EXHIBIT 10.27
EXECUTION COPY
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INVESTOR RIGHTS AGREEMENT
BY AND BETWEEN
IASIS INVESTMENT LLC
AND
IASIS HEALTHCARE CORPORATION
DATED AS OF JUNE 22, 2004
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms............................................... 1
Section 1.02. Other Interpretive Provisions............................... 5
ARTICLE II
REGISTRATION RIGHTS
Section 2.01. Shelf Registration.......................................... 5
Section 2.02. Demand Registration......................................... 6
Section 2.03. Piggyback Registration...................................... 9
Section 2.04. Black-out Periods........................................... 10
Section 2.05. Registration Procedures..................................... 11
Section 2.06. Underwritten Offerings...................................... 16
Section 2.07. No Inconsistent Agreements; Additional Rights............... 17
Section 2.08. Registration Expenses....................................... 17
Section 2.09. Indemnification............................................. 18
Section 2.10. Rules 144 and 144A and Regulation S......................... 21
ARTICLE III
PREEMPTIVE RIGHTS
Section 3.01. Preemptive Rights........................................... 21
ARTICLE IV
MISCELLANEOUS
Section 4.01. Term........................................................ 22
Section 4.02. Injunctive Relief........................................... 22
Section 4.03. Attorneys' Fees............................................. 22
Section 4.04. Notices..................................................... 22
Section 4.05. Amendment;.................................................. 23
Section 4.06. Successors, Assigns and Transferees......................... 23
Section 4.07. Binding Effect.............................................. 24
Section 4.08. Third Parties............................................... 24
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TABLE OF CONTENTS
(continued)
PAGE
Section 4.09. Governing Law; Jurisdiction................................. 24
Section 4.10. Severability................................................ 24
Section 4.11. Counterparts................................................ 24
Section 4.12. Headings.................................................... 24
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INVESTOR RIGHTS AGREEMENT
INVESTOR RIGHTS AGREEMENT (the "Agreement"), dated as of June
22, 2004, by and between IASIS Healthcare Corporation, a Delaware corporation
(the "Company") and IASIS Investment LLC, a Delaware limited liability company
(the "Investor").
WITNESSETH:
WHEREAS, as of the date hereof, the Investor is the owner of
all of the Registrable Securities (as defined below) of the Company; and
WHEREAS, the parties desire to set forth certain registration
rights applicable to the Registrable Securities and to provide for certain
preemptive rights with respect to issuances of new securities by the Company.
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises, covenants and agreements of the parties hereto, and for other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Adverse Disclosure" means public disclosure of material
non-public information that, in the Board of Directors' good faith judgment,
after consultation with independent outside counsel to the Company, (i) would be
required to be made in any Registration Statement filed with the SEC by the
Company so that such Registration Statement would not be materially misleading;
(ii) would not be required to be made at such time but for the filing of such
Registration Statement; and (iii) the Company has a bona fide business purpose
for not disclosing publicly.
"Agreement" has the meaning set forth in the preamble.
"Affiliate" has the meaning specified in Rule 12b-2 under the
Exchange Act. The term "Affiliated" has a correlative meaning.
"Board of Directors" means the board of directors of the
Company.
"Business Day" means any day other than a Saturday, Sunday or
a day on which commercial banks located in New York, New York are required or
authorized by law to be closed.
"Closing Date" "means the date of the completion of the
acquisition of the Company by the Investor.
"Common Share Equivalents" means securities (including,
without limitation, warrants) exercisable, exchangeable or convertible into
Common Shares.
"Common Shares" means the shares of common stock, par value
$.01 per share, of the Company, any securities into which such shares of common
stock shall have been changed or any securities resulting from any
reclassification or recapitalization of such shares of common stock.
"Company" has the meaning set forth in the preamble and shall
include the Company's successors by merger, acquisition, reorganization,
conversion or otherwise.
"Company Public Sale" has the meaning set forth in Section
2.03(a).
"Company Shares" means Common Shares and Common Share
Equivalents.
"Demand Notice" has the meaning set forth in Section 2.02(e).
"Demand Period" has the meaning set forth in Section 2.02(d).
"Demand Registration" has the meaning set forth in Section
2.02(a).
"Demand Registration Statement" has the meaning set forth in
Section 2.02(a).
"Demand Suspension" has the meaning set forth in Section
2.02(g).
"Effectiveness Date" means the date on which Holders are no
longer subject to any underwriter's lock-up in connection with the Company's
IPO, which in no event shall be later than nine (9) months after the IPO.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor thereto, and any rules and regulations promulgated
thereunder, all as the same shall be in effect from time to time.
"Holder" means any holder of Registrable Securities who is a
party hereto or who succeeds to rights hereunder pursuant to Section 4.06.
"Investor" has the meaning set forth in the preamble.
"Investor LLC Agreement" means the Amended and Restated
Limited Liability Company Operating Agreement of the Investor, dated as of the
date hereof, as amended, modified or supplemented from time to time.
"IPO" means an initial registered offering of any equity
securities of the Company to the public under the Securities Act.
"Long-Form Registration Statement" has the meaning set forth
in Section 2.02(a).
"Material Adverse Change" means (i) any general suspension of
trading in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter
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market in the United States; (ii) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States; (iii) a
material outbreak or escalation of armed hostilities or other international or
national calamity involving the United States or the declaration by the United
States of a national emergency or war or a change in national or international
financial, political or economic conditions; and (iv) any event, change,
circumstance or effect that is or is reasonably likely to be materially adverse
to the business, properties, assets, liabilities, condition (financial or
otherwise), operations, results of operations or prospects of the Company and
its subsidiaries taken as a whole.
"NASD" means the National Association of Securities Dealers,
Inc.
"New Company Shares" means Company Shares issued after the
Closing Date, other than any Company Shares issued or issuable (a) in connection
with any stock split, stock dividend, reclassification, recapitalization, or
similar event relating to any Company Shares; (b) in a public offering
registered under the Securities Act; (c) upon the recommendation or approval of
the Board of Directors to officers, directors or employees of the Company or any
direct or indirect subsidiary thereof pursuant to the terms of the Company's (or
such subsidiaries') employee benefit plans or arrangements; (d) in connection
with a financing transaction in which debt or convertible debt securities are
the primary component of the financing; (e) as consideration for any acquisition
by the Company, or any of its subsidiaries, of assets or of any business
(whether by merger, stock acquisition, asset acquisition or otherwise) or (f) to
one or more Persons whom the Board of Directors has determined in good faith are
strategic investors.
"Participating Holder" means, with respect to any
Registration, any Holder of Registrable Securities covered by the applicable
Registration Statement.
"Permitted Transferee" has the meaning set forth in Section
4.06.
"Person" means any individual, partnership, corporation,
limited liability company, unincorporated organization, trust or joint venture,
or a governmental agency or political subdivision thereof.
"Piggyback Registration" has the meaning set forth in Section
2.03(a).
"Preemption Notice" has the meaning set forth in Section
2.02(f).
