EXHIBIT A
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
December 31, 1996
To Xxxxxx X. Xxxxx and to each of the several
Purchasers (as defined below)
Dear Sirs:
This Amended and Restated Registration Rights Agreement (the "Amended
Agreement") amends, restates and supersedes in its entirety the Registration
Rights Agreement dated February 1, 1995 (the "Original Agreement") among U.S.
PHYSICIANS, Inc. (previously, Cancer Recovery, Inc.), a Pennsylvania corporation
("the Company"), the purchasers (such purchasers together with their permitted
transferees pursuant to Section 13(a) hereof, the "Series A Purchasers") of an
aggregate of 1,506,849 shares of Series A Convertible Preferred Stock, $.10 par
value (the "Series A Preferred Stock") of the Company and Xxxxxx X. Xxxxx
("Xxxxx"). This Amended Agreement adds as parties purchasers (such purchasers
together with their permitted transferees pursuant to Section 13(a) hereof, the
"Series B Purchasers") of shares of Series B Convertible Preferred Stock, $.10
par value ("the Series B Preferred Stock") and of warrants to purchase shares of
the Company's common stock (the "Warrants") of the Company pursuant to the
Series B Convertible Preferred and Warrant Stock Purchase Agreement of even date
herewith (the "Series B Purchase Agreement") among the Company and the Series B
Purchasers and in all other respects amends, restates and supersedes the
Original Agreement in its entirety. In addition, purchasers of Series B
Preferred Stock and Warrants after the date hereof and on or prior to January
15, 1997 (such purchasers together with their permitted transferees pursuant to
Section 13(a) the "Subsequent Purchasers") shall become parties to this
Agreement by executing counterpart signature pages of this Amended Agreement in
connection with the closing of their acquisition of Series B Preferred Stock and
Warrants.
This will confirm that in consideration of the agreement of Xxxxx and
the Series A Purchasers to amend and restate the Original Agreement as set forth
herein and the agreement of the Series B Purchasers to purchase shares of Series
B Preferred Stock and Warrants, pursuant to the Series B Purchase Agreement and
as an inducement to the Series B Purchasers to consummate the transactions
contemplated by the Series B Purchase Agreement, the Company covenants and
agrees with each of you as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering the
Securities Act.
"Common Stock" shall mean the Common Stock, $.01 par value, of
the Company, as constituted as of the date of this Agreement.
"Conversion Shares" shall mean shares of Common Stock issued
upon conversion of the Preferred Shares or exercise of the Warrants.
"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.
"Preferred Shares" shall mean shares of Series A Preferred
Stock and Series B Preferred Stock.
"Purchasers" shall mean each of the several Series A
Purchasers and Series B Purchasers named in Schedule I hereto and the
Subsequent Purchasers who shall become parties to this Agreement at
such time as they acquire Series B Preferred Stock on or prior to
January 15, 1997 and execute counterpart signature pages to this
Agreement, at which time Schedule I shall be amended accordingly.
"Registration Expenses" shall mean the expenses so described
in Section 8.
"Restricted Stock" shall mean the Conversion Shares, excluding
Conversion Shares which have been (a) registered under the Securities
Act pursuant to an effective registration statement filed thereunder
and disposed of in accordance with the registration statement covering
them or (b) publicly sold pursuant to Rule 144 under the Securities
Act.
"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.
"Selling Expenses" shall mean the expenses described in
Section 8.
"Warrants" shall mean the Warrants issued by the Company to
the Purchasers pursuant to the Series B Purchase Agreement.
2. Restrictive Legend. Each certificate representing Preferred Shares,
Warrants or Conversion Shares shall, except as otherwise provided in this
Section 2 or in Section 3, be stamped or otherwise imprinted with a legend
substantially in the following form:
2
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND ALL SUCH
APPLICABLE LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company (it being agreed that Ballard, Spahr, Xxxxxxx &
Xxxxxxxxx or Xxxxx, Xxxxxxx & Xxxxxxxxx, L.L.P. shall be satisfactory) the
securities represented thereby may be publicly sold without registration under
the Securities Act and any applicable state securities laws.
