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EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of November 14, 1997, between DVI,
Inc., a Delaware corporation (the "Company"), and the stockholders listed on the
signature pages hereto (each, a "Holder").
WHEREAS, DVI Financial Services, Inc., a Delaware corporation and
wholly-owned subsidiary of the Company, DVI Healthcare Financial Advisors, Inc.,
a Delaware corporation, DVI Mortgage Funding, Inc., a Delaware corporation, X.X.
Xxxxxxxxx Management Company, Inc., a Pennsylvania corporation, X.X. Xxxxxxxxx
Securities, Inc., a Pennsylvania corporation, X.X. Xxxxxxxxx Partners, Inc., a
Pennsylvania corporation, and the Holders have entered into an Acquisition and
Merger Agreement dated as of November 14, 1997 (the "Acquisition Agreement")
pursuant to which the Company has issued to the Holders 84,012 shares of the
Company's common stock, par value $.005 per share (the "Common Stock"); and
WHEREAS, in order to induce the Holders to enter into the Acquisition
Agreement and to consummate the transactions contemplated thereby, the Company
agreed to grant to the Holders the registration rights set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
SECTION 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Acquisition Agreement" has the meaning set forth in the introductory
clauses.
"Advice" shall have the meaning set forth in Section 5.
"Affiliate" means, with respect to any specified person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
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"Business Day" means any day that is not a Saturday, a Sunday or a legal
holiday on which banking institutions in the State of New York or the
Commonwealth of Pennsylvania are not required to be open.
"Capital Stock" means, with respect to the Company, any and all shares,
interests, participations or other equivalents (however designated) of capital
stock issued by the Company, including each class of common stock and preferred
stock of the Company.
"Common Stock" has the meaning set forth in the introductory clauses.
"Company" has the meaning set forth in the introductory clauses.
"Delay Period" has the meaning set forth in Section 2(c).
"Effectiveness Period" has the meaning set forth in Section 2(c).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Holdback Period" has the meaning set forth in Section 4.
"Holder" has the meaning set forth in the introductory clauses and
includes any assignee thereof in accordance with Section 9 of this Agreement.
"Indemnified Party" has the meaning set forth in Section 8(c).
"Indemnifying Party" has the meaning set forth in Section 8(c).
"Inspectors" has the meaning set forth in Section 5(j).
"Interruption Period" has the meaning set forth in Section 5.
"Losses" has the meaning set forth in Section 8(a).
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Piggyback Registration" has the meaning set forth in Section 3(a).
"Prospectus" means the prospectus included in any Registration Statement
(including a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable Shares
covered by such Registration Statement and all other amendments and
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supplements to such prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such prospectus.
"Records" has the meaning set forth in Section 5(j).
"Registrable Shares" means shares of Common Stock owned by a Holder at any
time during the Registration Period, unless (i) they have been effectively
registered under Section 5 of the Securities Act and disposed of pursuant to an
effective Registration Statement, (ii) such securities can be freely sold and
transferred without restriction under Rule 144 or any other restrictions under
the Securities Act or (iii) such securities have been transferred pursuant to
Rule 144 under the Securities Act or any successor rule such that, after any
such transfer referred to in this clause (iii), such securities may be freely
transferred without restriction under the Securities Act.
"Registration" means registration under the Securities Act of an offering
of Registrable Shares pursuant to a Shelf Registration, a Piggyback Registration
or otherwise pursuant to the terms of this Agreement.
"Registration Statement" means any registration statement under the
Securities Act of the Company that covers any of the Registrable Shares pursuant
to the provisions of this Agreement, including the related Prospectus, all
amendments and supplements to such registration statement, including pre- and
post-effective amendments, all exhibits thereto and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Shelf Registration" has the meaning set forth in Section 2(a).
"Underwritten Registration or Underwritten Offering" means a registration
under the Securities Act in which securities of the Company are sold to an
underwriter for reoffering to the public.
SECTION 2. Registration.
