EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT dated December 4, 1996 (the "Effective
Date") between Exigent Diagnostics, Inc.., a Delaware corporation (the
"Company"), Exigent Partners, L.P., a Delaware limited partnership (the
"Partnership"), X. Xxxxxxx Stoughton ("Stoughton"), Xxxxxx X. Xxxxx ("Grove"),
Xxxxxxx X. Xxxxxx ("Xxxxxx"), Xxxxxxx X. Xxxxxx ("Xxxxxx"), Xxxxxx X. Xxxx
("Xxxx"), Xxxxx X. Xxxxxxx ("Xxxxxxx") and Xxxxxx X. Xxxxx ("Xxxxx") (the
Partnership and each of the foregoing listed individuals is a "Stockholder";
collectively, are the "Stockholders").
W I T N E S S E T H:
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WHEREAS, Stoughton and Grove formed the Company on July 10, 1996 and
as a result of the incorporation were issued that number of shares of common
capital stock of the Company, $.01 par value per share ("Common Stock"), as is
set forth opposite their names on Exhibit A hereto;
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WHEREAS, Asarch, Knight, Xxxx, Xxxxxxx and Xxxxx became Stockholders
of the Company in October, 1996 subject to certain forfeiture restrictions
pertaining to their stock, and in the case of Xxxxx, rights to additional stock,
as more fully set forth in the letter agreements entered into between each of
them and the Company (the "Letter Agreement Shares");
WHEREAS, Xxxxx has purchased additional shares of Common Stock from
the Company pursuant to a Subscription Agreement dated today's date (the
"Subscription Agreement Shares")
WHEREAS, the Partnership purchased the number of shares of Common
Stock set opposite its name on Exhibit A hereto (the "Partnership Shares") in
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November 1996;
WHEREAS, the Company intends to undertake a 7,257.258 for one stock
split and, thereafter, the offer and sale of an additional 7,500,000 shares of
Common Stock (exclusive of an option by the Company to offer and sell an
additional 1,125,000 shares of Common Stock solely to cover over subscriptions)
pursuant to a private placement memorandum contemplated by a letter of intent
with Xxxxxxx Xxxxx Securities Incorporated (the "Memorandum")
NOW, THEREFORE, in consideration of the mutual covenants and
agreements made herein, and other good valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and accepted, the parties hereto
agree as follows:
1. Definitions. As used herein, unless the context otherwise requires,
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the following terms have the following respective meanings:
"Affiliate" has the meaning set forth in Rule 12b-2 under the Exchange
Act.
"Closing Price" means the last sale price, regular way, as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the principal national securities
exchange on which the Registrable Securities shall be listed or admitted to
trading on a Trading Day or, if the Registrable Securities shall not be listed
or admitted to trading on any national securities exchange an such Trading Day,
the last reported transaction price on such Trading Day or, if not so quoted,
the closing bid price in the over-the-counter market on such Trading Day, as
reported by NASDAQ or such other system then in use.
"Commission" means the United States Securities and' Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"Common Stock" has the meaning set forth in the first WHEREAS clause
of the Recitals.
"Demand" has the meaning set forth in Section 2.1.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar federal statute, and the rules and regulations of the Commission
promulgated thereunder, as the same shall be in effect at the time. Reference to
a particular section of the Securities Exchange Act of 1934, as amended, shall
include reference to the comparable section, if any, of any such subsequent
similar federal statute.
"Participating Holder" has the meaning set forth in Section 2.1.4.
"Person" means any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government or department or
agency of a government.
"Public Offering" means a Public Offering of securities registered
with the Commission under the Securities Act.
"Registrable Common Securities" means the Letter Agreement Shares, the
Subscription Agreement Shares and the Partnership Shares.
"Registrable Securities" means collectively the Registrable Common
Securities and any other securities issuable in connection therewith or in
replacement thereof by way of a dividend, distribution, recapitalization,
exchange, merger, consolidation or other reorganization. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (a) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (b) they shall have been sold as permitted by, and in compliance
with, Rule 144 (or any successor provision) promulgated under the Securities Act
or (c) they shall have ceased to be outstanding.