3. Notice of Proposed Transfer. Prior to any proposed transfer of any
Preferred Shares, Warrants or Conversion Shares (other than under the
circumstances described in Sections 4, 5 or 6), the holder thereof shall give
written notice to the Company of its intention to effect such transfer. Each
such notice shall describe the manner of the proposed transfer and, if requested
by the Company, shall be accompanied by an opinion of counsel satisfactory to
the Company (it being agreed that Ballard, Spahr, Xxxxxxx & Ingersoll or Xxxxx,
Xxxxxxx & Xxxxxxxxx, L.L.P. shall be satisfactory) to the effect that the
proposed transfer may be effected without registration under the Securities Act
and any applicable state securities laws, whereupon the holder of such
securities shall be entitled to transfer such securities in accordance with the
terms of its notice; provided, however, that no such opinion of counsel shall be
required for a transfer to one or more partners or members of the transferor (in
the case of a transferor that is a partnership) or to an affiliated corporation
(in the case of a transferor that is a corporation or a limited liability
company). Each certificate for Preferred Shares, Warrants or Conversion Shares
transferred as above provided shall bear the legend set forth in Section 2,
except that such certificate shall not bear such legend if (i) such transfer is
in accordance with the provisions of Rule 144 (or any other rule permitting
public sale without registration under the Securities Act) or (ii) the opinion
of counsel referred to above is to the further effect that the transferee and
any subsequent transferee (other than an affiliate of the Company) would be
entitled to transfer such securities in a public sale without registration under
the Securities Act. The restrictions provided for in this Section 3 shall not
apply to securities which are not required to bear the legend prescribed by
Section 2 in accordance with the provisions of that Section.
4. Required Registration. (a) At any time after the earliest of (i) six
months after any registration statement covering a public offering of securities
of the Company under the Securities Act shall have become effective, (ii) six
months after the Company shall otherwise have become a reporting company under
Section 12 of the Exchange Act, and (iii) the third anniversary of the date of
this Agreement, the holders of Restricted Stock constituting at least 40% of the
total shares of Restricted Stock then outstanding and held by either Series A
Purchasers or Series B Purchasers may request the Company to register under the
Securities Act all or any portion of the shares of Restricted Stock held by or
issuable to such requesting holder or holders for sale in the manner specified
in such notice, provided that the shares of Restricted Stock for which
registration has been requested shall constitute at least 20% of the total
shares of Restricted Stock originally issued to and held by Series A Purchasers
or Series B Purchasers if
3
such holder or holders shall request the registration of less than all shares of
Restricted Stock then held by such holder or holders (or any lesser percentage
if the reasonably anticipated aggregate price to the public of such public
offering would exceed $2,000,000). For purposes of this Section 4 and Sections
5, 6, 13(a) and 13(d), the term "Restricted Stock" shall be deemed to include
the number of shares of Restricted Stock which would be issuable to a holder of
Preferred Shares upon conversion of all Preferred Shares held by such holder at
such time and the number of shares of Restricted Stock which would be issuable
to a holder of Warrants upon exercise of all Warrants held by such holder at
such time, provided, however, that the only securities which the Company shall
be required to register pursuant hereto shall be shares of Common Stock, and
provided further, however, that, in any underwritten public offering
contemplated by this Section 4 or Sections 5 and 6, the holders of Preferred
Shares shall be entitled to sell such Preferred Shares to the underwriters for
conversion and sale of the shares of Common Stock issued upon conversion thereof
and the holders of warrants shall be entitled to sell to the underwriters the
shares of Common Stock issuable upon exercise of the Warrants. Notwithstanding
anything to the contrary contained herein, no request may be made under this
Section 4 within 180 days after the effective date of a registration statement
filed by the Company covering a firm commitment underwritten public offering in
which the holders of Restricted Stock shall have been entitled to join pursuant
to Sections 5 or 6 and in which there shall have been effectively registered all
shares of Restricted Stock as to which registration shall have been requested.
(b) Following receipt of any notice under this Section 4, the
Company shall immediately notify all holders of Restricted Stock from whom
notice has not been received and, additionally, for purposes of Section (c)
hereof, Xxxxx, and shall use its best efforts to register under the Securities
Act, for public sale in accordance with the method of disposition specified in
such notice from requesting holders, the number of shares of Restricted Stock
specified in such notice (and in all notices received by the Company from other
holders within 30 days after the giving of such notice by the Company). If such
method of disposition shall be an underwritten public offering, the holders of a
majority of the shares of Restricted Stock to be sold in such offering may
designate the managing underwriter of such offering, subject to the approval of
the Company, which approval shall not be unreasonably withheld or delayed. The
Company shall be obligated to register Restricted Stock pursuant to this Section
4 on two occasions only, provided, however, that such obligation shall be deemed
satisfied only when a registration statement covering all shares of Restricted
Stock specified in notices received as aforesaid, for sale in accordance with
the method of disposition specified by the requesting holders, shall have become
effective and, if such method of disposition is a firm commitment underwritten
public offering, all such shares shall have been sold pursuant thereto.
