REGISTRATION RIGHTS AGREEMENT
Registration
Rights Agreement
(this
"Agreement")
is
made and entered into as of January 8, 2007, by and among Xxxxxx, Inc., a
Delaware corporation (the "Company"); and Regal Medical Supply LLC, a North
Carolina limited liability company (the “Specified Holder”).
The
parties are entering into this Agreement pursuant to the terms of that certain
asset purchase agreement (the "Purchase Agreement") dated as of December 15,
2006, among the Company, Regal Acquisition Co. (the “Purchaser”), a Delaware
corporation and wholly-owned subsidiary of the Company, the Specified Holder
and
each of the Principal Shareholders (as defined in the Purchase Agreement).
Capitalized terms used and not otherwise defined herein shall have the meanings
given such terms in the Purchase Agreement.
The
Company and the Specified Holder hereby agree as follows:
1. Definitions.
As used
in this Agreement, the following terms shall have the following
meanings:
"Business
Day" means any day except Saturday, Sunday and any day which shall be a legal
holiday or a day on which banking institutions in the state of New York
generally are authorized or required by law or other government actions to
close.
"Commission"
means the Securities and Exchange Commission.
"Common
Stock" means the Company's Common Stock, par value $0.02 per share.
"Exchange
Act" means the Securities Exchange Act of 1934, as amended.
“Filing
Date” means the day which is eleven months following the Closing
Date.
"Holder"
or "Holders" means the holder or holders, as the case may be, from time to
time
of Registrable Securities, including without limitation the Specified Holder
and
its permitted assignees.
"Holder
Information” shall mean any information reasonably related to (i) the
Registrable Securities, (ii) the plan of distribution, and (iii) the acquisition
of certain assets of Regal by the Purchaser.
"Indemnified
Party" shall have the meaning set forth in Section 5(c).
"Indemnifying
Party" shall have the meaning set forth in Section 5(c).
"Losses"
shall have the meaning set forth in Section 5(a).
“Mandatory
Registration Statement” means the Registration Statement or Registration
Statements required to be filed pursuant to Section 2 hereof, including all
amendments thereof (whether pre-effective or post-effective), if
any.
"NASDAQ"
shall mean the National Association of Securities Dealers Automatic Quotation
System.
"Person"
means an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, govern-ment (or an agency or political subdivision thereof)
or
other entity of any kind.
"Proceeding"
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
"Prospectus"
means the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference in such
Prospectus.
"Registrable
Securities" means (i) the shares of Common Stock issued by the Company under
the
Purchase Agreement, and the securities issuable upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event with respect
to such shares of Common Stock, and (ii) any other dividend or other
distribution with respect to conversion or exchange of, or in replacement of,
Registrable Securities.
“Registration
Statement” means the Mandatory Registration Statement, and all exhibits thereto,
and all material incorporated by reference into any such Registration
Statement.
"Rule
144" means Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.
"Rule
415" means Rule 415 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.
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"Rule
416" means Rule 416 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.
"Securities
Act" means the Securities Act of 1933, as amended.
2. Mandatory.
(a) On
or
prior to the Filing Date, the Company shall use its commercially reasonable
efforts to prepare and file with the Commission "shelf" Registration Statements
covering all Registrable Securities for an offering to be made on a continuous
basis pursuant to Rule 415. The Registration Statements shall be on Form S-3
(or
on another form permissible for such registration in accordance herewith).
Such
Registration Statements are hereinafter called the “Mandatory Registration
Statement.” Nothing herein shall preclude the Company from including in the
Mandatory Registration Statement any Common Stock of any other person in
addition to the Holder.
(b) The
Company shall use commercially reasonable efforts to cause the Registration
Statements to be declared effective under the Securities Act as promptly as
practicable after the filing thereof and to keep such Registration Statements
continuously effective under the Securities Act until such date as is the
earlier to occur of (x) the date when all Registrable Securities covered by
such
Registration Statements have been sold or (y) the date on which the Registrable
Securities may be sold pursuant to Rule 144(k) as determined by counsel to
the
Company pursuant to a written opinion letter, addressed to the Company's
transfer agent to such effect (the "Effectiveness Period").
3. Registration
Procedures.
