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EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
by and between
SABRATEK CORPORATION
and
The former Stockholders of
STRATEGIC REIMBURSEMENT SERVICES, Inc.
Dated as of June 29, 1999
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TABLE OF CONTENTS
PAGE
1. Definitions...........................................................1
2. Shelf Registration....................................................3
3. Registration Procedures...............................................5
4. Holdback Arrangements.................................................8
5. Registration Expenses.................................................8
6. Indemnification.......................................................9
7. Miscellaneous........................................................11
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EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of June
29, 1999, by and among Sabratek Corporation, a Delaware corporation (the
"Company"), and the former stockholders (collectively, the "Stockholders" and
individually, a "Stockholder") of Strategic Reimbursement Services, Inc., a
Delaware corporation ("SRS").
The parties hereto agree as follows:
1. Definitions. The following terms as used herein shall have the following
meanings:
"Agreement of Merger" means the Agreement of Merger, dated as of June
29, 1999, by and among the Company, SBTK I Acquisition Corporation, an
Illinois corporation and a wholly-owned subsidiary of the Company, and SRS.
"Closing Registrable Securities" means the shares of Common Stock which
comprise the Closing Stock Consideration, as defined in the Agreement of
Merger.
"Closing Shelf Registration Statement" shall have the meaning specified
in Section 2.01.
"Commission" means the Securities and Exchange Commission and any other
similar or successor agency of the Federal government then administering
the Securities Act or the Exchange Act.
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Company and the related preferred stock purchase rights, as
appropriate.
"Company" shall have the meaning specified in the introductory
paragraph of this Agreement.
"Escrow Registrable Securities" means the shares of Common Stock which
comprise the Escrow Stock Consideration, as defined in the Agreement of
Merger.
"Deferred Shelf Registration Statement" shall have the meaning
specified in Section 2.02.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute then in effect, and any reference to a
particular section thereof shall include a reference to the comparable
section, if any, of any such similar Federal statute, and the rules and
regulations thereunder.
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"Person" means any individual, corporation, partnership, limited
liability company, association, trust or other entity or organization,
including a government or political subdivision or any agency or
instrumentality thereof.
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with
respect to the terms of the offering of any of the Registrable Securities
covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Registrable Securities" means (i) all of the shares of Common Stock
issued by the Company pursuant to the Agreement of Merger, (ii) any shares
of Common Stock issued pursuant to clause (iii) hereafter and (iii) any
shares of Common Stock issued or issuable in respect of the securities
described in clauses (i) and (ii) by reason of a stock split, stock
dividend or other recapitalization of the Company. For the purposes of this
Agreement, Registrable Securities will cease to be Registrable Securities
when (i) a registration statement covering such Registrable Securities has
been declared effective and they have been disposed of pursuant to such
effective registration statement, (ii) they are distributed to the public
pursuant to Rule 144 (or any similar provision then in force) or (iii) they
have been otherwise sold or transferred by the Stockholders (other than
pursuant to Section 7.02 below).
"Registration Statements" means any registration statement filed by the
Company under the Securities Act that covers any of the Registrable
Securities, including the Prospectus, any amendments and supplements to
such Registration Statements, including post-effective amendments and all
exhibits and all material incorporated by reference in such registration
statement.
"Rule 144" means Rule 144 under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute then in effect, and any reference to a particular
section thereof shall include a reference to a comparable section, if any,
of any such similar Federal statute, and the rules and regulations
thereunder.
"Shelf Registration Statements" means the Closing Shelf Registration
Statement and the Deferred Shelf Registration Statement.
"Stockholder" or "Stockholders" shall have the meanings specified in
the introductory paragraph of this Agreement.
