EXHIBIT 10.3
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as
of June 21, 2002, between Rotech Healthcare Inc., a Delaware corporation (the
"Company"), and Oaktree Capital Management, LLC ("Oaktree"), and General
Electric Capital Corporation ("GECC") (each of Oaktree and GECC, together with
its respective successors and permitted assigns, an "Investor" and collectively,
the "Investors").
WHEREAS, the Company and the Investors previously entered into that certain
Registration Rights Agreement, dated as of March 26, 2002 (the "Original
Registration Rights Agreement");
WHEREAS, the Company and the Investors desire to amend and restate the
Original Registration Rights Agreement in its entirety as set forth herein;
WHEREAS, pursuant to the Amended Joint Plan of Reorganization of Rotech
Medical Corporation and its affiliated Debtors and Debtors in Possession (the
"Plan"), dated December 20, 2001, which became effective on March 26, 2002, the
Company has agreed, among other things, to issue 25,000,000 shares of new common
stock, par value $0.0001 per share, of the Company (the "Common Stock");
WHEREAS, the Company has issued the Common Stock pursuant to the Plan; and
WHEREAS, the Company has agreed to grant to each of the Investors the
registration rights set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Definitions. As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:
Affiliate(s): Means a Person(s) who, directly or indirectly, through one or
more intermediaries, controls or is controlled by, or is under common
control with, an Investor. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise. For purposes of Section 2.1,
the term "Affiliate" shall be construed in accordance with Rule 144(a) of
the Securities Act.
Agreement: As defined in the introductory paragraph of this Agreement.
Business Day(s): Means any day(s), other than a Saturday or Sunday, when
commercial banks are open for business in New York, New York.
Change in Control: Means (i) a merger, consolidation, share exchange,
division or other reorganization of the Company with any corporation or
entity other than an entity owned at least 80% by the Company, unless
immediately after such transaction, the stockholders of the Company
immediately prior to such transaction beneficially own, directly or
indirectly, 51% or more of the combined voting power of the resulting
entity's outstanding voting securities of the resulting entity, or in the
case of a division, 51% or more of the combined voting power of the
outstanding voting securities of each entity resulting from the division of
each such entity, in each case in substantially the same proportion as such
stockholders owned shares of the Company prior to such transaction or (ii)
the stockholders of the Company approve an agreement for the sale or
disposition (in one transaction or a series of transactions) of assets of
the Company, the total consideration of which is greater than 51% of the
Total Market Value of the Company.
Commission: The Securities and Exchange Commission or any other Federal
agency at the time administering the Securities Act.
Common Stock: As defined in Section 1 hereof.
Company: As defined in the introductory paragraph of this Agreement.
Company Board: As defined in Section 2.10 hereof.
Exchange Act: 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. Reference to a
particular section of the Securities Exchange Act of 1934, as amended,
shall include a reference to the comparable section, if any, of any such
similar Federal statute.
Fair Market Value: Per share of Common Stock as of a particular date shall
mean: (i) the closing sales price per share of Common Stock on a national
securities exchange for the Business Day preceding the exercise date on
which there was a sale of shares of Common Stock on such exchange; (ii) if
clause (i) does not apply and the shares of Common Stock are then quoted on
the National Association of Securities Dealers Automated Quotation system
(known as "NASDAQ"), the closing price per share of Common Stock as
reported on such system for the Business Day preceding the exercise date on
which a sale was reported; (iii) if clause (i) and (ii) do not apply and
the shares of Common Stock are then traded on an over-the-counter market,
the closing price for the shares of Common Stock in such over-the-counter
market for the Business Day preceding the exercise date; or (iv) if the
shares of Common Stock are not then listed on a
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national securities exchange or traded in an over-the-counter market, such
value as the Company Board in its sole discretion may reasonably determine.
Initial Demand Request: As defined in Section 2.2 hereof.
Inspector: As defined in Section 2.5 hereof.
Investor: As defined in the introductory paragraph of this Agreement.
Managing Underwriters: Any investment banker or investment bankers and
manager or managers that administer the offering of Registrable Securities
covered by any registration statement.
Material Event: Any of the following pending or proposed events to the
extent not then publicly disclosed by the Company: (i) a merger,
acquisition or disposition of a business or component thereof, or any other
type of business combination or joint venture, any of which is material to
the Company; (ii) a Change in Control with respect to the Company; (iii)
any material private debt or equity financing of the Company; or (iv) a
public announcement of the quarterly or annual results of the operations of
the Company, and, with respect to any of the transaction or events
described in clauses (i) through (iv) above, the Company Board reasonably
has determined in good faith that compliance with this Agreement may
reasonably be expected to either materially interfere with the Company's
ability to consummate such transaction in a timely fashion or require the
Company to disclose material, non-public information prior to such time as
it would otherwise be required to be disclosed.
Nomination Right: As defined in Section 2.10 hereof.
Person: A corporation, an association, a partnership, an organization,
business, an individual, a governmental or political subdivision thereof or
a governmental agency.
Plan: As defined in Section 1 hereof.
Records: As defined in Section 2.5 hereof.
Registrable Securities: Any shares of Common Stock issued to any Investor
pursuant to the Plan (including such shares held by any successor or
permitted assignee of such Investor) and any securities issued or issuable
with respect to any Common Stock referred to above by way of stock dividend
or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or
otherwise. As to any particular Registrable Securities, once issued such
securities shall cease to be Registrable Securities when (a) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been
disposed of
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in accordance with such registration statement, (b) they shall have been
distributed to the public pursuant to Rule 144 (or any successor provision)
under the Securities Act, (c) they shall have been otherwise transferred,
new certificates for them not bearing a legend restricting further transfer
shall have been delivered by the Company and subsequent disposition of them
shall not require registration or qualification of them under the
Securities Act or any similar state law then in force, (d) they shall be
sold by the applicable Investor to the public pursuant to Section 1145 of
title 11 of the United States Code, as amended, or (e) they shall have
ceased to be outstanding. Notwithstanding anything herein to the contrary,
the registration rights granted hereunder shall terminate as to each
Investor and with respect to such Securities upon the date that such Common
Stock is no longer Registrable Securities.