(c) The Company and Xxxxx shall each be entitled to include in any
registration statement referred to in this Section 4 for sale in accordance with
the method of disposition specified by the requesting holders, shares of Common
Stock to be sold by the Company for its own account, or shares of Common Stock
held by Xxxxx on the date of this Agreement ("Xxxxx Common Stock"), as the case
may be, except as and to the extent that, in the opinion of the managing
underwriter (if such method of disposition shall be an underwritten public
offering),
4
such inclusion would adversely affect the marketing of the Restricted Stock to
be sold. Except for registration statements on Form X-0, X-0 or any successor
thereto, the Company will not file with the Commission any other registration
statement with respect to its Common Stock, whether for its own account or that
of other stockholders, from the date of receipt of a notice from requesting
holders pursuant to this Section 4 until the completion of the period of
distribution of the registration contemplated thereby.
5. Incidental Registration. If the Company at any time (other than
pursuant to Section 4 or Section 6) proposes to register any of its securities
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Forms X-0, X-0 or another form not available for
registering the Restricted Stock or Xxxxx Common Stock for sale to the public),
each such time it will give written notice to all holders of outstanding
Restricted Stock and to Xxxxx (except if the registration statement filed in
connection with such registration covers an initial public offering of
securities of the Company under the Securities Act (the "IPO"), in which case
then to the holders of outstanding Restricted Stock alone) of its intention so
to do. Upon the written request of any such holder, and/or of Xxxxx (except in
the case of such initial public offering), received by the Company within 30
days after the giving of any such notice by the Company, to register any of its
Restricted Stock and/or Xxxxx Common Stock, as the case may be, the Company will
use its best efforts to cause the Restricted Stock and/or Xxxxx Common Stock as
to which registration shall have been so requested to be included in the
securities to be covered by the registration statement proposed to be filed by
the Company, all to the extent requisite to permit the sale or other disposition
by the holder of such Restricted Stock and/or by Xxxxx of Xxxxx Common Stock so
registered. In the event that any registration pursuant to this Section 5 shall
be, in whole or in part, an underwritten public offering of Common Stock, the
number of shares of Restricted Stock and Xxxxx Common Stock to be included,
collectively, in such an underwriting may be reduced (pro rata among the
requesting holders and Xxxxx, based upon the number of shares of Restricted
Stock owned by such holders and the number of shares of Xxxxx Common Stock,
collectively) if and to the extent that the managing underwriter shall be of the
opinion that such inclusion would adversely affect the marketing of the
securities to be sold by the Company therein, provided, however, that such
number of shares of Restricted Stock and Xxxxx Common Stock shall not be reduced
if any shares are to be included in such underwriting for the account of any
person other than the Company or requesting holders of Restricted Stock or
Xxxxx, and provided, further, however, that, except in connection with the IPO,
in no event may less than one-third of the total number of shares of Common
Stock to be included in such underwriting be made available for shares of
Restricted Stock and/or Xxxxx Common Stock. Notwithstanding the foregoing
provisions, the Company may withdraw any registration statement referred to in
this Section 5 without thereby incurring any liability to the holders of
Restricted Stock or to Xxxxx.
6. Registration on Form S-3. If at any time (i) a holder or holders of
Preferred Shares or Restricted Stock request that the Company file a
registration statement on Form S-3 or any, successor thereto for a public
offering of all or any portion of the shares of Restricted Stock held by such
requesting holder or holders, the reasonably anticipated aggregate price to the
public of
5
which would exceed $500,000, and (ii) the Company is a registrant entitled to
use Form S-3 or any successor thereto to register such shares, then the Company
shall use its best efforts to register under the Securities Act on Form S-3 or
any successor thereto, for public sale in accordance with the method of
disposition specified in such notice, the number of shares of Restricted Stock
specified in such notice. Whenever the Company is required by this Section 6 to
use its best efforts to effect the registration of Restricted Stock, each of the
procedures and requirements of Section 4 (including but not limited to the
requirement that the Company notify all holders of Restricted Stock from whom
notice has not been received and provide them with the opportunity to
participate in the offering) shall apply to such registration, provided,
however, that there shall be no limitation on the number of registrations on
Form S-3 which may be requested and obtained under this Section 6, and provided,
further, however, that the requirements contained in the first sentence of
Section 4(a) shall not apply to any registration on Form S-3 which may be
requested and obtained under this Section 6.
