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EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into this 7th day of October, 1996 (the "Effective Date"), by and among INFOMED
HOLDINGS, INC., a Delaware corporation (the "Company"), those shareholders of
Xxxxxxx Central Holding, Inc. ("SCHI") appearing as signatories hereto (each,
an "SCHI Investor" and collectively, the "SCHI Investors"), and those
shareholders of the Company appearing as signatories hereto (each, a "Company
Investor" and collectively, the "Company Investors"; each SCHI Investor and
each Company Investor is occasionally referred to herein as an "Investor" and
the SCHI Investors and the Company Investors are occasionally collectively
referred to herein as the "Investors").
R E C I T A L S
WHEREAS, pursuant to the terms of an Amended and Restated Agreement and
Plan of Merger, dated as of September 5, 1996 (the "Merger Agreement"), by and
among the Company, SCHI and Infosub, Inc., a Georgia corporation ("Infosub"),
Infosub shall be merged with and into SCHI, with the result that each of the
outstanding shares of the no par value Class A Common Stock and Class B Common
Stock of SCHI (together the "SCHI Common Stock") will be converted into the
right to receive shares of the $0.001 par value common stock of the Company
(the "Company Common Stock"); and
WHEREAS, the Company has agreed, as a condition precedent to SCHI's
obligations under the Merger Agreement, to grant to all holders of SCHI Common
Stock certain registration rights, and to grant to the Company Investors
similar registration rights; and
WHEREAS, the Company and the Investors desire to define such registration
rights on the terms and subject to the conditions herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms have the respective
meanings set forth below:
Commission: shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act;
Exchange Act: shall mean the Securities Exchange Act of 1934, as amended;
Holder: shall mean any holder of Registrable Securities;
Initial Restricted Period: shall mean the 180-day period referred to in
Section 3(a) of this Agreement; provided, that if the Company completes a
Public Offering (as defined in Section
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3(b) of this Agreement) during such 180-day period and the time period referred
to in Section 3(b) of this Agreement would expire after expiration of the
180-day period referred to in Section 3(a) of this Agreement, the Initial
Restricted Period shall end on the date of expiration of the time period
referred to in Section 3(b) of this Agreement.
Initiating Holder: shall mean any Investor or any other Holder who is the
Holder of, or group of Holders who in the aggregate are Holders of, more than
10% of the then outstanding Registrable Securities;
Person: shall mean an individual, partnership, joint stock company,
corporation, trust or unincorporated organization, and a government or agency
or political subdivision thereof;
Plan: shall mean the Central Health Holding Company, Inc. Employee Stock
Ownership Plan as now in existence or hereafter amended, together with the
trust established pursuant thereto under that trust agreement dated February
26, 1993 as amended July 25, 1994 and July 16, 1996, and as further amended
from time to time.
register, registered and registration: shall mean a registration effected
by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be
filed) and the declaration or ordering of effectiveness of such registration
statement;
Registrable Securities: shall mean (A) the shares of Company Common Stock
issued to former holders of SCHI Common Stock, including the SCHI Investors,
under the Merger Agreement, (B) any shares of Company Common Stock held by
Company Investors as of the date of this Agreement, (C) the shares of the
Company Common Stock issued upon exercise of options or warrants to purchase
shares of the Company Common Stock, which options or warrants are outstanding
as of the date hereof, if such shares upon issuance constitute "restricted
securities" as defined in Rule 144(a)(3) (or any successor provision thereto)
under the Securities Act, and (D) any securities of the Company issued as a
dividend or other distribution with respect to, or in exchange for or in
replacement of, the shares of Company Common Stock referred to in clauses (A),
(B) or (C); provided, however, that Registrable Securities shall not include
(i) securities with respect to which a registration statement with respect to
the sale of such securities has become effective under the Securities Act and
all such securities have been disposed of in accordance with such registration
statement, or (ii) such securities as are actually sold pursuant to Rule 144
(or any successor provision thereto) under the Securities Act;
Registration Expenses: shall mean all expenses incurred by the Company in
compliance with Sections 2(a), (b) and (c) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company);
Security, Securities: shall have the meaning set forth in Section 2(1) of
the Securities Act;
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Securities Act: shall mean the Securities Act of 1933, as amended;
Selling Expenses: shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than fees and expenses
of one counsel for all the Holders; and
Small Holder: shall mean any Holder who is the holder of fewer than
20,000 shares of Company Common Stock.
