REGISTRATION RIGHTS AGREEMENT
dated
as
of November 7, 2007
by
and
among
CHINDEX
INTERNATIONAL, INC.
and
MAGENTA
MAGIC LIMITED
1
THIS
REGISTRATION RIGHTS
AGREEMENT (this “Agreement”) is made and
entered into as of November 7, 2007, by and between CHINDEX INTERNATIONAL,
INC.,
a Delaware corporation (the “Company”), and MAGENTA
MAGIC LIMITED, a private corporation organized under the laws of the British
Virgin Islands (“Purchaser”).
W
I T N E S S E T H :
WHEREAS,
the Company
and Purchaser entered into that certain Securities Purchase Agreement dated
as
of November 7, 2007 (the “Purchase Agreement”), in
connection with which the Company shall issue and sell to Purchaser 359,195
shares of the Tranche A Shares and reserved 1,436,781 shares of Conversion
Shares to be issued and issuable upon conversion of the Tranche B Notes and
Tranche C Notes.
WHEREAS,
to induce
Purchaser to enter into the Purchase Agreement, the Company has agreed to
provide the registration rights provided for in this Agreement for the holders
of Registrable Shares (as defined below); and
WHEREAS,
the execution
of this Agreement is a condition to the closing of the transactions contemplated
by the Purchase Agreement.
NOW,
THEREFORE, in
consideration of the premises and the mutual covenants of the parties hereto,
and for other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. DEFINITIONS. As
used in this Agreement, the following terms shall have the following
meanings. Capitalized terms not otherwise defined herein shall have
meanings ascribed to them under the Purchase Agreement.
“144A/Regulation
S Shares” means the shares of Common Stock initially sold to
Purchaser in the private placement and resold by Purchaser to “qualified
institutional buyers” (as such term is defined in Rule 144A) or to “non-U.S.
persons” (in accordance with Regulation S) in an “offshore transaction” (in
accordance with Regulation S), as applicable.
“Agreement”
is defined in the recital of this Agreement.
“Commission”
means the Securities and Exchange Commission.
“Company”
is defined in the recital of this Agreement, and includes any successor
thereto.
“Controlling
Person” is defined in Section 6(a).
“Demand
Registration” is defined in Section 2(b)(i).
“Demand
Registration Statement” is defined in Section
2(b)(i).
“End
of Suspension Notice” is defined in Section
5(b).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission pursuant
thereto.
“Fair
Market Value” means, with respect to a share of Common Stock, (i)
if such Common Stock is listed on a national securities exchange in the United
States, the 10 consecutive trading day average of the closing price per share
of
the Common Stock on such national securities exchange immediately following
the
time the Mandatory Shelf Registration Statement is declared effective by the
Commission, as published by the Wall Street Journal or other reliable
publication, (ii) if a public market exists for such shares of Common Stock
but such shares are not listed on a national securities exchange, the 10
consecutive trading day average of the mean between the closing bid and asked
quotations in the over-the-counter market for a share of such Common Stock
immediately following the time the Mandatory Shelf Registration Statement is
declared effective by the Commission, or (iii) if such Common Stock is not
then listed on a national securities exchange or traded in the over-the-counter
market, the price per share of Common Stock determined in good faith by the
Company’s board of directors based on the average of the estimated fair market
value of the Common Stock during the 10 consecutive trading day period following
the date on which the Mandatory Shelf Registration Statement is declared
effective by the Commission.
“Form
10-K” means an annual report required to be filed with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act, as
such
form may be amended from time to time, or any similar form, rule or regulation
hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such form, provided that such form need not
include those items required by Section 404 of the Xxxxxxxx-Xxxxx Act of
2002.
“Form 10-Q”
means a quarterly report required to be filed with the Commission pursuant
to
Section 13 or Section 15(d) of the Exchange Act, as such form may be amended
from time to time, or any similar form, rule or regulation hereafter adopted
by
the Commission as a replacement thereto having substantially the same effect
as
such form, provided that such form need not include those items required by
Section 404 of the Xxxxxxxx-Xxxxx Act of 2002.
“Free
Writing Prospectus” means a free writing prospectus, as defined in
Rule 405.
“Holder”
means each record owner of any Registrable Shares from time to time, including
Purchaser and its Affiliates.
“Indemnified
Party” is defined in Section 6(c).
“Indemnifying
Party” is defined in Section 6(c).
“Issuer
Free Writing Prospectus” means an issuer free writing prospectus,
as defined in Rule 433.
“Liabilities”
is defined in Section 6(a).
“Mandatory
Shelf Registration Statement” is defined in
Section 2(a).
“NASD”
means the National Association of Securities Dealers, Inc.
“No
Objections Letter” is defined in Section 4(t).
“Notice
and Questionnaire” is defined in Section
2(a)(iii).
“Participants”
is defined in the introductory paragraph of this Agreement.
“Permitted
Free Writing Prospectus” is defined in the last paragraph of
Section 4.
“Person”
means an individual, limited liability company, partnership, corporation, trust,
unincorporated organization, government or agency or political subdivision
thereof, or any other legal entity.
“Piggyback
Registration Statement” is defined in Section
2(b).
“Purchaser”
is defined in the introductory paragraph of this Agreement, and includes any
successor thereto.
“Purchase
Agreement” is defined in the first recital clause of this
Agreement.
“Prospectus”
means the prospectus included in any Registration Statement, including any
preliminary prospectus, and all other amendments and supplements to any such
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference, if any, in such
prospectus.
“Purchaser
Indemnitee” is defined in Section 6(a).
“Registrable
Shares” means (i) the Shares, (ii) Conversion Shares issued or
issuable upon conversion of the Notes, and (iii) Common Stock or any
other securities of the Company issued as a dividend or other distribution
with
respect to, or in exchange for, or in replacement of, the Common Stock owned
by
the Holders, provided, that, any such securities shall cease to be
Registrable Shares when (x) such securities shall have been sold or transferred
without limitation pursuant to a Registration Statement, (y) such
securities have been or may be sold or transferred without limitation to the
public pursuant to Rule 144 (or any similar provision then in force, including
Rule 144(k) but not Rule 144A) under the Securities Act, or (z) such securities
shall have ceased to be outstanding.
“Registration
Expenses” means any and all reasonable expenses incident to the
performance of or compliance with this Agreement, including: (i) all
Commission, securities exchange, NASD registration, listing, inclusion and
filing fees (including those of Purchaser and Holders associated or affiliated
with Purchaser), (ii) all reasonable fees and expenses incurred in connection
with compliance with international, federal or state securities or blue sky
laws
(including any registration, listing and filing fees and reasonable fees and
disbursements of counsel in connection with blue sky qualification of any of
the
Registrable Shares and the preparation of a blue sky memorandum and compliance
with the rules of the NASD), (iii) all reasonable expenses of any Persons in
preparing or assisting in preparing, word processing, duplicating, printing,
delivering and distributing any Registration Statement, any Prospectus, any
amendments or supplements thereto, any underwriting agreements, securities
sales
agreements, certificates and any other documents relating to the performance
under and compliance with this Agreement, (iv) all fees and expenses incurred
in
connection with the listing or inclusion of any of the Registrable Shares on
The
NASDAQ Stock Market pursuant to Section 4(n), (v) the reasonable fees and
disbursements of counsel for the Company and of the independent public
accountants of the Company (including the expenses of any special audit and
“cold comfort” letters required by or incident to such performance) and the
reasonable fees and disbursements of one counsel, reasonably acceptable to
the
Company, for the Holders, selected by the Holders holding a majority of the
Registrable Shares, (vi) any fees and disbursements customarily paid in issues
and sales of securities (including the fees and expenses of any experts retained
by the Company in connection with any Registration Statement), provided,
however, that Registration Expenses shall exclude brokers’ or
underwriters’ discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Registrable Shares by a Holder and the fees and
disbursements of any counsel to the Holders other than as provided for in clause
(v) above.
“Registration
Statement” means any Mandatory Shelf Registration Statement,
Demand Registration Statement or Piggyback Registration Statement.
“Regulation
S” means Regulation S (Rules 901-905) promulgated by the
Commission under the Securities Act, as such rules may be amended from time
to
time, or any similar rule or regulation hereafter adopted by the Commission
as a
replacement thereto having substantially the same effect as such
regulation.