7. Registration Procedures. If and whenever the Company is required by
the provisions of Sections 4, 5 or 6 to use its best efforts to effect the
registration of any shares of Restricted Stock (which, for purposes of Sections
7, 8 and 11 hereof shall be deemed to include shares of Xxxxx Common Stock)
under the Securities Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering pursuant to Section 4,
shall be on Form S-1 or other form of general applicability satisfactory to the
managing underwriter selected as therein provided) with respect to such
securities and use its best efforts to cause such registration statement to
become and remain effective for the period of the distribution contemplated
thereby (determined as hereinafter provided);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in paragraph (a) above and comply with the provisions of
the Securities Act with respect to the disposition of all Restricted Stock
covered by such registration statement in accordance with the sellers' intended
method of disposition set forth in such registration statement for such period;
(c) furnish to each seller of Restricted Stock and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale or other
disposition of the Restricted Stock covered by such registration statement;
(d) use its best efforts to register or qualify the Restricted Stock
covered by such registration statement under the securities or "blue sky" laws
of such jurisdictions as the sellers of Restricted Stock or, in the case of an
underwritten public offering, the managing underwriter reasonably shall request,
provided, however, that the Company shall not for any such purpose be required
to qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction;
6
(e) use its best efforts to list the Restricted Stock covered by
such registration statement with any securities exchange on which the Common
Stock of the Company is then listed;
(f) immediately notify each seller of Restricted Stock and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the prospectus contained in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(g) if the offering is underwritten and at the request of any seller
of Restricted Stock, use its best efforts to furnish on the date that Restricted
Stock is delivered to the underwriters for sale pursuant to such registration:
(i) an opinion of counsel representing the Company for the purposes of such
registration, dated such date, addressed to the underwriters and to such seller,
stating that such registration statement has become effective under the
Securities Act and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Securities
Act, (B) the registration statement, the related prospectus and each amendment
or supplement thereof comply as to form in all material respects with the
requirements of the Securities Act (except that such counsel need not express
any opinion as to financial statements contained therein) and (C) to such other
effects as reasonably may be requested by counsel for the underwriters or by
such seller or its counsel and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters reasonably may request;
and
(h) make available for inspection by each seller of Restricted
Stock, any underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant or other agent retained by
such seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection, with such
registration statement.
For purposes of Section 7(a) and 7(b) and of Section 4(c), the
period of distribution of Restricted Stock in a firm commitment underwritten
public offering shall be deemed to extend
7
until each underwriter has completed the distribution of all securities
purchased by it, and the period of distribution of Restricted Stock in any other
registration shall be deemed to extend until the earlier of the sale of all
Restricted Stock covered thereby and 120 days after the effective date thereof.
In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as reasonably shall
be necessary in order to assure compliance with federal and applicable state
securities laws.
In connection with each registration pursuant to Sections 4, 5 or 6
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
8. Expenses. All expenses incurred by the Company in complying with
Sections 4, 5 and 6, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses (including counsel fees)
incurred in connection with complying with state securities or "blue sky" laws,
fees of the National Association of Securities Dealers, Inc., transfer taxes,
fees of transfer agents and registrars, costs of insurance and fees and
disbursements of one counsel for the sellers of Restricted Stock, but excluding
any Selling Expenses, are called "Registration Expenses". All underwriting
discounts and selling commissions applicable to the sale of Restricted Stock are
called "Selling Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement under Sections 4, 5 or 6. All Selling Expenses in
connection with each registration statement under Sections 4, 5 or 6 shall be
borne by the participating sellers in proportion to the number of shares sold by
each, or by such participating sellers other than the Company (except to the
extent the Company shall be a seller) as they may agree.
9. Indemnification and Contribution. (a) In the event of a registration
of any of the Restricted Stock under the Securities Act pursuant to Sections 4,
5 or 6, the Company will indemnify and hold harmless each seller of such
Restricted Stock thereunder, each underwriter of such Restricted Stock
thereunder and each other person, if any, who controls such seller or
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such seller,
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise, out of or are based upon any untrue statement or alleged
untrue statement of any, material fact contained in any registration statement
under which such Restricted Stock was registered under the Securities Act
pursuant to Sections 4, 5 or 6, any preliminary prospectus or final prospectus
contained therein, or any amendment or
8
supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
such seller, each such underwriter and each such controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
provided, however, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by any such
seller, any such underwriter or any such controlling person in writing
specifically for use in such registration statement or prospectus.