"Pro Rata Portion" means a number of New Company Shares
determined by multiplying (i) the number of New Company Shares the Company
proposes to issue on the relevant issuance date by (ii) a fraction, the
numerator of which is the aggregate number of all Common Shares held by the
Investor immediately prior to such date and the denominator of which is the
aggregate number of all Common Shares outstanding immediately prior to such
date.
"Prospectus" means the prospectus included in any Registration
Statement, all amendments and supplements to such prospectus, including pre- and
post-effective amendments to such Registration Statement, and all other material
incorporated by reference in such prospectus.
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"Registrable Securities" means any Company Shares and any
securities that may be issued or distributed or be issuable in respect of any
Company Shares by way of conversion, dividend, stock split or other
distribution, merger, consolidation, exchange, recapitalization or
reclassification or similar transaction; provided, however, that any such
Registrable Securities shall cease to be Registrable Securities to the extent
(i) a Registration Statement with respect to the sale of such Registrable
Securities has been declared effective under the Securities Act and such
Registrable Securities have been disposed of in accordance with the plan of
distribution set forth in such Registration Statement, (ii) such Registrable
Securities have been distributed pursuant to Rule 144 (or any similar provisions
then in force) under the Securities Act or (iii) such Registrable Securities
shall have been otherwise transferred and new certificates for them not bearing
a legend restricting transfer under the Securities Act shall have been delivered
by the Company and such securities may be publicly resold without Registration
under the Securities Act.
"Registration" means a registration with the SEC of the
Company's securities for offer and sale to the public under a Registration
Statement. The term "Register" shall have a correlative meaning.
"Registration Expenses" has the meaning set forth in Section
2.08.
"Registration Statement" means any registration statement of
the Company filed with, or to be filed with, the SEC under the rules and
regulations promulgated under the Securities Act, including the related
Prospectus, amendments and supplements to such registration statement, including
pre- and post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement.
"Representatives" means, with respect to any Person, any of
such Person's officers, directors, employees, agents, attorneys, accountants,
actuaries, consultants, equity financing partners or financial advisors or other
Person associated with, or acting on behalf of, such Person.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended,
and any successor thereto, and any rules and regulations promulgated thereunder,
all as the same shall be in effect from time to time.
"Shelf Period" has the meaning set forth in Section 2.01(b).
"Shelf Registration" means a Registration effected pursuant to
Section 2.01.
"Shelf Registration Statement" means a Registration Statement
of the Company filed with the SEC on either (i) Form S-3 (or any successor form
or other appropriate form under the Securities Act) or (ii) if the Company is
not permitted to file a Registration Statement on Form S-3, an evergreen
Registration Statement on Form S-1 (or any successor form or other appropriate
form under the Securities Act), in each case for an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act (or any similar
rule that may be adopted by the SEC) covering the Registrable Securities, as
applicable.
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"Shelf Suspension" has the meaning set forth in Section
2.01(c).
"Short-Form Registration Statement" has the meaning set forth
in Section 2.02(a).
"Underwritten Offering" means a Registration in which
securities of the Company are sold to an underwriter or underwriters on a firm
commitment basis for reoffering to the public.
SECTION 1.02. Other Interpretive Provisions. (a) The meanings
of defined terms are equally applicable to the singular and plural forms
thereof.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and any subsection, Section, Exhibit, Schedule and Annex
references are to this Agreement unless otherwise specified.
(c) The term "including" is not limiting and means
"including without limitation."
(d) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(e) Whenever the context requires, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.01. Shelf Registration.
(a) Filing. After the Effectiveness Date, as promptly as
practicable following a request by the Investor, the Company shall file with the
SEC a Shelf Registration Statement relating to the offer and sale of all
Registrable Securities by the Holders from time to time in accordance with the
methods of distribution elected by such Holders and set forth in the Shelf
Registration Statement and, as promptly as practicable thereafter, shall use its
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective under the Securities Act. If, on the date of any such
request, the Company does not qualify to file a Shelf Registration Statement
under the Securities Act, the provisions of this Section 2.01 shall not apply.
(b) Continued Effectiveness. The Company shall use its
reasonable best efforts to keep such Shelf Registration Statement continuously
effective under the Securities Act in order to permit the Prospectus forming a
part thereof to be usable by Holders until the earlier of (i) the date as of
which all Registrable Securities have been sold pursuant to the Shelf
Registration Statement or another registration statement filed under the
Securities Act (but in no event prior to the applicable period referred to in
Section 4(3) of the Securities Act and Rule 174 thereunder) and (ii) the date as
of which each of the Holders is permitted to sell its Registrable
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Securities without Registration pursuant to Rule 144 under the Securities Act
without volume limitation or other restrictions on transfer thereunder (such
period of effectiveness, the "Shelf Period"). Subject to Section 2.01(c), the
Company shall not be deemed to have used its reasonable best efforts to keep the
Shelf Registration Statement effective during the Shelf Period if the Company
voluntarily takes any action or omits to take any action that would result in
Holders of Registrable Securities covered thereby not being able to offer and
sell any Registrable Securities pursuant to such Shelf Registration Statement
during the Shelf Period, unless such action or omission is required by
applicable law.
(c) Suspension of Registration. If the continued use of
such Shelf Registration Statement at any time would require the Company to make
an Adverse Disclosure, the Company may, upon giving at least ten days' prior
written notice of such action to the Holders, suspend use of the Shelf
Registration Statement (a "Shelf Suspension"); provided that the Company shall
not be permitted to exercise a Shelf Suspension (i) more than one time during
any 12-month period, or (ii) for a period exceeding thirty days on any one
occasion. In the case of a Shelf Suspension, the Holders agree to suspend use of
the applicable Prospectus in connection with any sale or purchase of, or offer
to sell or purchase, Registrable Securities, upon receipt of the notice referred
to above. The Company shall immediately notify the Holders upon the termination
of any Shelf Suspension, amend or supplement the Prospectus, if necessary, so it
does not contain any untrue statement or omission and furnish to the Holders
such numbers of copies of the Prospectus as so amended or supplemented as the
Holders may reasonably request. The Company agrees, if necessary, to supplement
or make amendments to the Shelf Registration Statement, if required by the
registration form used by the Company for the Shelf Registration or by the
instructions applicable to such registration form or by the Securities Act or
the rules or regulations promulgated thereunder or as may reasonably be
requested by the Investor.
(d) Underwritten Offering. If the Investor so elects, an
offering of Registrable Securities pursuant to the Shelf Registration Statement
shall be in the form of an Underwritten Offering, and the Company shall amend or
supplement the Shelf Registration Statement for such purpose, and the Investor
shall have the right to select the managing underwriter or underwriters to
administer such offering; provided that such managing underwriter or
underwriters shall be reasonably acceptable to the Company.
SECTION 2.02. Demand Registration.
(a) Demand by the Investor. If, after the Effectiveness
Date, there is no currently effective Shelf Registration Statement on file with
the SEC, the Investor may make a written request to the Company for Registration
of all or part of the Registrable Securities held by the Investor (i) on Form
S-1 or any similar long-form registration statement (a "Long-Form Registration")
or (ii) on Form S-3 or any similar short-form registration statement (a
"Short-Form Registration Statement") if the Company qualifies to use such short
form. Any such requested Long-Form Registration or Short-Form Registration shall
hereinafter be referred to as a "Demand Registration." Each request for a Demand
Registration shall specify the kind and aggregate amount of Registrable
Securities to be Registered and the intended methods of disposition thereof.