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"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Section 2, including, without limitation, all
registration, filing and National Association of Securities Dealers, Inc. fees,
all listing fees, all fees and expenses of complying with securities or blue sky
laws (including, without limitation, reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Registrable Securities), all word processing, duplicating and printing expenses,
messenger and delivery expenses, the fees and disbursements of counsel for the
Company and counsel for the Participating Holders comprising not more than one
outside law firm which shall be selected by the Participating Holders of a
majority of the Registrable Securities sought to be registered in such
registration (the "Selling Stockholder Counsel"), and of the Company's
independent public accountants, including the expenses of "comfort" letters
required by or incident to such performance and compliance, and any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities.
"Securities Act" means the Securities Act of 1933, as amended, or any
subsequent similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
References to a particular section of the Securities Act of 1933, as amended,
shall include a reference to the comparable section, if any, of any such
subsequent similar federal statute.
2. Registration Rights.
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2.1. Registration on Demand.
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2.1.1. Demand. After the earlier of the effective date of
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the initial Public Offering of Common Stock and the fifth (5th) anniversary of
the Final Closing (as defined in the Memorandum), subject to Section 2.1.7, upon
the written request (the "Demand") of the holders of a majority of Registrable
Securities that the Company effect the registration under the Securities Act of
all or part of the Registrable Securities, the Company shall cause to be filed,
and shall take all commercially reasonable actions to effect, as soon as
practicable and in any event, subject to the reasonable cooperation of the
Stockholders, within 120 days after the Demand is received from the
Stockholders, the registration under the Securities Act, of the Registrable
Securities which the Company has been so requested to register by the
Stockholders. Prior to such registration being declared effective, the holders
of a majority of the Registrable Securities requesting such Demand registration
may withdraw such Demand registration, subject to the provisions of Section
2.1.4 below.
2.1.2. Registration of Other Securities. Whenever the
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Company shall effect a registration pursuant to this Section 2.1 in connection
with an underwritten offering by the Stockholders of Registrable Securities,
holders of securities of the Company who have "piggyback" registration rights
may include all or a portion of such securities in such registration, offering
or sale. If the managing underwriter of any such offering shall inform the
Company by letter of its belief that the number or type of securities of the
Company requested by holders of the securities of the Company other than the
Stockholders to be included in such registration would
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materially and adversely affect the underwritten offering, then the Company
shall include in such registration, to the extent of the number and type of
securities which the Company is so advised can be sold in (or during the time
of) such offering, first, all of the Registrable Securities specified by the
Stockholders in the Demand and second, for each holder of the Company's
securities other than the Stockholders, the fraction of each holder's securities
proposed to be registered which is obtained by dividing (i) the number of the
securities of the Company that such holder proposes to include in such
registration by (ii) the total number of securities proposed to be included in
such registration by all holders other than the Stockholders.
2.1.3. Registration Statement Form. Registrations under
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this Section 2.1 shall be on such appropriate registration form of the
Commission as shall be selected by the Company. The Company shall include in any
such registration statement all information which, in the opinion of counsel to
the Company, is required to be included.
2.1.4. Expenses. The Company shall pay the Registration
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Expenses in connection with any Demand registration effected pursuant to this
Section 2.1, other than underwriting discounts and selling commissions relating
to the sale or disposition of Registrable Securities and the fees and expenses
of the Stockholders' counsel. If the registration pursuant to a Demand is
withdrawn at the request of the Stockholders participating in the registration
(a "Participating Holder") and such Stockholders elect not to have such
registration count as its Demand registration under this Section 2.1, the
Stockholders shall pay all the Registration Expenses of such registration, other
than the fees and expenses of counsel to Company or of any other holder of
Common Stock. At no time shall the Stockholders be required to pay the
underwriting discounts or selling commissions relating to the sale or
disposition of shares of Common Stock by other Persons, or the fees and expenses
of any other Persons or the Company's counsel, except as required by Section
2.6.2 below.
2.1.5. Effective Registration Statement. A registration
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requested pursuant to this Section 2.1 shall not be deemed to have been effected
(i) unless a registration statement with respect thereto has become effective,
(ii) if after it has become effective, such registration is interfered with by
any stop order, injunction or other order or requirement of the Commission or
other governmental agency or court for any reason and has not thereafter become
effective, or (iii) in the case of an underwritten offering, if the conditions
to closing specified in the underwriting agreement, if any, entered into in
connection with such registration are not satisfied or waived.