“Rule
144”, “Rule 144A”, “Rule
158”, “Rule 405”, “Rule
415”, “Rule 424” or “Rule
433”, respectively, means such specified rule
promulgated by the Commission pursuant to the Securities Act, as such rule
may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission as a replacement thereto having substantially the
same
effect as such rule.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules
and regulations promulgated by the Commission thereunder.
“Shares”
means the Shares of Common Stock being offered and sold pursuant to the terms
and conditions of the Purchase Agreement.
“Suspension
Event” is defined in Section 5(b).
“Suspension
Notice” is defined in Section 5(b).
“Underwritten
Offering” means a sale of securities of the Company to an
underwriter or underwriters for reoffering to the public.
2. REGISTRATION
RIGHTS.
(a) Mandatory
Shelf Registration. As set forth in Section 4,
the Company agrees to file with the Commission within 30 days, from the date
on
which the Holder provides the Company with a completed and signed questionnaire
in the form provided as Appendix A hereto, a shelf registration statement on
Form S-3 or such other form under the Securities Act then available to the
Company providing for the resale pursuant to Rule 415 from time to time by
the
Holders of their Registrable Shares for a three-year period commencing from
the
Closing Date (the “Mandatory Shelf Registration
Statement”).
(i) Effectiveness
and Scope. The Company shall use its reasonable best
efforts to cause the Mandatory Shelf Registration Statement to be declared
effective by the Commission as promptly as practicable following such filing
and
to remain effective until the date on which all Shares in respect thereof cease
to be Registrable Shares. The Mandatory Shelf Registration Statement
shall provide for the resale from time to time, and pursuant to any method
or
combination of methods legally available (including an Underwritten Offering,
a
direct sale to purchasers, a sale through brokers or agents or a sale over
the
internet) by the Holders of any and all Registrable Shares.
(ii) Underwriting. If
any Holder proposes to conduct an Underwritten Offering under the Mandatory
Shelf Registration Statement, such Holder shall advise the Company and all
other
Holders whose securities are included in the Mandatory Shelf Registration
Statement (if applicable), of the managing underwriters for such proposed
Underwritten Offering (which may be Purchaser or an Affiliate thereof); such
managing underwriters to be subject to the approval of the Company, not to
be
unreasonably withheld. In such event, the Company shall enter into an
underwriting agreement in customary form with the managing underwriters, which
shall include, among other provisions, indemnities to the effect and to the
extent provided in Section 6, and shall take all such other reasonable
actions as are requested by the
managing
underwriter in order to expedite or facilitate the registration and disposition
of the Registrable Shares included in such Underwritten Offering; provided,
however, that the Company shall be required to cause appropriate officers of
the Company or its Affiliates to participate in a “road show” or similar
marketing effort being conducted by such underwriter with respect to such
Underwritten Offering only if the Holders reasonably anticipate gross proceeds
from such Underwritten Offering of at least $10 million. All Holders
proposing to distribute their Registrable Shares through such Underwritten
Offering shall enter into an underwriting agreement in customary form with
the
managing underwriters selected for such underwriting and complete and execute
any questionnaires, powers of attorney, indemnities, securities escrow
agreements and other documents reasonably required under the terms of such
underwriting, and furnish to the Company such information in writing as the
Company may reasonably request for inclusion in the Registration Statement;
provided, however, that
no Holder shall be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements as are customary and reasonably requested by the
underwriters. Notwithstanding any other provision of this Agreement,
with respect to an Underwritten Offering in connection with the Mandatory Shelf
Registration Statement, if the managing underwriters determine in good faith
that marketing factors require a limitation on the number of shares to be
included in such Underwritten Offering, then the managing underwriters may
exclude shares (including Registrable Shares) from the Underwritten Offering,
and any shares included in the Underwritten Offering shall be allocated to
each
of the Holders requesting inclusion of their Registrable Shares in such
Underwritten Offering on a pro rata basis based on the total number of
such Registrable Shares requested to be included.
(iii) Selling
Stockholder Questionnaires. Each Holder agrees, by its
acquisition of Shares, that if such Holder wishes to sell Registrable Shares
pursuant to the Mandatory Shelf Registration Statement and related Prospectus,
it will do so only in accordance with this Section 2(a)(iii). Each Holder
wishing to sell Registrable Shares pursuant to the Mandatory Shelf Registration
Statement and related Prospectus agrees to deliver a written notice,
substantially in form and substance of Annex A (a “Notice and
Questionnaire”), to the Company. The Company shall mail the Notice
and Questionnaire to the Holders no later than the date of initial filing of
the
Mandatory Shelf Registration Statement with the Commission. No Holder shall
be
entitled to be named as a selling securityholder in the Mandatory Shelf
Registration Statement as of the initial effective date of the Mandatory Shelf
Registration Statement, and no Holder may use the Prospectus forming a part
thereof for resales of Registrable Shares at any time, unless such Holder has
returned a completed and signed Notice and Questionnaire to the Company by
the
deadline for response set forth therein; provided, however, Holders shall
have at least 20 days from the date on which the Notice and Questionnaire is
first mailed to such Holders to return a completed and signed Notice and
Questionnaire to the Company. Notwithstanding the foregoing, (x) upon the
request of any Holder that did not return a Notice and Questionnaire on a timely
basis or did not receive a Notice and Questionnaire because it was a subsequent
transferee of Registrable Shares after the Company mailed the Notice and
Questionnaire, the Company shall distribute a Notice and Questionnaire to such
Holders at the address set forth in the request and (y) upon receipt of a
properly completed Notice and Questionnaire from such Holder, the Company shall
use its best efforts to name such Holder as a selling securityholder in the
Mandatory Shelf Registration Statement by means of a pre-effective amendment,
by
means of a post-effective amendment or, if permitted by the Commission, by
means
of a Prospectus supplement to the Mandatory Shelf Registration Statement;
provided, however, that the Company will have no obligation to add
Holders to the Mandatory Shelf Registration Statement as selling securityholders
more frequently than once every 30 calendar days.
(b) Demand
Registration.
(i) Request
for registration. If (i) the Mandatory Shelf
Registration Statement is not declared effective by the 120th day following
the
Closing or (ii) the Commission shall have issued a stop order relating to the
Mandatory Shelf Registration Statement and such order remains in
effect,
and
the
Company receives from the Holders of Registrable Shares constituting at least
3%
of the then outstanding Common Stock of the Company on a Fully-Diluted basis
(such Holder or Holders referred to as the “Initiating
Holder”) a request in writing that the Company effect any
registration with respect to the Registrable Shares held by such Initiating
Holder then outstanding on a form other than Form S-3 (including the Prospectus,
amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto and all
material incorporated by reference or deemed to be incorporated by reference,
if
any, in such registration statement, the “Demand Registration
Statement”), the Company shall (i) within ten (10) days of receipt
of such written request, give written notice of the proposed registration to
all
other Holders, and (ii) as soon as practicable, use its reasonable best efforts
to effect registration of those Registrable Shares (“Demand
Registration”) that the Company has been so requested to register
by the Initiating Holder and all other Holders to whom notice was given within
twenty (20) days after receiving such written notice from the Company on that
form and to cause those Registrable Shares to be qualified in jurisdictions
as
the Holder or Holders may reasonably request, subject to limitations of this
Section 2. The Company shall not be obligated to take any action to
effect any registration pursuant to this Section 2(b)(i) after the Company
has
effected a total of four Demand Registrations.
(ii) Right
of Deferral. Notwithstanding the foregoing, the Company
shall not be obligated to file a Demand Registration Statement pursuant to
this
Section 2, if the Company furnishes to the Initiating Holder a
certificate signed by a director of the Company certifying that in the good
faith judgment of the Board it would be seriously detrimental to the Company
for
a Demand Registration Statement to be filed because (i) a merger, consolidation,
substantial acquisition or other similar corporate action is expected to occur
imminently or (ii) the Company intends to issue equity securities or
equity-linked securities not pursuant to a registration statement, then the
Company’s obligation to use its reasonable best efforts to file a Demand
Registration Statement shall be deferred for a period not to exceed ninety
(90)
days from the receipt of the request to file the registration by that Holder;
provided, that the Company shall not exercise the right to delay a
request contained in this Section 2(b)(ii) more than once in any 12-month
period, and provided further, that during such 90-day period, the
Company shall not file a registration statement for securities to be issued
and
sold for its own account (except on Form S-4).