Within thirty days of a request for a Demand Registration, the Company shall
file a Registration Statement relating to such Demand Registration (a "Demand
Registration Statement"), and shall use its reasonable best efforts to cause
such Demand Registration
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Statement to promptly be declared effective under (x) the Securities Act and (y)
the "Blue Sky" laws of such jurisdictions as any Participating Holder or any
underwriter, if any, reasonably requests.
(b) Limitation on Demand Registrations. The Investor
shall have the right to request up to six Long-Form Registrations and an
unlimited number of Short-Form Registrations, but no more than three Demand
Registrations in any twelve-month period.
(c) Demand Withdrawal. Any Holder may withdraw its
Registrable Securities from a Demand Registration at any time prior to the
effectiveness of the applicable Demand Registration Statement. Upon receipt of a
notice to such effect from the Investor, the Company shall cease all efforts to
secure effectiveness of the applicable Demand Registration Statement, and such
Registration nonetheless shall be deemed a Demand Registration by the Investor
for purposes of Section 2.02(b) unless (i) the Investor shall have paid or
reimbursed the Company for its pro rata share of all reasonable and documented
out-of-pocket fees and expenses incurred by the Company in connection with the
Registration of the Investor's withdrawn Registrable Securities (based on the
number of securities the Investor sought to register, as compared to the total
number of securities included on such Demand Registration Statement) or (ii) the
withdrawal is made following the occurrence of a Material Adverse Change or
because the Registration would require the Company to make an Adverse
Disclosure.
(d) Effective Registration. The Company shall be deemed
to have effected a Demand Registration if the Demand Registration Statement is
declared effective by the SEC and remains effective for not less than one
hundred eighty days (or such shorter period as will terminate when all
Registrable Securities covered by such Demand Registration Statement have been
sold or withdrawn), or if such Registration Statement relates to an Underwritten
Offering, such longer period as, in the opinion of counsel for the underwriter
or underwriters, a Prospectus is required by law to be delivered in connection
with sales of Registrable Securities by an underwriter or dealer (the applicable
period, the "Demand Period"). No Demand Registration shall be deemed to have
been effected if (i) during the Demand Period such Registration is interfered
with by any stop order, injunction or other order or requirement of the SEC or
other governmental agency or court or (ii) the conditions to closing specified
in the underwriting agreement, if any, entered into in connection with such
Registration are not satisfied other than by reason of a wrongful act,
misrepresentation or breach of such applicable underwriting agreement by the
Investor.
(e) Demand Notice. Promptly upon receipt of any request
for a Demand Registration pursuant to Section 2.02(a) (but in no event more than
five Business Days thereafter), the Company shall deliver a written notice (a
"Demand Notice") of any such Registration request to all other Holders, and the
Company shall include in such Demand Registration all such Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within ten Business Days after the date that the Demand Notice
has been delivered. All requests made pursuant to this Section 2.02(e) shall
specify the aggregate amount of Registrable Securities to be registered and the
intended method of distribution of such securities.
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(f) Preemption. If not more than thirty days prior to
receipt of any request for a Demand Registration pursuant to Section 2.02(a) the
Company shall have (i) circulated to prospective underwriters and their counsel
a draft of a Registration Statement for a primary offering of equity securities
on behalf of the Company, (ii) solicited bids for a primary offering of equity
securities, or (iii) otherwise reached an understanding with an underwriter with
respect to a primary offering of equity securities, the Company may preempt the
Demand Registration with such primary offering by delivering written notice of
such intention (the "Preemption Notice") to the Investor and all other Holders
within five days after the Company has received the request for a Demand
Registration. The period of preemption may be up to forty-five days following
the date such Preemption Notice is delivered. Notwithstanding anything to the
contrary herein, the Company shall not be entitled to exercise its right to
preempt a Demand Registration pursuant to this Section 2.02(f) more than once
during any twelve-month period.
(g) Delay in Filing; Suspension of Registration. If the
filing, initial effectiveness or continued use of a Demand Registration
Statement at any time would require the Company to make an Adverse Disclosure,
the Company may, upon giving prompt written notice of such action to the
Holders, delay the filing or initial effectiveness of, or suspend use of, the
Demand Registration Statement (a "Demand Suspension"); provided, however, that
the Company shall not be permitted to exercise a Demand Suspension (i) more than
once during any 12-month period, or (ii) for a period exceeding thirty days on
any one occasion. In the case of a Demand Suspension, the Holders agree to
suspend use of the applicable Prospectus in connection with any sale or
purchase, or offer to sell or purchase, Registrable Securities, upon receipt of
the notice referred to above. The Company shall immediately notify the Holders
upon the termination of any Demand Suspension, amend or supplement the
Prospectus, if necessary, so it does not contain any untrue statement or
omission and furnish to the Holders such numbers of copies of the Prospectus as
so amended or supplemented as the Holders may reasonably request. The Company
agrees, if necessary, to supplement or make amendments to the Demand
Registration Statement, if required by the registration form used by the Company
for the Demand Registration or by the instructions applicable to such
registration form or by the Securities Act or the rules or regulations
promulgated thereunder or as may reasonably be requested by the Investor.
(h) Underwritten Offering. If the Investor so requests,
an offering of Registrable Securities pursuant to a Demand Registration shall be
in the form of an Underwritten Offering, and the Investor shall have the right
to select the managing underwriter or underwriters to administer the offering;
provided that such managing underwriter or underwriters shall be reasonably
acceptable to the Company.
(i) Priority of Securities Registered Pursuant to Demand
Registrations. If the managing underwriter or underwriters of a proposed
Underwritten Offering of the Registrable Securities included in a Demand
Registration (or, in the case of a Demand Registration not being underwritten,
the Investor), advise the Board of Directors in writing that, in its or their
opinion, the number of securities requested to be included in such Demand
Registration exceeds the number which can be sold in such offering without being
likely to have a significant adverse effect on the price, timing or distribution
of the securities offered or the market for the securities offered, the
securities to be included in such Demand Registration shall be (i) first, up to
100% of the Registrable Securities that the Investor proposes to include in the
Demand Registration,
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(ii) second, and only if all the securities referred to in clause (i) have been
included, the number of Registrable Securities that, in the opinion of such
managing underwriter or underwriters (or the Investor, as the case may be) can
be sold without having such adverse effect, with such number to be allocated pro
rata among the Holders that have requested to participate in such Demand
Registration based on the relative number of Registrable Securities then held by
each such Holder (provided that any securities thereby allocated to a Holder
that exceed such Holder's request shall be reallocated among the remaining
requesting Holders in like manner) and (iii) third, and only if all the
securities referred to in clause (ii) have been included, the number of
securities that the Company proposes to include in such Registration that, in
the opinion of the managing underwriter or underwriters (or the Investor, as the
case may be) can be sold without having such adverse effect.
SECTION 2.03. Piggyback Registration.