2.1.6. Selection of Underwriters. In connection with each
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underwritten offering, (a) the Company shall promptly select the managing
underwriter subject to the approval of the Stockholders (which approval shall
not be unreasonably withheld, delayed or conditioned by the Stockholders) and
(b) if they so desire, the Stockholders shall promptly (by the holders of a
majority of the Registrable Securities sought to be registered by the
Participating Holders in such Demand) select the co-managing underwriter subject
to the approval of the Company (which approval shall not be unreasonably
withheld, delayed or conditioned by the Company).
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2.1.7. Limitations on Registration on Demand. The Company
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shall not be required to prepare and file a registration statement pursuant to
this Section 2.1 which would become effective within (a) 180 days following the
effective date of a registration statement filed by the Company with the
Commission pertaining to an initial underwritten Public Offering of convertible
debt securities or equity securities for cash (a "Public Offering") for the
account of the Company, provided that no other holder of the Company's
securities shall have been permitted to participate in such initial Public
Offering, or (b) 120 days following the effective date of a registration
statement (other than a registration statement filed on Form S-4 or S-8) filed
by the Company with the Commission pertaining to any subsequent Public Offering
for the account of the Company or another holder of securities of the Company if
the Stockholders were afforded the opportunity to include all of its Registrable
Securities in such subsequent registration pursuant to Section 2.2. In no event
shall the Company be required to effect more than two (2) registrations pursuant
to this Section 2.1. Notwithstanding the foregoing, if, in the good faith
determination of the Company's Board of Directors, a registration would
adversely affect certain activities of the Company to the material detriment of
the Company, then the Company may at its option direct that such Demand be
delayed for a period not in excess of 90 days in the aggregate from the date of
the Company's receipt of the Demand. The rights of the holders of Registrable
Securities to cause a Demand registration to be effected hereunder are subject
to the prior rights of the investors in the private offering contemplated by the
Memorandum (the "Offering") to effect a registration pursuant to the last
sentence of Section 2.1.7 of the Registration Rights Agreement to be entered
into by the Company in connection with the Private Offering, the form of which
is attached to the Memorandum.
2.2. Piggyback Registration.
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2.2.1. Right to Include Registrable Securities. If the
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Company at any time proposes to register any of its securities under the
Securities Act by registration on Forms X-0, X-0, X-0 or any successor or
similar form(s) (except registrations on such Forms or similar forms solely for
registration of securities in connection with (i) an employee benefit plan or
dividend reinvestment plan or a merger or consolidation or (ii) debt securities
which are not convertible into Common Stock), whether or not for sale for its
own account, it shall each such time give written notice to the Stockholders of
its intention to do so at least 30 days prior to the anticipated filing date of
a registration statement with respect to such registration with the Commission.
Upon the written request of the Stockholders made as promptly as practicable and
in any event within 10 business days after the receipt of any such notice, which
request shall specify the Registrable Securities intended to be disposed of by
the Stockholders, the Company shall use commercially reasonable efforts to
effect the registration under the Securities Act of all Registrable Securities
which the Company has been so requested to register by the Stockholders;
provided, however, that if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to the Stockholders and (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from
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any obligation of the Company to pay the Registration Expenses in connection
therewith), without prejudice, (provided, however, that the Stockholders may
request that such registration be effected as a registration under Section 2.1
hereof) and (ii) in the case of a determination to delay registering, shall be
permitted to delay registering any Registrable Securities for the same period as
the delay in registering such other securities.