(a) The Company, within 30 days of the date hereof, shall file with
the SEC, and the Company thereafter shall use its best efforts to cause to be
declared effective within six months after the date of such filing and in no
event later than one year after the date hereof, a Registration Statement on the
appropriate form, including Form S-3 (or its successor form) if such form is
then available for use by the Company, for the registration and sale, in
accordance with the intended method or methods of distribution, of the total
number of Registrable Shares held of record by the Holders, which shall include
a "shelf" registration (a "Shelf Registration") pursuant to Rule 415 under the
Securities Act.
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(b) The Company shall use commercially reasonable efforts to keep
each Registration Statement filed pursuant to this Section 2 continuously
effective and usable for the resale of the Registrable Shares covered thereby
(i) in the case of a Registration that is not a Shelf Registration, for a period
of 120 days from the date on which the SEC declares such Registration Statement
effective and (ii) in the case of a Shelf Registration, continuously from the
date on which the SEC declares such Registration Statement effective, in either
case until all the Registrable Shares covered by such Registration Statement
have been sold (pursuant to such Registration Statement).
(c) The Company shall be entitled to postpone the filing of any
Registration Statement otherwise required to be prepared and filed by the
Company pursuant to this Section 2, or suspend the use of any effective
Registration Statement under this Section 2, for a reasonable period of time,
but not in excess of 30 days (a "Delay Period"), if either the President and
Chief Executive Officer or Executive Vice President and Chief Financial Officer
of the Company determines that in such officer's reasonable judgment and good
faith the registration and distribution of the Registrable Shares covered or to
be covered by such Registration Statement would materially interfere with any
pending material financing, acquisition or corporate reorganization or other
material corporate development involving the Company or any of its subsidiaries
or would require premature disclosure thereof and promptly gives the Holders
written notice of such determination, containing a general statement of the
reasons for such postponement and an approximation of the period of the
anticipated delay; provided, however, that (i) the aggregate number of days
included in all Delay Periods during any consecutive 12 months shall not exceed
the aggregate of (x) 90 days minus (y) the number of days occurring during all
Holdback Periods (as defined in Section 4) and Interruption Periods (as defined
in Section 5(k)) during such consecutive 12 months and (ii) a period of at least
60 days shall elapse between the termination of any Delay Period, Holdback
Period or Interruption Period and the commencement of the immediately succeeding
Delay Period. If the Company shall so postpone the filing of a Registration
Statement, such filing shall be commenced immediately following the end of such
Delay Period and the time period for which the Company is required to maintain
the effectiveness of any Registration Statement shall be extended by the
aggregate number of days of all Delay Periods, all Holdback Periods and all
Interruption Periods occurring during such Registration and such period and any
extension thereof is hereinafter referred to as the "Effectiveness Period." The
Company shall not be entitled to initiate a Delay Period unless it shall (A) to
the extent permitted by agreements with other security holders of the Company,
concurrently prohibit sales by such other security holders under registration
statements covering securities held by such other security holders and (B) in
accordance with the Company's policies from time to time in effect, forbid
purchases and sales in the open market by senior executives of the Company.
(d) Except to the extent required by agreements with other security
holders of the Company entered into prior to the date of the Acquisition
Purchase Agreement, the Company shall not include any securities that are not
Registrable Shares in any Registration Statement filed pursuant to this Section
2 without the prior written consent of the Holders of a majority in number of
the Registrable Shares covered by such Registration Statement.
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SECTION 3. Piggyback Registration.
(a) Right to Piggyback. If at any time prior to the time a Shelf
Registration Statement is declared effective for the registration and sale of
the total number of Registrable Shares the Company proposes to file a
registration statement under the Securities Act with respect to a public
offering of securities of the same type as the Registrable Shares pursuant to a
firm commitment underwritten offering solely for cash for its own account (other
than a registration statement (i) on Form S-4 or Form S-8 or any successor forms
thereto, or (ii) filed solely in connection with a dividend reinvestment plan or
employee benefit plan covering officers or directors of the Company or its
Affiliates) or for the account of any holder of securities of the same type as
the Registrable Shares (to the extent that the Company has the right to include
Registrable Shares in any registration statement to be filed by the Company on
behalf of such holder), then the Company shall give written notice of such
proposed filing to the Holders at least 30 days before the anticipated filing
date. Such notice shall offer the Holders the opportunity to register such
amount of Registrable Shares as they may request (a "Piggyback Registration").