Registration Expenses: All expenses incident to the Company's performance
of or compliance with Section 2 hereof, including, without limitation, all
registration, filing and NASD fees, all stock exchange listing fees, all
fees and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and delivery
expenses, the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special
audits or "cold comfort" letters required by or incident to such
performance and compliance, the reasonable fees and disbursements of one
(1) counsel representing all Investors (as selected by the holders of a
majority of the Registrable Securities in a registration), premiums and
other costs of policies of insurance purchased by the Company against
liabilities arising out of the public offering of the Registrable
Securities being registered and any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but excluding
underwriting discounts and commissions and transfer taxes, if any, provided
that, in any case where Registration Expenses are not to be borne by the
Company, such expenses shall not include salaries of Company personnel or
general overhead expenses of the Company, auditing fees, premiums or other
expenses relating to liability insurance required by underwriters of the
Company or other expenses for the preparation of financial statements or
other data normally prepared by the Company in the ordinary course of its
business or which the Company would have incurred in any event.
Securities Act: The Securities Act of 1933, as amended, or any similar
Federal statute, and the rules and regulations of the Commission
thereunder, all as of the same shall be in effect at the time. References
to a particular section of the Securities Act of 1933, as amended, shall
include a reference to the comparable section, if any, of any such similar
Federal statute.
Shelf Investor: As defined in Section 2.1(a) hereof.
Subsequent Demand Request: As defined in Section 2.2 hereof.
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Total Market Value: Means the aggregate Fair Market Value of the Company's
outstanding Common Stock (on a fully diluted basis) plus the aggregate
market value of the Company's outstanding debt securities as measured by
the face value of such outstanding debt securities.
2. Registration under Securities Act, etc.
2.1 Shelf Registration Statement
(a) Filing. At any time on or after September 1, 2002,
either Oaktree or GECC, so long as such Investor meets one of the requirements
of Section 2.1(d) below (as such, a "Shelf Investor"), may request in writing
(such request, a "Shelf Registration Request"), that the Company prepare and
file with the Commission, one (1) registration statement for an offering to be
made on a continuous basis pursuant to Rule 415 under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission, covering all of the Registrable Securities
held by each Shelf Investor (such registration the "Shelf Registration
Statement"). Upon receipt of a Shelf Registration Request from any Shelf
Investor, the Company shall promptly provide a copy of such Shelf Registration
Request to each other Investor and each Investor that is a Shelf Investor shall
be entitled to have the Registrable Securities of such Shelf Investor included
in the Shelf Registration Statement, so long as such Shelf Investor meets one of
the requirements of Section 2.1(d) below. The Company shall file the Shelf
Registration Statement with the Commission not later than thirty (30) days
following receipt of such request by the Company. The Shelf Registration
Statement shall be on Form S-1 under the Securities Act or another appropriate
form selected by the Company (and reasonably acceptable to the Participating
Investors) permitting registration of such Registrable Securities for resale by
the Shelf Investors in the manner or manners reasonably designated by them (not
including underwritten offerings). The Company shall use its best efforts to
cause the Shelf Registration Statement to be declared effective pursuant to the
Securities Act within sixty (60) days after the date the Shelf Registration
Statement is filed with the Commission, and to keep the Shelf Registration
Statement continuously effective under the Securities Act for a period of
thirty-six (36) months from the date that such Shelf Registration Statement is
declared or ordered effective by the Commission or, if earlier, until such time
as each Shelf Investor participating in such Shelf Registration no longer meets
any of the requirements of Section 2.1(d) below. If there is a disagreement
between the Company and a Shelf Investor with respect to whether or not such
Shelf Investor is or should be deemed to be an Affiliate of the Company for
purposes of this Agreement, the Company and the Shelf Investor shall be entitled
to rely upon a written legal opinion of outside counsel to the Company addressed
to the Company and the Shelf Investor reasonably acceptable to the Company and
the Shelf Investor and its legal counsel. In no event shall the Company be
required to file more than one (1) Shelf Registration Statement pursuant to this
Agreement. For the avoidance of doubt, in the event that the Company files a
registration statement in connection with the initial public offering of its
Common Stock and, after giving effect to such initial public offering, one
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or more of the Investors continues to meet one or more of the requirements of
Section 2.1(d) of this Agreement, then such Investor or Investors shall continue
to have the rights set forth in this Section 2.1 with respect to the preparation
and filing of the Shelf Registration Statement described herein.
(b) Selling Securityholder Information. The Company may
require each Shelf Investor to furnish to the Company such information regarding
the Shelf Investor and the distribution of the Registrable Securities as the
Company may from time to time reasonably require for inclusion in the Shelf
Registration Statement, and the Company may exclude from such registration the
Registrable Securities of any Shelf Investor that fails to furnish such
information within twenty (20) Business Days after receiving such request. Each
Shelf Investor agrees to furnish to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Shelf Investor not misleading.
(c) Expenses. The Company will pay all Registration Expenses
in connection with the Shelf Registration Statement.
(d) Participation in Shelf Registration. A Shelf Investor
shall be able to offer or sell any Registrable Securities by means of the Shelf
Registration Statement so long as such Shelf Investor (x) beneficially owns at
least seven and one-half percent (7.5 %) of the outstanding Common Stock of the
Company, (y) has the right to nominate a member of, or has a designee on, the
Company Board pursuant to Section 2.10 hereof or (z) is deemed to be an
Affiliate of the Company.
2.2 Registration on Request
(a) Initial Demand Request. Beginning on the date which is
one (1) year after the effective date of the Plan, an Investor or Investors
holding, in the aggregate, at least seven and one-half percent (7.5%) of the
Registrable Securities then outstanding, subject to Section 2.2(f) hereof, may
request, in writing, registration under the Securities Act, of all or part of
their Registrable Securities (the "Initial Demand Request"); provided, that no
less than seven and one-half percent (7.5%) of the outstanding shares of Common
Stock are requested to be included in such registration.