2. REGISTRATION RIGHTS
(a) Requested Registration.
(i) Request for Registration. If the Company shall receive from an
Initiating Holder, at any time on or after expiration of the Initial Restricted
Period, a written request that the Company effect any registration with respect
to all or a part of the Registrable Securities, the Company will:
(A) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(B) as soon as practicable, use its reasonable best efforts to
effect such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) as
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in such request as
are specified in a written request received by the Company within ten
business days after written notice from the Company is given under Section
2(a)(i)(A) above; provided that the Company shall not be obligated to
effect, or take any action to effect, any such registration pursuant to
this Section 2(a):
(u) Unless the aggregate of Registrable Securities
requested by all Holders to be registered pursuant to such request
equals the greater of (i) not less than 20% of all Registrable
Securities then held by all Holders and (ii) Registrable Securities
having an estimated aggregate offering price of not less than $10
million;
(v) Solely with respect to underwritten registrations
requested pursuant to this Agreement, if the Company shall have
previously effected an underwritten registration with respect to
Registrable Securities pursuant to Section 2(b) hereof, the Company
shall not be required to effect any underwritten registration pursuant
to this Section 2(a) until a period of 180 days shall have elapsed
from the effective date of the most recent such previous registration;
provided that if, in the most recent such previous registration,
participation pursuant to Section 2(b) hereof shall not have been to
the extent requested pursuant to Section 2(b) hereof, then the
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Company shall not be required to effect any underwritten registration
pursuant to this Section 2(a) until a period of 90 days shall have
elapsed from the effective date of the most recent such previous
registration;
(w) If, upon receipt of a registration request pursuant to
this Section 2(a), the Company is advised in writing (with a copy to
each Initiating Holder) by a recognized national independent investment
banking firm selected by the Company that, in such firm's opinion, a
registration at the time and on the terms requested would adversely
affect any public offering of securities of the Company by the Company
(other than in connection with benefit and similar plans) or by or on
behalf of any shareholder of the Company exercising a demand
registration right (collectively, a "Company Offering") with respect
to which the Company has commenced preparations for a registration
prior to the receipt of a registration request pursuant to this
Section 2(a), the Company shall not be required to effect a
registration pursuant to this Section 2(a) until the earlier of (i) 30
days after the completion of such Company Offering, (ii) promptly
after any abandonment of such Company Offering or (iii) 60 days after
the date of receipt of a registration request pursuant to this Section
2(a); provided, however, that the periods during which the Company
shall not be required to effect a registration pursuant to this
Section 2(a) together with any periods of suspension under Section
2(i) hereof may not exceed 90 days in the aggregate during any period
of 12 consecutive months;
(x) If the Registrable Securities requested by all Holders
to be registered pursuant to such request are included in, and
eligible for sale under, the Shelf Registration (as defined below);
(y) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act or applicable rules or
regulations thereunder;
(z) After the Company has effected three (3) such
registrations pursuant to this Section 2(a) (in the aggregate for all
Holders) and such registrations have been declared or ordered
effective and the sales of such Registrable Securities shall have
closed; provided, that Holders shall not have the right to request an
underwritten registration pursuant to this Section 2(a) more than one
(1) time in any six-month period; and provided further, that Holders
other than the Plan shall be entitled to deliver no more than two (2)
requests that the Company effect a registration pursuant to this
Section 2(a), thereby reserving at least one (1) such request for the
Plan.
The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 2(a)(ii) below, include other
Securities of the Company which are held by Persons who, by virtue of
agreements with the Company, are entitled to include their Securities in any
such registration ("Other Stockholders").