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2. Shelf Registration
2.01 Closing Shelf Registration Statement. The Company shall file as
promptly as practicable (but in any event within 15 days after the date of this
Agreement) and use its reasonable best efforts to have declared effective a
shelf registration statement pursuant to Rule 415 (or any successor rule
thereto) under the Securities Act (the "Closing Shelf Registration Statement")
for a delayed or continuous public offering of 600,000 Closing Registrable
Securities, subject to the provisions of Section 2.03 and the other terms and
conditions of this Agreement. Such registration statement shall be on Form S-3
(or any successor form to Form S-3) or another appropriate form permitting
registration of such Registrable Securities for resale by the Stockholders on a
delayed or continuous basis as contemplated by this Section. In the event the
registration of a delayed or continuous offering of such Registrable Securities
is not permitted under the Securities Act, the Company will provide comparable
alternative registration rights under the Securities Act to the Stockholders.
2.02 Deferred Shelf Registration Statement. The Company shall file on or
prior to the two month anniversary of the date of effectiveness of the Closing
Shelf Registration Statement (but not later than December 1, 1999) and use its
reasonable best efforts to have declared effective a shelf registration
statement pursuant to Rule 415 (or any successor thereto) under the Securities
Act (the "Deferred Shelf Registration Statement") for a delayed or continuous
public offering of all of the Registrable Securities (other than those
Registrable Securities already registered pursuant to Section 2.01) subject to
the provisions of Section 2.03 and the other terms and conditions of this
Agreement. Such registration statement shall be on Form S-3 (or any successor
form to Form S-3) or another appropriate form permitting registration of such
Registrable Securities for resale by the Stockholders on a delayed or continuous
basis as contemplated by this Section. In the event the registration of a
delayed or continuous offering of such Registrable Securities is not permitted
under the Securities Act, the Company will provide comparable alternative
registration rights under the Securities Act to the Stockholders.
2.03 Limitations on Shelf Registrations. The shelf registration rights
granted to the Stockholders pursuant to Sections 2.01 and 2.02 are subject to
the following limitations:
(a) the Company shall not be obligated under Section 2.01 to file more
than one Closing Shelf Registration Statement, provided that a Closing Shelf
Registration Statement which does not become or remain effective for the period
specified in Section 3.01(a) shall not be deemed to constitute a Closing Shelf
Registration Statement filed pursuant to Section 2.01 (unless such Closing Shelf
Registration Statement has not become effective or does not remain effective due
solely to the fault of the Stockholders);
(b) the Company shall not be obligated under Section 2.02 to file more
than one Deferred Shelf Registration Statement, provided that a Deferred Shelf
Registration Statement which does not become or remain effective for the period
specified in Section 3.01(a) shall not be deemed to constitute a Deferred Shelf
Registration Statement filed pursuant to Section 2.02 (unless such
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Deferred Shelf Registration Statement has not become effective or does not
remain effective due solely to the fault of the Stockholders);
(c) the Company shall be entitled to postpone for a reasonable time,
not exceeding 20 days, the filing of any Shelf Registration Statement or its
efforts to cause any Shelf Registration Statement to become effective if at the
time the right to delay is exercised the Company shall determine in good faith
that such offering would interfere with any acquisition, financing or other
transaction which the Company is actively pursuing and is material to the
Company or would involve initial or continuing disclosure obligations that would
not be in the best interests of the Company; and
(d) the Company by notice to the Stockholders may postpone all sales
under the Shelf Registration Statements for a reasonable time, not exceeding 20
days, if the Company shall determine in good faith that permitting such sales
would interfere in any material respect with any material acquisition, financing
or other transaction which the Company is actively pursuing or require premature
disclosure (if the Company is so advised by its legal counsel) of any other
material corporate development or event, which disclosure would adversely affect
the interests of the Company in any material respect; provided that (x) the
Company may not implement more than three such postponements and (y) all
postponements under this paragraph shall not exceed 60 days in any 12 month
period.
(e) Notwithstanding Section 2.01, the Company shall be entitled to
postpone filing of the Closing Shelf Registration Statement if and so long as
the independent public accountant of the Company does not consent to the filing
thereof; provided that the Closing Shelf Registration Statement shall be filed
not later than October 15, 1999.
