REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made effective as
of May 2, 1997 by and between Lasermedics, Inc., a Texas corporation (the
"Company"), Xxxxx X. Xxxxxxx, Xxxxx X. Xxxxxx and X. X. (Skip) Xxxxx (each being
referred to individually as a "Seller" and collectively as the "Sellers").
WHEREAS, the Sellers are the holders of 300,000 shares (the "Shares") of
the Company's common stock, par value $.01 per share ("Common Stock"); and
WHEREAS, the Company wishes to grant the Sellers certain registration
rights with respect to the Shares, as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth below:
1.1 "COMMISSION" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
1.2 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
1.3 "PUBLIC OFFERING" shall mean an offering in which the Common Stock is
offered to the public whether or not through an underwriter.
1.4 THE TERMS "REGISTER," "REGISTERED," AND "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering by the
Commission of the effectiveness of such registration statement.
1.5 "REGISTERABLE SECURITIES" shall mean (i) the Shares, and (ii) any
Common Stock issued or issuable at any time or from time to time with respect to
Shares upon a stock split, stock dividend, recapitalization or other similar
event involving the Company until such Shares are sold pursuant to a
Registration Statement or an exemption from registration under the Securities
Act.
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1.6 "REGISTRATION EXPENSES" shall mean all expenses, other than Selling
Expenses (as defined below), incurred by the Company in complying with this
Agreement, including, without limitation, all registration, qualification and
filing fees, exchange listing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company and for the Sellers, blue sky fees and
expenses, 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).
1.7 "SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
1.8 "SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Sellers.
1.9 "UNDERWRITTEN PUBLIC OFFERING" shall mean a public offering in which
the Common Stock is offered and sold on a firm commitment basis through one or
more underwriters, all pursuant to an underwriting agreement between the Company
and such underwriters.
ARTICLE 2
REGISTRATION RIGHTS
2.1 PIGGYBACK REGISTRATION RIGHTS.
2.1.1 Subject to the terms hereof, if at any time or from time to
time prior to the second anniversary of the date hereof: (i) the Company
shall determine to register any of its securities for the purpose of
completing a Public Offering; (ii) any selling shareholders other than the
Sellers are included in such offering; and (iii) the Sellers are the
beneficial owners of any Registrable Securities; the Company will promptly
give to the Sellers written notice thereof no less than 20 days prior to
the filing of any registration statement; and include in such registration
(and any related qualification under blue sky laws or other compliance),
and in the underwriting involved therein, if any, such Registrable
Securities as any or all of the Sellers may request in a writing delivered
to the Company within 10 days after Sellers' receipt of Company's written
notice.
2.1.2 Notwithstanding anything to the contrary contained in Section
2.1.1, the Company shall not be required to include Registrable Securities
in any registration statement pursuant to this Section 2.1 if the proposed
registration is: (i) a registration of a stock option or other employee
incentive compensation plan or of securities issued or issuable pursuant
to any such plan; (ii) a registration of securities issued or issuable
pursuant to a stockholder reinvestment plan or other similar plan; (iii) a
registration of securities issued in exchange for any securities or any
assets of, or in connection with a merger or consolidation with, an
unaffiliated company; or (iv) a registration of securities pursuant to a
"rights" or other similar
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plan designed to protect the Company's shareholders from a coercive or
other attempt to take control of the Company.
2.1.3 The Sellers may participate in any number of registrations
until all of the Shares held by the Sellers have been distributed pursuant
to a registration.
2.1.4 The right of the Sellers to registration pursuant to this
Section shall be conditioned upon such Seller's participation in such
reasonable underwriting arrangements, if an Underwritten Public Offering
is being undertaken, as the Company shall make regarding the offering, and
the inclusion of Registrable Securities in the underwriting shall be
limited to the extent provided herein. The Sellers and all other
shareholders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders
distributing their securities through such underwriting) enter into an
under writing agreement in customary form with the managing underwriter
selected for such underwriting by the Company. Notwithstanding any other
provision of this Section, if the managing underwriter concludes in its
reasonable judgment that the number of shares to be registered for selling
stockholders (including the Sellers) would materially adversely affect
such offering, the number of Shares to be registered, together with the
number of shares of Common Stock or other securities held by other
stockholders proposed to be registered in such offering, shall be reduced
on a pro rata basis based on the number of Shares proposed to be sold by
the Sellers as compared to the number of shares proposed to be sold by all
stockholders. If any of the Sellers disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter, delivered not less than ten days
before the effective date. The Registrable Securities excluded by the
managing underwriter or withdrawn from such underwriting shall be
withdrawn from such registration, and shall not be transferred in a public
distribution prior to 270 days after the effective date of the
registration statement relating thereto, or such other shorter period of
time as the underwriters may require, provided, however, that the lock-up
shall in no event remain in effect past August 2, 1999.
2.1.5 The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section prior to the effectiveness
of such registration whether or not any of the Sellers have elected to
include securities in such registration.