(a) Participation. If the Company at any time proposes to
file a Registration Statement under the Securities Act with respect to any
offering of its securities for its own account or for the account of any other
Persons (other than (i) a Registration under Section 2.01 or 2.02, (ii) a
Registration on Form S-4 or S-8 or any successor form to such Forms or (iii) a
Registration of securities solely relating to an offering and sale to employees
or directors of the Company pursuant to any employee stock plan or other
employee benefit plan arrangement) (a "Company Public Sale"), then, as soon as
practicable (but in no event less than 45 days prior to the proposed date of
filing of such Registration Statement), the Company shall give written notice of
such proposed filing to the Holders, and such notice shall offer the Holders the
opportunity to Register under such Registration Statement such number of
Registrable Securities as each such Holder may request in writing (a "Piggyback
Registration"). Subject to Section 2.03(b), the Company shall include in such
Registration Statement all such Registrable Securities that are requested to be
included therein within 15 days after the receipt by such Holders of any such
notice; 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 not to Register or to delay Registration of such
securities, the Company shall give written notice of such determination to each
Holder 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 the Investor to request that such Registration be effected as a
Demand Registration under Section 2.02, and (ii) in the case of a determination
to delay Registering, in the absence of a request for a Demand Registration,
shall be permitted to delay Registering any Registrable Securities, for the same
period as the delay in Registering such other securities. If the offering
pursuant to such Registration Statement is to be underwritten, then each Holder
making a request for a Piggyback Registration pursuant to this Section 2.03(a)
must, and the Company shall make such arrangements with the managing underwriter
or underwriters so that each such Holder may, participate in such Underwritten
Offering. If the offering pursuant to such Registration Statement is to be on
any other basis, then each Holder making a request for a Piggyback Registration
pursuant to this Section 2.03(a) must, and the Company shall make such
arrangements so that each such Holder may, participate in such offering on such
basis. Each Holder shall be permitted to withdraw all or part of its Registrable
Securities from a Piggyback Registration at any time prior to the effectiveness
of such Registration Statement.
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(b) Priority of Piggyback Registration. If the managing
underwriter or underwriters of any proposed Underwritten Offering of Registrable
Securities included in a Piggyback Registration informs the Company and the
Holders of Registrable Securities in writing that, in its or their opinion, the
number of securities which such Holders and any other Persons intend to include
in such offering exceeds the number which can be sold in such offering without
being likely to have a significant adverse effect on the price, timing or
distribution of the securities offered or the market for the securities offered,
then the securities to be included in such Registration shall be (i) first, 100%
of the securities that the Company or (subject to Section 2.07) any Person
(other than a Holder) exercising a contractual right to demand Registration, as
the case may be, proposes to sell, and (ii) second, and only if all the
securities referred to in clause (i) have been included, the number of
Registrable Securities that, in the opinion of such managing underwriter or
underwriters, can be sold without having such adverse effect, with such number
to be allocated pro rata among Holders that have requested to participate in
such Registration based on the relative number of Registrable Securities then
held by each such Holder (provided that any securities thereby allocated to a
Holder that exceed such Holder's request shall be reallocated among the
remaining requesting Holders in like manner) and (iii) third, and only if all of
the Registrable Securities referred to in clause (ii) have been included in such
Registration, any other securities eligible for inclusion in such Registration.
(c) No Effect on Demand Registrations. No Registration of
Registrable Securities effected pursuant to a request under this Section 2.03
shall be deemed to have been effected pursuant to Sections 2.01 and 2.02 or
shall relieve the Company of its obligations under Sections 2.01 or 2.02.
SECTION 2.04. Black-out Periods.
(a) Black-out Periods for Holders. In the event of a
Company Public Sale of the Company's equity securities in an Underwritten
Offering, the Holders agree, if requested by the managing underwriter or
underwriters in such Underwritten Offering, not to effect any public sale or
distribution of any securities (except, in each case, as part of the applicable
Registration, if permitted) that are the same as or similar to those being
Registered in connection with such Company Public Sale, or any securities
convertible into or exchangeable or exercisable for such securities, during the
period beginning seven days before and ending one hundred eighty days (in the
event of the Company's initial public offering) or ninety days (in the event of
any other Company Public Sale) (or, in either case, such lesser period as may be
permitted by the Company or such managing underwriter or underwriters) after,
the effective date of the Registration Statement filed in connection with such
Registration, to the extent timely notified in writing by the Company or the
managing underwriter or underwriters.
(b) Black-out Period for the Company and Others. In the
case of a Registration of Registrable Securities pursuant to Section 2.01 or
2.02 for an Underwritten Offering, the Company and the Holders agree, if
requested by the Investor or the managing underwriter or underwriters, not to
effect any public sale or distribution of any securities that are the same as or
similar to those being Registered, or any securities convertible into or
exchangeable or exercisable for such securities, during the period beginning
seven days before, and ending ninety days (or such lesser period as may be
permitted by the Investor or such managing underwriter or underwriters) after,
the effective date of the Registration Statement
10
filed in connection with such Registration (or, in the case of an offering under
a Shelf Registration Statement, the date of the closing under the underwriting
agreement in connection therewith), to the extent timely notified in writing by
the Investor or the managing underwriter or underwriters. Notwithstanding the
foregoing, the Company may effect a public sale or distribution of securities of
the type described above and during the periods described above if such sale or
distribution is made pursuant to Registrations on Form S-4 or S-8 or any
successor form to such Forms or as part of any Registration of securities for
offering and sale to employees or directors of the Company pursuant to any
employee stock plan or other employee benefit plan arrangement. The Company
agrees to use its reasonable best efforts to obtain from each holder of
restricted securities of the Company which securities are the same as or similar
to the Registrable Securities being Registered, or any restricted securities
convertible into or exchangeable or exercisable for any of such securities, an
agreement not to effect any public sale or distribution of such securities
during any such period referred to in this paragraph, except as part of any such
Registration, if permitted. Without limiting the foregoing (but subject to
Section 2.07), if after the date hereof the Company grants any Person (other
than a Holder) any rights to demand or participate in a Registration, the
Company agrees that the agreement with respect thereto shall include such
Person's agreement to comply with any black-out period required by this Section
as if it were the Company hereunder.
SECTION 2.05. Registration Procedures.