3. Registration Procedures.
3.01 Preparation and Filing. The Company will:
(a) prepare and file with the Commission each Shelf Registration
Statement with respect to Registrable Securities as contemplated by this
Agreement and use its reasonable best efforts to cause each Shelf Registration
Statement to become and remain effective until the earlier of (i) the date on
which all of the respective Registrable Securities have ceased to be Registrable
Securities and (ii) the two year anniversary of the effective date of such Shelf
Registration Statement (such two year anniversary, the "Shelf Expiration Date");
(b) otherwise use its reasonable best efforts to comply in all
material respects with all applicable rules and regulations of the Commission;
(c) use its reasonable best efforts to cause all the Registrable
Securities to be listed on the Nasdaq Stock Market promptly following issuance,
if the Registrable Securities are not
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already so listed, or such other principal trading market on which the Common
Stock then trades if the Common Stock is not then traded on the Nasdaq Stock
Market;
(d) take such actions as the Stockholders shall reasonably request in
order to expedite or facilitate the disposition of the Registrable Securities,
subject to the terms and conditions of this Agreement; provided that the Company
shall not be obligated pursuant to this subsection or any other provision of
this Agreement to participate in or assist with a "road show" or other special
selling efforts with respect to the sale of any Registrable Securities;
(e) permit the Stockholders to participate in the preparation of the
Shelf Registration Statements and to require the insertion therein of material
furnished to the Company in writing which in the judgment of the Stockholders
should be included and which is reasonably acceptable to the Company;
(f) use such reasonable efforts to prevent the issuance of any stop
order suspending the effectiveness of any Shelf Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus and, if any
such order is issued, to obtain the lifting thereof at the earliest reasonable
time;
(g) not at any time file or make any amendment to any Shelf
Registration Statement, or any amendment of or supplement to the respective
Prospectus (excluding the documents incorporated by reference into such
Prospectus), of which the Stockholders shall not have previously been advised or
furnished a copy or to which the Stockholders, or counsel for the Stockholders,
shall reasonably object;
(h) furnish to the Stockholders without charge as many signed copies
of the Shelf Registration Statements (as originally filed) and of all amendments
thereto, whether filed before or after the Shelf Registration Statement becomes
effective, copies of all exhibits and documents filed therewith, including
documents incorporated by reference into the respective Prospectus, and signed
copies of all consents and certificates of experts, as the Stockholders may
reasonably request;
(i) the Company will deliver to the Stockholders, without charge, from
time to time during the period when any Prospectus is required to be delivered
under the Securities Act, such number of copies of the respective Prospectus (as
supplemented or amended) as the Stockholders may reasonably request; and
(j) comply in all material respects to the best of its ability with
the Securities Act and the rules and regulations of the Commission thereunder,
and the Exchange Act and the rules and regulations of the Commission thereunder,
and any applicable state "blue sky" laws, so as to permit the completion of the
distribution of the Registrable Securities in accordance with the intended
method or methods of distribution contemplated in the respective Prospectus and
permitted by this Agreement. If at any time when a prospectus is required by the
Securities Act to be delivered in connection with sales of the Registrable
Securities any event shall occur or condition exist as a result
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of which it is necessary or desirable, based on the advice of counsel for the
Stockholders or agents or counsel for the Company, to amend any Shelf
Registration Statement or amend or supplement the respective Prospectus in order
that such Prospectus will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary or desirable, based on the
advice of such counsel, at any such time to amend any Shelf Registration
Statement or amend or supplement the respective Prospectus of the Company, the
Company will promptly prepare and file with the Commission such amendment or
supplement as may be necessary to correct such untrue statement or omission or
to make such Shelf Registration Statement or Prospectus comply with such
requirements.
3.02 Amendments. In connection with the Shelf Registration Statements filed
pursuant to this Agreement, the Company shall file any post-effective amendment
or amendments to the Shelf Registration Statements which may be required under
the Securities Act during the period required to effect the distribution
contemplated thereby; provided that the Company shall not be required to file
any post-effective amendment to the Shelf Registration Statements after the
second anniversary of the effective date of such Shelf Registration Statement.