(b) Subsequent Demand Request. After the earlier to occur of
(i) an Initial Demand Request having been made, and the Company has filed a
registration statement covering the Registrable Securities requested to be
included pursuant to such Initial Demand Request that has been declared or
ordered effective under the Securities Act and (ii) the completion of an initial
public offering of the Company's Common Stock, until the date which is six (6)
years after the effective date of the Plan an Investor or Investors holding, in
the aggregate, the greater of (x) five percent (5%) or more of the Registrable
Securities then outstanding and (y) Registrable Securities with a Fair Market
Value equal to at least an aggregate of fifty million dollars ($50,000,000) on
the date of the request referred to below, subject to Section 2.2(f) hereof, may
request, in writing, registration under the Securities Act, of all or part of
their
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Registrable Securities (each such request to be referred to as a "Subsequent
Demand Request"); provided that no less than the greater of (i) five percent
(5%) of the Registrable Securities and (ii) Registrable Securities with a Fair
Market Value equal to at least an aggregate of twenty-five million dollars
($25,000,000) are requested to be included in such registration; and provided,
further, that the Company shall not be required to effect more than one (1) such
registration per each twelve (12) month period beginning one (1) year after the
effective date of the Plan and ending on the date which is six (6) years after
the effective date of the Plan.
(c) Within 10 days after receipt of any request pursuant to
Section 2.2(a) or Section 2.2(b) hereof, the Company will give notice of such
request to the other Investors. Any Investor that sells or disposes, or elects
to sell or dispose, of securities pursuant to a registration statement of the
Company filed pursuant to this Agreement is referred to herein as a
"Participating Investor." The Company will use its best efforts to effect the
registration on an appropriate form under the Securities Act and will include in
such registration, subject to Section 2.2(f) hereof, all Registrable Securities
held by any Participating Investor with respect to which the Company has
received a written request for inclusion therein within 30 days after the
receipt of the Company's notice. All registrations initiated by a Participating
Investor pursuant to Section 2.2(a) or Section 2.2(b) hereof are referred to
herein as "Demand Registrations." Notwithstanding anything to the contrary in
this Agreement, the Company shall not be required to include in any Demand
Registration any shares of Common Stock held by any Participating Investor that
have previously been registered under the Securities Act pursuant to a Shelf
Registration Statement pursuant to Section 2.1 of this Agreement, so long as
such Shelf Registration Statement remains effective.
(d) Number of Demands. Subject to Section 2.2(e)(iii)
hereof, the Company shall not be required to effect more than three (3)
registrations pursuant to this Section 2.2 requested by any one Investor or more
than five (5) registrations in the aggregate requested by all of the Investors
pursuant to this Section 2.2; provided, however, that, in each case, such
obligation shall be deemed satisfied only when a registration statement covering
all shares of Registrable Securities specified in notices received as aforesaid,
for sale in accordance with the method of disposition specified by the
requesting Investors, shall have become effective.
(e) Priority in Registration.
(i) If the Company includes in any underwritten Demand
Registration any securities which are not Registrable Securities and the
Managing Underwriters advise the Company in writing that in their opinion the
number of securities proposed to be included exceeds the number of securities
which can be sold in such offering, the Company will include in such
registration the number of securities which it is so advised can be sold in (or
during the time of) such offering: (A) first, the Registrable Securities
requested to be included by the Participating Investor or Investors and the
securities to be included by the Company which are not Registrable Securities
pro rata based upon the total number of Registrable Securities which such
Investor or
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Investors propose to include and the total number of securities the Company
proposes to include in such registration and (B) second, the securities proposed
to be included in such registration by any other holders as determined by the
Company and the Managing Underwriters.
(ii) Notwithstanding the provisions in clause (i) of this
Section 2.2(e), in the event that (a) the first Demand Registration effected
pursuant to this Agreement occurs prior to the issuance and sale by the Company
of shares of Common Stock in an underwritten offering pursuant to an effective
registration statement under the Securities Act, (b) the Company proposes to
include any securities which are not Registrable Securities in such
registration, and (c) the Managing Underwriters advise the Company in writing
that in their opinion the number of securities proposed to be included in such
registration exceeds the number of securities which can be sold in such
offering, the Company will include in such registration: (A) first, the
securities proposed to be sold by the Company for its own account, (B) second,
the Registrable Securities requested to be included in such registration pro
rata based upon the total number of Registrable Securities which each such
Participating Investor requested to be included in proportion to the total
number of Registrable Securities requested to be included by all Participating
Investors and (C) third, the securities proposed to be included in such
registration by any other holders as determined by the Company and the Managing
Underwriters.
(iii) In the event that the first Demand Registration is a
registration described in clause (ii) of this Section 2.2(e) and, pursuant to
the provisions of such clause (ii) of this Section 2.2(e), the Investor or
Investors, as the case may be, are not able to include all the Registrable
Securities such Investor or Investors have requested to be included in such
registration, such registration shall not be considered a registration for the
purposes of, and only for the purposes of, counting the number of registrations
required to be effected by the Company as provided for in this Section 2.2.
(f) Registration Statement Form. Registrations under this
Section 2.2 shall be on such appropriate registration form of the Commission (i)
as shall be selected by the Company and, as shall be reasonably acceptable to
each Participating Investor and (ii) as shall permit the disposition of such
Registrable Securities in accordance with the intended method or methods of
disposition specified in their request for such registration. If, in connection
with any registration under this Section 2.2 which is proposed by the Company to
be on Form S-3 or any similar short form registration statement which is a
successor to Form S-3, the Managing Underwriters, if any, shall advise the
Company in writing that in their opinion the use of another permitted form is of
material importance to the success of the offering, then such registration shall
be on such other permitted form.
(g) Expenses. The Company will pay all Registration Expenses
in connection with any registration requested pursuant to this Section 2.2.