2.2 EXPENSES OF REGISTRATION. All Registration Expenses shall be borne by
the Company. Unless otherwise stated herein, all Selling Expenses relating to
securities registered on behalf of the Sellers shall be borne by the Sellers.
2.3 REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep the Sellers advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense, the Company will:
2.3.1 Prepare and file with the Commission a registration statement
with respect to such securities and use its commercially reasonable
efforts to cause such registration
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statement to become and remain effective until the distribution described
in such registration statement has been completed;
2.3.2 Furnish to each underwriter such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as such
underwriter may reasonably request in order to facilitate the public sale
of the shares by such underwriter, and promptly furnish to each
underwriter and the Sellers notice of any stop-order or similar notice
issued by the Commission or any state agency charged with the regulation
of securities, and notice of any Nasdaq or securities exchange listing;
and
2.3.3 Cause the Shares to be listed on the Nasdaq Stock Market's OTC
Bulletin Board and any securities exchange or market on which the Common
Stock is approved for listing.
2.4 INDEMNIFICATION.
2.4.1 To the extent permitted by law, the Company will indemnify the
Sellers, with respect to which registration, qualification or compliance
has been effected pursuant to this Agreement, and each underwriter, if
any, and each person who controls any underwriter within the meaning of
Section 15 of the Securities Act, against all expenses, claims, losses,
damages or liabilities (or actions with respect thereto), including any of
the foregoing incurred in settlement of any litigation, commenced or
threatened, to the extent such expenses, claims, losses, damages or
liabilities arise out of or are based on any untrue state ment (or alleged
untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other similar document, or any
amendment or supplement thereto, 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, in light of the circumstances
in which they were made, not misleading, or any violation by the Company
of the Securities Act or any rule or regulation promulgated under the
Securities Act applicable to the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse
the Sellers, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim,
loss, damage, liability or action; provided, however, that the indemnity
contained herein shall not apply to amounts paid in settlement of any
claim, loss, damage, liability or expense if settlement is effected
without the consent of the Company (which consent shall not unreasonably
be withheld); provided, further, 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
or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of the Sellers, or such underwriter specifically for use therein or
the violation of the Securities Act or any rule or regulation promulgated
thereunder by any such person. Notwithstanding the foregoing, insofar as
the foregoing indemnity relates to any such untrue statement (or alleged
untrue statement) or omission (or
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alleged omission) made in the preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the time
the registration statement becomes effective or in the final prospectus
filed with the Commission pursuant to the applicable rules of the
Commission or in any supplement or addendum thereto, the indemnity
agreement herein shall not inure to the benefit of any underwriter if a
copy of the final prospectus filed pursuant to such rules, together with
all supplements and addenda thereto, was not furnished to the person or
entity asserting the loss, liability, claim or damage at or prior to the
time such furnishing is required by the Securities Act.
2.4.2 To the extent permitted by law, the Sellers will, if
securities held by the Sellers are included in the securities as to which
such registration, qualification or compliance is being effected pursuant
to terms hereof, indemnify the Company, each of its directors and
officers, each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or
such underwriter within the meaning of Section 15 of the Securities Act,
and each other person selling the Company's securities covered by such
registration statement, each of such person's officers and directors and
each person controlling such persons within the meaning of Section 15 of
the Securities Act, 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, or 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 Sellers of any
rule or regulation promulgated under the Securities Act applicable to the
Sellers and relating to action or inaction required of the Sellers in
connection with any such registration, qualification or compliance, and
will reimburse the Company, such other persons, such directors, officers,
persons, underwriters or control persons for any legal or 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 the Sellers specifically for use therein; provided, however, that the
indemnity contained herein shall not apply to amounts paid in settlement
of any claim, loss, damage, liability or expense if settlement is effected
without the consent of the Sellers (which consent shall not be
unreasonably withheld). Notwithstanding the foregoing, the liability of
any Seller under this Section 2.4.2 shall be limited in an amount equal to
the net proceeds from the sale of the shares sold by such Seller, unless
such liability arises out of or is based on willful conduct by that
Seller. In addition, insofar as the foregoing indemnity relates to any
such untrue statement (or alleged untrue statement) or omission (or
alleged omission) made in the preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the time
the registration statement becomes effective or in the final prospectus
filed pursuant to applicable rules of the Commission or in any supplement
or addendum thereto, the indemnity agreement herein shall not inure to the
benefit of the Company or any underwriter if a copy of the final
prospectus filed pursuant to such rules, together with all supplements and
addenda thereto, was not furnished to the person or entity
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asserting the loss, liability, claim or damage at or prior to the time
such furnishing is required by the Securities Act.