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(ii) Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to Section 2(a). If Other Stockholders request inclusion in any such
registration, the Holders shall offer to include the securities of such Other
Stockholders in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Section 2. The Holders
whose shares are to be included in such registration and the Company shall
(together with all Other Stockholders proposing to distribute their securities
through such underwriting) enter into underwriting and related agreements in
customary form with the representative of the underwriter or underwriters
selected for such underwriting by the Initiating Holders and reasonably
acceptable to the Company. Such underwriting agreement will contain such
representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, indemnities and
contribution to the effect and to the extent provided in Section 2(f) hereof
and the provision of opinions of counsel and accountants' letters to the effect
and to the extent provided in Section 2(e) hereof, and the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
the Holders. The Company shall cooperate fully with the Holders and the
underwriters in connection with any underwritten offering. Notwithstanding any
other provision of this Section 2(a), if the representative advises the Holders
in writing that marketing factors require a limitation on the number of shares
to be underwritten, the securities of the Company held by Other Stockholders
shall be excluded from such registration to the extent so required by such
limitation. If, after the exclusion of such shares, further reductions are
still required, the number of shares included in the registration by each
Holder shall be reduced on a pro rata basis (based on the number of shares held
by such Holder), by such minimum number of shares as is necessary to comply
with such request. No Registrable Securities or any other securities excluded
from the underwriting by reason of the underwriter's marketing limitation shall
be included in such registration. If any Other Stockholder who has requested
inclusion in such registration as provided above disapproves of the terms of
the underwriting, such person may elect to withdraw therefrom by written notice
to the Company, the underwriter and the Initiating Holders. The securities so
withdrawn shall also be withdrawn from registration. If the underwriter has
not limited the number of Registrable Securities or other securities to be
underwritten, the Company and officers and directors of the Company may include
its or their securities for its or their own account in such registration if
the representative so agrees and if the number of Registrable Securities and
other securities which would otherwise have been included in such registration
and underwriting will not thereby be limited.
(b) Company Registration.
(i) If the Company shall determine to register any of its equity
securities either for its own account or for the account of Other Stockholders,
other than the Shelf Registration, or a registration relating solely to benefit
plans, or a registration relating solely to a Commission Rule 145 transaction,
or a registration on any registration form which does not permit secondary
sales or does not include substantially the same information as would be
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required to be included in a registration statement covering the sale of
Registrable Securities, the Company will:
(A) promptly give to each of the Holders a written notice
thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the applicable
blue sky or other state securities laws); and
(B) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in
a written request or requests, made by the Holders within ten (10) business
days after the giving of the written notice from the Company described in
clause (i) above, except as set forth in Section 2(b)(ii) below. Such
written request shall specify the amount of Registrable Securities intended
to be disposed of by a Holder and may specify all or a part of the Holders'
Registrable Securities.
Notwithstanding the foregoing, if, at any time after giving such written notice
of its intention to effect such registration and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such equity securities
the Company may, at its election, give written notice of such determination to
the Holders and thereupon the Company shall be relieved of its obligation to
register such Registrable Securities in connection with the registration of
such equity securities (but not from its obligation to pay Registration
Expenses to the extent incurred in connection therewith as provided herein),
without prejudice, however, to the rights (if any) of Holders immediately to
request that such registration be effected as a registration under Section 2(a)
hereof.