2.2.2. Priority in Piggyback Registrations. Notwithstanding
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anything in Section 2.2.1 above to the contrary, if the managing underwriter of
any underwritten offering shall inform the Company by letter of its belief that
the number or type of Registrable Securities requested to be included in such
registration would materially and adversely affect such offering, then the
Company shall promptly notify the Stockholders of such fact. If the managing
underwriter does not agree to include all (or such lesser amount as the
Stockholders shall, in their discretion, agree to) of the number of the
Registrable Securities initially requested by the Stockholders to be included in
such registration, then the Company shall include in such registration, to the
extent of the number and type which the Company is so advised can be sold in (or
during the time of) such offering first, all securities proposed by the Company
to be sold for its own account, if the Company initiated such registration, or
by the holder of securities who initiated such demand registration, if any,
second, for each of the Stockholders, Xxxxxxx Xxxxx Securities Incorporated,
SmithKline Xxxxxxx Corporation (and its affiliates), and the purchasers of
Common Stock offered pursuant to the Memorandum (and the respective successors
and assigns of any of the foregoing), other than the holder of the securities
who initiated such demand registration, if any, the fraction of such holder's
securities proposed to be registered which is obtained by dividing (i) the
number of the securities of the Company that such holder proposes to include in
such registration by (ii) the total number of securities proposed to be sold in
such offering by such holders, and third, for each remaining holder of the
Company's securities, other than the holder of the securities who initiated such
demand registration and the holders listed above, if any, the fraction of such
holder's securities proposed to be registered which is obtained by dividing (i)
the number of the securities of the Company that such holder proposes to include
in such registration by (ii) the total number of securities proposed to be sold
in such offering by such holders.
2.3. Registration Procedures.
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2.3.1. In connection with the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2, the
Company shall as promptly as practicable:
(i) prepare and file with the Commission the
requisite registration statement to effect such registration and thereafter use
commercially reasonable efforts to cause such registration statement to become
and remain effective;
(ii) prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
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registration statement for 180 days or such shorter period as may be required
for the disposition of all of such Registrable Securities by the underwriters;
(iii) furnish to the Stockholders such number of
conformed copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such number of copies of such other
documents as the Stockholders may reasonably request;
(iv) use commercially reasonable efforts (x) to
register or qualify all Registrable Securities and other securities covered by
such registration statement under such other securities or Blue Sky laws of such
States of the United States of America where an exemption is not available and
as the Stockholders shall reasonably request, (y) to keep such registration or
qualification in effect for so long as such registration statement remains in
effect, and (z) to take any other action which may reasonably be necessary or
advisable to enable the Stockholders to consummate the disposition in such
jurisdictions of the Registrable Securities to be sold by the Stockholders,
except that the Company shall not for any such purpose be required to qualify
generally to do business as a foreign Company in any jurisdiction wherein it
would not, but for the requirements of this paragraph (iv), be obligated to be
so qualified or to consent to general service of process in any such
jurisdiction;
(v) use commercially reasonable efforts to cause
all Registrable Securities covered by such registration statement to be
registered with or approved by such other federal or state governmental agencies
or authorities as may be necessary in the opinion of counsel to the Company and
counsel to the Stockholders to consummate the disposition of such Registrable
Securities in accordance with their intended method of disposition;
(vi) furnish to the Stockholders, (x) an opinion of
outside counsel for the Company, and (y) a copy of a "comfort" letter addressed
to the Company and/or any managing underwriter signed by the certified
independent public accountants who have certified the Company's financial
statements included or incorporated by reference in such registration statement,
each covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountant's comfort letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountant's comfort letters delivered to the underwriters in
underwritten Public Offerings of securities (and dated the dates such opinions
and comfort letters are customarily dated);
(vii) notify the Stockholders when a prospectus
relating thereto is required to be delivered under the Securities Act, upon
discovery that, or upon the happening of any event as a result of which, the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material fact
required
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to be stated therein or necessary to make the statements therein not misleading,
in the light of the circumstances under which they were made, and at the request
of the Stockholders to use its best efforts to promptly prepare and furnish to
the Stockholders such number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made;
(viii) otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission, and make available to
its security-holders, as soon as reasonably practicable, an earnings statement
meeting the requirements of Section 11(a) of the Securities Act, which the
Company shall be entitled to satisfy by complying with the requirements of Rule
158 promulgated thereunder, and promptly furnish a copy of the same to the
Stockholders;
(ix) provide and cause to be maintained a transfer
agent and registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement; and
(x) use commercially reasonable efforts to list all
Registrable Securities covered by such registration statement on any national
securities exchange or over-the-counter market, if any, on which Registrable
Securities of the same class, and if applicable, series, covered by such
registration statement are then listed.
The Stockholders agree that upon receipt of any notice from the
Company of the happening of an event of the kind described in Section
2.3.1(vii), the Stockholders shall forthwith discontinue its disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until the Stockholders' receipt of the copies of the
supplemented or amended prospectus contemplated by Section 2.3.1(vii).