Subject to Section 3(b), the Company shall include in each such Piggyback
Registration all Registrable Shares with respect to which the Company has
received written requests for inclusion therein within 15 days after notice has
been given to the Holders. Each Holder shall be permitted to withdraw all or any
portion of the Registrable Shares of such Holder from a Piggyback Registration
at any time prior to the effective date of such Piggyback Registration;
provided, however, that if such withdrawal occurs after the filing of the
Registration Statement with respect to such Piggyback Registration, the
withdrawing Holders shall reimburse the Company for the portion of the SEC
registration fee paid by the Company with respect to the Registrable Shares so
withdrawn.
(b) Priority on Piggyback Registrations. The Company shall permit
the Holders to include all such Registrable Shares on the same terms and
conditions as any similar securities, if any, of the Company included therein.
Notwithstanding the foregoing, if the Company or the managing underwriter or
underwriters participating in such offering advise the Holders in writing that
in their good faith determination the total amount of securities requested to be
included in such Piggyback Registration exceeds the amount which can be sold in
(or during the time of) such offering without delaying or jeopardizing the
success of the offering (including the price per share of the securities to be
sold), then the amount of securities to be offered for the account of the
Holders and other holders of securities who have piggyback registration rights
with respect thereto shall be reduced (to zero if necessary) pro rata on the
basis of the number of common stock equivalents requested to be registered by
each such Holder or holder participating in such offering.
(c) Right to Abandon. Nothing in this Section 3 shall create any
liability on the part of the Company to the Holders if the Company in its sole
discretion should decide not to file a registration statement proposed to be
filed pursuant to Section 3(a) or to withdraw such registration statement
subsequent to its filing, regardless of any action whatsoever that a Holder may
have taken, whether as a result of the issuance by the Company of any notice
hereunder or otherwise.
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SECTION 4. Holdback Agreement. If (i) during the Effectiveness Period, the
Company shall file a registration statement (other than in connection with the
registration of securities issuable pursuant to an employee stock option, stock
purchase or similar plan or pursuant to a merger, exchange offer or a
transaction of the type specified in Rule 145(a) under the Securities Act) with
respect to the Common Stock or similar securities or securities convertible
into, or exchangeable or exercisable for, such securities and (ii) with
reasonable prior notice, the Company (in the case of a non-underwritten public
offering by the Company pursuant to such registration statement) advises the
Holders in writing that a public sale or distribution of such Registrable Shares
would materially adversely affect such offering or the managing underwriter or
underwriters (in the case of an underwritten public offering by the Company
pursuant to such registration statement) advises the Company in writing (in
which case the Company shall notify the Holders) that a public sale or
distribution of Registrable Shares would materially adversely impact such
offering, then each Holder shall, to the extent not inconsistent with applicable
law, refrain from, and agree in a writing to the Company and the underwriter or
underwriters to refrain from, effecting any public sale or distribution of
Registrable Shares during the ten days prior to the effective date of such
registration statement and until the earliest of (A) the abandonment of such
offering, (B) 90 days from the effective date of such registration statement and
(C) if such offering is an underwritten offering, the termination in whole or in
part of any "hold back" period obtained by the underwriter or underwriters in
such offering from the Company in connection therewith but in no event longer
than 180 days (each such period, a "Holdback Period").