(a) In connection with the Company's Registration
obligations under Sections 2.01, 2.02 and 2.03, the Company shall use its
reasonable best efforts to effect such Registration to permit the sale of such
Registrable Securities in accordance with the intended method or methods of
distribution thereof as expeditiously as reasonably practicable, and in
connection therewith the Company shall:
(i) prepare the required Registration Statement including
all exhibits and financial statements required under the Securities Act
to be filed therewith, and before filing a Registration Statement or
Prospectus, or any amendments or supplements thereto, (x) furnish to
the underwriters, if any, and to Participating Holders, copies of all
documents prepared to be filed, which documents shall be subject to the
review of such underwriters and such Holders and their respective
counsel and (y) except in the case of a Registration under Section
2.03, not file any Registration Statement or Prospectus or amendments
or supplements thereto to which the Investor or the underwriters, if
any, shall reasonably object;
(ii) as soon as possible (in the case of a Demand
Registration, no later than thirty days after a request for a Demand
Registration) file with the SEC a Registration Statement relating to
the Registrable Securities including all exhibits and financial
statements required by the SEC to be filed therewith, and use its
reasonable best efforts to cause such Registration Statement to become
effective under the Securities Act as soon as practicable;
(iii) prepare and file with the SEC such pre- and
post-effective amendments to such Registration Statement and
supplements to the Prospectus as may be (x) reasonably requested by the
Investor, (y) reasonably requested by any other Participating Holder
(to
11
the extent such request relates to information relating to such
Holder), or (z) necessary to keep such Registration effective for the
period of time required by this Agreement, and comply with provisions
of the applicable securities laws with respect to the sale or other
disposition of all securities covered by such Registration Statement
during such period in accordance with the intended method or methods of
disposition by the sellers thereof set forth in such Registration
Statement;
(iv) notify the Participating Holders and the managing
underwriter or underwriters, if any, and (if requested) confirm such
advice in writing and provide copies of the relevant documents, as soon
as reasonably practicable after notice thereof is received by the
Company (a) when the applicable Registration Statement or any amendment
thereto has been filed or becomes effective, and when the applicable
Prospectus or any amendment or supplement to such Prospectus has been
filed, (b) of any written comments by the SEC or any request by the SEC
or any other federal or state governmental authority for amendments or
supplements to such Registration Statement or such Prospectus or for
additional information, (c) of the issuance by the SEC of any stop
order suspending the effectiveness of such Registration Statement or
any order by the SEC or any other regulatory authority preventing or
suspending the use of any preliminary or final Prospectus or the
initiation or threatening of any proceedings for such purposes, (d) if,
at any time, the representations and warranties of the Company in any
applicable underwriting agreement cease to be true and correct in all
material respects, and (e) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
(v) promptly notify the Participating Holders and the
managing underwriter or underwriters, if any, when the Company becomes
aware of the happening of any event as a result of which the applicable
Registration Statement or the Prospectus included in such Registration
Statement (as then in effect) contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein (in the case of such Prospectus and any preliminary
Prospectus, in light of the circumstances under which they were made)
not misleading or, if for any other reason it shall be necessary during
such time period to amend or supplement such Registration Statement or
Prospectus in order to comply with the Securities Act and, in either
case as promptly as reasonably practicable thereafter, prepare and file
with the SEC, and furnish without charge to the Participating Holders
and the managing underwriter or underwriters, if any, an amendment or
supplement to such Registration Statement or Prospectus which shall
correct such misstatement or omission or effect such compliance;
(vi) use its reasonable best efforts to prevent, or obtain
the withdrawal of, any stop order or other order suspending the use of
any preliminary or final Prospectus;
(vii) promptly incorporate in a Prospectus supplement or
post-effective amendment such information as the managing underwriter
or underwriters and the Investor agree should be included therein
relating to the plan of distribution with respect to such Registrable
Securities; and make all required filings of such Prospectus supplement
or post-effective amendment as soon as reasonably practicable after
being
12
notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment;
(viii) furnish to each Participating Holder and each
underwriter, if any, without charge, as many conformed copies as such
Holder or underwriter may reasonably request of the applicable
Registration Statement and any amendment or post-effective amendment
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those
incorporated by reference);
(ix) deliver to each Participating Holder and each
underwriter, if any, without charge, as many copies of the applicable
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Holder or underwriter may reasonably request
(it being understood that the Company consents to the use of such
Prospectus or any amendment or supplement thereto by such Holder and
the underwriters, if any, in connection with the offering and sale of
the Registrable Securities covered by such Prospectus or any amendment
or supplement thereto) and such other documents as such Holder or
underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities by such Holder or
underwriter;
(x) on or prior to the date on which the applicable
Registration Statement is declared effective, use its reasonable best
efforts to register or qualify, and cooperate with the Participating
Holders, the managing underwriter or underwriters, if any, and their
respective counsel, in connection with the registration or
qualification of such Registrable Securities for offer and sale under
the securities or "Blue Sky" laws of each state and other jurisdiction
of the United States as any Participating Holder or managing
underwriter or underwriters, if any, or their respective counsel
reasonably request in writing and do any and all other acts or things
reasonably necessary or advisable to keep such registration or
qualification in effect for such period as required by Section 2.01(b)
or Section 2.02(d), whichever is applicable, provided that the Company
will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action
which would subject it to taxation or general service of process in any
such jurisdiction where it is not then so subject;
(xi) cooperate with the Participating Holders and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends; and
enable such Registrable Securities to be in such denominations and
registered in such names as the managing underwriters may request at
least two business days prior to any sale of Registrable Securities to
the underwriters;
(xii) use its reasonable best efforts to cause the
Registrable Securities covered by the applicable 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 or the underwriter or underwriters, if any, to consummate the
disposition of such Registrable Securities;
13
(xiii) not later than the effective date of the applicable
Registration Statement, provide a CUSIP number for all Registrable
Securities and provide the applicable transfer agent with printed
certificates for the Registrable Securities which are in a form
eligible for deposit with The Depository Trust Company;
(xiv) make such representations and warranties to the
Participating Holders and the underwriters or agents, if any, in form,
substance and scope as are customarily made by issuers in secondary
underwritten public offerings;
(xv) enter into such customary agreements (including
underwriting and indemnification agreements) and take all such other
actions as the Investor or the managing underwriter or underwriters, if
any, reasonably request in order to expedite or facilitate the
registration and disposition of such Registrable Securities;
(xvi) obtain for delivery to the Participating Holders and
to the underwriter or underwriters, if any, an opinion or opinions from
counsel for the Company dated the effective date of the Registration
Statement or, in the event of an Underwritten Offering, the date of the
closing under the underwriting agreement, in customary form, scope and
substance, which opinions shall be reasonably satisfactory to such
Holders or underwriters, as the case may be, and their respective
counsel;
(xvii) in the case of an Underwritten Offering, obtain for
delivery to the Company and the managing underwriter or underwriters,
with copies to the Participating Holders, a cold comfort letter from
the Company's independent certified public accountants in customary
form and covering such matters of the type customarily covered by cold
comfort letters as the managing underwriter or underwriters reasonably
request, dated the date of execution of the underwriting agreement and
brought down to the closing under the underwriting agreement;
(xviii) cooperate with each Participating Holder and each
underwriter, if any, participating in the disposition of such
Registrable Securities and their respective counsel in connection with
any filings required to be made with the NASD;
(xix) use its reasonable best efforts to comply with all
applicable securities laws and make available to its security holders,
as soon as reasonably practicable, an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and the rules and
regulations promulgated thereunder;
(xx) provide and cause to be maintained a transfer agent
and registrar for all Registrable Securities covered by the applicable
Registration Statement from and after a date not later than the
effective date of such Registration Statement;
(xxi) use its best efforts to cause all Registrable
Securities covered by the applicable Registration Statement to be
listed on each securities exchange on which any of the Company's
securities are then listed or quoted and on each inter-dealer quotation
system on which any of the Company's securities are then quoted;
14
(xxii) make available upon reasonable notice at reasonable
times and for reasonable periods for inspection by the Investor, by any
underwriter participating in any disposition to be effected pursuant to
such Registration Statement and by any attorney, accountant or other
agent retained by the Investor or any such underwriter, all pertinent
financial and other records, pertinent corporate documents and
properties of the Company, and cause all of the Company's officers,
directors and employees and the independent public accountants who have
certified its financial statements to make themselves available to
discuss the business of the Company and to supply all information
reasonably requested by any such Person in connection with such
Registration Statement as shall be necessary to enable them to exercise
their due diligence responsibility; provided that any such Person
gaining access to information regarding the Company pursuant to this
Section 2.05(a)(xxii) shall agree to hold in strict confidence and
shall not make any disclosure or use any information regarding the
Company that the Company determines in good faith to be confidential,
and of which determination such Person is notified, unless (w) the
release of such information is requested or required (by deposition,
interrogatory, requests for information or documents by a governmental
entity, subpoena or similar process), (x) such information is or
becomes publicly known other than through a breach of this or any other
agreement of which such Person has knowledge, (y) such information is
or becomes available to such Person on a non-confidential basis from a
source other than the Company or (z) such information is independently
developed by such Person; and
(xxiii) in the case of an Underwritten Offering, cause the
senior executive officers of the Company to participate in the
customary "road show" presentations that may be reasonably requested by
the managing underwriter or underwriters in any such Underwritten
Offering and otherwise to facilitate, cooperate with, and participate
in each proposed offering contemplated herein and customary selling
efforts related thereto.