2.4. Underwritten Offerings.
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2.4.1. Requested Underwritten Offerings. If requested by
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the underwriters for any underwritten offering by the Stockholders pursuant to a
registration requested under Section 2.1, the Company shall enter into an
underwriting agreement with such underwriters for such offering, such agreement
to be reasonably satisfactory in substance and form to the Company, the
Stockholders and the underwriters, and to contain such representations and
warranties by the Company and the Stockholders and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2.6 or as are
generally prevailing in agreements of that type. The Stockholders shall
cooperate with the Company in the negotiation of the underwriting agreement and
shall give consideration to the reasonable suggestions of the Company regarding
the form and substance thereof. The Stockholders shall be a party to such
underwriting agreement. The
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Stockholders shall not be required to make any representations or warranties to
or agreements with the Company or the underwriters other than representations,
warranties or agreements regarding the Stockholders, the Stockholders'
Registrable Securities, the Stockholders' intended method of distribution and
any other representations or warranties required by law or customarily given by
selling shareholders in an underwritten Public Offering or as reasonably
required by the managing underwriter of the offering of Registrable Securities.
2.4.2. Piggyback Underwritten Offerings. If the Company
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proposes to register any of its securities under the Securities Act as
contemplated by Section 2.2 and such securities are to be distributed by or
through one or more underwriters, subject to the priority and other provisions
of Section 2.2.2 the Company shall, if requested by the Stockholders, arrange
for such underwriters to include all the Registrable Securities to be offered
and sold by the Stockholders among the securities of the Company to be
distributed by such underwriters. The Stockholders shall become a party to the
underwriting agreement negotiated between the Company and such underwriters. The
Stockholders shall not be required to make any representations or warranties to
or agreements with the Company or the underwriters other than representations,
warranties or agreements regarding the Stockholders, the Stockholders'
Registrable Securities and the Stockholders' intended method of distribution or
any other representations or warranties required by law or customarily given by
selling shareholders in an underwritten Public Offering or as reasonably
required by the managing underwriter of the offering of Registrable Securities.
2.4.3. Holdback Agreements.
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(i) In connection with the initial Public Offering
or any registration of Registrable Securities in connection with an underwritten
Public Offering, the Stockholders agree if required by the underwriter or
underwriters not to effect any public sale or distribution, including any sale
pursuant to Rule 144 under the Securities Act, of any Registrable Securities,
and not to effect any such public sale or distribution of any other equity
security of the Company or of any security convertible into or exchangeable or
exercisable for any equity security of the Company (in each case, other than as
part of such underwritten Public Offering) during the 15 days prior to, and
during the 180-day period, or such shorter period set forth in the underwriting
agreement with respect to such offering as the managing underwriter of such
offering shall reasonably require, beginning on, the effective date of such
registration statement.
(ii) If any registration of Registrable Securities
shall be in connection with an underwritten Public Offering, the Company agrees
(x) if required by the underwriter or underwriters, not to effect any public
sale or distribution of any of its equity securities or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (other than in connection with any employee stock option or other
benefit plan which has been duly adopted by the Company and which provides for
the distribution to participants in the plan of equity securities of the Company
or securities convertible or exchangeable or exercisable for equity securities
of the Company, or in connection with a merger or acquisition approved by the
Board of Directors of the Company) during the 180-day period, or
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such other period as the managing underwriter of such offering shall reasonably
require, beginning on the effective date of such registration statement (except
as part of such registration) and (y) that any agreement entered into after the
date of this Agreement pursuant to which the Company issues or agrees to issue
any privately placed equity securities shall contain a provision under which
holders of such securities agree that, if required by the underwriter or
underwriters, they will not effect any public sale or distribution of any such
securities during the period referred to in the foregoing clause (x), including
any sale pursuant to Rule 144 under the Securities Act (except as part of such
registration, if permitted), if such holder is participating in the offering
pursuant to such registration.