(iii) Registration
of Other Securities in Demand Registration. Any Demand
Registration Statement filed pursuant to the request of the Holders under this
Section 2 may, subject to the provisions of Section 2(b)(iv),
include securities of the Company other than the Registrable
Shares. If the Company, officers or directors of the Company holding
securities other than the Registrable Shares, or holders of securities other
than the Registrable Shares, request inclusion of other securities of the
Company held thereby in the registration, the Company may, in its sole
discretion, offer to any or all of the Company, those officers or directors,
and
the holders of securities other than the Registrable Shares, that their
securities be included in the underwriting and may condition that offer on
the
acceptance by those Persons of the terms of this Section 2.
(iv) Underwriting. If
any Holder proposes to conduct an Underwritten Offering under the Demand
Registration Statement, such Holder shall advise the Company and all other
Holders whose securities are included in the Demand Registration Statement
(if
applicable), of the managing underwriters for such proposed Underwritten
Offering; such managing underwriters to be subject to the approval of the
Company. In such event, the Company shall enter into an underwriting
agreement in customary form with the managing underwriters, which shall include,
among other provisions, indemnities to the effect and to the extent provided
in
Section 6, and shall take all such other reasonable actions as are
requested by the managing underwriter in order to expedite or facilitate the
registration and disposition of the Registrable Shares included in such
Underwritten Offering; provided, however, that the Company shall be
required to cause appropriate officers of the Company or its Affiliates to
participate in a “road show” or similar marketing effort being conducted by such
underwriter with respect to such Underwritten Offering
only
if
the Holders reasonably anticipate gross proceeds from such Underwritten Offering
of at least US$10 million. All Holders proposing to distribute their
Registrable Shares through such Underwritten Offering shall enter into an
underwriting agreement in customary form with the managing underwriters selected
for such underwriting and complete and execute any questionnaires, powers of
attorney, indemnities, securities escrow agreements and other documents
reasonably required under the terms of such underwriting, and furnish to the
Company such information in writing as the Company may reasonably request for
inclusion in the Registration Statement. Notwithstanding any other
provision of this Agreement, with respect to an Underwritten Offering in
connection with the Demand Registration Statement, if the managing underwriters
determine in good faith that marketing factors require a limitation on the
number of shares to be included in such Underwritten Offering, then the managing
underwriters may exclude shares (including Registrable Shares) from the
Underwritten Offering, and any shares included in the Underwritten Offering
shall be allocated to each of the Holders requesting inclusion of their
Registrable Shares in such Underwritten Offering on a pro rata basis
based on the total number of such Registrable Shares requested to be
included.
(v) Selling
Stockholder Questionnaires. Each Holder agrees, by its
acquisition of the Securities issued or issuable under the Purchase Agreement,
that if such Holder wishes to sell Registrable Shares pursuant to the Demand
Registration Statement and related Prospectus, it will do so only in accordance
with this Section 2(b)(v). Each Holder wishing to sell
Registrable Shares pursuant to the Demand Registration Statement and related
Prospectus agrees to deliver a written notice, substantially in form and
substance of Annex A (a “Notice and
Questionnaire”), to the Company. The Company shall mail
the Notice and Questionnaire to the Holders no later than the date of initial
filing of the Demand Registration Statement with the Commission. No
Holder shall be entitled to be named as a selling securityholder in the Demand
Registration Statement as of the initial effective date of the Demand
Registration Statement, and no Holder may use the Prospectus forming a part
thereof for resales of Registrable Shares at any time, unless such Holder has
returned a completed and signed Notice and Questionnaire to the Company by
the
deadline for response set forth therein; provided, however, Holders shall
have at least twenty (20) days from the date on which the Notice and
Questionnaire is first mailed to such Holders to return a completed and signed
Notice and Questionnaire to the Company. Notwithstanding the
foregoing, (x) upon the request of any Holder that did not return a Notice
and
Questionnaire on a timely basis or did not receive a Notice and Questionnaire
because it was a subsequent transferee of Registrable Shares after the Company
mailed the Notice and Questionnaire, the Company shall distribute a Notice
and
Questionnaire to such Holders at the address set forth in the request and (y)
upon receipt of a properly completed Notice and Questionnaire from such Holder,
the Company shall use its best efforts to name such Holder as a selling
securityholder in the Demand Registration Statement by means of a pre-effective
amendment, by means of a post-effective amendment or, if permitted by the
Commission, by means of a Prospectus supplement to the Demand Registration
Statement; provided, however, that the Company will have no obligation to
add Holders to the Demand Registration Statement as selling securityholders
more
frequently than once every thirty (30) calendar days.
(c) Piggyback
Registration. If, after the date hereof and within three
years following the Closing Date, the Company proposes to file a registration
statement under the Securities Act providing for a public offering of the
Company’s equity securities, other than the Mandatory Shelf Registration
Statement or a registration statement on Form S-8 or Form S-4 or any similar
form hereafter adopted by the Commission as a replacement therefor (including
the Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto
and all material incorporated by reference or deemed to be incorporated by
reference, if any, in such registration statement, the “Piggyback
Registration Statement”), the Company will notify each Holder of
Registrable Shares constituting at least 3% of the then outstanding Common
Stock
of the Company on a Fully-Diluted basis of the proposed filing if clause (i)
or
(ii) of the following sentence applies. If (i) the Piggyback
Registration Statement relates to an Underwritten Offering, or (ii) the
Mandatory Shelf Registration
Statement
is not then effective, then each Holder in the case of clauses (i) and (ii)
shall be given an opportunity to include in such Piggyback Registration
Statement all or any part of such Holder’s Registrable Shares. Each
such Holder desiring to include in any such Piggyback Registration Statement
all
or part of such Holder’s Registrable Shares shall, within 10 days after delivery
of the above-described notice by the Company, so notify the Company in writing,
and in such notice shall inform the Company of the number of Registrable Shares
such Holder wishes to include in such Piggyback Registration Statement and
provide, as a condition to such inclusion, such information regarding itself,
its Registrable Shares and the intended method of disposition of such securities
as is required pursuant to Regulation S-K promulgated under the Securities
Act
to effect the registration of the Registrable Shares. Any Holder’s
election to include any Registrable Shares in such Piggyback Registration
Statement will not affect the inclusion of such Registrable Shares in the
Mandatory Shelf Registration Statement until such Registrable Shares have been
sold under the Piggyback Registration Statement, at which time the Company
may
remove from the Mandatory Shelf Registration Statement such Registrable
Shares.
(i) Right
to Terminate Piggyback Registration. At any time, the
Company may terminate or withdraw any Piggyback Registration Statement referred
to in this Section 2(c) and without any obligation to any such Holder
whether or not any Holder has elected to include Registrable Shares in such
registration. The Company may suspend the effectiveness and use of
any Piggyback Registration Statement at any time for an unlimited amount of
time
whether or not any Holder has elected to include Registrable Shares in such
registration.
(ii) Underwriting. The
Company shall advise the Holders of the identity of the managing underwriters
for any Underwritten Offering proposed under the Piggyback Registration
Statement. The right of any such Holder’s Registrable Shares to be
included in any Piggyback Registration Statement pursuant to this Section
2(c) shall be conditioned upon such Holder’s participation in such
Underwritten Offering and the inclusion of such Holder’s Registrable Shares in
the Underwritten Offering to the extent provided herein. All Holders
proposing to distribute their Registrable Shares through such Underwritten
Offering shall enter into an underwriting agreement in customary form with
the
managing underwriters selected for such underwriting and complete and execute
any questionnaires, powers of attorney, indemnities, securities escrow
agreements and other documents reasonably required under the terms of such
underwriting, and furnish to the Company such information in writing as the
Company may reasonably request for inclusion in the Registration Statement;
provided, however, that no Holder shall be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements as are
customary and reasonably requested by the underwriters. Notwithstanding any
other provision of this Agreement, if the managing underwriters determine in
good faith that marketing factors require a limitation on the number of shares
to be included, then the managing underwriters may exclude shares (including
Registrable Shares) from the Piggyback Registration Statement and the
Underwritten Offering, and any shares of Common Stock included in the Piggyback
Registration Statement and the Underwritten Offering shall be allocated,
first, to the Company, and second, to any Person exercising demand
registration rights that are the basis for such registration, and third,
to each of the Holders requesting inclusion of their Registrable Shares in
such
Piggyback Registration Statement on a pro rata basis based
on the total number of such shares requested to be included; provided,
that if (i) the Mandatory Shelf Registration Statement is not declared effective
by the 120th
day following the Closing or (ii) the Commission shall have issued a stop order
relating to the Mandatory Shelf Registration Statement and such order remains
in
effect, then the number of Registrable Shares requested by any holder for
inclusion in the Piggyback Registration shall be allocated on a pro rata
basis with the person exercising demand registration rights that are the basis
for such registration; provided, further, that the number of Registrable
Shares to be included in the Piggyback Registration Statement shall not be
reduced unless all other securities of the Company held by other holders of
the
Company’s capital stock with registration rights that are inferior (with respect
to such reduction) to the registration rights of the Holders set forth herein,
are first entirely excluded from the underwriting and
registration. If any Holder
9
Registration
Rights Agreement
disapproves
of the terms of any Underwritten Offering, such Holder may elect to withdraw
therefrom by written notice to the Company and the underwriter, delivered at
least 10 Business Days before the effective date of the Piggyback Registration
Statement. Any Registrable Shares excluded or withdrawn from such
Underwritten Offering shall be excluded and withdrawn from the Piggyback
Registration Statement.