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(h) Effective Registration Statement. A Demand Registration
requested pursuant to this Section 2.2 shall not be deemed to have been effected
(i) unless a registration statement with respect thereto has been declared
effective by the Commission, provided that a registration which does not become
effective after the Company has filed a registration statement with respect
thereto solely by reason of the refusal to proceed of all Participating
Investors (other than a refusal to proceed based upon the advice of outside
counsel relating to a matter with respect to the Company) shall be deemed to
have been effected by the Company at the request of a Participating Investor
unless the Participating Investors shall have elected to pay all Registration
Expenses in connection with such registration, (ii) if, after it has become
effective, such registration becomes subject to any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court for any reason, or (iii) if the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied. A Participating Investor shall be permitted
to withdraw all or any part of the Registrable Securities from a Demand
Registration at any time prior to the effective date of such Demand
Registration.
(i) Selection of Underwriters. If a Demand Registration
pursuant to this Section 2.2 involves an underwritten offering, the underwriter
or underwriters thereof shall be selected by the Company subject to the consent
of the Participating Investors (such consent not to be unreasonably withheld).
If an Investor or Investors request a Demand Registration in which such Investor
or Investors hold a majority of the securities to be included in such
registration, the Participating Investors shall have the right to select an
underwriter to serve as co-lead underwriter and joint bookrunner along with the
underwriter selected by the Company in the underwritten offering to be conducted
with respect to such registration.
(ii) The underwriter selected by the Company or the
Investors, as the case may be, shall be reputable and nationally recognized as
an underwriter.
2.3 Exceptions to Registration.
(a) Notwithstanding anything in this Agreement to the
contrary, the Company shall not be obligated to take any action to effect or
maintain the effectiveness of any registration pursuant to Section 2.1 or
Section 2.2 hereof:
(i) During the period starting with the date thirty (30)
days prior to the Company's estimated date of filing of, and ending on the
ninetieth (90th) day immediately following the effective date of, any
registration statement pertaining to equity securities of the Company (other
than (i) a registration statement filed on Forms S-4, F-4 or S-8 (or any
successor forms thereto) promulgated under the Securities Act, (ii) a
registration of securities in a Rule 145 transaction, or (iii) a other
registration statement filed in connection with a dividend reinvestment plan or
employee benefit plan covering officers or directors of the Company or its
Affiliates),
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provided that the Company is actively employing in good faith its best efforts
to cause such registration statement to become effective;
(ii) With respect to a registration pursuant to Section 2.2
only (and not Section 2.1), if the Company determines in good faith that the
registration and distribution of Registrable Securities (or the use of the
registration statement or related prospectus) resulting from a Demand
Registration would require the Company to disclose publicly a pending Material
Event; or
(iii) During the period starting with the date ninety (90)
days prior to the Company's estimated date of filing of, and ending on the
ninetieth (90th) day immediately following the effective date of, a registration
statement pertaining to the initial public offering of the Company's Common
Stock; provided that, during such period, the Company is actively and
continuously employing good faith efforts to effect and consummate such initial
public offering; and provided further that such period shall be extended for an
additional period of up to sixty (60) days in the event that the underwriter for
the Company's initial public offering reasonably determines that such an
extension is necessary in order to successfully market the Common Stock offered
in the initial public offering.
(b) If the Company delays the filing of any registration
statement, the furnishing of any supplement for a planned public offering, or
suspends the use of an effective registration statement, it shall so notify each
Investor, indicating that the provisions of Section 2.3(a)(ii) or Section
2.3(a)(iii) hereof are applicable, and the anticipated delay; provided that, in
the case of a delay due to the applicability of the provisions in Section
2.3(a)(iii), the notice to each Investor shall set forth the estimated date of
the filing of the registration statement pertaining to the initial public
offering of the Company's Common Stock and shall be delivered by the Chief
Executive Officer of the Company or Chairman of the Board of Directors of the
Company, in either case, on behalf of the entire Board of Directors of the
Company. No Investor shall request a registration pursuant to Section 2.1 or
Section 2.2 hereof until, pursuant to Section 2.3(c) hereof, the Company has
notified the Investor that the provisions of Section 2.3(a)(ii) or Section
2.3(a)(iii), as the case may be, are no longer applicable.
(c) If the Company delays the filing of any registration
statement, the furnishing of any supplement, or suspends the use of an effective
registration statement pursuant to this Section 2.3 and the reason for such
delay becomes no longer applicable, the Company shall promptly notify the
Investor of such fact and any Investor may exercise any right that it may have
to request a registration pursuant to Section 2.1 or Section 2.2 hereof
immediately following its receipt of such notice.
(d) No Investor shall at any time disclose publicly that any
such Investor has received from the Company any notice of the type specified in
clause (b) or (c) of this Section 2.3.
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(e) The Company may not delay the filing of any registration
statement or the furnishing of any supplement, or suspend the use of any
effective registration statement pursuant to clause (a)(ii) of this Section 2.3
for more than an aggregate of 75 days in any consecutive 12 month period and the
suspension of the filing of any registration statement or the furnishing of any
supplement or the use of any effective registration statement pursuant to this
Section 2.3 shall not prejudice any right that the Investor may have to request
that the Company effect the registration of the Investor's Registrable
Securities pursuant to Section 2.1 or Section 2.2 hereof at a later date.
2.4 Incidental Registration
(a) Right to Include Registrable Securities. If the Company
at any time proposes to register any securities substantially similar to the
Registrable Securities under the Securities Act (other than by a registration on
Form S-4 or S-8, or any successor or similar forms and other than securities
registered to effect the acquisition of or combination with another person or
pursuant to Sections 2.1 or 2.2 hereof), whether or not for sale for its own
account, it will each such time give prompt written notice to each Investor of
its intention to do so and of such Investor's rights under this Section 2.4.