(ii) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2(b)(i)(A). In such event, the right of each of the
Holders to registration pursuant to this Section 2(b) shall be conditioned upon
such Holders' participation in such underwriting and the inclusion of such
Holders' Registrable Securities in the underwriting to the extent provided
herein. The Holders whose shares are to be included in such registration shall
(together with the Company and the Other Stockholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for the underwriting by the Company or such Other Stockholders, as the
case may be. Such underwriting agreement will contain such representations and
warranties by the Company and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and contribution to
the effect and to the extent provided in Section 2(f) hereof and the provision
of opinions of counsel and accountants' letters to the effect and to the extent
provided in Section 2(e), and the representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of the Holders whose
shares are to be included in such registration. Notwithstanding any other
provision of this Section 2(b), if the representative determines that marketing
factors require a limitation on the number of shares to be underwritten, the
Company shall so advise all holders of securities requesting registration, and
the number of shares of securities that are entitled to be included in
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the registration and underwriting shall be allocated in the following manner:
The securities of the Company held by officers, directors and Other
Stockholders (other than Other Stockholders who are exercising demand
registration rights with respect to such underwriting ("Other Demanding
Holders")) of the Company shall be excluded from such registration and
underwriting to the extent required by such limitation, and, if a limitation on
the number of shares is still required, the number of shares that may be
included in the registration and underwriting by each of the Holders and by
each Other Demanding Holder shall be reduced, on a pro rata basis (based on the
number of shares held by such holder), by such minimum number of shares as is
necessary to comply with such limitation. If any of the Holders or any
officer, director or Other Stockholder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
(c) Shelf Registration.
(i) Within 45 days after the date (the "S-3 Eligibility Date") on
which the Company shall become eligible to utilize Registration Statement Form
S-3 (or other successor form which shall permit the Company to incorporate by
reference periodic reports filed under the Exchange Act both before and after
the date such registration statement is declared effective) to effect the
registration of shares of Company Common Stock for resale by securityholders,
the Company shall file a "shelf" registration statement pursuant to Rule 415
under the Securities Act (the "Shelf Registration") with respect to the
Registrable Securities to be issued under the Merger Agreement to Small Holders
and shares of Registrable Securities to be issued to the Plan under the Merger
Agreement. The Company shall, (A) subject to Section 2(i) hereof, use its
reasonable best efforts to have the Shelf Registration declared effective as
soon as practicable after the filing thereof, and (B) subject to Section 2(i)
hereof, use its reasonable best efforts to keep the Shelf Registration
continuously effective from the date such Shelf Registration is effective until
the date of termination of this Agreement in order to permit the prospectus
forming a part thereof to be usable by Holders during such period. Except as
set forth in Section 2(c)(iii) below, the Shelf Registration may not include
other securities of the Company which are held by Other Stockholders.
(ii) Subject to Section 2(i) hereof, the Company shall supplement
or amend the Shelf Registration, (A) as required by the registration form
utilized by the Company or by the instructions applicable to such registration
form or by the Securities Act or the rules and regulations promulgated
thereunder, (B) to include in such Shelf Registration any additional securities
that become Registrable Securities by operation of the definition thereof, (C)
from and after the later of the date on which the Initial Restricted Period
expires and the date that is 45 days after the S-3 Eligibility Date, to cover
offers and sales of all or part of the Registrable Securities then outstanding
which are held by Holders who are not Small Holders, and (D) from and after the
later of the date on which the Initial Restricted Period expires and the date
that is 45 days after the S-3 Eligibility Date, following the written request
of an Initiating Holder pursuant to Section 2(c)(iii) below, to cover offers
and sales of all or a part of the Registrable Securities by means of an
underwriting including the incorporation of any information required pursuant
to Section 2(e)(x) below. The Company shall furnish to the Holders of the
Registrable Securities to
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which the Shelf Registration relates copies of any such supplement or amendment
sufficiently in advance (but in no event less than five business days in
advance) of its use and/or filing with the Commission to allow the Holders a
meaningful opportunity to comment thereon.