(iii) Hold-Back
Agreement. By electing to include Registrable Shares in
the Piggyback Registration Statement, if any, the Holder shall be deemed to
have
agreed not to effect any sale or distribution of securities of the Company
of
the same or similar class or classes of the securities included in the
Registration Statement or any securities convertible into or exchangeable or
exercisable for such securities, including a sale pursuant to Rule 144 under
the
Securities Act, or enter into any other transaction designed to directly or
indirectly transfer any of the economic consequences of ownership of Common
Stock of the Company, during such periods as reasonably requested (but in no
event longer than 120 days following the effective date of the Piggyback
Registration Statement), provided each of the executive officers and directors
of the Company that holds shares of Common Stock of the Company or securities
convertible into or exchangeable or exercisable for shares of Common Stock
of
the Company is subject to at least the same restrictions for the entire time
period required of the Holders hereunder) by the managing underwriters, if
an
Underwritten Offering.
(iv) Mandatory
Shelf Registration not Impacted by Piggyback Registration
Statement. The Company’s obligation to file the
Mandatory Shelf Registration Statement shall not be affected by the filing
or
effectiveness of the Piggyback Registration Statement.
(d) Expenses. The
Company shall pay all Registration Expenses (including those of Purchaser and
Holders affiliated or associated with Purchaser) in connection with the
registration of the Registrable Shares pursuant to this
Agreement. Each Holder participating in a registration pursuant to
this Section 2 shall bear such Holder’s proportionate share (based on the
total number of Registrable Shares sold in such registration) of all discounts
and commissions payable to underwriters or brokers and all transfer taxes in
connection with a registration of Registrable Shares pursuant to this Agreement
and any other expense of the Holders not specifically allocated to the Company
pursuant to this Agreement relating to the sale or disposition of such Holder’s
Registrable Shares pursuant to any Registration Statement.
3. RULE
144 AND RULE 144A REPORTING; REPORTS TO HOLDERS.
(a) With
a
view to making available the benefits of certain rules and regulations of the
Commission that may permit the sale of the Registrable Shares to the public
without registration, the Company agrees to, so long as any Holder owns any
Registrable Shares:
(i) make
and
keep adequate current public information available, as those terms are
understood and defined in Rule 144(c) at all times after the effective date
of
the first registration statement filed by the Company for an offering of the
Company’s securities to the general public;
(ii) use
its
best efforts to file (including electronically on XXXXX) with the Commission
in
a timely manner all reports and other documents required to be filed by the
Company under the Securities Act and the Exchange Act
(iii) so
long
as a Holder owns any Registrable Shares constituting 144A/Regulation S Shares,
if the Company is not required to file reports and other documents under the
Securities Act and the Exchange Act, it will make available other information
as
required by, and so long as necessary to permit sales of Registrable Shares
pursuant to, Rule 144 or Rule 144A; and
10
Registration
Rights Agreement
(iv) furnish
to any Holder promptly upon request a written statement by the Company as to
its
compliance with the reporting requirements of Rule 144 and of the Exchange
Act,
a copy of the most recent annual or quarterly report of the Company, and such
other reports and documents of the Company, and take such reasonable further
actions consistent with this Section 3, as a Holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing
a Holder to sell any such Registrable Shares without registration.
(b) So
long
as a Holder owns any Registrable Shares, notwithstanding that the Company may
not be required to file reports under the Securities Act or the Exchange Act
or
otherwise report on an annual and quarterly basis on forms provided for such
annual and quarterly reporting pursuant to rules and regulations promulgated
by
the Commission, the Company shall furnish to the Holders all quarterly and
annual financial information that would be required to be contained in a filing
with the Commission on Forms 10-K and 10-Q if the Company were required to
file
such forms, including a “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and, with respect to the annual information
only, audit reports thereon by the certified independent accountants of the
Company. Such annual reports shall be furnished within 60 days of
fiscal year end and such quarterly reports shall be furnished within 15 days
after the end of such quarter.
4. REGISTRATION
PROCEDURES. In connection with the obligations of the
Company with respect to any registration pursuant to this Agreement, the Company
shall:
(a) notify
Purchaser, in writing, at least 10 Business Days before filing a Registration
Statement, of its intention to file a Registration Statement with the Commission
and, at least 5 Business Days before filing, provide a copy of the Registration
Statement to Purchaser; prepare and file with the Commission, as specified
in
this Agreement, each Registration Statement, which Registration Statement shall
comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the Commission
to be filed therewith and shall be reasonably acceptable to Purchaser; notify
Purchaser at least 5 Business Days before filing of any amendment or supplement
to such Registration Statement and, at least 3 Business Days before filing,
provide a copy of such amendment or supplement to Purchaser for review and
comment; promptly following receipt from the Commission, provide to Purchaser
copies of any comments made by the staff of the Commission relating to such
Registration Statement and the Company’s responses thereto for review and
comment; and use its reasonable best efforts to cause the Mandatory Shelf
Registration Statement and the Demand Registration Statement to become effective
as soon as practicable after filing and to remain effective as set forth in
Section 2(a)(i) and Section 2(b)(i) respectively;
(b) subject
to Section 4(i), (i) prepare and file with the Commission such amendments
and post-effective amendments to each such Registration Statement as may be
necessary to keep such Registration Statement effective for the period described
in Section 2(a)(i) and Section 2(b)(i), (ii) cause each Prospectus
contained therein to be supplemented by any required Prospectus supplement,
and
as so supplemented to be filed pursuant to Rule 424 or any similar rule that
may
be adopted under the Securities Act, (iii) promptly amend or supplement each
such Registration Statement to include the Company’s quarterly and annual
financial information and other material developments (unless the Company is
eligible to incorporate such information by reference into the Registration
Statement), during which time sales of the Registrable Shares under the
Registration Statement will be suspended until such amendment or supplement
is
filed and effective, and (iv) comply in all material respects with the
provisions of the Securities Act with respect to the disposition of all
Registrable Shares covered by each Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by
the
selling Holders thereof;
11
Registration
Rights Agreement
(c) furnish
to the Holders, without charge, as many copies of each Prospectus, including
each preliminary Prospectus, any Issuer Free Writing Prospectus, and any
amendment or supplement thereto and such other documents as such Holder may
reasonably request, in order to facilitate the public sale or other disposition
of the Registrable Shares; the Company hereby consents to the use, in accordance
with Applicable Law, of such Prospectus, including each preliminary Prospectus,
and any Issuer Free Writing Prospectus by the Holders, if any, in connection
with the offering and sale of the Registrable Shares covered by any such
Prospectus;
(d) use
its
best efforts to register or qualify, or obtain exemption from registration
or
qualification for, all Registrable Shares by the time the applicable
Registration Statement is declared effective by the Commission under all
applicable state securities or “blue sky” laws of such domestic jurisdictions as
Purchaser or any Holder covered by a Registration Statement shall reasonably
request in writing, keep each such registration or qualification or exemption
effective during the period such Registration Statement is required to be kept
effective pursuant to Section 2(a)(i) and Section 2(b)(i) and do
any and all other acts and things that may be reasonably necessary or advisable
to enable such Holder to consummate the disposition in each such jurisdiction
of
such Registrable Shares owned by such Holder; provided, however, that the
Company shall not be required to (i) qualify generally to do business in any
jurisdiction or to register as a broker or dealer in such jurisdiction where
it
would not otherwise be required to qualify but for this Section 4(d),
(ii) subject itself to taxation in any such jurisdiction, or (iii) submit to
the
general service of process in any such jurisdiction;
(e) use
its
reasonable best efforts to cause all Registrable Shares covered by such
Registration Statement to be registered and approved by such other domestic
governmental agencies or authorities, if any, as may be necessary to enable
the
Holders thereof to consummate the disposition of such Registrable
Shares;
(f) notify
Purchaser and each Holder with Registrable Shares covered by a Registration
Statement promptly and, if requested by Purchaser or any such Holder, confirm
such advice in writing (i) when such Registration Statement has become effective
and when any post-effective amendments and supplements thereto become effective,
(ii) of the issuance by the Commission or any state securities authority of
any
stop order suspending the effectiveness of such Registration Statement or the
initiation or threatening of any proceedings for that purpose (including a
pending proceeding against the Company under Section 8A of the Securities Act
in
connection with the offering of the Registrable Shares), (iii) of any request
by
the Commission or any other federal or state governmental authority for
amendments or supplements to such Registration Statement or related Prospectus
or any Issuer Free Writing Prospectus or for additional information, and (iv)
of
the happening of any event during the period such Registration Statement is
effective as a result of which such Registration Statement or the related
Prospectus or any Issuer Free Writing Prospectus or any document incorporated
by
reference therein contains (other than with respect to information provided
to
the Company in writing by the Holders for use therein) any 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 (which information
shall be accompanied by an instruction to suspend the use of the Registration
Statement and the Prospectus and such Issuer Free Writing Prospectus until