SECTION 5. Registration Procedures. In connection with the registration
obligations of the Company pursuant to and in accordance with Sections 2 and 3
(and subject to Sections 2 and 3), the Company shall use commercially reasonable
efforts to effect such registration to permit the sale of such Registrable
Shares in accordance with the intended method or methods of disposition thereof,
and pursuant thereto the Company shall as expeditiously as possible (but subject
to Sections 2 and 3):
(a) prepare and file with the SEC a Registration Statement for the
sale of the Registrable Shares on any form for which the Company then qualifies
or which counsel for the Company shall deem appropriate in accordance with such
Holders' intended method or methods of distribution thereof, subject to Section
2(a) and, subject to the Company's right to terminate or abandon a registration
pursuant to Section 3(c), use commercially reasonable efforts to cause such
Registration Statement to become effective and remain effective as provided
herein;
(b) prepare and file with the SEC such amendments and supplements
(including post-effective amendments) to such Registration Statement, and such
supplements to the related Prospectus, as may be required by the rules,
regulations or instructions applicable to the Securities Act during the
applicable period in accordance with the intended methods of disposition
specified by the Holders of the Registrable Shares covered by such Registration
Statement, make generally available earnings statements satisfying the
provisions of Section 11(a) of the Securities Act (provided that the Company
shall be deemed to have complied with this clause if it has complied with Rule
158 under the Securities Act), and cause the related Prospectus as so
supplemented to be filed pursuant to Rule 424 under the Securities Act;
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provided, however, that before filing a Registration Statement or Prospectus, or
any amendments or supplements thereto (other than reports required to be filed
by it under the Exchange Act), the Company shall furnish to the Holders of
Registrable Shares covered by such Registration Statement and their counsel for
review and comment, copies of all documents required to be filed;
(c) notify the Holders of any Registrable Shares covered by such
Registration Statement promptly and (if requested) confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to such Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of any
request by the SEC for amendments or supplements to such Registration Statement
or the related Prospectus or for additional information regarding such Holders,
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of such Registration Statement or the initiation of any proceedings for that
purpose, (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, and (v) of the happening of any
event that requires the making of any changes in such Registration Statement,
Prospectus or documents incorporated or deemed to be incorporated therein by
reference so that they will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading;
(d) use commercially reasonable efforts to obtain the withdrawal of
any order suspending the effectiveness of such Registration Statement, or the
lifting of any suspension of the qualification or exemption from qualification
of any Registrable Shares for sale in any jurisdiction in the United States;
(e) furnish to the Holder of any Registrable Shares covered by such
Registration Statement, each counsel for such Holders and each managing
underwriter, if any, without charge, one conformed copy of such Registration
Statement, as declared effective by the SEC, and of each post-effective
amendment thereto, in each case including financial statements and schedules and
all exhibits and reports incorporated or deemed to be incorporated therein by
reference; and deliver, without charge, such number of copies of the preliminary
prospectus, any amended preliminary prospectus, each final Prospectus and any
post-effective amendment or supplement thereto, as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Shares of such
Holder covered by such Registration Statement in conformity with the
requirements of the Securities Act;
(f) prior to any public offering of Registrable Shares covered by
such Registration Statement, use commercially reasonable efforts to register or
qualify such Registrable Shares for offer and sale under the securities or Blue
Sky laws of such jurisdictions as the Holders of such Registrable Shares shall
reasonably request in writing; provided, however, that the Company shall in no
event be required to qualify generally to do business as a foreign corporation
or as a dealer in any jurisdiction where it is not at the time so qualified or
to execute or file a general consent to service of process in any such
jurisdiction where it has
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not theretofore done so or to take any action that would subject it to general
service of process or taxation in any such jurisdiction where it is not then
subject;
(g) upon the occurrence of any event contemplated by paragraph
5(c)(v), prepare a supplement or post-effective amendment to such Registration
Statement or the related Prospectus or any document incorporated or deemed to be
incorporated therein by reference and file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Shares being sold
thereunder (including upon the termination of any Delay Period), such Prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(h) use commercially reasonable efforts to cause all Registrable
Shares covered by such Registration Statement to be listed on each securities
exchange or automated interdealer quotation system, if any, on which similar
securities issued by the Company are then listed or quoted;
(i) on or before the effective date of such Registration Statement,