(iii) From and after the later of the date on which the Initial
Restricted Period expires and the date that is 45 days after the S-3
Eligibility Date, the Holders may, at their election and upon written notice by
an Initiating Holder to the Company, subject to the limitations set forth in
clauses (u), (v), (w), (y) and (z) of Section 2(a)(i)(B) hereof, effect offers
and sales under the Shelf Registration by means of one or more underwritten
offerings, in which case the provisions of Section 2(a)(ii) above shall apply
to any such underwritten distribution of securities under the Shelf
Registration and such underwriting shall, if sales of Registrable Securities
pursuant thereto shall have closed, be regarded as the exercise of one of the
registration rights contemplated by Section 2(a) hereof; provided, that sales
by the Plan pursuant to such underwriting shall under no circumstances be
regarded as an exercise of such rights unless the Plan shall have been the
person that made demand that such sales be effected pursuant to an
underwriting. In the event any Initiating Holder does so notify the Company
pursuant to this Section 2(c)(iii), the Company shall promptly give written
notice to all other Holders and (subject to the provisions of Section 2(a)(ii)
above) shall include in such request all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are specified in
a written request received by the Company within ten (10) business days after
the written notice from the Company is given. In the event of such an
election, and, without the consent of the Holders of a majority of the then
outstanding Registrable Securities, under no other circumstances, the Shelf
Registration may, subject to Section 2(a)(ii) above, be amended to include
other shares of Company Common Stock which are held by Other Stockholders.
(d) Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Section 2 (including all Registration Expenses incurred in connection with the
Shelf Registration and any supplements or amendments thereto, whether or not it
becomes effective, and whether all, none or some of the Registrable Securities
are sold pursuant to the Shelf Registration) shall be borne by the Company, and
all Selling Expenses shall be borne by the Holders of the securities so
registered pro rata on the basis of the number of their shares so registered;
provided, however, that if, as a result of the withdrawal of a request for
registration by any of the Holders, as applicable, the registration statement
does not become effective, the Holders and Other Stockholders requesting
registration may elect to bear the Registration Expenses (pro rata on the basis
of the number of their shares so included in the registration request, or on
such other basis as such Holders and Other Stockholders may agree), in which
case such registration shall not be counted as a registration pursuant to
Section 2(a)(i)(B)(z).
(e) Registration Procedures. In the case of each registration effected
by the Company pursuant to this Section 2, the Company will keep the Holders,
as applicable, advised in writing as to the initiation of each registration and
as to the completion thereof. At its expense, the Company will:
(i) other than the Shelf Registration, the obligations in respect of
which are set forth in Section 2(c)(i)(B) above, keep such registration
effective for a period of one
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hundred eighty (180) days or until the Holders, as applicable, have
completed the distribution described in the registration statement relating
thereto, whichever first occurs;
(ii) furnish to each Holder, and to any underwriter before filing with
the Commission, copies of any registration statement (including all
exhibits) and any prospectus forming a part thereof and any amendments and
supplements thereto (including all documents incorporated or deemed
incorporated by reference therein prior to the effectiveness of such
registration statement and including each preliminary prospectus, any
summary prospectus or any term sheet (as such term is used in Rule 434
under the Securities Act)) and any other prospectus filed under Rule 424
under the Securities Act, which documents, other than documents
incorporated or deemed incorporated by reference, will be subject the
review of the Holders and any such underwriter for a period of at least
five business days, and the Company shall not file any such registration
statement or such prospectus or any amendment or supplement to such
registration statement or prospectus to which any Holder or any such
underwriter shall reasonably object within five business days after the
receipt thereof; a Holder or such underwriters, if any, shall be deemed to
have reasonably objected to such filing only if the registration statement,
amendment, prospectus or supplement, as applicable, as proposed to be
filed, contains a material misstatement or omission;
(iii) furnish to each Holder and to any underwriter, such number of
conformed copies of the applicable registration statement and of each
amendment and supplement thereto (in each case including all exhibits) and
such number of copies of the prospectus forming a part of such registration
statement (including each preliminary prospectus, any summary prospectus or
any term sheet (as such term is used in Rule 434 under the Securities Act))
and any other prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents, including without limitation documents incorporated or deemed to
be incorporated by reference prior to the effectiveness of such
registration, as each of the Holders or any such underwriter, from time to
time may reasonably request;
(iv) to the extent practicable, promptly prior to the filing of any
document that is to be incorporated by reference into any registration
statement or prospectus forming a part thereof subsequent to the
effectiveness thereof, and in any event no later than the date such
document is filed with the Commission, provide copies of such document to