the
requisite changes have been made), and at the request of any such
Holder;
(g) during
the period of time referred to in Section 2(a)(i), use its reasonable
best efforts to avoid the issuance of, or if issued, to obtain the withdrawal
of, any order enjoining or suspending the use or effectiveness of a Registration
Statement or suspending the qualification (or exemption from qualification)
of
any of the Registrable Shares for sale in any jurisdiction, as promptly as
practicable;
(h) upon
request, furnish to each requesting Holder with Registrable Shares covered
by a
Registration Statement, without charge, at least one conformed copy of such
Registration Statement and
12
Registration
Rights Agreement
any
post-effective amendment or supplement thereto (without documents incorporated
therein by reference or exhibits thereto, unless requested);
(i) except
as
provided in Section 5, upon the occurrence of any event contemplated by
Section 4(f)(iv), use its reasonable best efforts to promptly prepare a
supplement or post-effective amendment to a Registration Statement or the
related Prospectus or any Issuer Free Writing Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Shares, such
Prospectus or Issuer Free Writing Prospectus will not contain (other than with
respect to information provided to the Company in writing by the Holders for
use
therein) any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and, upon request, promptly furnish to each requesting Holder covered by such
Registration Statement a reasonable number of copies of each such supplement
or
post-effective amendment;
(j) if
requested by the managing underwriters or any Holders of Registrable Shares
being sold in connection with an Underwritten Offering, (i) promptly incorporate
in a Prospectus supplement or post-effective amendment such material information
as the managing underwriters or such Holders indicate relates to them or
otherwise reasonably request be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to
be
incorporated in such Prospectus supplement or post-effective
amendment;
(k) in
the
case of an Underwritten Offering, use its reasonable best efforts to provide
to
the Holders and the underwriters a signed counterpart, addressed to each such
Holder and the underwriters, of: (i) an opinion of counsel for the
Company, dated the date of each closing under the underwriting agreement,
reasonably satisfactory to the underwriters; and (ii) a “comfort” letter, dated
the effective date of such Registration Statement and the date of each closing
under the underwriting agreement, signed by the independent public accountants
who have certified the Company’s financial statements included in such
Registration Statement, covering substantially the same matters with respect
to
such Registration Statement (and the Prospectus included therein) and with
respect to events subsequent to the date of such financial statements, as are
customarily covered in accountants’ letters delivered to underwriters in
underwritten public offerings of securities, and such other financial matters
as
the underwriters may reasonably request and customarily obtained by underwriters
in underwritten offerings, provided that, to be an addressee of the comfort
letter, each Holder may be required to confirm that it is in the category of
persons to whom a comfort letter may be delivered in accordance with applicable
accounting literature;
(l) enter
into customary agreements (including in the case of an Underwritten Offering,
an
underwriting agreement in customary form) and take all other action in
connection therewith to expedite or facilitate the distribution of the
Registrable Shares included in such Registration Statement and, in the case
of
an Underwritten Offering, make representations and warranties to the
underwriters in such form and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same to the extent
customary if and when requested;
(m) in
connection with an Underwritten Offering, use its reasonable best efforts to
make available for inspection by the representative of any underwriters
participating in any disposition pursuant to a Registration Statement, all
financial and other records and cause the respective officers, directors and
employees of the Company to supply all information reasonably requested by
any
such representatives, the managing underwriters, counsel thereto or accountants
in connection with a Registration Statement; provided, however, that such
records, documents or information that the Company determines, in good faith,
to
be confidential and notifies such representatives, managing underwriters,
counsel thereto or accountants are confidential shall not be used by the
underwriters or the Holders as the basis for any market
13
Registration
Rights Agreement
transactions
in the securities of the Company) and shall not be disclosed by the
representatives, managing underwriters, counsel thereto or accountants unless
(i) the disclosure of such records, documents or information is necessary to
avoid or correct a material misstatement or material omission in a Registration
Statement or Prospectus, (ii) the release of such records, documents or
information is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, or (iii) such records, documents or information have
been generally made available to the public; provided further, that upon
learning that the disclosure of such records, documents or information is sought
in a court of competent jurisdiction, the recipient of such confidential
information shall give notice to the Company and allow (and cooperate with)
the
Company at its expense to undertake appropriate action to prevent disclosure
of
the information deemed confidential. To the extent practicable, the
foregoing inspection and information gathering shall be coordinated on behalf
of
the Holders and the other parties entitled thereto by one counsel designated
by
and on behalf of the Holders and the other parties, which counsel the Company
determines in good faith is reasonably acceptable;
(n) use
its
reasonable best efforts (including seeking to cure in the Company’s listing or
inclusion application any deficiencies cited by the exchange or market) to
maintain the listing on The Nasdaq Stock Market;
(o) prepare
and file in a timely manner all documents and reports required by the Exchange
Act and, to the extent the Company’s obligation to file such reports pursuant to
Section 15(d) of the Exchange Act expires before the expiration of the
effectiveness period of the Registration Statement as required by Section
2(a)(i), the Company shall register the Registrable Shares under the
Exchange Act and shall maintain such registration through the effectiveness
period required by Section 2(a)(i);
(p) provide
a
CUSIP number for all Registrable Shares not later than the effective date of
the
Registration Statement;
(q) (i)
otherwise use its reasonable best efforts to comply in all material respects
with all applicable rules and regulations of the Commission, (ii) make generally
available to its stockholders, as soon as reasonably practicable, earnings
statements covering at least 12 months that satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder, and (iii) delay filing
any
Registration Statement or Prospectus or amendment or supplement to such
Registration Statement or Prospectus to which any Holder of Registrable Shares
covered by any such Registration Statement shall have reasonably objected on
the
grounds that such Registration Statement or Prospectus or amendment or
supplement does not comply in all material respects with the requirements of
the
Securities Act, such Holder having been furnished with a copy thereof at least
3
Business Days before the filing thereof, provided that the Company may file
such
Registration Statement or Prospectus or amendment or supplement following such
time as the Company shall have made a good faith effort to resolve any such
issue with the objecting Holder and shall have advised the Holder in writing
of
its reasonable belief that such filing complies in all material respects with
the requirements of the Securities Act;
(r) cause
to
be maintained a registrar and transfer agent for all Registrable Shares covered
by any Registration Statement from and after a date not later than the effective
date of such Registration Statement;
(s) in
connection with any sale or transfer of the Registrable Shares (whether or
not
pursuant to a Registration Statement) that will result in the securities being
delivered no longer constituting Registrable Shares, cooperate with the Holders
and the managing underwriters to facilitate the timely preparation and delivery
of certificates representing the Registrable Shares to be sold, which
certificates shall not bear any transfer restrictive legends (other than as
required by the Company’s charter), and to enable such
14
Registration
Rights Agreement
Registrable
Shares to be in such denominations and registered in such names as the managing
underwriters or the Holders may request at least 3 Business Days before any
sale
of the Registrable Shares;
(t) if
required under the rules of the NASD, in connection with the initial filing
of a
Shelf Registration Statement and each amendment thereto with the Commission
pursuant to Section 2(a), prepare and, within one Business Day of such filing
with the Commission, to file with the NASD all forms and information required
or
requested by the NASD in order to obtain written confirmation from the NASD
that
the NASD does not object to the fairness and reasonableness of the underwriting
terms and arrangements (or any deemed underwriting terms and arrangements)
(each
such written confirmation, a “No Objections Letter”) relating to the resale of
Registrable Shares pursuant to the Shelf Registration Statement, including,
without limitation, information provided to the NASD through its COBRADesk
system, and shall pay all costs, fees and expenses incident to the NASD’s review
of the Shelf Registration Statement and the related underwriting terms and
arrangements, including, without limitation, all filing fees associated with
any
filings or submissions to the NASD and the legal expenses, filing fees and
other
disbursements of Purchaser and any other NASD member that is the holder of,
or
is affiliated or associated with an owner of, Registrable Shares included in
the
Shelf Registration Statement (including in connection with any initial or
subsequent member filing);
The
Company may require the Holders to
furnish to the Company in writing such information regarding the proposed
distribution by such Holder as the Company may from time to time reasonably
request in writing or as shall be required to effect the registration of the
Registrable Shares, and no Holder shall be entitled to be named as a selling
stockholder in any Registration Statement and no Holder shall be entitled to
use
the Prospectus forming a part thereof if such Holder does not timely provide
such information to the Company. Each Holder further agrees to
furnish promptly to the Company in writing all information required from time
to
time to make the information previously furnished by such Holder not
misleading.