3.03 Notification of Certain Events.
(a) During the period for which the Company is required to file and
keep effective each Shelf Registration Statement pursuant to this Agreement, the
Company shall promptly notify the Stockholders during the period such Shelf
Registration Statement is required to remain effective, or at any time when a
Prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event or the existence of any fact, as a result of
such Shelf Registration Statement or such Prospectus contained in the Shelf
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of
circumstances then existing. The Stockholders agree, upon receipt of such
notice, forthwith to cease making offers and sales of Registrable Securities
pursuant to the respective Shelf Registration Statement or deliveries of the
respective Prospectus contained therein for any purpose and to return to the
Company the copies of such Prospectus not theretofore delivered by the
Stockholders. Subject to Section 3.02, the Company shall promptly prepare and
furnish to the Stockholders a reasonable number of copies of any supplement to
or amendment of such Prospectus that may be necessary so that, as thereafter
delivered to the purchaser of Registrable Securities, such Prospectus shall not
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make these statement therein
not misleading in the light of circumstances then existing.
(b) The Company will promptly notify the Stockholders and confirm the
notice in writing, (i) when each Shelf Registration Statement, or any
post-effective amendment related thereto shall have become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been filed,
(ii) of any request by the Commission to amend any Shelf Registration Statement
or amend or supplement any Prospectus or for additional information and (iii) of
the
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issuance by the Commission of any stop order suspending the effectiveness of any
Shelf Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of the
Registrable Securities for offering or sale in any jurisdiction, or of the
institution or threatening of any proceedings for any of such purposes.
3.04 Provision of Information. As a condition to the obligation of the
Company under Section 2 to cause any Shelf Registration Statement or an
amendment to be filed or shares to be included in any Shelf Registration
Statement, the Stockholders shall provide such information regarding them and
their intended method of distribution of Registrable Securities and execute such
documents, powers of attorney and questionnaires as may reasonably be required
by the Company in connection with such registration.
3.05 Reports. The Company covenants that it will file the reports required
to be filed by it under the Securities Act and the rules and regulations of the
Commission thereunder and it will take such further action as the Stockholders
may reasonably request, all to the extent required from time to time to enable
the Stockholders to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144.
3.06 State Securities Laws. In connection with the offering of any
securities registered pursuant to this Agreement, the Company shall use its
reasonable best efforts to qualify or register the securities to be sold under
the securities or "blue sky" laws of such jurisdictions as may be reasonably
requested by the Stockholders or any other acts and things which may be
necessary or advisable to enable the Stockholders to consummate the disposition
in such jurisdiction of such securities; provided, however, that the Company
shall not be obligated to qualify as a foreign corporation to do business under
the laws of any such jurisdiction in which it is not then qualified or to file
any general consent to service of process.
4. Holdback Arrangements.
The Company shall have the right to require that the Stockholders shall not
effect any public sale or distribution (including sales pursuant to any Shelf
Registration Statement or pursuant to Rule 144) of Common Stock during the ten
business days prior to, and the 45-day period beginning on, the effective date
of the registration under the Securities Act of any underwritten offering of
Common Stock for cash by the Company (or such an offering by the Company and
stockholders of the Company), if the managing underwriter(s) for the public
offering so request; provided, however, no stockholder shall be obligated
pursuant to this Section 4 with respect to any underwritten offering unless (a)
the Stockholders were provided an opportunity to include their Registrable
Securities in such offering, by written notice delivered not less than 30 days
prior to the filing of the Registration Statement with respect thereto, and (b)
either (i) all of the Registrable securities so requested to be included in such
Registration Statement have been included or (ii) the only securities sold in
such offering were sold by the Company, and no other stockholder of the Company
were permitted to include their securities in such Registration Statement. The
Company shall be entitled to exercise its rights under this Section not more
than once during any 12 month period.
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5. Registration Expenses.