2.4.3 Notwithstanding the provisions of Sections 2.4.1 and 2.4.2,
each party entitled to indemnification under this Section 2.4 (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 litigation, 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, 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 Agreement unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such
action and provided further, that the Indemnifying Party shall not assume
the defense for matters as to which there is a conflict of interest or as
to which the Indemnifying Party is asserting separate or different
defenses, which defenses are inconsistent with the defenses of the
Indemnified Party. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party,
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. No Indemnified Party shall consent to
entry of any judgment or enter into any settlement without the consent of
each Indemnifying Party.
2.4.4 If the indemnification provided for in this Section 2.4 is
unavailable to an Indemnified Party in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and all shareholders offering securities in the offering (the
"Selling Security Holders") on the other from the offering of the
Company's securities, 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 Company on the one
hand and the Selling Security Holders on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Selling
Security Holders on the other shall be the net proceeds from the offering
(before deducting expenses) received by the Company on the one hand and
the Selling Security Holders on the other. The relative fault of the
Company on the one hand and the Selling Security Holders on the other
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of material fact or the omission or
alleged omission to state a material fact relates to information supplied
by the Company or by the Selling Security Holders and the parties'
relevant intent, knowledge, access to information
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and opportunity to correct or prevent such statement or omission. The
Company and the Selling Security Holders agree that it would not be just
and equitable if contribution pursuant to this Section 2.4 were based
solely upon the number of entities from whom contribution was requested or
by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section. The amount
paid or payable by an Indemnified Party as a result of the losses, claims,
damages and liabilities referred to above in this Section shall be deemed
to include any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such
action or claim, subject to the provisions hereof. Notwithstanding the
provisions of this Section, no Selling Security Holder shall be required
to contribute any amount or make any other payments under this Agreement
which in the aggregate exceed the proceeds received by such Selling
Security Holder unless such losses, claims, damages or liabilities are
based on conduct which such Selling Security Holder actually knows to be
in controversion of the Securities Act. No person guilty of fraudulent
misrepresentation (within the meaning of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
2.5 CERTAIN INFORMATION. The Sellers agree, with respect to any
Registrable Securities included in any registration, to furnish to the Company
such information regarding the Sellers, the Registrable Securities and the
distribution proposed by the Sellers as the Company may reasonably request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to herein.
2.6 RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of Restricted Securities (used herein as defined in Rule 144 under the
Securities Act) to the public without registration, the Company agrees to use
its best lawful efforts to:
2.6.1 Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times
during which the Company is subject to the reporting requirements of the
Exchange Act;
2.6.2 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 (at all times during which the Company is subject to such
reporting requirements); and
2.6.3 For as long as any of the Sellers owns any Restricted
Securities (as defined in Rule 144 promulgated under the Securities Act),
furnish to those Sellers forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule
144 and with regard to the Securities Act and the Exchange Act (at all
times during which the Company is subject to such reporting requirements),
a copy of the most recent annual or quarterly report of the Company, and
such other reports and documents of the Company and other information in
the possession of or reasonably obtainable by the Company as the Sellers
may reasonably request in availing themselves of any rule or regulation of
the Commission allowing the Sellers to sell any such securities
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without registration.
2.7 TRANSFERABILITY. The rights conferred by this Agreement shall not be
transferable to any party other than by will or through the laws of descent and
distribution. Subject to the restrictions on the transferability of the rights
contained herein, this Agreement shall be binding upon and inure to the benefit
of the heirs, legatees, legal representatives, successors and assigns of the
parties hereto.
2.8 GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the State of Texas.
2.9 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject hereof. This Agreement, or any provision hereof, may be amended, waived,
discharged or terminated upon the written consent of the Company and the
Sellers.
2.10 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger
including Federal Express or similar courier service, addressed (a) if to the
Sellers: to each of the Sellers individually at the addresses listed on Exhibit
A hereto, or at such other address they shall have furnished to the Company in
writing, or (b) if to the Company: to Lasermedics, Inc., 000 Xxxxxxxxxx
Xxxxxxxxx, Xxxxx Xxxx, Xxxxx 00000, Attention: President, or at such other
address as the Company shall have furnished to the Sellers. Each such notice or
other communication shall for all purposes of this Agreement be treated as
effective upon receipt.
2.11 DELAYS OR OMISSIONS. Except as expressly provided herein, no delay or
omission to exercise any right, power or remedy accruing to any party to this
Agreement shall impair any such right, power or remedy of such party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party to this Agreement, shall be cumulative and not alter native.
2.12 COUNTERPARTS. This Agreement may be executed by facsimile signature
and in any number of counterparts, each of which shall be enforceable against
the parties actually executing such counterparts, and all of which together
shall constitute one instrument.
2.13 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
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2.14 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement
are used for convenience only and are not considered in construing or
interpreting this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective upon the date first set forth above.
LASERMEDICS, INC.
/S/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx,
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
SELLERS
/S/ XXXXX X. XXXXXXX
Xxxxx X. Xxxxxxx
/S/ XXXXX X. XXXXXX
Xxxxx X. Xxxxxx
/S/ X. X. (SKIP) XXXXX
X. X. (Skip) Xxxxx
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