Each
Holder agrees that, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 4(f)(ii), 4(f)(iii) or 4(f)(iv), such
Holder will immediately discontinue disposition of Registrable Shares pursuant
to a Registration Statement until (i) any such stop order is vacated or (ii)
if
an event described in Section 4(f)(iii) or 4(f)(iv) occurs, such
Holder’s receipt of the copies of the supplemented or amended
Prospectus. If so directed by the Company, such Holder will deliver
to the Company (at the reasonable expense of the Company) all copies in its
possession, other than permanent file copies then in such Holder’s possession,
of the Prospectus covering such Registrable Shares current at the time of
receipt of such notice.
Each
Holder represents that it has not
prepared or had prepared on its behalf or used or referred to, and agrees that
it will not prepare or have prepared on its behalf or use or refer to, any
Free
Writing Prospectus, and has not distributed and will not distribute any written
materials in connection with the offer or sale of the Registrable Shares without
the prior express written consent of the Company and, in connection with any
Underwritten Offering, the underwriters. Any such Free Writing
Prospectus consented to by the Company and the underwriters, as the case may
be,
is hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company represents and agrees that it
has treated and will treat, as the case may be, each Permitted Free Writing
Prospectus as an Issuer Free Writing Prospectus, including in respect of timely
filing with the Commission, legending and record keeping.
5. SUSPENSION
PERIOD.
(a) Subject
to the provisions of this Section 5, following the effectiveness of
a Registration Statement (and the filings with any international, federal or
state securities commissions), the Company may direct the Holders (in
15
Registration
Rights Agreement
the
case
of a Mandatory Shelf Registration Statement) or Initiating Holders (in the
case
of a Demand Registration Statement or Piggyback Registration Statement), in
accordance with Section 5(b), to suspend sales of the Registrable Shares
pursuant to a Registration Statement for such times as the Company reasonably
may determine is necessary and advisable (but in no event for more than an
aggregate of 90 days, including for purposes of such
calculation, any days that were deferred under Section 2(b)(ii), in any
consecutive 12-month period commencing on Closing, except as a result of a
review of any post-effective amendment by the Commission before declaring any
post-effective amendment to the Registration Statement effective,
provided that the Company has used its reasonable best efforts to cause
such post-effective amendment to be declared effective) if
(i) a certificate is delivered by the Company and signed by a director of the
Company certifying that in the good faith judgment of the Board it would be
seriously detrimental to the Company to proceed with such sale because (x)
a
merger, consolidation, substantial acquisition or other similar corporate action
is expected to occur imminently or (y) the Company intends to issue equity
securities or equity-linked securities not pursuant to a registration statement;
or (ii) the majority of the members of the Board of Directors of the
Company shall have determined in good faith, upon the advice of counsel, that
it
is required by law, rule, regulation or Commission-published release or
interpretation to supplement the Registration Statement or file a post-effective
amendment to the Registration Statement in order to incorporate information
into
the Registration Statement for the purpose of (1) including in the
Registration Statement any prospectus required under Section 10(a)(3) of the
Securities Act; (2) reflecting in the prospectus included in the
Registration Statement any facts or events arising after the effective date
of
the Registration Statement (or of the most-recent post-effective amendment)
that, individually or in the aggregate, represents a fundamental change in
the
information set forth therein; or (3) including in the prospectus included
in the Registration Statement any material information with respect to the
plan
of distribution not disclosed in the Registration Statement or any material
change to such information. Upon the occurrence of any such
suspension, the Company shall use its reasonable best efforts to cause the
Registration Statement to become effective or to promptly (and in the case
of a
suspension under clause (ii), use reasonable best efforts to within seven (7)
days) amend or supplement the Registration Statement on a post-effective basis
or to take such action as is necessary to make resumed use of the Registration
Statement compatible with the Company’s best interests, as applicable, so as to
permit the Holders to resume sales of the Registrable Shares as soon as
possible.
(b) In
the
case of an event that causes the Company to suspend the use of a Registration
Statement (a “Suspension Event”), the Company shall
give written notice (a “Suspension Notice”) to
Purchaser and the Holders (or the Initiating Holders, as the case may be) to
suspend sales of the Registrable Shares and such notice shall state generally
the basis for the notice and that such suspension shall continue only for so
long as the Suspension Event or its effect is continuing and the Company is
using its best efforts and taking all reasonable steps to terminate suspension
of the use of the Registration Statement as promptly as possible. No
Holder shall effect any sales of the Registrable Shares pursuant to such
Registration Statement (or such filings) at any time after it has received
a
Suspension Notice from the Company and before receipt of an End of Suspension
Notice (as defined below). If so directed by the Company, each Holder
will deliver to the Company (at the expense of the Company) all copies other
than permanent file copies then in such Holder’s possession of the Prospectus
and any Issuer Free Writing Prospectus covering the Registrable Shares at the
time of receipt of the Suspension Notice. The Holders (or the
Initiating Holders, as the case may be) may recommence effecting sales of the
Registrable Shares pursuant to the Registration Statement (or such filings)
following further notice to such effect (an “End of Suspension
Notice”) from the Company, which End of Suspension Notice shall be
given by the Company to the Holders (or the Initiating Holders, as the case
may
be) and Purchaser in the manner described above promptly following the
conclusion of any Suspension Event and its effect.
(c) Notwithstanding
any provision herein to the contrary, subject to any Suspension Events or as
contemplated by Section 4(f)(iv), the Company shall use its reasonable
best efforts to cause each Registration Statement to be maintained effective
pursuant to this Agreement until the Registrable Shares are not Registrable
Shares.
16
Registration
Rights Agreement
6. INDEMNIFICATION
AND CONTRIBUTION.
(a) The
Company agrees to indemnify and hold harmless (i) Purchaser, each Holder and
any
underwriter (as determined in the Securities Act) for such Holder (including,
if
applicable, Purchaser), (ii) each Person, if any, who controls (within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) any of the foregoing (a “Controlling Person”),
and (iii) the respective officers, directors, partners, members, employees,
representatives and agents of any such Person or any Controlling Person (any
Person referred to in clause (i), (ii) or (iii) may hereinafter be referred
to
as an “Purchaser Indemnitee”) from and against any and
all losses, claims, damages, judgments, actions, reasonable out-of-pocket
expenses, and other liabilities, including, as incurred, reimbursement of all
reasonable costs of investigating, preparing, pursuing or defending any claim
or
action, or any investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable fees and expenses of outside
counsel to any Purchaser Indemnitee, joint or several (the
“Liabilities”), directly or indirectly related to,
based upon, arising out of or in connection with any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement,
Prospectus or Issuer Free Writing Prospectus (as amended or supplemented),
or
any preliminary Prospectus or any other document prepared by the Company used
to
sell the Registrable Shares, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the
statements therein (in the case of a Prospectus, in light of the circumstances
under which they were made), not misleading, except insofar as such Liabilities
arise out of or are based upon (i) any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Purchaser Indemnitee furnished to the Company or
any
underwriter in writing by such Purchaser Indemnitee expressly for use therein,
or (ii) any sales by any Holder after the delivery by the Company to such Holder
of a Suspension Notice and before the delivery by the Company of an End of
Suspension Notice. The Company shall notify the Holders promptly of
the institution, threat or assertion of any claim, proceeding (including any
governmental investigation), or litigation which it shall have become aware
in
connection with the matters addressed by this Agreement which involves the
Company or a Purchaser Indemnitee. The indemnity provided for herein
shall remain in full force and effect regardless of any investigation made
by or
on behalf of any Purchaser Indemnitee.