(a) The Company will pay and bear all costs and expenses incident to
the performance of its obligations under this Agreement with respect to the
registration pursuant to Section 2, including:
(i) the preparation, printing and filing of each Shelf
Registration Statement (including financial statements and exhibits) as
originally filed and as amended, any preliminary prospectuses and the
Prospectus and any amendments or supplements thereto, and the cost or
furnishing copies thereof to the Stockholders;
(ii) the preparation and printing of certificates representing
the Registrable Securities, any blue sky survey and other documents
relating to the performance of and compliance by the Company with this
Agreement; and
(iii) all fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange or other
trading market, if the Registrable Securities are not already so
registered.
(b) The Stockholders will pay and bear all costs and expenses incident
to the delivery of the Registrable Securities to be sold by them, including any
stock transfer taxes payable upon the sale of such Registrable Securities and
any underwriter discounts or commissions, broker or dealer fees or costs and any
similar costs and expenses in connection therewith; provided that if the then
applicable institutional investor broker fee of Bear Xxxxxxx & Co. Inc. (6 cents
per share) is not made available to any Stockholder with respect to any sale of
Registrable Securities, the Company shall bear the additional incremental broker
cost incurred with respect to such sale. The Stockholders will also bear the
costs and expenses of their own counsel and other agents retained in connection
with all Shelf Registration Statements, except that the Company shall pay for
the reasonable and documented costs and expenses incurred by legal counsel to
the Stockholders in connection with all Shelf Registration Statements in an
amount not to exceed $15,000.
The Company and the Stockholders hereby mutually agree to use Bear Xxxxxxx
& Co. as selling broker in connection with all sales of Registrable Securities.
6. Indemnification.
6.01 Indemnification by the Company. In connection with any registration of
securities pursuant to this Agreement, to the extent permitted by law, the
Company shall indemnify and hold harmless the Stockholders and each agent of the
Stockholders (such holder and any such other Person being hereinafter an
"Indemnitee") (i) against any and all losses, claims, damages and expenses
whatsoever to which such Indemnitee may become subject, to the extent such
losses, claims, damages or expenses (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Shelf Registration
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Statement, Prospectus or any amendment or supplement to any of the foregoing, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; (ii) against any and all losses, claims, damages and
expenses whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the
Company; (iii) against any and all losses, claims, damages and expenses
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any alleged violation by the Company of the Securities Act, the Exchange Act or
any state "blue sky" law in connection with the offering covered by any Shelf
Registration Statement; and (iv) against any and all expense whatsoever
(including reasonable fees and disbursements of counsel chosen by the
Stockholders), as reasonably incurred in investigating, preparing for or
defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, or any such alleged violation to the extent that any such
expense is not paid under subparagraph (i) or (iii) above and provided that such
expense resulted from reliance upon written information furnished to the
Stockholders by or on behalf of the Company regarding distribution of
Registrable Securities and such information was provided expressly for use in
the preparation of such document; provided further, however, that the Company
shall not be required to indemnify and hold harmless or reimburse an Indemnitee
to the extent that any such loss, claim, damage or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission in any document made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Indemnitee
expressly for use in the preparation of such documents; provided further that
the Company shall not be required to indemnify any Indemnitees, to the extent
that the loss, claim, damage, liability (or actions in respect thereof) or
expense for which indemnification is claimed results from the failure by such
Indemnitee to send or give a copy of the then current Prospectus (if theretofore
made available to the Stockholders) or a prospectus supplement to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission if such statement or omission was corrected in the then current
Prospectus or in a prospectus supplement; provided further that the Company
shall not be required to indemnify any Indemnitees to the extent that the loss,
claim, damage, liability (or actions in respect thereof) or expense for which
indemnification is claimed arises with respect to a sale or transfer of Common
Stock made during a period during which the sale or transfer thereof is not
permitted under this Agreement.