the Holders, if requested, and to any underwriter, make representatives of
the Company available for discussion of such document and other customary
due diligence matters, and include such information in such document prior
to the filing thereof as any Holder or any such underwriter reasonably may
request;
(v) make available at reasonable times for inspection by the Holders,
any underwriter participating in any disposition pursuant to such
registration and any attorney or accountant retained by the Holders or any
such underwriter, all financial and other records, pertinent corporate
documents and properties of the Company and cause the officers, directors
and employees of the Company to supply all information reasonably requested
by the Holders and any such underwriters, attorneys or accountants in
connection
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with such registration subsequent to the filing of the applicable
registration statement and prior to the effectiveness of the applicable
registration statement;
(vi) use its reasonable best efforts (x) to register or qualify all
Registrable Securities and other securities covered by such registration
under such other securities or blue sky laws of such States of the United
States of America where an exemption is not available and as the sellers of
Registrable Securities covered by such registration shall reasonably
request, (y) to keep such registration or qualification in effect for so
long as the applicable registration statement remains in effect, and (z) to
take any other action which may be reasonably necessary or advisable to
enable such sellers to consummate the disposition in such jurisdictions of
the securities to be sold by such sellers, except that the Company shall
not for any such purpose be required to qualify generally to do business as
a foreign corporation in any jurisdiction where it is not so qualified, or
to subject itself to taxation in any such jurisdiction, or to execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to
service in such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations thereunder;
(vii) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the Company
and counsel to the Holders of Registrable Securities to enable the Holders
thereof to consummate the disposition of such Registrable Securities;
(viii) subject to Section 2(i) hereof, promptly notify each Holder of
Registrable Securities covered by a registration statement (A) upon
discovery that, or upon the happening of any event as a result of which,
the prospectus forming a part of such 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, in the light of the circumstances under which they were
made, not misleading, (B) of the issuance by the Commission of any stop
order suspending the effectiveness of such registration statement or the
initiation of proceedings for that purpose, (C) of any request by the
Commission for (1) amendments to such registration statement or any
document incorporated or deemed to be incorporated by reference in any such
registration statement, (2) supplements to the prospectus forming a part of
such registration statement or (3) additional information, or (D) of the
receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation of
any proceeding for such purpose, and at the request of any such Holder
promptly prepare and furnish to it a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
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(ix) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of any such registration, or the lifting
of any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction;
(x) if requested by any Initiating Holder, or any underwriter,
promptly incorporate in such registration statement or prospectus, pursuant
to a supplement or post effective amendment if necessary, such information
as the Initiating Holder and any underwriter may reasonably request to have
included therein, including, without limitation, information relating to
the "plan of distribution" of the Registrable Securities, information with
respect to the principal amount or number of shares of Registrable
Securities being sold to such underwriter, the purchase price being paid
therefor and any other terms of the offering of the Registrable Securities
to be sold in such offering and make all required filings of any such
prospectus supplement or post-effective amendment as soon as practicable
after the Company is notified of the matters to be incorporated in such
prospectus supplement or post effective amendment;
(xi) furnish to the Holders, addressed to them, an opinion of counsel
for the Company, dated the date of the closing under the underwriting
agreement, if any, or the date of effectiveness of the registration
statement if such registration is not an underwritten offering, and use its
reasonable best efforts to furnish to the Holders, addressed to them, a
"cold comfort" letter signed by the independent certified public
accountants who have certified the Company's financial statements included
in such registration, covering substantially the same matters with respect
to such registration (and the prospectus included therein) and, in the case
of such accountants' letter, with respect to events subsequent to the date
of such financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to underwriters in
underwritten public offerings of securities and such other matters as the
Holders may reasonably request;
(xii) provide promptly to the Holders upon request any document filed
by the Company with the Commission pursuant to the requirements of Section
13 and Section 15 of the Exchange Act; and
(xiii) use its reasonable best efforts to cause all Registrable
Securities included in any registration pursuant hereto to be listed on
each securities exchange on which securities of the same class are then
listed, or, if not then listed on any securities exchange, to be eligible
for trading in any over-the-counter market or trading system in which
securities of the same class are then traded.