Upon the written request of any Investor made within 30 days after the receipt
of any such notice (which request shall specify the Registrable Securities
intended to be disposed of by such Investor and the intended method of
disposition thereof), the Company will, subject to Section 2.2 hereof, effect
the registration under the Securities Act of all Registrable Securities which
the Company has been so requested to register by such Participating Investor, to
the extent requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be registered,
by inclusion of such Registrable Securities in the registration statement which
covers the securities which the Company proposes to register, provided that if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
either not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to each
Participating Investor and, thereupon, (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith), without prejudice,
however, to the rights of any Participating Investor to request that such
registration be effected as a registration under Section 2.2 hereof, and (ii) in
the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in
registering such other securities. No registration effected under this Section
2.4 shall relieve the Company of its obligation to effect any registration upon
request under Section 2.2 hereof, nor shall any such registration hereunder be
deemed to have been effected pursuant to Section 2.2 hereof. The Company will
pay all Registration Expenses in connection with each registration of
Registrable Securities requested pursuant to this Section 2.4.
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(b) Priority in Incidental Registrations. If (i) a
registration pursuant to this Section 2.4 involves an underwritten offering of
the securities so being registered, for sale for the account of the Company or
any other entity, to be distributed (on a firm commitment basis) by or through
one or more Managing Underwriters, (ii) the Registrable Securities so requested
to be registered for sale for the account of a Participating Investor are not
also to be included in such underwritten offering (because the Company has not
been requested so to include such Registrable Securities pursuant to Section
2.6(b)) hereof and (iii) the Managing Underwriter of such underwritten offering
shall inform the Company and each Participating Investor by letter of its belief
that the number of securities requested to be included in such registration
exceeds the number which can be sold in (or during the time of) such offering,
then the Company will include in such registration, to the extent of the number
which the Company is so advised can be sold in (or during the time of) such
offering, (A) first, the securities proposed by the Company to be sold for its
own account, (B) second, the Registrable Securities requested to be included in
such registration, pro rata based upon the total number of Registrable
Securities which such Participating Investor requested to be included in
proportion to the number of Registrable Securities that are requested to be
included by all Participating Investors and (C) third, the securities proposed
to be included in such registration by any other holders as determined by the
Company and the Managing Underwriters.
2.5 Registration Procedures.
(a) If and whenever the Company is required to effect the
registration of any Registrable Securities under the Securities Act as provided
in Sections 2.1, 2.2 and 2.4 hereof the Company shall, as expeditiously as
possible:
(i) prepare and (in the case of a registration pursuant to
Section 2.2 hereof, such filing to be made within 45 days after the initial
request of the Investor or in any event as soon thereafter as possible) file
with the Commission the requisite registration statement to effect such
registration (including such audited financial statements as may be required by
the Securities Act or the rules and regulations promulgated thereunder) and
thereafter cause such registration statement to become and remain effective,
provided however that the Company may discontinue any registration of its
securities which are not Registrable Securities (and, under the circumstances
specified in Section 2.4(a) hereof, its securities which are Registrable
Securities) at any time prior to the effective date of the registration
statement relating thereto, provided further that at least five (5) Business
Days before filing such registration statement or any amendments thereto, the
Company will furnish to the counsel selected by the Participating Investors
copies of all such documents proposed to be filed, and all reasonable
modifications suggested by such counsel will be made to such registration
statement or any amendments thereto;
(ii) subject to Section 2.3 hereof, 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 and to comply with the provisions of the
Securities
12
Act with respect to the disposition of all securities covered by such
registration statement until such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement;
(iii) furnish to each Participating Investor and each
underwriter, if any, such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus contained in
such registration statement (including each preliminary prospectus and any
summary prospectus) 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, as such Participating Investor and such underwriter, if
any, may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities;
(iv) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities laws or blue sky laws of such
jurisdictions as any seller thereof and any underwriter of the securities being
sold by such seller shall reasonably request, to keep such registrations or
qualifications in effect for so long as such registration statement remains in
effect, and take any other action which may be reasonably necessary or advisable
to enable such seller and underwriter to consummate the disposition in such
jurisdictions of the securities owned by such seller, except that the Company
shall not for any such purpose be required to (x) qualify generally to do
business as a foreign corporation in any jurisdiction wherein it would not but
for the requirements of this subdivision (iv) be obligated to be so qualified,
(y) consent to general service of process in any such jurisdiction, or (z)
subject itself to taxation in any such jurisdiction;
(v) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such Registrable
Securities;
(vi) furnish to each Participating Investor a signed
counterpart, addressed to such Participating Investor and the underwriters, if
any, of (x) an opinion of counsel for the Company, dated the effective date of
such registration statement (or, if such registration includes an underwritten
public offering, an opinion dated the date of the closing under the underwriting
agreement), reasonably satisfactory in form and substance to such Participating
Investor and the underwriters, and (y) a "comfort" letter (or, in the case of
any such Person which does not satisfy the conditions for receipt of a "comfort"
letter specified in Statement on Auditing Standards No. 72, an "agreed upon
procedures" letter), dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering, a letter of
like kind dated the date of the closing under the underwriting agreement),
signed by the independent public accountants who have certified the Company's
financial statements included in such registration statement, covering
substantially the same matters with
13
respect to such registration statement (and the prospectus included therein)
and, in the case of the 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 the underwriters in
underwritten public offerings of securities (with, in the case of an "agreed
upon procedures" letter, such modifications or deletions as may be required
under Statement on Auditing Standards No. 35) and, in the case of the
accountants' letter, such other financial matters, and, in the case of the legal
opinion, such other legal matters, as a Participating Investor (or the
underwriters, if any) may reasonably request;
(vii) notify each Participating Investor and the managing
underwriter or underwriters, if any, promptly and confirm such advice in writing
promptly thereafter (v) when the registration statement, the prospectus or any
prospectus supplement related thereto or post-effective amendment to the
registration statement has been filed, and, with respect to the registration
statement or any post-effective amendment thereto, when the same has become
effective; (w) of any request by the Commission for amendments or supplements to
the registration statement or the prospectus or for additional information; (x)
of the issuance by the Commission of any stop order suspending the effectiveness