6.02 Indemnification by the Stockholders. In connection with each Shelf
Registration Statement, the Stockholders will furnish to the Company in writing
such information as shall be reasonably requested by the Company for use in the
respective Shelf Registration Statement or prospectus and shall, to the extent
permitted by law, indemnify and hold harmless the Company, its directors,
officers and agents and each Person, if any, who controls the Company (within
the
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meaning of the Securities Act or the Exchange Act) (the Company and any such
other Person being hereinafter a "Company Indemnitee") against all losses,
claims, damages or liabilities to which any such Company Indemnitee may become
subject, under the Securities Act or the Exchange Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in any Shelf Registration Statement, prospectus or any
preliminary prospectus or any amendment or supplement to any of the foregoing,
or arise out of or are based upon the omission to state therein 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, in each
case, to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of the Stockholders regarding such Stockholder or his intended method
of distribution of Registrable Securities and such information was provided
expressly for use in the preparation of such documents; and, subject to Section
6.03, the Stockholders shall reimburse the Company Indemnitee for any and all
expenses whatsoever (including reasonable fees and disbursements of counsel
chosen by the Company), reasonably incurred by the Company Indemnitee in
connection with investigating, preparing for or defending against any such loss,
claim, damage, liability or action; provided, however, that the maximum amount
of liability of the Stockholders under this Section shall be limited to an
amount equal to the net after-tax proceeds actually received by the Stockholders
from the sale of securities effected pursuant to such registration.
6.03 Indemnification Procedures. Promptly after receipt by an indemnified
party under Section 6.01 or Section 6.02 of notice of the commencement of any
action, suit, proceeding or investigation or threat thereof made in writing for
which such Person will claim indemnification or contribution pursuant to this
Agreement, the indemnified party shall notify the indemnifying party thereof in
writing and, unless in such indemnified party's reasonable judgment a conflict
of interest may exist between such indemnified and indemnifying parties with
respect to such claim, shall permit such indemnifying party to assume and
control the defense of such claim at its expense with counsel reasonably
satisfactory to such indemnified party. The failure to so notify the
indemnifying party shall relieve the indemnifying party from any liability
hereunder with respect to the action if such failure prevents the indemnifying
party from contesting such action; provided, however that any such failure shall
not relieve the indemnifying party from any other liability which it may have to
any other party. If the indemnifying party gives notice to such indemnified
party of its election to assume and control the defense of such claim, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses subsequently incurred by the indemnified party in connection with
the defense or investigation of the action unless the indemnified party shall
have given the indemnifying party notice of a conflict of interest with respect
to such claim. The failure of an indemnifying party to give notice to the
indemnified party of its election to assume and control the defense of any
action for which notice has been received by the indemnifying party in
accordance with this Section within 45 days after the receipt of such notice
shall constitute an election by the indemnifying party not to assume and control
the defense of such action. An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party
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with respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other indemnified party with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of separate
counsel for such indemnified parties. No indemnified party shall consent to
entry of any judgment or enter into any settlement with respect to a claim
without the consent of the indemnifying party.
6.04 Rights of Contribution. In order to provide for just and equitable
contribution in circumstances under with the indemnity contemplated by Section
6.01 and Section 6.02 is for any reason not available, other than by reason of
the exceptions provided therein, the parties required to indemnify by the terms
thereof shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement incurred by
the Company and the Stockholders, except to the extent that contribution is not
permitted under Section 11(f) of the Securities Act. In determining the amounts
which the respective parties shall contribute, there shall be considered the
relative knowledge of the parties and access to information concerning the
matter with respect to which the claim was asserted, the opportunity to correct
and prevent any statement or omission and any other equitable considerations
appropriate under the circumstances. The Company and the Stockholders agree with
each other that the Stockholders shall not be required to contribute any amount
in excess of the amount the Stockholders would have been required to pay to
indemnified parties if the indemnity under Section 6.02 were available. For
purposes of this Section, each director and each officer of the Company who
signed any Shelf Registration Statement, and each Person, if any, who controls
the Company or the Stockholders within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as the Company or the
Stockholders, as the case may be.