(f) Indemnification.
(i) The Company will indemnify each of the Holders, as applicable,
each of its officers, directors, members and partners, and each person
controlling each of the Holders, with respect to each registration which has
been effected pursuant to this Section 2, and each underwriter, if any, and
each person who controls any underwriter, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue
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statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by
the Company of the Securities Act or the Exchange Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration, qualification
or compliance, and will reimburse each of the Holders, each of its officers,
directors, members and partners, and each person controlling each of the
Holders, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon
written information furnished to the Company by the Holders or underwriter and
stated to be specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities held by it
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter, each Other Stockholder and each of their officers, directors,
members and partners, and each person controlling such Other Stockholder
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document made by such Holder, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements by such Holder therein not
misleading, and will reimburse the Company and such Other Stockholders,
directors, officers, partners, members, persons, underwriters or control
persons for any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company by such Holder and stated to be specifically for use therein;
provided, however, that the obligations of each of the Holders hereunder and
under clause (vi) below shall be limited to an amount equal to the net proceeds
to such Holder of securities sold as contemplated herein.
(iii) Each party entitled to indemnification under this Section
2(f) (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld) and the Indemnified Party
may participate in such defense at such party's expense (unless the Indemnified
Party shall have reasonably concluded that there may be a conflict of
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13
interest between the Indemnifying Party and the Indemnified Party in such
action, in which case the fees and expenses of one such counsel for all
Indemnified Parties shall be at the expense of the Indemnifying Party), and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 2 unless the Indemnifying Party is materially prejudiced
thereby. No Indemnifying Party, in the defense of any such claim or litigation
shall, except with the consent of each Indemnified Party (which consent shall
not be unreasonably withheld or delayed), consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(f) is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party 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 Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing provisions,
the provisions in such underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of the Company and Holders is
subject to the condition that, insofar as they relate to any loss, claim,
liability or damage made in a preliminary prospectus but eliminated or remedied
in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 424(b) (the "Final
Prospectus"), such indemnity or contribution agreement shall not inure to the
benefit of any underwriter or Holder (but only if such Holder was required to
deliver such Final Prospectus) if a copy of the Final Prospectus was furnished
to the underwriter and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Securities Act.
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(g) Information by the Holders. Each of the Holders holding securities
included in any registration shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the
Company may reasonably request in writing and as shall be reasonably required
in connection with any registration, qualification or compliance referred to in
this Section 2.
(h) Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of
restricted securities to the public without registration, the Company agrees
to:
(i) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act ("Rule 144"),
at all times;
(ii) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(iii) so long as the Holder owns any Registrable Securities, furnish
to the Holder upon request, a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed as the Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing the Holder to sell any such
securities without registration.
(i) Holdback Agreement; Postponement. Notwithstanding the provisions of
Sections 2(a), (b) and (c), if the Board of Directors of the Company determines
in good faith that it is in the best interests of the Company (A) not to
disclose the existence of facts surrounding any proposed or pending
acquisition, disposition, strategic alliance or financing transaction involving
the Company or (B) for any purpose, to suspend the registration rights set
forth herein, the Company may, by notice to the Holders in accordance with
Section 5(a), (1) suspend the rights of the Holders to make sales pursuant to
the Shelf Registration and (2) postpone any registration which is requested
pursuant to Section 2(a), in each case for such a period of time as the Board
of Directors may determine; provided that (x) such periods of suspension
together with any periods of suspension effected pursuant to Section
2(a)(i)(B)(v) hereof may not exceed 90 days in the aggregate during any period
of 12 consecutive months and (y) the Company may not impose such a suspension
or a postponement pursuant to Section 2(a)(i)(B)(v) following the printing and
distribution of a preliminary prospectus in any underwritten public offering of
Registrable Securities pursuant to Section 2(a)(i) or 2(c)(iii) (except such
suspension, not to exceed ten days, which results from an event that is not
within the reasonable control of the Company).