(b) The Company may require each Participating Holder to
furnish to the Company such information regarding the distribution of such
securities and such other information relating to such Holder and its ownership
of Registrable Securities as the Company may from time to time reasonably
request in writing. Each Participating Holder agrees to furnish such information
to the Company and to cooperate with the Company as reasonably necessary to
enable the Company to comply with the provisions of this Agreement.
(c) Each Participating Holder agrees that, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 2.05(a)(v), such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to such Registration Statement
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 2.05(a)(v), or until such Holder is advised
in writing by the Company that the use of the Prospectus may be resumed, and if
so directed by the Company, such Holder shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the period during which the applicable Registration
Statement is required to be maintained effective shall be extended by the number
of days during the period from and including the date of the giving of such
notice to and including the date when each seller of
15
Registrable Securities covered by such Registration Statement either receives
the copies of the supplemented or amended Prospectus contemplated by Section
2.05(a)(v) or is advised in writing by the Company that the use of the
Prospectus may be resumed.
(d) Holders may seek to register different types of
Registrable Securities simultaneously, and the Company shall use its reasonable
best efforts to effect such Registration and sale in accordance with the
intended method or methods of disposition specified by such Holders.
SECTION 2.06. Underwritten Offerings.
(a) Shelf and Demand Registrations. If requested by the
underwriters for any Underwritten Offering requested by the Investor pursuant to
a Registration under Section 2.01 or Section 2.02, the Company shall enter into
an underwriting agreement with such underwriters for such offering, such
agreement to be reasonably satisfactory in substance and form to the Company,
the Investor and the underwriters, and to contain such representations and
warranties by the Company and such other terms as are generally prevailing in
agreements of that type, including indemnities no less favorable to the
recipient thereof than those provided in Section 2.09. The Participating Holders
shall cooperate with the Company in the negotiation of such underwriting
agreement and shall give consideration to the reasonable suggestions of the
Company regarding the form thereof. Such Holders shall be parties to such
underwriting agreement, which underwriting agreement shall (i) contain such
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such Holders as are customarily made by
issuers to selling stockholders in secondary underwritten public offerings and
(ii) provide that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement also shall be conditions
precedent to the obligations of such Holders. Such Holders 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 Holders, such Holder's title to the Registrable Securities, such Holder's
intended method of distribution and any other representations required to be
made by such Holder under applicable law, and the aggregate amount of the
liability of such Holder shall not exceed such Holder's net proceeds from such
Underwritten Offering.
(b) Piggyback Registrations. If the Company proposes to
register any of its securities under the Securities Act as contemplated by
Section 2.03 and such securities are to be distributed in an Underwritten
Offering through one or more underwriters, the Company shall, if requested by
any Holder pursuant to Section 2.03 and subject to the provisions of Section
2.03(b), use its reasonable best efforts to arrange for such underwriters to
include on the same terms and conditions that apply to the other sellers in such
Registration all the Registrable Securities to be offered and sold by such
Holder among the securities of the Company to be distributed by such
underwriters in such Registration. The Participating Holders shall be parties to
the underwriting agreement between the Company and such underwriters, which
underwriting agreement shall (i) contain such representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such Holders as are customarily made by issuers to selling stockholders in
secondary underwritten public offerings and (ii) provide that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement also shall be conditions precedent to the obligations of
such Holders.
16
Any such Holder 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 Holder; such Holder's
title to the Registrable Securities and such Holder's intended method of
distribution or any other representations required to be made by such Holder
under applicable law, and the aggregate amount of the liability of such Holder
shall not exceed such Holder's net proceeds from such Underwritten Offering.
(c) Participation in Underwritten Registrations. 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 by the Persons entitled to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
(d) Price and Underwriting Discounts. In the case of an
Underwritten Offering under Section 2.01 or 2.02, the price, underwriting
discount and other financial terms for the Registrable Securities shall be
determined by the Investor. In addition, in the case of any Underwritten
Offering, each of the Holders may withdraw their request to participate in the
registration pursuant to Section 2.01, 2.02 or 2.03 after being advised of such
price, discount and other terms and shall not be required to enter into any
agreements or documentation that would require otherwise.
SECTION 2.07. No Inconsistent Agreements; Additional Rights.
The Company shall not hereafter enter into, and is not currently a party to, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders by this Agreement. Without the consent of the Investor,
the Company shall not enter into any agreement granting registration or similar
rights to any Person.
SECTION 2.08. Registration Expenses. All expenses incident to
the Company's performance of or compliance with this Agreement shall be paid by
the Company, including (i) all registration and filing fees, and any other fees
and expenses associated with filings required to be made with the SEC or the
NASD, (ii) all fees and expenses in connection with compliance with any
securities or "Blue Sky" laws, (iii) all printing, duplicating, word processing,
messenger, telephone, facsimile and delivery expenses (including expenses of
printing certificates for the Registrable Securities in a form eligible for
deposit with The Depository Trust Company and of printing prospectuses), (iv)
all fees and disbursements of counsel for the Company and of all independent
certified public accountants of the Company (including the expenses of any
special audit and cold comfort letters required by or incident to such
performance), (v) Securities Act liability insurance or similar insurance if the
Company so desires or the underwriters so require in accordance with
then-customary underwriting practice, (vi) all fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities
exchange or quotation of the Registrable Securities on any inter-dealer
quotation system, (vii) all applicable rating agency fees with respect to the
Registrable Securities, (viii) all reasonable fees and disbursements of legal
counsel selected by the Investor, (ix) all fees and expenses of accountants
selected by the Investor, (x) any reasonable fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, (xi) all fees
and expenses of any special experts or other Persons retained by the Company in
connection with any Registration,
17
(xii) all of the Company's internal expenses (including all salaries and
expenses of its officers and employees performing legal or accounting duties)
and (xiii) all expenses related to the "road-show" for any underwritten
offering, including all travel, meals and lodging. All such expenses are
referred to herein as "Registration Expenses." The Company shall not be required
to pay any fees and disbursements to underwriters not customarily paid by the
issuers of securities in a secondary offering, including underwriting discounts
and commissions and transfer taxes, if any, attributable to the sale of
Registrable Securities.