7. Miscellaneous.
7.01 Mergers and Other Transactions. The Company agrees that, as a
condition to any merger, consolidation or the sale of all or substantially all
of its assets in exchange for securities of another entity, it will use its
reasonable best efforts in light of the circumstances then existing to require
the surviving, consolidated or purchasing entity to enter into an agreement to
register the securities of such surviving, consolidated or purchasing entity, to
be received by the Stockholders, on substantially the same terms and provisions
as are provided in this Agreement.
7.02 Assignment. The registration rights contained in Section 2 of this
Agreement shall be transferable by the Stockholders subject to:
(i) the Stockholders obtaining the prior written consent of the
Company to transfer such registration rights, which consent shall not be
unreasonably withheld or delayed;
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(ii) the transferee shall agree to become subject (in a writing
reasonably acceptable to the Company) to all of the term, conditions and
obligations of this Agreement, including in form this Section 7.02; and
(iii) giving effect to such transfer, there shall be no more than
a total of 10 holders of Registrable Securities.
This Agreement is not assignable other than by operation of law or with the
consent of all parties hereto, and any purported assignment in violation hereof
shall be null and void.
7.03 Limitation of Registration Rights. Nothing contained in this Agreement
shall create any obligation on behalf of the Company to register under the
Securities Act any securities which are not Registrable Securities held by the
Stockholders.
7.04 No Inconsistent Agreements. The Company will not hereafter enter into
any agreement with respect to its securities which is inconsistent with the
rights granted to the Stockholders in this Agreement. The Company has not
previously entered into any agreement, with respect to any of its securities,
granting any registration rights to any person, which agreement is in effect on
the date hereof.
7.05 Remedies. The Stockholders, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of their rights under this Agreement. The Company agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this Agreement and hereby
agrees to waive the defense in any action for specific performance that a remedy
at law would be adequate.
7.06 Dispute Resolution. To the extent feasible, the parties desire to
resolve any controversies or claims or issues arising out of or relating to this
Agreement through discussions and negotiations between each other. The parties
agree to use their reasonable best efforts to attempt to resolve any disputes,
controversies, claims or issues arising out of or relating to this Agreement by
face-to-face negotiations with each other. In the event that, after discussions,
such controversies, claims or issues cannot be resolved solely between the
parties, then the parties shall, within 10 days after either the Company or any
one of the Stockholders give notice to the other, jointly submit their dispute
(other than any dispute relating to any claim arising out of the ownership of
Common Stock) to binding arbitration in the City of Chicago, Illinois. Such
arbitration shall be administered by the American Arbitration Association (the
"Institute") in accordance with its then prevailing rules for arbitration of
business disputes (except as otherwise provided by this Agreement), by three
independent and impartial arbitrators, one of whom shall be appointed by the
Company, one of whom shall be appointed by a majority in interest of the
Stockholders (on the basis of the number of Registrable Securities owned by each
Stockholder) and one of whom shall be appointed by the Institute (collectively,
the "Arbitrator"). Throughout any Arbitration or Dispute Resolution process the
respective Stockholders, at that time, shall act by majority in interest.
Notwithstanding anything
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to the contrary provided in Section 9.10 of this Agreement, the arbitration
shall be governed by the United States Arbitration Act, 9 U.S.C. Section 1 et.