(j) Assignment. The registration rights set forth in Section 2 hereof
may be assigned, in whole or in part, to any transferee of Registrable
Securities (who shall be considered thereafter to be a Holder (provided that
any transferee who is not an affiliate of Investor shall be a Holder only with
respect to such Registrable Securities so acquired and any stock of the
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Company issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, such Registrable Securities) and shall be
bound by all obligations and limitations of this Agreement).
(k) Registration Rights. The Company will not grant any right of
registration under the Securities Act relating to any of its equity securities
to any person or entity other than pursuant to this Agreement unless the
Holders shall be entitled to have included in any registration effected
pursuant to Section 2(b)(ii) all Registrable Securities requested by them to be
so included prior to the inclusion of any securities requested to be registered
by the persons or entities entitled to any such other registration rights,
other than securities of Other Demanding Holders with respect to such
registration, which shall rank on a parity with shares held by Holders in
respect of such Section 2(b)(ii) registration.
3. RESALE RESTRICTIONS. Each Investor agrees and covenants to the Company
as follows:
(a) For a period of 180 days following the Effective Time, the Investor
will not, directly or indirectly, sell, offer to sell or otherwise
dispose of any Company Common Stock; and
(b) For a period of 90 days (or such longer period not to exceed 180 days,
as may be agreed upon by the Company and the underwriters) after the
effective date of any distribution of securities in an underwritten public
offering (a "Public Offering") to the general public pursuant to a
registration statement filed with and declared effective with the
Commission pursuant to the 1933 Act, the Investor will not, directly or
indirectly, sell, offer to sell or otherwise dispose of any Company Common
Stock (other than any of such Shareholder's Company Common Stock included
in such Public Offering) unless otherwise consented to by the
representatives of the underwriters in such Public Offering.
(c) Notwithstanding the provisions of paragraphs (a) and (b) above,
the Plan shall not be prohibited from making distributions of Company
Common Stock to participants in the Plan in accordance with the terms of
the Plan and applicable law, whether such distribution is effected pursuant
to the Shelf Registration, another registration statement or an applicable
exemption from the registration requirements of the Securities Act and
applicable state securities laws.
4. INTERPRETATION OF THIS AGREEMENT
(a) Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
(c) Section Headings. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
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5. MISCELLANEOUS
(a) Notices.
(i) All communications under this Agreement shall be in writing and
shall be delivered by facsimile or by hand or mailed by overnight courier or by
registered or certified mail, postage prepaid:
(A) if to the Company, to InfoMed Holdings, Inc., 0000 Xxxxxx
Xxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, (000) 000-0000, Attention: General Counsel
and Secretary, or at such other address as it may have furnished in writing to
the Investors;
(B) if to the Investors, at the addresses listed on Schedule I
hereto, or at such other addresses as may have been furnished the Company in
writing.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier, on the
first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of such
mailing.
(b) Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the Investor
by any photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and the Investors may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Investors in the regular
course of business) and that any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence.
(c) Third Party Beneficiaries; Successors and Assigns. Each of the
Shareholders as of the Effective Date of the Merger is an intended beneficiary
of this Agreement and shall be entitled to the benefits of this Agreement,
subject to compliance with the obligations of this Agreement as applied to
Shareholders hereunder. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties.
(d) Entire Agreement; Amendment and Waiver. This Agreement constitutes
the entire understanding of the parties hereto and supersedes all prior
understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with)
the written consent of the Company and the Holders of a majority of the then
outstanding Registrable Securities.
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(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
(f) 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 Holders of Registrable Securities in this Agreement.
(g) Remedies. Each Holder of Registrable Securities, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its 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.
(h) 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 and understood that all of the rights and privileges
of each of the Holders shall be enforceable to the fullest extent permitted by
law.
[Signatures appear on the following page.]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
INFOMED HOLDINGS, INC.
By:
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Name:
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Title:
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SCHI INVESTORS:
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COMPANY INVESTORS:
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Name:
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