(a) In
connection with the Company's registration obligations hereunder, the Company
shall as expeditiously as reasonably possible (i) prepare and file with the
Commission a registration statement with respect to such shares of Common Stock
(including such indeterminate number of shares of Common Stock pursuant to
Rule
416 to cover securities issuable upon stock splits, stock dividends or similar
transactions) and use its commercially reasonable efforts to cause such
registration statement to become effective and maintain the effectiveness of
such registration statement for the Effectiveness Period, (ii) use its
commercially reasonable efforts to register or qualify the securities covered
by
such registration statement under such other securities or state blue sky laws
as the Holder shall request, but not more than five jurisdictions, except that
the Company shall not for any such purpose be required to qualify to do business
as a foreign corporation or to file a general consent to service of process
in
any jurisdiction wherein it is not so qualified or has not so consented to
service, and (iii) use its commercially reasonable efforts to list or qualify
for quotation, the securities covered by such registration statement, with
any
securities exchange or national quotation system on which the Common Stock
is
then listed or quoted.
(b) If
(i)
there is material non-public information regarding the Company which the
Company's Board of Directors (the "Board") reasonably determines not to be
in
the Company's best interest to disclose and which the Company is not otherwise
required to disclose, or (ii) there is a significant business opportunity
(including, but not limited to, the acquisition or disposition of assets (other
than in the ordinary course of business) or any merger, consolidation, tender
offer or other similar transaction) available to the Company which the Board
reasonably determines not to be in the Company's best interest to disclose
and
which the Company would be required to disclose under the Registration
Statement, then the Company may postpone or suspend filing or effectiveness
of a
registration statement for a period not to exceed 60 consecutive days,
provided,
however,
that
the Company may not postpone or suspend its obligation under this Section 3(b)
for more than 90 days in the aggregate during any 12 month period.
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4. Registration
Expenses.
All
fees and expenses incurred by the Company in connection with the Company's
performance of or compliance with its obligations hereunder, including without
limitation (i) all registration and filing fees (including any expenses incident
to filing with NASDAQ and each other securities exchange, national quotation
system, market or over-the-counter bulletin board on which the Common Stock
issued by the Company is then listed or quoted), (ii) blue sky fees and
expenses, (iii) all printing expenses, and (iv) all fees and disbursements
of
counsel and accountants for the Company (including the expenses of any audit
incident to or required by any such registration), and any other advisors to
the
Company in connection with the transactions contemplated hereby, will be paid
by
the Company. The Holders shall bear their own expenses for all of their
attorneys’ fees and expenses, underwriting discounts, selling commissions and
stock transfer taxes incurred in connection with the sale of the Registrable
Securities.
5. Indemnification
(a) Indemnification
by the Company.
The
Company shall, notwithstanding any termination of this Agreement, indemnify
and
hold harmless each Holder to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, costs of preparation and reasonable attorneys'
fees) and expenses (collectively, "Losses"),
as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained in the Registration Statement, any Prospectus
or
any form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus
or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, except to the extent, but only to the extent, that such
untrue statements or omissions are based upon information regarding such Holder
furnished to the Company by such Holder for use therein or to the extent that
such information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed or approved in writing
by such Holder for use in the Registration Statement, such Prospectus or such
form of Prospectus or in any amendment or supplement thereto.
(b) Indemnification
by Holders.
Each
Holder shall, notwithstanding any termination of this Agreement, severally,
based on each Holder’s respective percentage of Registrable Securities,
indemnify and hold harmless the Company, the directors, officers, agents,
representatives and 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,
to
the fullest extent permitted by applicable law, from and against all Losses,
as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained in the Registration Statement, any Prospectus
or
any form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or form of prospectus or supplement
thereto, in the light of the circumstances under which they were made) not
misleading, to the extent that such untrue statement or omission is contained
in
or omitted from any information so furnished by such Holder to the Company
for
inclusion therein or to the extent that such information relates to such Holder
or such Holder's proposed method of distribution of Registrable Securities
and
was reviewed or approved in writing by such Holder for use in the Registration
Statement, such Prospectus or such form of Prospectus Supplement or in any
amendment or supplement thereto.
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(c) Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an "Indemnified
Party"),
such
Indemnified Party promptly shall notify the Person from whom indemnity is sought
(the "Indemnifying
Party")
in
writing, and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party
and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except to the extent that such failure shall have
materially adversely prejudiced the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
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 or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (2) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects
to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld.
(d) Contribution.
If a
claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party because of a failure or refusal of a governmental authority
to
enforce such indemnification in accordance with its terms (by reason of public
policy or otherwise), then each Indemnifying Party, in lieu of indemnifying
such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party 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 and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made 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 such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or
other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees
or
expenses if the indemnification provided for in this Section was available
to
such party in accordance with its terms.
5
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by
any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. 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
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
6. Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company, on the one hand, or by a Holder, on the other
hand, of any of their respective obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise
all rights granted by law and under this Agreement, including recovery of
damages, will be entitled to specific performance of its rights under
this Agreement.