seq. The Arbitrator shall permit and facilitate such discovery as it shall
determine appropriate in the circumstances, taking into account the needs of the
parties hereto and the desirability of making discovery expeditious and cost
effective. The arbitrator may issue such interim orders in accordance with
principles of equity as may be necessary to protect any party from irreparable
harm during the pendency of any arbitration, including entry of a preliminary
injunction. Any such order shall be without prejudice to the final determination
of the controversy. Each party to this Agreement hereby agrees that such
arbitration shall be completed and a final arbitration decision rendered within
60 days of the submission of the respective dispute to arbitration, except as
otherwise specified in this Agreement, and each of such parties shall take all
actions appropriate and necessary to cause such arbitration to be so completed
within such 60 day period. The Arbitrator shall not be empowered to award any
party any punitive damages in connection therewith, and each party hereby
irrevocably waives any right to recover such punitive damages. The determination
of the Arbitrator as to a dispute shall be final and binding for all purposes of
this Agreement. Each party to any such arbitration shall use its best efforts
and utmost diligence to safeguard and to protect against disclosure, misuse,
espionage, loss and theft and shall keep and maintain in strict confidence and
shall not disclose to any third party any information that may be disclosed to
it in connection with such arbitration proceeding, other than to its employees
and agents who require access to such information to perform their duties and
other than is required or appropriate to disclose pursuant to applicable law
(including pursuant to securities laws and any reporting requirements
thereunder) or court order or in any arbitration contemplated by this Agreement;
the arbitrator shall to the extent permitted by the rules and regulations of the
Institute be likewise bound by this confidentiality provision and shall not make
public its opinion or findings in connection with the relevant proceeding. The
fees and expenses of the Arbitrator shall be equally shared by the parties and
each of the Parties shall bear its own costs and expenses in connection with any
such arbitrations.
7.07 Notices. All notices and any other communications provided for or
permitted hereunder shall be made by hand delivery or registered first-class
mail:
If to the Company:
Sabratek Corporation
0000 Xxxxx Xx. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Chief Financial Officer
with a copy (which shall not constitute notice) to:
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
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If to any Stockholder:
Notice shall be sent to the address or facsimile
number of the respective Stockholder as inserted on
the execution pages of this Agreement
with a copy (which shall not constitute notice) to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
All Notices hereunder will be in writing. Any Notice hereunder shall
be deemed duly given if (and then two business days after) it is sent by
registered or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth on the execution pages hereof,
unless otherwise provided for herein,.
Any party hereto may send any Notice hereunder to the intended
recipient at the address provided using any other means (including personal
delivery, expedited courier, messenger service, telecopy, telex, ordinary mail
or electronic mail), but no such Notice shall be deemed to have been duly given
unless and until it actually is received by the intended recipient. Any party to
this Agreement may change the address to which Notices hereunder are to be
delivered by giving the other parties hereto notice in the manner herein set
forth.
7.08 Counterparts. This agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same agreement. A facsimile copy of this
Agreement and any signatures hereon shall be considered as originals for all
purposes.
7.09 Headings. Section headings are inserted herein for convenience only
and do not form a part of this Agreement.
7.10 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois without regard to principles
of conflicts of law.
7.11 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the
Stockholders shall be enforceable to the fullest extent permitted by law.
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7.12 Entire Agreement; Amendment. This agreement contains the entire
agreement among the parties hereto with respect to the transactions contemplated
herein, and supersedes all prior written agreements and negotiations and oral
understandings, if any, with respect to its subject matter. This Agreement may
not be amended, supplemented or discharged except by an instrument in writing
signed by the Company and a majority in interest of the Stockholders (on the
basis of the number of Registrable Securities owned by such stockholder).
* * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
SABRATEK CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Its: President
----------------------------------------
STOCKHOLDERS:
/s/ Xxxxxx Xxxxxx
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Signature
Printed Name: Xxxxxx Xxxxxx
Address:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Facsimile:
---------------------------------
/s/ Xxxx Xxxx
--------------------------------------------
Signature
Printed Name: Xxxx Xxxx
Address:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Facsimile:
---------------------------------
19
/s/ Xxxxx Xxxxxxxx
--------------------------------------------
Signature
Printed Name: Xxxxx Xxxxxxxx
Address:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Facsimile:
---------------------------------
/s/ Xxxxxxx Xxxxxxxx
--------------------------------------------
Signature
Printed Name: Xxxxxxx Xxxxxxxx
Address:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Facsimile:
---------------------------------
/s/ Xxxxxxx Xxxxxxxx
--------------------------------------------
Signature
Printed Name: Xxxxxxx Xxxxxxxx
Address:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Facsimile:
---------------------------------