of the registration statement or the initiation of any proceedings by any Person
for that purpose; (y) if at any time the representations and warranties of the
Company made as contemplated by Section 2.4 hereof cease to be true and correct
in all material respects; and (z) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation or threat of any proceeding for such purpose;
(viii) notify each Participating Investor, at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act, upon discovery that, or upon the happening of any event as a result of
which, the prospectus included in 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 not misleading in the light of the circumstances under which they were
made, and promptly prepare and, subject to the provisions of Section 2.3 hereof,
furnish to such seller or Participating Investor and each underwriter, if any, 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 not misleading in the
light of the circumstances under which they were made;
(ix) use its best efforts to obtain the withdrawal of any
order suspending the effectiveness of the registration statement at the earliest
possible moment;
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(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
months, beginning with the first day of the Company's first full calendar
quarter after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder, and will furnish to each Participating Investor at
least five Business Days prior to the filing thereof a copy of any amendment or
supplement to such registration statement or prospectus and shall not file any
thereof to which such Participating Investor shall have reasonably objected on
the grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Securities Act or of the rules or
regulations thereunder;
(xi) make available for inspection by a representative or
representatives of each Participating Investor, any underwriter participating in
any disposition pursuant to the registration statement and any attorney or
accountant retained by any Participating Investor or such underwriter (each, an
"Inspector"), all financial and other records, pertinent corporate documents and
properties of the Company (the "Records"), and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such Inspector in connection with such registration in order to permit
investigation within the meaning of Section 11 of the Securities Act. Any of the
Records which the Company determines, in good faith, to be confidential, and
which it notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records is necessary to avoid or
correct a material misstatement in or omission from any registration statement,
(ii) the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction or (iii) the information in such
Records has been made generally available to the public. Each Participating
Investor agrees that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the Company and
allow the Company at the Company's expense, to undertake appropriate action to
prevent disclosure of the Records deemed confidential;
(xii) intentionally omitted;
(xiii) list all Registrable Securities covered by such
registration statement on any securities exchange on which any of the securities
of the same class as the Registrable Securities are then listed;
(xiv) in the case of an underwritten offering, make
appropriate officers and management employees of the Company reasonably
available to the selling holders of Registrable Securities upon advance notice
for meetings with prospective purchasers of such securities and prepare and
present to potential investors customary "road show" material in a manner
consistent with other new issuances of other securities similar to the
Registrable Securities;
15
(xv) promptly incorporate in a prospectus supplement or
post-effective amendment to the applicable registration statement such
information as the underwriter, if any, or the holders of the Registrable
Securities included in such registration agree should be included therein
relating to the plan of distribution with respect to such Registrable
Securities; and, subject to Section 2.3 hereof, make all required filings of
such prospectus supplement or post-effective amendment as soon as reasonably
practicable after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(xvi) file in a timely manner any reports required to be
filed by the Company under the Securities Act, the Exchange Act and the
securities laws of any jurisdiction in which the Registrable Securities were
sold;
(xvii) provide and cause to be maintained a transfer agent
and registrar (which may be the same entity) for all Registrable Securities
covered by such registration statement from and after a date not later than the
effective date of such registration statement; and
(xviii) use its best efforts to provide a CUSIP number for
the Registrable Securities, not later than the effective date of the
registration statement.
(b) The Company may require each seller of Registrable
Securities as to which any registration is being effected to furnish the Company
such information regarding such seller and the distribution of such securities
as the Company may from time to time reasonably request in writing.
(c) The Company will not file any registration statement
covering the Registrable Securities or amendment thereto or any prospectus or
any supplement thereto (including such documents incorporated by reference and
proposed to be filed after the initial filing of the registration statement) to
which Investor or the underwriter or underwriters, if any, shall reasonably
object.
(d) The Investors agree by acquisition of the Registrable
Securities that, upon receipt of any notice from the Company of the occurrence
of any event of the kind described in subdivision (viii) of Section 2.5(a)
hereof, the Investors will forthwith discontinue their respective dispositions
of Registrable Securities pursuant to the registration statement relating to
such Registrable Securities until each such Investor's receipt of the copies of
the supplemented or amended prospectus contemplated by subdivision (viii)
Section 2.5(a) hereof and, if so directed by the Company, will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such Investor's possession of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice.
(e) If any such registration statement to be filed pursuant
to this Agreement refers to any Investor or any of its Affiliates by name or
otherwise as the
16
holder of any securities of the Company, then such Investor shall have the right
to require (i) the insertion therein of language, in form and substance
reasonably satisfactory to the Company, to the effect that the holding by such
Investor of such securities is not to be construed as a recommendation by such
Investor of the investment quality of the Company's securities covered thereby
and that such holding does not imply that such Investor will assist in meeting
any future financial requirements of the Company, or (ii) in the event that such
reference to such Investor or any of its Affiliates by name or otherwise is not
required by the Securities Act or any similar federal statute then in force, the
deletion of the reference to such Investor.
2.6 Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by the
Managing Underwriters for any underwritten offering by any Investor pursuant to
a registration requested under Section 2.2 hereof, the Company will enter into
an underwriting agreement with such Managing Underwriters for such offering,
such agreement to be satisfactory in substance and form to the Company, such
Participating Investors and the Managing Underwriters, and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of this type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2.8 hereof. The
Participating Investors will cooperate with the Company in the negotiation of
the underwriting agreement. The Participating Investors shall be party to such
underwriting agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such Managing Underwriters shall also be made
to and for the benefit of such Participating Investors and that any or all of
the conditions precedent to the obligations of such Managing Underwriters under
such underwriting agreement be conditions precedent to the obligations of such
Participating Investors. A Participating Investor shall not be required to make
any representations or warranties to or agreements with the Company or the
Managing Underwriters other than representations and warranties contained in a
writing furnished by such holder expressly for use in such registration
statement or agreements regarding such Participating Investors, the
Participating Investor's Registrable Securities and the Participating Investor's
intended method of distribution and any other representation required by law.