The Company and each Holder agree that monetary damages would not
provide adequate
compensation for any losses incurred by reason of a breach by it of any of
the
provisions of this Agreement and further agrees that, in the event of any action
for specific performance in respect of such breach, it shall waive the defense
that a remedy at law would be adequate.
(b) Governing
Law.
This
Agreement shall be subject to the exclusive jurisdiction of the courts of New
York County, New York. The parties to this Agreement agree that any breach
of
any term or condition of this Agreement shall be deemed to be a breach occurring
in the State of New York by virtue of a failure to perform an act required
to be
performed in the State of New York and irrevocably and expressly agree to submit
to the jurisdiction of the courts of the State of New York for the purpose
of
resolving any disputes among the parties relating to this Agreement or the
transactions contemplated hereby. The parties irrevocably waive, to the fullest
extent permitted by law, any objection which they may now or hereafter have
to
the laying of venue of any suit, action or proceeding arising out of or relating
to this Agreement, or any judgment entered by any court in respect hereof
brought in New York County, New York, and further irrevocably waive any claim
that any suit, action or proceeding brought in New York County, New York has
been brought in an inconvenient forum.
6
(c) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, unless the same shall be in writing
and
signed by the Company and each of the Holders. Notwithstanding the foregoing,
a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders and that does not directly
or
indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities to which such waiver or consent
relates; provided,
however,
that
the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding
sentence.
(d) Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be in writing and shall be deemed given and effective
on the earlier of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified for
notice prior to 5:00 p.m., Eastern time, on a Business Day, (ii) the Business
Day after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile telephone number specified for notice later
than
5:00 p.m., Eastern time, on any date and earlier than 11:59 p.m., Eastern time,
on such date, (iii) the Business Day following the date of mailing, if sent
by
nationally recognized overnight courier service or (iv) actual receipt by the
party to whom such notice is required to be given. The addresses for such
communications shall be with respect to each Holder at its address set forth
under its name on the signature page hereto, or with respect to the Company,
addressed to:
Xxxxxx,
Inc.
000
Xxxxxxx Xxxx
Xxxx
Xxxx, Xxx Xxxx 00000
Attn:
Chief Executive Officer
Facsimile:
000-000-0000
or
to
such other address or addresses or facsimile number or numbers as any such
party
may most recently have designated in writing to the other parties hereto by
such
notice. Copies of notices to the Company shall be sent to Xxxx Xxxxxxx, P.C.,
1350 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxxxx
X. Xxxxxxxx, Esq., Facsimile No. 212-245-3009. Notices to any Holder shall
be
sent to the address listed on Schedule 1 attached hereto, if applicable.
(e) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns and shall inure to the benefit of each
Holder and its successors and assigns. The Company may not assign this Agreement
or any of its rights or obligations hereunder without the prior written consent
of each Holder. The Specified Holder may assign its rights hereunder to the
Principal Shareholders (as defined in the Purchase Agreement) in the manner
as
permitted under this Agreement.
7
(f) Assignment
of Registration Rights.
The
rights of any of the Specified Holders hereunder, including the right to have
the Company register for resale Registrable Securities in accordance with the
terms of this Agreement, shall be assigned only to the Principal Shareholders
(as defined in the Purchase Agreement).
(g) Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature
is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
(h) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
(i) Severability.
If any
term, provision, covenant or restriction of this Agreement is held to be
invalid, illegal, void or unenforceable in any respect, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain
in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their reasonable efforts to find and employ
an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would
have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void
or
unenforceable.
(j) Headings.
The
headings herein are for convenience 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]
8
In
Witness Whereof,
the
parties hereto have caused this Registration Rights Agreement to be duly
executed by their respective authorized persons as of the date first indicated
above.
| COMPANY: | XXXXXX, INC. | |
| |
|
|
| By: | /S/ W. Xxxx Xxxxxxx | |
|
Name: W. Xxxx Xxxxxxx |
||
| Title: President and CEO | ||
| SPECIFIED HOLDER: | ||
| REGAL MEDICAL SUPPLY, LLC | ||
| |
|
|
| By: | /S/ Xxxx Xxxx Xxxxx | |
|
Name: Xxxx Xxxx Xxxxx |
||
| Title: President | ||
Schedule
1
Regal
Medical Supply, LLC
000
Xxxxxx Xxxxxxx
Xxxxx
0
Xxxxxxxx,
XX 00000
Attn:
Xxxx Xxxxx