2.5. Preparation; Reasonable Investigation. In connection with the
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preparation and filing of any registration statement under the Securities Act in
which the Stockholders are a selling shareholder, the Company shall give the
Stockholders not less than 30 days prior written notice of the preparation of
such registration statement and give the Stockholders and its counsel and
accountants the opportunity to participate, at the Stockholders' expense, in the
preparation of such registration statement, each prospectus included therein or
filed with the Commission, and each amendment thereof or supplement thereto
(provided that the Stockholders shall furnish the Company with comments on any
such amendment or supplement as promptly as the Company shall reasonably
require), and give each of them such access to its books and records, such
opportunities to discuss the business of the Company with officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of the Stockholders' counsel, to conduct a
reasonable investigation within the meaning of the Securities Act. Any expenses
incurred by the Stockholders in connection with any such investigation shall be
borne by the Stockholders, other than the reasonable fees and disbursements of
Selling Stockholder Counsel incurred in connection with such investigation.
2.6. Indemnification.
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2.6.1. Indemnification by the Company. In the event of any
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registration of any securities of the Company under the Securities Act in which
the Stockholders are selling shareholders, the Company shall, and hereby does,
indemnify and hold harmless, in the case of any registration statement filed
pursuant to Sections 2.1 or 2.2, the Participating Holders, its directors,
officers, employees, agents and affiliates and, to the extent required by any
underwriting agreement entered into by the Company, each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person who controls a Participating Holder or any such underwriter
within the meaning of the Securities Act, insofar as losses, claims, damages, or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any fact contained in any registration statement under which
such securities were registered under the Securities Act, any preliminary
prospectus, final prospectus, or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made not misleading,
and the Company shall reimburse the Stockholders and each such director,
officer, agent or affiliate, and, to the extent required by any
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underwriting agreement entered into by the Company, underwriter and controlling
Person for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company through an
instrument duly executed by the Participating Holders, specifically stating that
it is for use in the preparation thereof. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Participating Holders or any such director, officer, agent or affiliate or
controlling Person and shall survive the transfer of such securities by the
Participating Holders.
2.6.2. Indemnification by the Stockholders. If any Registrable
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Securities are included in any registration statement, the Participating
Holders shall indemnify and hold harmless (in the same manner and to the same
extent as set forth in Section 2.6.1 above) the Company, each director of the
Company, each officer of the Company and each employee of the Company and, to
the extent required by any underwriting agreement entered into by the
Participating Holders, each other Person who participates as an underwriter in
the offering or sale of such securities and each other Person who controls any
such underwriter within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by the Participating Holders
specifically stating that it is for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement; provided, however, in no event shall the liability of
any Participating Holder under this Section 2.6.2 exceed the proceeds from the
Sale of the securities to be sold by such Participating Holder in any such
registration.
2.6.3. Notice of Claims, Etc. Promptly after receipt, by an indemnified
----------------------
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding paragraphs of this Section 2.6, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party, immediately give written notice to the latter of the
commencement of such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 2.6, except to the extent that the indemnifying party is materially
prejudiced by such failure. The indemnified party shall be entitled to receive
the indemnification payments described in Section 2.6.6 after providing such
written notice to the indemnifying party. In case any such action is brought
against an indemnified party, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such claim, the indemnifying party shall be
entitled to
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participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that the indemnifying
parties may agree, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party shall not
be liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof other than
reasonable out of pocket costs related to the indemnified party's cooperation
with the indemnifying party, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties arises in respect of such claim after the assumption of the defense
thereof. No indemnifying party shall be liable for any settlement of any action
or proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Consent of the indemnified party
shall be required for the entry of any judgment or to enter into a settlement
only when such judgment or settlement does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect such claim or litigation.
2.6.4. Contribution. If the indemnification provided for in this Section
------------
2.6 shall for any reason be held by a court to be unavailable to an indemnified
party under Section 2.6.1 or 2.6.2 hereof in respect of any loss, claim, damage
or liability, or any action in respect thereof, then, in lieu of the amount paid
or payable under Sections 2.6.1 or 2.6.2 hereof, the indemnified party and the
indemnifying party under Sections 2.6.1 or 2.6.2 hereof shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating the same), (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on one hand and the Stockholders on the other or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect the relative fault of the
Company on one hand and the Stockholders on the other that resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. No Person guilty of fraudulent
misrepresentation (within the meaning of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim,
effected without such Person's written consent, which consent shall not be
unreasonably withheld; provided, however, in no event shall the liability of any
Participating Holder under this Section 2.6.4 exceed the proceeds from the sale
of the securities to be sold by such Participating Holder in any such
registration.