(b) In
connection with any Registration Statement in which a Holder is participating,
such Holder agrees, severally and not jointly, to indemnify and hold harmless
Purchaser, the Company, each Person who controls the Company or Purchaser within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, and the respective officers, directors, partners, members, representatives,
employees and agents of such Person or Controlling Person to the same extent
as
the foregoing indemnity from the Company to each Purchaser Indemnitee, but
only
with reference to (i) untrue statements or omissions or alleged untrue
statements or omissions made in reliance upon and in strict conformity with
information relating to such Holder furnished to the Company in writing by
such
Holder expressly for use in any Registration Statement or Prospectus, any
amendment or supplement thereto, or any preliminary Prospectus and (ii) any
sales by any Holder after the delivery by the Company to such Holder of a
Suspension Notice and before the delivery by the Company of an End of Suspension
Notice. The liability of any Holder pursuant to clause (i) of the
immediately preceding sentence shall in no event exceed the net proceeds
received by such Holder from sales of Registrable Shares giving rise to such
obligations. If a Holder elects to include Registrable Shares in an
Underwritten Offering, the Holder shall be required to agree to such customary
indemnification provisions as may reasonably be required by the underwriter
in
connection with such Underwritten Offering.
(c) If
any
suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any Person
in respect of which indemnity may be sought pursuant to Section 6(a) or
6(b), such Person (the “Indemnified Party”), shall promptly notify the
Person against whom such indemnity may be sought (the “Indemnifying Party”), in
writing (to the extent
17
Registration
Rights Agreement
legally
advisable) of the commencement thereof (but the failure to so notify an
Indemnifying Party shall not relieve it from any Liability which it may have
under this Section 6, except to the extent the Indemnifying Party is
materially prejudiced by the failure to give notice), and the Indemnifying
Party, upon request of the Indemnified Party, shall retain counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party and
any
others the Indemnifying Party may reasonably designate in such proceeding and
shall assume the defense of such proceeding and pay the fees and expenses
actually incurred by such counsel related to such
proceeding. Notwithstanding the foregoing, in any such proceeding,
any Indemnified Party may retain its own counsel, but the fees and expenses
of
such counsel shall be at the expense of such Indemnified Party, unless (i)
the
Indemnifying Party and the Indemnified Party shall have mutually agreed in
writing to the contrary, (ii) the Indemnifying Party failed within a reasonable
time after notice of commencement of the action to assume the defense and employ
counsel reasonably satisfactory to the Indemnified Party, (iii) the Indemnifying
Party and its counsel do not pursue in a reasonable manner the defense of such
action or (iv) the named parties to any such action (including any impleaded
parties) include both such Indemnified Party and the Indemnifying Party, or
any
Affiliate of the Indemnifying Party, and such Indemnified Party shall have
been
reasonably advised by counsel that, either (x) there may be one or more legal
defenses available to it which are different from or additional to those
available to the Indemnifying Party or such Affiliate of the Indemnifying Party
or (y) a conflict may exist between such Indemnified Party and the Indemnifying
Party or such Affiliate of the Indemnifying Party, in which event the
Indemnifying Party may not assume or direct the defense of such action on behalf
of such Indemnified Party, it being understood, however, that the Indemnifying
Party shall not, in connection with any one such action or separate but
substantially similar or related actions arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all such
Indemnified Parties, which firm shall be designated in writing by those
Indemnified Parties who sold a majority of the Registrable Shares sold by all
such Indemnified Parties and any such separate firm for the Company, the
directors, the officers and such control Persons of the Company as shall be
designated in writing by the Company. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld or delayed, but if
settled with such consent or if there be a final judgment for the plaintiff,
the
Indemnifying Party agrees to indemnify any Indemnified Party from and against
any Liability by reason of such settlement or judgment to the extent provided
in
this Section 6 without reference to this sentence. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Party is or could have been a party and indemnity
could
have been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Party from all Liability
on claims that are the subject matter of such proceeding.
(d) If
the
indemnification provided for in Section 6(a) or 6(b) is for any
reason held to be unavailable to an Indemnified Party in respect of any
Liabilities referred to therein (other than by reason of the exceptions provided
therein) or is insufficient to hold harmless a party indemnified thereunder,
then each Indemnifying Party under such sections, in lieu of indemnifying such
Indemnified Party thereunder, shall contribute to the amount paid or payable
by
such Indemnified Party as a result of such Liabilities (i) in such proportion
as
is appropriate to reflect the relative benefits of the Indemnified Party on
the
one hand and the Indemnifying Parties on the other in connection with the
statements or omissions that resulted in such Liabilities, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Indemnifying
Parties and the Indemnified Party, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand,
and any Purchaser Indemnitees, on the other, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by such Purchaser Indemnitees
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
18
Registration
Rights Agreement
(e) The
parties agree that it would not be just and equitable if contribution pursuant
to this Section 6 were determined by pro rata allocation (even if
such Indemnified Parties were treated as one entity for such purpose), or by
any
other method of allocation that does not take account of the equitable
considerations referred to in Section 6(d). The amount paid or
payable by an Indemnified Party as a result of any Liabilities referred to
in
Section 6(d) shall be deemed to include, subject to the limitations set
forth above, any reasonable legal or other expenses actually incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 6, in
no event shall a Purchaser Indemnitee be required to contribute any amount
in
excess of the amount by which proceeds received by such Purchaser Indemnitee
from sales of Registrable Shares exceeds the amount of any damages that such
Purchaser Indemnitee has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. For
purposes of this Section 6, each Person, if any, who controls (within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) Purchaser or a Holder shall have the same rights to contribution as
Purchaser or such Holder, as the case may be, and each Person, if any, who
controls (within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act) the Company, and each officer, director, partner,
member, employee, representative, agent or manager of the Company shall have
the
same rights to contribution as the Company. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties, notify each party
or
parties from whom contribution may be sought, but the omission to so notify
such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section
6 or otherwise, except to the extent that any party is materially prejudiced
by the failure to give notice. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act),
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(f) The
indemnity and contribution agreements contained in this Section 6 will be
in addition to any Liability which any Indemnifying Party may otherwise have
to
any Indemnified Party. Each Purchaser Indemnitee’s obligations to
contribute pursuant to this Section 6 are not joint but are several in
the proportion that the number of Shares sold by such Purchaser Indemnitee
bears
to the number of Shares sold by all Purchaser Indemnities.
7. TERMINATION
OF THE COMPANY’S OBLIGATIONS. The Company shall have no
further obligations pursuant to this Agreement at such time as no Registrable
Shares are outstanding after their original issuance, provided, however,
that the Company’s obligations under Sections 3, and 6 (and any related
definitions) shall remain in full force and effect following such time;
provided, further, that if no Registrable Shares are outstanding after
their original issuance because the Company redeemed the Registrable Shares
pursuant to its charter documents, the Company’s obligations hereunder shall
terminate at such time.
8. MISCELLANEOUS.
(a) Remedies. In
the event of a breach by the Company of any of its obligations under this
Agreement, each Holder, in addition to being entitled to exercise all rights
provided herein or, in the case of Purchaser, in the Purchase Agreement, or
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. Subject to Section
6, the Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of
any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) Amendments
and Waivers. This Agreement may not be amended, modified
or supplemented, and waivers or consents to or departures from the provisions
hereof may not be given,
19
Registration
Rights Agreement
without
the written consent of the Company and Holders beneficially owning a majority
of
the Registrable Shares; provided, however, that for
purposes of this Agreement, Registrable Shares owned, directly or indirectly,
by
an entity that is an Affiliate of the Company due to the Company’s owning an
interest in such entity shall not be deemed to be
outstanding. Notwithstanding the foregoing, a waiver or consent to or
departure from the provisions hereof with respect to a matter that relates
exclusively to (i) the Mandatory Shelf Registration Statement may be given
only
with the consent of a majority of Registrable Shares covered thereby and (ii)
the rights of a Holder whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect, impair,
limit or compromise the rights of other Holders may be given by such Holder;
provided that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions
of
the immediately preceding sentence.