(b) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Sections 4, 5 or 6, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer, director, underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Restricted Stock
was registered under the Securities Act pursuant to Sections 4, 5 or 6, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
provided, however, that such seller will be liable hereunder in any such case if
and only to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon and in conformity with information
pertaining to such seller, as such, furnished in writing to the Company by such
seller specifically for use in such registration statement or prospectus, and
provided, however that the liability of each seller hereunder shall be limited
to the proportion of any such loss, claim, damage, liability or expense which is
equal to the proportion that the public offering price of the shares sold by
such seller under such registration statement bears to the total public offering
price of all securities sold thereunder, but not in any event to exceed the
proceeds received by such seller from the sale of Restricted Stock covered by
such registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnifying party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which
9
it may have to such indemnified party other than under this Section 9 and shall
only relieve it from any liability which it may have to such indemnified party
under this Section 9 if and to the extent the indemnifying party is prejudiced
by such omission. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in and, to the
extent it shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 9 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected, provided,
however, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified party shall have the
right to select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Restricted Stock exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 9 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 9 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling holder or any such controlling
person in circumstances for which indemnification is provided under this Section
9; then, and in each such case, the Company and such holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such holder
is responsible for the portion represented by the percentage that the public
offering price of its Restricted Stock offered by the registration statement
bears to the public offering price of all securities offered by such
registration statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the public offering price of all
such Restricted Stock offered by it pursuant to such registration statement; and
(B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.
10. Changes in Common Stock, Warrants or Preferred Shares. If, and as
often as, there is any change in the Common Stock, Warrants or the Preferred
Shares by way of a stock split, stock dividend, combination or reclassification,
or through a merger, consolidation,
10
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof so that the rights and
privileges granted hereby shall continue with respect to the Common Stock,
Warrants or the Preferred Shares as so changed.
11. 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 the Restricted Stock to the public without registration, at all times
after 90 days after any registration statement covering a public offering of
securities of the Company under the Securities Act shall have become effective,
the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) 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
(c) furnish to each holder of Restricted Stock forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of such 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 by the Company as such
holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing such holder to sell any Restricted Stock without
registration.
12. Representations and Warranties of the Company. The Company
represents and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement by
the Company have been duly authorized by all requisite corporate action and will
not violate any provision of law, any order of any court or other agency of
government, the Articles of Incorporation or Bylaws of the Company or any
provision of any indenture, agreement or other instrument to which it or any or
its properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.
13. Miscellaneous.
(a) All covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and
11
assigns of the parties hereto (including without limitation transferees of any
Preferred Shares, Warrants or Restricted Stock, but excluding transferees of
Xxxxx Common Stock other than members of Xxxxx'x immediate family, Xxxxx'x
estate and any trust established to benefit a member of Xxxxx'x family), whether
so expressed or not, provided, however, that registration rights conferred
herein on the holders of Preferred Shares, Warrants or Restricted Stock shall
only inure to the benefit of a transferee of Preferred Shares, Warrants or
Restricted Stock if (i) there is transferred to such transferee at least 20% of
the total shares of Restricted Stock originally issued pursuant to the Purchase
Agreement to the direct or indirect transferor of such transferee or (ii) such
transferee is a partner, member, shareholder or affiliate of a party hereto.
(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in person, mailed by
certified or registered mail, return receipt requested, or sent by telecopier or
telex, addressed as follows:
if to the Company or any other party hereto, at the address of such
party set forth in the applicable purchase agreement;
if to any subsequent holder of Preferred Shares, Warrants or
Restricted Stock, to it at such address as may have been furnished to
the Company in writing by such holder;
if to Xxxxx, at an address to be furnished by Xxxxx to the Company;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Preferred Shares, Warrants
or Restricted Stock) or to the holders of Preferred Shares, Warrants or
Restricted Stock (in the case of the Company) in accordance with the provisions
of this paragraph.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
(d) This Agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and the holders
of at least two-thirds of the outstanding shares of each of the Series A
Preferred Shares, the Series B Preferred Shares and the Common Shares; provided,
however, that no such amendment, modification or waiver may disproportionately
affect the rights of Xxxxx under Section 5 hereof relative to the rights of the
holders of Restricted Stock under that section without the written consent of
Xxxxx.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) The obligations of the Company to register shares of Restricted
Stock and/or Xxxxx Common Stock under Sections 4, 5 or 6 shall terminate on the
fifteenth anniversary of the date of this Agreement.