2.6.5. Other Indemnification. Indemnification and contribution similar to
---------------------
that specified in the preceding paragraphs of this Section 2.6 (with appropriate
modifications) shall be given by the Company and the Participating Holders with
respect to any required registration or other qualification of securities under
any federal or state law or regulation of any governmental authority other than
the Securities Act.
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3. Rule 144. With a view to making available the benefits of certain
--------
rules and regulations of the Commission that may permit the sale of the
Registrable Securities to the public without registration after an initial
Public Offering, the Company agrees to:
(a) provide information and such other assistance requested by the
Stockholders as is customarily provided by issuers in connection with sales of
their common stock by directors or affiliates under Rule 144, promulgated under
the Securities Act;
(b) make and keep public information available, as those terms are
understood and defined in Rule 144 promulgated under the Securities Act at all
times;
(c) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(d) deliver a written statement as to whether it has complied with
such requirements of this Section, to the Stockholders upon the Stockholders'
request.
4. Intentionally Omitted
---------------------
5. Modification; Waivers. This Agreement may be modified or amended only
---------------------
with the written consent of each party hereto. No party shall be released from
its obligations hereunder without the written consent of the other party. The
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) by the party
entitled to enforce such term, but any such waiver shall be effective only if in
a writing signed by the party against which such waiver is to be asserted.
Except as otherwise specifically provided herein, no delay on the part of any
party hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party hereto of any
right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any right, power or privilege hereunder.
6. Entire Agreement. This Agreement represents the entire understanding
----------------
and agreement between the parties hereto with respect to the subject matter
hereof and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.
7. Severability. If any provision of this Agreement, or the application
------------
of such provision to any Person or circumstance, shall be held invalid, the
remainder of this Agreement or the application of such provision to other
Persons or circumstances, to the extent permitted by law, shall not be affected
thereby; provided, that the parties shall negotiate in good faith with respect
to an equitable modification of the provision or application thereof held to be
invalid.
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8. Notices.
-------
(a) Any notice or communication to any party hereto shall be duly
given if in writing and delivered in person, receipt requested, or courier
guaranteeing next day delivery, or facsimile (with written confirmation of
receipt) to such other party's address or facsimile number set forth below.
If to EXIGENT DIAGNOSTICS, INC., X. XXXXXXX STOUGHTON, XXXXXX X.
XXXXX, XXXXXXX X. XXXXXX, XXXXXXX X. XXXXXX, XXXXXX X. XXXX or XXXXX X. XXXXXXX:
0 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Attention: X. Xxxxxxx Stoughton
Facsimile: 610-270-6150
with a copy to:
Xxxxx X. Xxxxxxx, Esquire
Pepper, Xxxxxxxx & Xxxxxxx
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
If to EXIGENT PARTNERS, L.P. OR XXXXXX X. XXXXX:
c/o Xxxxxxx Xxxxx Securities Incorporated
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxxx, Esquire
Xxxxxxx, Calamari & Xxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 212-213-1199
(b) All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered or facsimiled
(with written confirmation of receipt); and the next business day after timely
delivery to the courier, if sent by courier guaranteeing next day delivery.
-14-
9. Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and shall be binding upon the Company and the Stockholders and their respective
successors and permitted assigns. Each Stockholder may assign its rights under
this Agreement to any Person to whom the Stockholder transfers any of the
Registrable Securities or any interest therein without the necessity of
obtaining any consent to such assignment, provided that the such Person becomes
a party to that certain stockholders agreement, by and among the Company, the
Stockholders and certain other holders of the Common Stock. In the event that a
Stockholder assigns its rights to a holder or holders of only a portion of the
Registrable Securities, then all references to the Stockholder herein shall also
be deemed to refer to such other holder or holders, but in such event the
Stockholder shall have the sole right to make all decisions by and give notices
for such holder or holders under this Agreement; provided, that if the
Stockholder no longer owns any Registrable Securities, then all decisions and
notices hereunder shall be made by the holders of not less than a majority of
the Registrable Securities outstanding and all other holders of Registrable
Securities shall be bound by any such decision.
10. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which for all purposes shall be deemed to be an original
and all of which together shall constitute the same agreement.