SECTION 2.09. Indemnification.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the full extent permitted by law, each Holder,
each member, limited or general partner thereof, each member, limited or general
partner of each such member, limited or general partner, each of their
respective Affiliates, officers, directors, shareholders, employees, advisors,
and agents and each Person who controls (within the meaning of the Securities
Act or the Exchange Act) such Persons and each of their respective
Representatives from and against any and all losses, penalties, judgments,
suits, costs, claims, damages, liabilities and expenses, joint or several
(including reasonable costs of investigation and legal expenses) (each, a "Loss"
and collectively "Losses") arising out of or based upon (i) any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement under which such Registrable Securities were Registered under the
Securities Act (including any final, preliminary or summary Prospectus contained
therein or any amendment thereof or supplement thereto or any documents
incorporated by reference therein) or any other disclosure document produced by
or on behalf of the Company or any of its subsidiaries including, without
limitation, reports and other documents filed under the Exchange Act, (ii) any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
Prospectus or preliminary Prospectus, in light of the circumstances under which
they were made) not misleading or (iii) any actions or inactions or proceedings
in respect of the foregoing whether or not such indemnified party is a party
thereto; provided, that the Company shall not be liable to any particular
indemnified party (A) to the extent that any such Loss arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any such Registration Statement or other document in reliance
upon and in conformity with written information furnished to the Company by such
indemnified party expressly for use in the preparation thereof or (B) to the
extent that any such Loss arises out of or is based upon an untrue statement or
omission in a preliminary Prospectus relating to Registrable Securities, if a
Prospectus (as then amended or supplemented) that would have cured the defect
was furnished to the indemnified party from whom the Person asserting the claim
giving rise to such Loss purchased Registrable Securities at least five days
prior to the written confirmation of the sale of the Registrable Securities to
such Person and a copy of such Prospectus (as amended and supplemented) was not
sent or given by or on behalf of such indemnified party to such Person at or
prior to the written confirmation of the sale of the Registrable Securities to
such Person. This indemnity shall be in addition to any liability the Company
may otherwise have. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Holder or any
indemnified party and shall survive the transfer of such securities by such
Holder. The Company shall also indemnify underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, their officers and directors and each Person who controls such
Persons (within the meaning of the Securities Act and the
18
Exchange Act) to the same extent as provided above with respect to the
indemnification of the indemnified parties.
(b) Indemnification by the Participating Holders. Each
Participating Holder agrees (severally and not jointly) to indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its directors and
officers and each Person who controls the Company (within the meaning of the
Securities Act or the Exchange Act) from and against any Losses resulting from
(i) any untrue statement of a material fact in any Registration Statement under
which such Registrable Securities were Registered under the Securities Act
(including any final, preliminary or summary Prospectus contained therein or any
amendment thereof or supplement thereto or any documents incorporated by
reference therein), or (ii) any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of a Prospectus or preliminary Prospectus, in light of the
circumstances under which they were made) not misleading, to the extent, but
only to the extent, that such untrue statement or omission is contained in any
information furnished in writing by such Holder to the Company specifically for
inclusion in such Registration Statement and has not been corrected in a
subsequent writing prior to or concurrently with the sale of the Registrable
Securities to the Person asserting the claim. In no event shall the liability of
such Holder hereunder be greater in amount than the dollar amount of the net
proceeds received by such Holder under the sale of Registrable Securities giving
rise to such indemnification obligation. The Company shall be entitled to
receive indemnities from underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the distribution, to
the same extent as provided above (with appropriate modification) with respect
to information furnished in writing by such Persons specifically for inclusion
in any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder shall (i) give prompt written notice to
the indemnifying party of any claim with respect to which it seeks
indemnification (provided that any delay or failure to so notify the
indemnifying party shall relieve the indemnifying party of its obligations
hereunder only to the extent, if at all, that it is actually and materially
prejudiced by reason of such delay or failure) and (ii) permit such indemnifying
party to assume the defense of such claim with counsel reasonably satisfactory
to the indemnified party; provided that any Person entitled to indemnification
hereunder shall have the right to select and employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such Person unless (A) the indemnifying party
has agreed in writing to pay such fees or expenses, (B) the indemnifying party
shall have failed to assume the defense of such claim within a reasonable time
after receipt of notice of such claim from the Person entitled to
indemnification hereunder and employ counsel reasonably satisfactory to such
Person, (C) the indemnified party has reasonably concluded (based upon advice of
its counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, or (D) in the reasonable judgment of any such Person
(based upon advice of its counsel) a conflict of interest may exist between such
Person and the indemnifying party with respect to such claims (in which case, if
the Person notifies the indemnifying party in writing that such Person elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such Person). If the indemnifying party assumes the defense, the
indemnifying party shall not have the right to settle such action without the
consent of the
19
indemnified party. No indemnifying party shall consent to entry of any judgment
or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of an
unconditional release from all liability in respect to such claim or litigation
without the prior written consent of such indemnified party. If such defense is
not assumed by the indemnifying party, the indemnifying party will not be
subject to any liability for any settlement made without its prior written
consent, but such consent may not be unreasonably withheld. It is understood
that the indemnifying party or parties shall not, except as specifically set
forth in this Section 2.09(c), in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements or other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time unless (x) the employment of more
than one counsel has been authorized in writing by the indemnifying party or
parties, (y) an indemnified party has reasonably concluded (based on the advice
of counsel) that there may be legal defenses available to it that are different
from or in addition to those available to the other indemnified parties or (z) a
conflict or potential conflict exists or may exist (based upon advice of counsel
to an indemnified party) between such indemnified party and the other
indemnified parties, in each of which cases the indemnifying party shall be
obligated to pay the reasonable fees and expenses of such additional counsel or
counsels.
