxxx 00000.
Any notice delivered after business hours or on a Saturday, Sunday or
legal holiday at the place designated in such delivery shall be deemed for
purposes of computing any time period hereunder to have been delivered on the
next business day.
(d) Interpretation. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against the Company or Founders,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties hereto.
(e) Headings. The headings in this Agreement are for convenience only
and shall not affect the construction hereof.
(f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY
CONFLICT OF LAW PROVISION THEREOF.
(g) Remedies.
(i) Each of the Company and Founders acknowledge that the
other party would not have an adequate remedy at law for money damages
in the event that any of the covenants or agreements of the other party
in this Agreement were not performed in accordance with its terms, and
it is therefore agreed that each of Founders and the Company, in
addition to and without limiting any other remedy or right it may have,
will have the right to an injunction or other equitable relief in any
court of competent jurisdiction, subject to Section 6(f), enjoining any
such breach and enforcing specifically the terms and provisions hereof,
and each of Founders and the Company hereby waive any and all defenses
they may have on the grounds of lack of jurisdiction or competence of
the court to grant such an injunction or other equitable relief.
(ii) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise or beginning
of the exercise of any thereof by any party shall not preclude the
simultaneous or later exercise of any other such right, power or remedy
by such party.
(h) Severability. In the event that any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
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(i) Counterpart. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.
Delivery of an executed counterpart of this Agreement by telefacsimile shall be
equally as effective as delivery of a manually executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by
telefacsimile also shall deliver a manually executed counterpart of this
Agreement, but the failure to deliver a manually executed counterpart shall not
affect the validity, enforceability and binding effect of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
RTIN HOLDINGS, INC.
By: /s/ Xxxxxx Xxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Financial Officer
FOUNDERS:
/s/ Xxxxxxxx Xxxxx
------------------------------
Xxxxxxxx Xxxxx
/s/ Xxx X. Xxx
------------------------------
Xxx X. Xxx