provide the transfer agent of the Company for the Registrable Shares with
printed certificates for the Registrable Shares covered by such Registration
Statement, which are in a form eligible for deposit with The Depository Trust
Company;
(j) if such offering is an underwritten offering, make available for
inspection by any Holder of Registrable Shares included in such Registration
Statement, any underwriter participating in any offering pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
any such Holder or underwriter (collectively, the "Inspectors"), all financial
and other records and other information, pertinent corporate documents and
properties of any of the Company and its subsidiaries and affiliates
(collectively, the "Records"), as shall be reasonably necessary to enable them
to exercise their due diligence responsibilities; provided, however, that the
Records that the Company determines, in good faith, to be confidential and which
it notifies the Inspectors in writing are confidential shall not be disclosed to
any Inspector unless such Inspector signs a confidentiality agreement reasonably
satisfactory to the Company (which shall permit the disclosure of such Records
in such Registration Statement or the related Prospectus if necessary to avoid
or correct a material misstatement in or material omission from such
Registration Statement or Prospectus) or either (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in such
Registration Statement or (ii) the release of such Records is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction; provided
further, however, that (A) any decision regarding the disclosure of information
pursuant to subclause (i) shall be made only after consultation with counsel for
the applicable Inspectors and the Company and (B) with respect to any release of
Records pursuant to subclause (ii), each Holder of Registrable Shares agrees
that it shall, promptly after learning that disclosure of such Records is sought
in a court having jurisdiction, give notice to the Company so that the Company,
at the Company's expense, may undertake appropriate action to prevent disclosure
of such Records; and
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(k) if such offering is an underwritten offering, enter into such
agreements (including an underwriting agreement in form, scope and substance as
is customary in underwritten offerings) and take all such other appropriate and
reasonable actions requested by the Holders of a majority of the Registrable
Shares being sold in connection therewith (including those reasonably requested
by the managing underwriters) in order to expedite or facilitate the disposition
of such Registrable Shares, and in such connection, (i) use commercially
reasonable efforts to obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters and counsel to the Holders
of the Registrable Shares being sold), addressed to each selling Holder of
Registrable Shares covered by such Registration Statement and each of the
underwriters as to the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such counsel and underwriters, (ii) use commercially reasonable efforts to
obtain "cold comfort" letters and updates thereof from the independent certified
public accountants of the Company (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements and financial data are,
or are required to be, included in the Registration Statement), addressed to
each selling holder of Registrable Shares covered by the Registration Statement
(unless such accountants shall be prohibited from so addressing such letters by
applicable standards of the accounting profession) and each of the underwriters,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with underwritten
offerings, (iii) if requested and if an underwriting agreement is entered into,
provide indemnification provisions and procedures substantially to the effect
set forth in Section 8 hereof with respect to all parties to be indemnified
pursuant to such Section. The above shall be done at each closing under such
underwriting or similar agreement, or as and to the extent required thereunder.
The Company may require each Holder of Registrable Shares covered by a
Registration Statement to furnish such information regarding such Holder and
such Holder's intended method of disposition of such Registrable Shares as it
may from time to time reasonably request in writing. If any such information is
not furnished within a reasonable period of time after receipt of such request,
the Company may exclude such Holder's Registrable Shares from such Registration
Statement.
Each Holder of Registrable Shares covered by a Registration Statement
agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 5(c)(ii), 5(c)(iii), 5(c)(iv) or 5(c)(v),
that such Holder shall forthwith discontinue disposition of any Registrable
Shares covered by such Registration Statement or the related Prospectus until
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 5(g), or until such Holder is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be resumed, and has
received copies of any amended or supplemented Prospectus or any additional or
supplemental filings which are incorporated, or deemed to be incorporated, by
reference in such Prospectus (such period during which disposition is
discontinued being an "Interruption Period") and, if requested by the Company,
the Holder shall deliver to the Company (at the expense of the Company) all
copies then in its
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possession, other than permanent file copies then in such holder's possession,
of the Prospectus covering such Registrable Shares at the time of receipt of
such request.
Each Holder of Registrable Shares covered by a Registration Statement
further agrees not to utilize any material other than the applicable current
preliminary prospectus or Prospectus in connection with the offering of such
Registrable Shares.