11. Headings. The Section headings in this Agreement are for convenience
--------
of reference only, and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.
12. Construction. This Agreement shall be governed, construed and
------------
enforced in accordance with the laws of the State of New York without regard to
its principles of conflict of laws.
13. No Inconsistent Agreements. The Company has not previously, and shall
--------------------------
not hereafter, enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Stockholders in this Agreement.
14. Recapitalizations, Etc. In the event that any capital stock or other
-----------------------
securities are issued in respect of, in exchange for, or in substitution of, any
Registrable Securities by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the shares of Registrable Securities or any other
similar change in the Company's capital structure, appropriate adjustments shall
be made in this Agreement so as to fairly and equitably preserve, as far as
practicable, the original rights and obligations of the parties hereto under
this Agreement.
15. Arbitration. Any controversy or claim arising out of or relating to
-----------
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Rules of the American Arbitration Association in effect at
the time such arbitration is instituted. The arbitration panel shall be
composed of three arbitrators, one of whom shall be chosen by the Company, one
of
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whom shall be chosen by the Stockholders, and one of whom shall be chosen by the
two arbitrators previously designated. If both or either of the Company and/or
the Stockholders fails to choose an arbitrator within fourteen (14) calendar
days after receiving notice of commencement of arbitration or if the two
arbitrators fail to choose a third arbitrator within fourteen (14) calendar days
of their appointment, such arbitrators shall be chosen by the American
Arbitration Association. Unless the parties to the arbitration shall otherwise
agree to a different place of arbitration, the place of arbitration shall be New
York, New York. The arbitration award shall be final and binding upon the
parties thereto and may be entered in any court having jurisdiction. Each party
shall bear (i) its own expenses in connection with such arbitration and (ii)
one-half of the fees and expenses of the American Arbitration Association and
all arbitrators unless any arbitration award shall contain otherwise provide.
16. Specific Performance. The parties hereto agree that the Registrable
--------------------
Securities of the Company cannot be purchased or sold in the open market and
that, for these reasons, among others, the holder or holders of the Registrable
Securities will be irreparably damaged in the event that this Agreement is not
specifically enforceable. Accordingly, in the event of any controversy
concerning the Registrable Securities which are the subject of this Agreement,
or any right or obligation to register such securities, such right or obligation
determined as part of an arbitration award described in Section 15 shall be
enforceable in a court of equity by specific performance. The rights granted in
this Section 16 shall be cumulative and not exclusive, and shall be in addition
to any and all other rights which the parties hereto may have hereunder, at law
or in equity. the Stockholders consents to the jurisdiction of the federal
courts in the City of New York in any suit, action or proceeding brought
pursuant to this Section 16, waives any objection it may have to the laying of
venue in any such suit, action or proceeding in any of such court, and agrees
that service of any court paper may be made in such manner as may be provided
under applicable laws or court rules governing service of process.
17. Term. This Agreement shall continue in full force and effect for nine
----
(9) years from the Final Closing or, with respect to any Stockholder, the first
date on which the such Stockholder and their affiliates may sell all of the
Registrable Securities held by them in a ninety (90) day period pursuant to Rule
144 under the Securities Act.
-16-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the date first above written and delivered by their respective duly
authorized officers.
EXIGENT DIAGNOSTICS, INC.
By: /s/ X. Xxxxxxx Stoughton
---------------------------------
X. Xxxxxxx Stoughton
Chairman and Chief Executive Officer
EXIGENT PARTNERS, L.P.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------
Xxxxx Xxxxxxxxx, General Partner
/s/ X. XXXXXXX STOUGHTON
-------------------------------------
X. XXXXXXX STOUGHTON
/s/ XXXXXX X. XXXXX
--------------------------------------
XXXXXX X. XXXXX
/s/ XXXXXXX X. XXXXXX
--------------------------------------
XXXXXXX X. XXXXXX
/s/ XXXXXXX X. XXXXXX
--------------------------------------
XXXXXXX X. XXXXXX
/s/ XXXXXX X. XXXX
--------------------------------------
XXXXXX X. XXXX
/s/ XXXXX X. XXXXXXX
--------------------------------------
XXXXX X. XXXXXXX
/s/ XXXXXX X. XXXXX
--------------------------------------
XXXXXX X. XXXXX
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