12
(g) If requested in writing by the underwriters for the initial
underwritten public offering of securities of the Company, each holder of
Restricted Stock who is a party to this Agreement shall agree not to sell
publicly any shares of Restricted Stock or any other shares of Common Stock
(other than shares of Restricted Stock or other shares of Common Stock being
registered in such offering), without the consent of such underwriters, for a
period of not more than 180 days following the effective date of the
registration statement relating to such offering; provided, however, that all
persons entitled to registration rights with respect to shares of Common Stock
who are not parties to this Agreement, all other persons selling shares of
Common Stock in such offering, all persons holding in excess of 1% of the
capital stock of the Company on a fully diluted basis and all executive officers
and directors of the Company shall also have agreed not to sell publicly their
Common Stock under the circumstances and pursuant to the terms set forth in this
Section 13(g).
(h) Notwithstanding the provisions of Section 7(a), the Company's
obligation to file a registration statement, or cause such registration
statement to become and remain effective, shall be suspended for a period not to
exceed 90 days in any 12-month period if there exists at the time material
non-public information relating to the Company which, in the reasonable opinion
of the Company, should not be disclosed.
(i) The Company shall not grant to any third party any registration
rights more favorable than or inconsistent with any of those contained herein,
so long as any of the registration rights under this Agreement remains in
effect.
(j) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
(k) This Agreement, the Warrants, the Series B Purchase Agreement and
the exhibits thereto constitute the entire agreement of the parties with respect
to the subject matter hereof and supersedes all prior agreements and
understandings between them or any of them as to such subject matter, including
the Original Agreement, which is hereby terminated and has no further force or
effect.
12(a)
Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this Agreement
shall be a binding agreement between the Company and you.
Very truly yours,
U.S. PHYSICIANS, Inc.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Title: President
------------------------------
AGREED TO AND ACCEPTED as of
the date first above written.
/s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
13
PURCHASERS NAMED IN SCHEDULE I:
EDISON VENTURE FUND III, L.P.,
By: Edison Partners III, L.P.,
its General Partner
By: /s/ Xxxxxx X. Xxxxx, III
-------------------------------
General Partner
NEPA VENTURE FUND II, L.P.
By: NEPA II Management Partners, L.P.,
its general partner
By: NEPA II Management Corporation,
its general partner
By: /s/ Xxxxxxxx X. Xxxxx, III
-------------------------------
Title: Chief Executive Officer
-----------------------
MAJOR OIL, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------
Xxxx X. Xxxxxxx, Xx., President
KEYSTONE VENTURE IV, L.P.,
By: Keystone Venture IV Management Co., L.P.
the general partner of
Keystone Venture IV, L.P.
By: Keystone Venture IV Management Co. Group
the general partner of
Keystone Venture IV Management Co., L.P.
By: /s/ Xxxxx X. Xxxx
-------------------------------
Xxxxx X. Xxxx
Vice President
14
SUBSEQUENT PURCHASERS:
/s/ Xxxxxxx X. Xxxxx, M.D.
------------------------------
Xxxxxxx X. Xxxxx, M.D.
/s/ Xxxxxx X. Xxxxx
------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx
------------------------------
Xxxxxx X. Xxxxx
E.J.K. Real Estate Services Limited
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Xxxxxxx X. Xxxxxxxx
Title: President
-------------------
Glenville Capital Partners, L.P.
By: Glenville Capital Corporation
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Title: President
-------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
15
DOMINION FUND IV, A DELAWARE
LIMITED PARTNERSHIP
By Dominion Management IV,
its General Partner
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxxx X. Xxxxxx,
Member
/s/ Xxxxxx X. Xxxx, Xx.
-------------------------------
Xxxxxx X. Xxxx, Xx.
/s/ Xxxxxxxx X. Xxxxx, Xx.
-------------------------------
Xxxxxxxx X. Xxxxx, Xx.
Xxxxxxx Xxxxxx & Co., Inc.
FBO: Xxxxxxx X. Xxxxx XXX
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------
Xxxxxx Xxxxxxxxx
Xx. Account Administrator
16
SCHEDULE I
Edison Venture Fund III, L.P.
NEPA Venture Fund II, L.P.
Major Oil, Inc.
Keystone Venture IV, L.P.
Xxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxx
E.J.K. Real Estate Services Limited
Glenville Capital Partners, L.P.
Dominion Fund IV, a Delaware Limited Partnership
Xxxxxx X. Xxxx, Xx.
Xxxxxxxx X. Xxxxx, Xx.
Xxxxxxx Xxxxxx & Co., Inc.
FBO: Xxxxxxx X. Xxxxx XXX
17