SECTION 6. Registration Expenses. Whether or not any Registration
Statement is filed or becomes effective, the Company shall pay all costs, fees
and expenses incident to the Company's performance of or compliance with this
Agreement, including (i) all registration and filing fees, including NASD filing
fees, (ii) all fees and expenses of compliance with securities or Blue Sky laws,
including reasonable fees and disbursements of counsel in connection therewith,
(iii) printing expenses (including expenses of printing certificates for
Registrable Shares and of printing prospectuses if the printing of prospectuses
is requested by the Holders or the managing underwriter, if any), (iv)
messenger, telephone and delivery expenses, (v) fees and disbursements of
counsel for the Company, (vi) fees and disbursements of all independent
certified public accountants of the Company (including expenses of any "cold
comfort" letters required in connection with this Agreement) and all other
persons retained by the Company in connection with such Registration Statement,
(vii) fees and disbursements of underwriters customarily paid by the issuers or
sellers of securities and (viii) all other costs, fees and expenses incident to
the Company's performance or compliance with this Agreement. Notwithstanding the
foregoing, the fees and expenses of any persons retained by any Holder and any
discounts, commissions or brokers' fees or fees of similar securities industry
professionals and any transfer taxes relating to the disposition of the
Registrable Shares by a Holder, will be payable by such Holder and the Company
will have no obligation to pay any such amounts.
SECTION 7. Underwriting Requirements. In the case of any underwritten
offering pursuant to a Piggyback Registration, the Company shall select the
institution or institutions that shall manage or lead such offering. No Holder
shall be entitled to participate in an underwritten offering unless and until
such Holder has entered into an underwriting or other agreement (including a
"holdback agreement" to the effect set forth in Section 4) with such institution
or institutions for such offering in such form as the Company and such
institution or institutions shall reasonably determine.
SECTION 8. Indemnification.
(a) Indemnification by the Company. The Company shall, without
limitation as to time, indemnify and hold harmless, to the fullest extent
permitted by law, each Holder of Registrable Shares whose Registrable Shares are
covered by a Registration Statement or Prospectus and each underwriter if such
offering is an underwritten offering, the officers, directors and agents and
employees of each of them, each Person who controls each such Holder or
underwriter, as the case may be (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act), and the officers, directors,
agents and employees of each such controlling person, to the fullest extent
lawful, from and against any and all losses, claims, damages, liabilities,
judgment, costs (including, without limitation, costs of preparation and
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reasonable attorneys' fees) and expenses (collectively, "Losses"), as incurred,
arising out of or based upon (A) any untrue or alleged untrue statement of a
material fact contained in such Registration Statement or Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or based upon any omission or alleged omission of a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as the same are based upon information furnished in writing to
the Company by or on behalf of such Holder expressly for use therein; provided,
however, that the Company shall not be liable to any such Holder to the extent
that any such Losses arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any preliminary
prospectus if (i) having previously been furnished by or on behalf of the
Company with copies of the Prospectus, such Holder failed to send or deliver a
copy of the Prospectus with or prior to the delivery of written confirmation of
the sale of Registrable Shares by such Holder to the person asserting the claim
from which such Losses arise and (ii) the Prospectus would have corrected in all
material respects such untrue statement or alleged untrue statement or such
omission or alleged omission; and provided further, however, that the Company
shall not be liable in any such case to the extent that any such Losses arise
out of or are based upon an untrue statement or alleged untrue statement or
omission or alleged omission in the Prospectus, if (x) such untrue statement or
alleged untrue statement, omission or alleged omission is corrected in all
material respects in an amendment or supplement to the Prospectus and (y) having
previously been furnished by or on behalf of the Company with copies of the
Prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such Prospectus as so amended or supplemented, prior to or concurrently
with the sale of Registrable Shares or (B) any violation by the Company of any
federal or state securities rule or regulation applicable to the Company and
relating to any action or inaction by the Company in connection with such
registration. Such indemnification and reimbursement obligations shall remain in
full force and effect following the transfer of Registrable Shares.