(b) Incidental Underwritten Offerings. If the Company at any
time proposes to register any of its securities under the Securities Act as
contemplated by Section 2.4 hereof and such securities are to be distributed by
or through one or more Managing Underwriters, the Company will, if requested by
an Investor or Investors as provided in Section 2.4 hereof and subject to the
provisions of Section 2.4(b) hereof, use its best efforts to arrange for such
Managing Underwriters to include all the Registrable Securities to be offered
and sold by any Participating Investor among the securities to be distributed by
such underwriters. Each such Participating Investor shall be party to the
underwriting agreement between the Company and such Managing Underwriters and
may, at its option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the
17
benefit of such Managing Underwriters shall also be made to and for the benefit
of any Participating Investor and that any or all of the conditions precedent to
the obligations of such Managing Underwriters under such underwriting agreement
be conditions precedent to the obligations of such Participating Investor. A
Participating Investor shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Participating Investor,
such Participating Investor's Registrable Securities and such Participating
Investor's intended method of distribution and any other representation required
by law.
(c) Participation in Underwritten Offerings. No Person may
participate in any underwritten offering hereunder unless such Person (i) agrees
to sell such Person's securities on the basis provided in any underwriting
arrangements approved, subject to the terms and conditions hereof, by each
Participating Investor and (ii) completes and executes all questionnaires,
indemnities, underwriting agreements and other documents (other than powers of
attorney) reasonably required under the terms of such underwriting arrangements.
Notwithstanding the foregoing, no underwriting agreement (or other agreement in
connection with such offering) shall require a Participating Investor to make
any representations or warranties to or agreements with the Company or the
underwriters other than representations and warranties contained in a writing
furnished by such holder expressly for use in the related registration statement
or agreements regarding such Participating Investor, such Participating
Investor's Registrable Securities and such Participating Investor's intended
method of distribution and any other representation required by law.
2.7 Preparation; Reasonable Investigation. In connection
with the preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, the Company will give any
Participating Investor, its underwriters, if any, and their counsel and
accountants, the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of such holders' and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.
2.8 Indemnification.
(a) Indemnification by the Company. In the event of any
registration of any securities of the Company under the Securities Act, the
Company will, and hereby does agree to, indemnify and hold harmless (i) in the
case of any registration statement filed pursuant to Section 2.1, 2.2 or 2.4
hereof, a Participating Investor, its directors and officers, each other Person
who participates as an underwriter in the offering or sale of such securities
and each other Person, if any, who controls such Participating Investor or any
such underwriter within the meaning of the Securities Act,
18
and (ii) in the case of any registration statement of the Company, a
Participating Investor, its directors and officers and each other Person, if
any, who controls such Participating Investor within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such Participating Investor or any such director or officer or
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, 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
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, 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, and the Company will reimburse each such Participating
Investor and each such director, officer, underwriter and controlling person for
any legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding, provided that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage, liability (or action or proceeding
in respect thereof) or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such Participating Investor
specifically stating that it may be used in the preparation thereof and,
provided further that the Company shall not be liable to any Person who
participates as an underwriter in the offering or sale of Registrable Securities
or to any other Person, if any, who controls such underwriter within the meaning
of the Securities Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of such Person's failure to send or give a copy of the final prospectus, as
the same may be then supplemented or amended, within the time required by the
Securities Act to the Person asserting the existence of an untrue statement or
alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of Registrable Securities to such Person if
such statement or omission was corrected in such final prospectus. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of a Participating Investor or any such director, officer,
underwriter or controlling person and shall survive the transfer of such
securities by any Participating Investor.
(b) Indemnification by Investor. The Company may require, as
a condition to including any Registrable Securities in any registration
statement filed pursuant to Section 2.2 or 2.4 hereof, that the Company shall
have received an undertaking satisfactory to it from each Participating
Investor, severally and not jointly, that each will indemnify and hold harmless
the Company (in the same manner and to the same extent as set forth in
subdivision (a) of this Section 2.8), each director of the Company, each officer
of the Company and each other person, if any, who controls the Company within
the meaning of the Securities Act, with respect to any statement or
19
alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by such
Participating Investor specifically stating that it may be used in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. Any such indemnity
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Company or any such director, officer or controlling person
and shall survive the transfer of such securities by Investor.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Section 2.8,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding subdivisions of this Section 2.8, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that the indemnifying party may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action 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, or a covenant not to xxx, in respect to such claim or litigation.
No indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party.
(d) Other Indemnification. Indemnification similar to that
specified in the preceding subdivisions of this Section 2.8 (with appropriate
modifications) shall be given by the Company and any Participating Investor with
respect to any required registration or other qualification of securities under
any Federal or state law or regulation of any governmental authority, other than
the Securities Act.
(e) Indemnification Payments. The indemnification required
by this Section 2.8 shall be made by periodic payments of the amount thereof
20
during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.
(f) Contribution. If the indemnification provided for in the
preceding subdivisions of this Section 2.8 is unavailable to an indemnified
party in respect of any expense, loss, claim, damage or liability 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 expense, loss, claim, damage or liability. In determining
the amount of contribution to which the indemnified party is entitled, there
shall be considered with respect to any Persons involved the relative knowledge
and access to information concerning the matter with respect to which the claim
was asserted, the opportunity to correct and prevent any statement or omission,
and other equitable considerations appropriate under the circumstances. It is
hereby agreed that it would not necessarily be equitable if the amount of such
contribution were determined by pro rata or per capita allocation, provided that
the foregoing contribution agreement shall not inure to the benefit of any
indemnified party if indemnification would be unavailable to such indemnified
party by reason of the provisions contained in the first sentence of subdivision
(a) of this Section 2.8, and in no event shall the obligation of any
indemnifying party to contribute under this subdivision (f) exceed the amount
that such indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided for under subdivisions (a) or
(b) of this Section 2.8 had been available under the circumstances.