(d) Contribution. If for any reason the indemnification
provided for in paragraphs (a) and (b) of this Section 2.09 is unavailable to an
indemnified party or insufficient in respect of any Losses referred to therein,
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such Loss (i) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the indemnified party or parties on the other hand in connection with
the acts, statements or omissions that resulted in such losses, as well as any
other relevant equitable considerations. In connection with any Registration
Statement filed with the SEC by the Company, the relative fault of the
indemnifying party on the one hand and the indemnified party on the other hand
shall be determined by reference to, among other things, whether any untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the indemnifying
party or by the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 2.09(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 this Section 2.09(d). 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. The amount paid or payable by
an indemnified party as a result of the Losses referred to in Sections 2.09(a)
and 2.09(b) shall be deemed to include, subject to the limitations set forth
above, 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 Section 2.09(d), in connection with any
Registration Statement filed by the Company, a Participating Holder shall not be
required to contribute any amount in excess of the dollar amount of the net
proceeds received by such Holder under the sale of Registrable Securities giving
rise to such contribution obligation. If indemnification is available under this
Section 2.09, the indemnifying parties shall indemnify each indemnified party to
the full extent provided in Sections 2.09(a) and 2.09(b) hereof without
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regard to the provisions of this Section 2.09(d). The remedies provided for in
this Section 2.09 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
SECTION 2.10. Rules 144 and 144A and Regulation S. The Company
covenants that it will file the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
SEC thereunder (or, if the Company is not required to file such reports, it
will, upon the reasonable request of the Investor, make publicly available such
necessary information for so long as necessary to permit sales pursuant to Rules
144, 144A or Regulation S under the Securities Act), and it will take such
further action as the Investor may reasonably request, all to the extent
required from time to time to enable the Investor to sell Registrable Securities
without Registration under the Securities Act within the limitation of the
exemptions provided by (i) Rules 144, 144A or Regulation S under the Securities
Act, as such Rules may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the SEC. Upon the reasonable request of the
Investor, the Company will deliver to the Investor a written statement as to
whether it has complied with such requirements and, if not, the specifics
thereof.
ARTICLE III
PREEMPTIVE RIGHTS
SECTION 3.01. Preemptive Rights. (a) If, following the Closing
Date, the Company proposes to issue New Company Shares, the Company shall
provide written notice (the "Preemptive Rights Notice") of such anticipated
issuance to the Investor (and any of its Permitted Transferees) no later than
twenty (20) Business Days prior to the anticipated issuance date. The Preemptive
Rights Notice shall set forth the material terms and conditions of the issuance,
including the proposed purchase price for the New Company Shares. The Investor
and its Permitted Transferees shall have the right to purchase up to their Pro
Rata Portion of such New Company Shares at the price and on the terms and
conditions specified in the Preemptive Rights Notice by delivering an
irrevocable written notice to the Company no later than three (3) Business Days
before the anticipated issuance date (the "Election Date") setting forth the
number of such New Company Shares for which the right is exercised. In the event
the Investor or any of its Permitted Transferees elects not to purchase its full
Pro Rata Portion of New Company Shares, the Company shall allocate any remaining
amount among the Investor and/or those Permitted Transferees (pro rata in
accordance with the Company Shares then held by each such Investor or Permitted
Transferee) who have indicated in writing a desire to purchase Company Shares in
excess of their respective Pro Rata Portions.
(b) In the event the Investor or its Permitted
Transferees does not purchase all such New Company Shares in accordance with the
procedures set forth in Section 3.01(a) by the Election Date, the Company shall
have sixty (60) days from the Election Date to sell to other Persons the
remaining New Company Shares at the price and on the terms and conditions
specified in the Preemptive Rights Notice. If the Company fails to sell such New
Company Shares within sixty (60) days of the Election Date, the Company shall
not thereafter issue or sell any New Company Shares without first offering such
New Company Shares to the Investor and its Permitted Transferees in the manner
provided in Section 3.01(a).
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ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Term. This Agreement shall terminate upon the
later of the expiration of the Shelf Period and such time as there are no
Registrable Securities, except for the provisions of Sections 2.09 and 2.10 and
all of this Article IV, which shall survive any such termination.
SECTION 4.02. Injunctive Relief. It is hereby agreed and
acknowledged that it will be impossible to measure in money the damage that
would be suffered if the parties fail to comply with any of the obligations
herein imposed on them and that in the event of any such failure, an aggrieved
Person will be irreparably damaged and will not have an adequate remedy at law.
Any such Person shall, therefore, be entitled (in addition to any other remedy
to which it may be entitled in law or in equity) to injunctive relief, including
specific performance, to enforce such obligations, and if any action should be
brought in equity to enforce any of the provisions of this Agreement, none of
the parties hereto shall raise the defense that there is an adequate remedy at
law.
SECTION 4.03. Attorneys' Fees. In any action or proceeding
brought to enforce any provision of this Agreement or where any provision hereof
is validly asserted as a defense, the successful party shall, to the extent
permitted by applicable law, be entitled to recover reasonable attorneys' fees
in addition to any other available remedy.
SECTION 4.04. Notices. Unless otherwise specified herein, all
notices and other communications authorized or required to be given pursuant to
this Agreement shall be in writing and shall be given or made (and shall be
deemed to have been duly given or made upon receipt) by personal hand-delivery,
by facsimile transmission, by electronic mail, by mailing the same in a sealed
envelope, registered first-class mail, postage prepaid, return receipt
requested, or by air courier guaranteeing overnight delivery, sent to the Person
at the address given for such Person below or such other address as such Person
may specify by notice to the Company:
To the Company:
IASIS Healthcare Corporation
000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Texas Pacific Group
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, XX 00000
Attention: General Counsel
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Fax: (000) 000-0000
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxx, Esq.
Xxxxxxx Xxxxxxxxxxx, Esq.
Fax: (000) 000-0000
Email: xxxxx@xxxx.xxx
xxxxxxxxxxxx@xxxx.xxx
To the Investor:
IASIS Investment LLC
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxx, Esq.
Xxxxxxx Xxxxxxxxxxx, Esq.
Fax: (000) 000-0000
Email: xxxxx@xxxx.xxx
xxxxxxxxxxxx@xxxx.xxx
SECTION 4.05. Amendment. Any provision of this Agreement may
be amended if, and only if, such amendment is in writing and signed by the
parties hereto.
SECTION 4.06. Successors, Assigns and Transferees. Each party
may assign all or a portion of its rights hereunder to any Person to which such
party transfers its ownership of all or any of its Registrable Securities and
any Person that acquires Registrable Securities pursuant to the terms of the
Investor LLC Agreement (collectively, "Permitted Transferees").
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SECTION 4.07. Binding Effect. Except as otherwise provided in
this Agreement, the terms and provisions of this Agreement shall be binding on
and inure to the benefit of each of the parties hereto and their respective
successors.
SECTION 4.08. Third Parties. Nothing in this Agreement,
express or implied, is intended or shall be construed to confer upon any Person
not a party hereto (other than each other Person entitled to indemnity or
contribution under Section 2.09) any right, remedy or claim under or by virtue
of this Agreement.
SECTION 4.09. Governing Law; Jurisdiction. THIS AGREEMENT
SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF. ANY ACTION OR
PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS AGREEMENT MAY BE
BROUGHT AND ENFORCED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR (TO
THE EXTENT SUBJECT MATTER JURISDICTION EXISTS THEREFOR) THE U.S. DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND THE PARTIES IRREVOCABLY SUBMIT TO THE
JURISDICTION OF BOTH SUCH COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING.
SECTION 4.10. Severability. If any provision of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 4.11. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, and all of
which shall constitute one and the same agreement.
SECTION 4.12. Headings. The heading references herein and in
the table of contents hereto are for convenience purposes only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
IASIS HEALTHCARE CORPORATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman and Chief Executive
Officer
IASIS INVESTMENT LLC
By: TPG IASIS IV LLC,
as Managing Member
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