(b) Indemnification by Holder of Registrable Shares. In connection
with any Registration Statement in which a Holder is participating, such Holder
shall furnish to the Company in writing such information as the Company
reasonably requests for use in connection with such Registration Statement or
the related Prospectus and agrees to indemnify, to the full extent permitted by
law, the Company, its directors, officers, agents or employees, each Person who
controls the Company (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act) and the directors, officers, agents or employees
of such controlling Persons, from and against all Losses arising out of or based
upon any untrue or alleged untrue statement of a material fact contained in such
Registration Statement or the related Prospectus or any amendment or supplement
thereto, or any preliminary prospectus, or arising out of or based upon any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, to the extent that such
untrue or alleged untrue statement or omission or alleged omission is based upon
any information so furnished in writing by or on behalf of such Holder to the
Company expressly for use in such Registration Statement or Prospectus; provided
that the aggregate amount which any such Holder shall be required to pay
pursuant hereto shall be limited to the amount of net proceeds received by the
Holder upon the sale of the Registrable Shares pursuant to the Registration
Statement giving rise to such matters.
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(c) Conduct of Indemnification Proceedings. If any Person shall be
entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified Party
shall give prompt notice to the party from which such indemnity is sought (the
"Indemnifying Party") of any claim or of the commencement of any proceeding with
respect to which such Indemnified Party seeks indemnification or contribution
pursuant hereto; provided, however, that the delay or failure to so notify the
Indemnifying Party shall not relieve the Indemnifying Party from any obligation
or liability except to the extent that the Indemnifying Party has been
prejudiced by such delay or failure. The Indemnifying Party shall have the
right, exercisable by giving written notice to an Indemnified Party promptly
after the receipt of written notice from such Indemnified Party of such claim or
proceeding, to assume, at the Indemnifying Party's expense, the defense of any
such claim or proceeding, with counsel reasonably satisfactory to such
Indemnified Party; provided, however, that (i) an Indemnified Party shall have
the right to employ separate counsel in any such claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless: (1) the Indemnifying
Party agrees to pay such fees and expenses; (2) the Indemnifying Party fails
promptly to assume the defense of such claim or proceeding or fails to employ
counsel reasonably satisfactory to such Indemnified Party; or (3) the named
parties to any proceeding (including impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such Indemnified Party shall
have been advised by counsel that there may be one or more legal defenses
available to it that are inconsistent with those available to the Indemnifying
Party or that a conflict of interest is likely to exist among such Indemnified
Party and any other indemnified parties (in which case the Indemnifying Party
shall not have the right to assume the defense of such action on behalf of such
Indemnified Party); and (ii) subject to clause (3) above, the Indemnifying Party
shall not, in connection with any one such claim or proceeding or separate but
substantially similar or related claims or proceedings in the same jurisdiction,
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one firm of attorneys (together with appropriate
local counsel) at any time for all of the indemnified parties, or for fees and
expenses that are not reasonable. Whether or not such defense is assumed by the
Indemnifying Party, such Indemnified Party shall not be subject to any liability
for any settlement made without its consent. The Indemnifying Party shall not
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release, in form and substance reasonably
satisfactory to the Indemnified Party, from all liability in respect of such
claim or litigation for which such Indemnified Party would be entitled to
indemnification hereunder.
(d) Contribution. If the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any Losses (other
than in accordance with its terms), then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party, on the one hand, and such indemnified party, on the other hand, in
connection with the actions, statements or omissions that resulted in such
Losses as well as any other relevant equitable considerations. The relative
fault of such indemnifying party, on the one hand, and indemnified party, on the
other hand, shall be determined by reference to, among other things,
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whether any action in question, including any untrue statement of a material
fact or omission or alleged omission to state a material fact, has been taken
by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent any such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include any legal or other fees or expenses incurred by such party
in connection with any investigation or proceeding. The parties hereto agree
that it would not be just and equitable if contribution pursuant to this Section
8(d) were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provision of this Section
8(d), an indemnifying party that is a Holder shall not be required to contribute
any amount which is in excess of the amount by which the total proceeds received
by such Holder from the sale of the Registrable Shares sold by such Holder (net
of all underwriting discounts and commissions) exceeds the amount of any damages
that such indemnifying party has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged 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.