The Company and the Investors agree that it would not be just and equitable
if contribution pursuant to this subdivision (f) were determined by pro rata
allocation (even if a Participating Investor and any underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth in the preceding sentence and subdivision (c) of this
Section 2.8, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subdivision (f), neither a
Participating Investor nor underwriter shall be required to contribute any
amount in excess of the amount by which (i) in the case of a Participating
Investor, the net proceeds received from the sale of Registrable Securities or
(ii) in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that a Participating
Investor or such underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
21
2.9 Adjustments Affecting Registrable Securities. The
Company will not effect or permit to occur any combination or subdivision of
shares which would adversely affect the ability of the holders of Registrable
Securities to include such Registrable Securities in any registration of its
securities contemplated by this Section 2 or the marketability of such
Registrable Securities under any such registration.
2.10 Nomination of Directors. Each Investor shall have the
right (the "Nomination Right"), so long as such Investor has on the date hereof
and thereafter maintains beneficial ownership of at least seven and one-half
percent (7 1/2%) of the then outstanding Common Stock, to nominate one person to
serve on the Board of Directors of the Company (the "Company Board"). Subject to
the terms of this Section 2.10 and the fiduciary duties of the Board as required
under applicable law, the Company agrees to cause such nominee(s) to be included
in the management slate of nominees presented to stockholders of the Company for
election as directors and to recommend to stockholders their election to the
Company Board. Notwithstanding any provisions to the contrary in this Agreement,
an Investor's right to nominate one person to serve on the Company Board is not
assignable and any purported assignment of such right shall be null and void.
The Nomination Right of each Investor shall terminate and be of no further force
or effect upon the earlier of (i) the date which is three (3) years after the
effective date of the Plan and (ii) the occurrence of a firm commitment
underwritten initial public offering of the Company's Common Stock resulting in
gross proceeds of at least one-hundred million dollars ($100,000,000).
3. Rule 144. The Company shall use its best efforts to file in a timely
manner the reports required to be filed by it under the Securities Act and the
Exchange Act (including but not limited to the reports under sections 13 and
15(d) of the Exchange Act referred to in subparagraph (c) of Rule 144 adopted by
the Commission under the Securities Act) and the rules and regulations adopted
by the Commission thereunder (or, if the Company is not required to file such
reports, will, upon the request of any Participating Investor, make publicly
available other information) and will take such further action as such Investor
may reasonably request, all to the extent required from time to time to enable
such Participating Investor to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by (a)
Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or (b) any similar rule or regulation hereafter adopted by the Commission.
Upon the request of any Investor, the Company will deliver to such Investor a
written statement as to whether it has complied with the requirements of this
Section 3.
4. Amendments and Waivers. This Agreement may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of each Investor.
Investors shall be bound by any consent authorized by this Section 4, whether or
not such Registrable Securities shall have been marked to indicate such consent.
22
5. Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
6. Mergers. The Company shall not, directly or indirectly, enter into any
merger, consolidation or reorganization in which the Company shall not be the
surviving corporation unless the surviving corporation shall, prior to such
merger, consolidation or reorganization, agree in writing to assume the
obligations of the Company under this Agreement, and for that purpose references
hereunder to "Registrable Securities" shall be deemed to include the common
stock, if any, that holders of Registrable Securities would be entitled to
receive in exchange for Common Stock under any such merger, consolidation or
reorganization; provided, however, that, to the extent holders of Registrable
Securities receive securities that are by their terms convertible into common
stock of the issuer thereof, then only such shares of common stock as are issued
or issuable upon conversion of said convertible securities shall be included
within the definition of Registrable Securities.
7. Notices. All notices, requests and other communications to any Person
provided for hereunder shall be in writing and shall be given to such Person (a)
in the case of the Company, addressed in the manner set forth below, or (b) in
the case of any other Person, at the address that such Person shall have
furnished to the Company in writing.
If to the Company:
Rotech Healthcare Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Chief Legal Officer
If to the Investors:
General Electric Capital Corporation
0 Xxxx Xxxxx Xxxx, Xxxxxxxx 0X
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx and Xxxx X. Xxxxxx
Oaktree Capital Management, LLC
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000 Xxxxx Xxxxx Xxx.
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxxx Xxxxxxx and Xxxxxxx Xxxxx
Each such notice, request or other communication shall be effective (i) if given
by mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (ii) if given by any other
means (including, without limitation, by air courier), when delivered at the
address specified above, provided that any such notice, request or communication
to Investor shall not be effective until receipt is acknowledged in a writing
reasonably satisfactory to both parties.
8. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns. Except as otherwise specifically provided for or
prohibited herein, the rights of the Investors hereunder may only be assigned
(i) in connection with the transfer of Registrable Securities constituting no
less than five percent (5%) of the outstanding Common Stock or (ii) by an
Investor to an Affiliate of such Investor.
9. Descriptive Headings. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for reference only and shall not
limit or otherwise affect the meaning hereof.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF. THE PARTIES HERETO WAIVE THEIR RIGHT TO A JURY TRIAL WITH RESPECT TO
DISPUTES HEREUNDER.
11. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
12. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the Company and Investor relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter (including, without limitation, the Original Registration Rights
Agreement).
13. SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF
THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY
24
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS AND APPELLATE COURTS
FROM ANY THEREOF. THE COMPANY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF TO THE COMPANY BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE COMPANY AT ITS ADDRESS
SPECIFIED IN SECTION 7 HEREOF. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS.
14. Severability. If any provision of this Agreement, or the application of
such provision to any Person or circumstance, shall be held invalid, illegal or
unenforceable the remainder of this Agreement, or the application of such
provision to Persons or circumstances other than those to which it is held
invalid, illegal or unenforceable, shall not be affected thereby.
[signatures appear on following page]
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their respective officers thereunto duly authorized
as of the date first above written.
ROTECH HEALTHCARE INC.
By:__________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
By:__________________________
Name:
Title:
OAKTREE CAPITAL MANAGEMENT, LLC,
as agent and on behalf of certain funds and accounts
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
26