(c) Notices. All
notices and other communications, provided for or permitted hereunder shall
be
made in writing and delivered by facsimile (with receipt confirmed), overnight
courier or registered or certified mail, return receipt requested, or by
telegram, addressed as follows:
(i) if
to a
Holder, at the most current address given by the transfer agent and registrar
of
the Shares to the Company (including by email);
(ii) if
to the
Company, at the offices of the Company at 0000 Xxxx Xxxx Xxxxxxx, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Chief Executive Officer (facsimile x0
(000) 000-0000); with a copy (which shall not constitute notice) to Xxxxxx
Xxxxxxx & Xxxx LLP at Xxx Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, XX 00000-0000,
Attention: Xxxx X. Xxxxx (facsimile x0 (000) 000-0000);
and
(iii) if
to
Purchaser, at the offices of Purchaser at 26/F, Chater House, 0 Xxxxxxxxx Xxxx,
Xxxxxxx, Xxxx Xxxx, Xxxxxxxxx: Principal Investment Management, Middle
Office (facsimile x000 0000-0000); with a copy (which shall not
constitute notice) to Milbank, Tweed, Xxxxxx & XxXxxx LLP, Tower 2, China
Central Place, 1505-1506, Xxxxxxxx Xxxxxxxx, Xxxxxxx, 000000, Xxxxx.
Attention: Xxxxxx Sun, Esq. (facsimile x00 (00)
0000-0000).
(d) Successors
and Assigns; Third Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the successors and assigns
of
each of the parties hereto and shall inure to the benefit of each
Holder. The Company agrees that the Holders shall be third party
beneficiaries to the agreements made hereunder by Purchaser and the Company,
and
each Holder shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights
hereunder; provided, however, that such Holder fulfills all of
its obligations hereunder.
(e) Counterparts. This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and
the
same agreement.
(f) Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF
CONFLICTS OF LAW THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN
THE
LAW OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK OR THE SUPREME COURT OF
THE
STATE OF NEW YORK OR SITTING IN NEW YORK COUNTY IN RESPECT OF ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF
20
Registration
Rights Agreement
THE
AFORESAID COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH
SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
(g) Severability. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their best efforts
to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention
of the parties hereto that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be
hereafter declared invalid, illegal, void or unenforceable.
(h) Entire
Agreement. This Agreement, together with the Purchase
Agreement, is intended by the parties hereto as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.
(i) Registrable
Shares Held by the Company or its Affiliates. Whenever
the consent or approval of Holders of a specified percentage of Registrable
Shares is required hereunder, Registrable Shares (or securities convertible
into
Registrable Shares) held by the Company or entities that are Affiliates of
the
Company due to the Company’s owning an interest in such entities shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
(j) Survival. This
Agreement is intended to survive the consummation of the transactions
contemplated by the Purchase Agreement. The indemnification and
contribution obligations under Section 6 shall survive the termination of
the Company’s obligations under Section 2.
(k) Headings. The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the provisions of this Agreement. All
references made in this Agreement to “Section” refer to such Section of this
Agreement, unless expressly stated otherwise.
(l) Adjustment
for Stock Splits, etc. Wherever in this Agreement there
is a reference to a specific number of shares with respect to any securities,
then upon the occurrence of any subdivision, combination, or stock dividend
of
such shares, the specific number of shares with respect to any securities so
referenced in this Agreement shall automatically be proportionally adjusted
to
reflect the effect on the outstanding shares of such class or series of stock
by
such subdivision, combination, or stock dividend.
(m) No
Inconsistent Terms. The Company represents, warrants and
agrees that (i) the rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders
of
any other outstanding securities issued or guaranteed by the Company under
any
other agreement and (ii) the Company has not entered into any agreement that
is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof.
[Remainder
of this Page Intentionally Left Blank]
21
Registration
Rights Agreement
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
| CHINDEX INTERNATIONAL, INC. | |||
|
|
By:
|
/s/ Xxxxxxx Xxxxxx | |
| Name | Xxxxxxx Xxxxxx | ||
| Title | Chief Executive Officer | ||
| MAGENTA MAGIC LIMITED | |||
|
|
By:
|
/s/ Xxxxxx Xxxxx | |
| Name | Xxxxxx Xxxxx | ||
| Title | Authorized Signatory | ||
Signature
Page to Registration Rights Agreement
APPENDIX
A
Certain
Terms Used in Questionnaire
Affiliate. For
NASD purposes (Question 10 above), the term “affiliate” or “affiliated” means a
company which controls, is controlled by or is under common control with a
member. A company will be presumed to control a member if the company
beneficially owns 10% or more of the outstanding voting securities of a member
which is a corporation, or beneficially owns a partnership interest in 10%
or
more of the distributable profits or losses of a member which is a
partnership. A member will be presumed to control a company if the
member and persons associated with the member beneficially own 10% or more
of
the outstanding voting securities of a company which is a corporation, or
beneficially own a partnership interest in 10% or more of the distributable
profits or losses of a company which is a partnership. A company will
be presumed to be under common control with a member if
|
o
|
the
same natural person or company controls both the member and company
by
beneficially owning 10% or more of the outstanding voting securities
of a
member or company which is a corporation, or by beneficially owning
a
partnership interest in 10% or more of the distributable profits
or losses
of a member or company which is a partnership
or
|
|
o
|
a
person having the power to direct or cause the direction of the management
or policies of the member or the company also has the power to direct
or
cause the direction of the management or policies of the other entity
in
question.
|
For
other
purposes of this Questionnaire, an “affiliate” of a company is a person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such company.
Associated. The
term “associated” means
|
o
|
any
corporation or organization (other than the Company or any of its
subsidiaries) of which the holder is an officer, director or partner
or of
which the holder is, directly or indirectly, the beneficial owner
of 5% or
more of any class of equity
securities,
|
|
o
|
any
trustee or other estate in which the holder has a substantial beneficial
interest or as to which you serve as trustee or in a similar
capacity,
|
|
o
|
the
holder’s spouse,
|
|
o
|
any
relative of the holder’s spouse or any relative of the holder who has the
same home as the holder or who is a director or officer or key executive
of the Company or any of its subsidiaries,
and
|
Registration Rights
Agreement
|
o
|
any
partner, syndicate member of a person with whom the holder has agreed
to
act in concert with respect to the acquisition, holding, voting or
disposition of the Company’s
securities.
|
Beneficial
Ownership A person “beneficially owns” a security if he, directly
or indirectly, has or shares voting power or investment power of such security,
whether through a contract, arrangement, understanding, relationship or
otherwise. A person is also the beneficial owner of a security if he
has the right to acquire beneficial ownership at any time within 60 days (i)
through the exercise of any option, warrant or right, (ii) through the
conversion of a security, (iii) pursuant to the power to revoke a trust,
discretionary account or similar arrangement, or (iv) pursuant to the automatic
termination of a trust, discretionary account or similar
arrangement.
Immediate
family. The term “immediate family” includes the
parents, mother-in-law, father-in-law, spouse, brother or sister, brother-in-law
or sister-in-law, son-in-law or daughter-in-law, and children of an employee
or
associated person of a member, except any person other than the spouse and
children who does not live in the same household as, have a business
relationship with, provide material support to, or receive material support
from, the employee or associated person of a member. In addition, the
immediate family includes any other person who either lives in the same
household as, provides material support to, or receives material support from,
an employee or associated person of a member.
Member. The
term “member” means any individual, partnership, corporation, or other legal
entity admitted to membership in the NASD under the provisions of Article I
of
the By-laws of the NASD.
Participating
member. The term “participating member” means any
member that is participating in a public offering, any associated person of
the
member, any members of their immediate family and any affiliate of the
member.
Participation
or participating in a public offering. The terms
“participation or participating in a public offering” means participation in the
preparation of the offering or other documents, participation in the
distribution of the offering on an underwritten, non-underwritten, or any other
basis, furnishing of customer and/or broker lists for solicitation, or
participation in any advisory or consulting capacity to the issuer related
to
the offering,.
Person
associated with a member. The term “person associated
with a member” means every sole proprietor, partner, officer, director or branch
manager of any member, or any natural person occupying a similar status or
performing similar functions, or any natural person engaged in the investment
banking or securities business who is directly or indirectly controlling or
controlled by such member (for example, an employee), whether or not such person
is registered or exempt from registration with the NASD pursuant to its
By-laws.
Registration Rights
Agreement