SECTION 9. Transfer of Registration Rights. The rights to cause the
Company to register Registrable Shares pursuant to this Agreement may not be
assigned by a Holder to a transferee or assignee of such securities except to
(i) a Person who acquires Registrable Shares and who has agreed to be bound by
the terms of this Agreement as if such Person were a Holder, (ii) a Person who
is upon the death of any Holder, the executor of the estate of such Holder or
any of such Holder's heirs, devisees, legatees or assigns or (iii) upon the
disability of any Holder, any guardian or conservator of such Holder.
SECTION 10. Miscellaneous.
(a) Termination. This Agreement and the obligations of the Company
and the Holders hereunder (other than Section 8) shall terminate on the first
date on which no Registrable Shares remain outstanding.
(b) Notices. All notices or communications hereunder shall be in
writing (including telecopy or similar writing), addressed as follows:
To the Company:
DVI, Inc.
000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
and
Xxxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
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To the Holders:
To the Addresses set forth on the Signature Pages hereto
with a copy to:
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
Twelfth Floor Packard Building
S.E. Corner of 00xx xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx, Esq.
or such other addresses as each of the parties hereto or any future Holder may
designate to the other parties.
Any such notice or communication shall be deemed given (i) when
made, if made by hand delivery, (ii) upon transmission, if sent by confirmed
telecopier, (iii) one business day after being deposited with a next-day
courier, postage prepaid, or (iv) three business days after being sent certified
or registered mail, return receipt requested, postage prepaid, in each case
addressed as above (or to such other address or to such other telecopier number
as such party may designate in writing from time to time).
(c) Separability. If any provision of this Agreement shall be
declared to be invalid or unenforceable, in whole or in part, such invalidity or
unenforcibility shall not affect the remaining provisions hereof which shall
remain in full force and effect.
(d) Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, devisees,
legatees, legal representatives, successors and assigns; provided that the
Company may not assign any of its obligations hereunder.
(e) Entire Agreement. This Agreement represents the entire agreement
of the parties and shall supersede any and all previous contracts, arrangements
or understandings between the parties hereto with respect to the subject matter
hereof.
(f) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of Holders of at least a
majority in number of the Registrable Shares then outstanding.
(g) Publicity. No public release or announcement concerning the
transactions contemplated hereby shall be issued by any party without the prior
consent of the other parties, except to the extent that such party is advised by
counsel that such release or announcement is
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necessary or advisable under applicable law or the rules or regulations of any
securities exchange, in which case the party required to make the release or
announcement shall to the extent practicable provide the other party with an
opportunity to review and comment on such release or announcement in advance of
its issuance.
(h) Expenses. Whether or not the transactions contemplated hereby
are consummated, except as otherwise provided herein, all costs and expenses
incurred in connection with the execution of this Agreement shall be paid by the
party incurring such costs or expenses, except as otherwise set forth herein.
(i) Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(j) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be one and the same agreement, and shall become
effective when counterparts have been signed by each of the parties and
delivered to each other party.
(k) Governing Law. This Agreement shall be construed, interpreted,
and governed in accordance with the internal laws of Delaware without giving
regard to the principles of conflicts of law.
(l) Waiver. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof.
(m) Calculation of Time Periods. Except as otherwise indicated, all
periods of time referred to herein shall include all Saturdays, Sundays and
holidays; provided, however, that if the date to perform the act or give any
notice with respect to this Agreement shall fall on a day other than a Business
Day, such act or notice may be timely performed or given if performed or given
on the next succeeding Business Day.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first written above.
DVI, INC.
By:/s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and C.F.O.
STOCKHOLDERS:
/s/ Xxxx Xxxxxxx
--------------------------------------------
Xxxx Xxxxxxx
Address:
/s/ Xxxxx Xxxxxxx
--------------------------------------------
Xxxxx Xxxxxxx
Address:
/s/ Xxxx X. Xxxxxxx III
--------------------------------------------
Xxxx X. Xxxxxxx III
Address:
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