EXHIBIT 10.3
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
February 28, 2006, is by and among Gentiva Health Services, Inc., a Delaware
corporation ("Parent"), and Xxxxxx X. Xxxxxxx, as the representative of the
Stockholders of Parent listed on Schedule I hereto (all of whom are former
Securityholders of The Healthfield Group, Inc., a Delaware corporation
("Healthfield")) (each, a "Stockholder").
RECITALS
WHEREAS, pursuant to the Agreement and Plan of Merger (the "Merger
Agreement"), dated as of January 4, 2006, by and among Parent, Xxxx Acquisition
Sub Corp., a Delaware corporation and a wholly-owned subsidiary of Parent
("Merger Sub"), Healthfield, Xxxxxx X. Xxxxxxx, individually as a Securityholder
of Healthfield and as the representative of the Securityholders of Healthfield
(the "Stockholder Representative") and the Securityholders named therein, Merger
Sub was merged with and into Healthfield;
WHEREAS, by virtue of the Merger, each Stockholder was issued and
beneficially owns the shares of common stock of Parent, par value $.10 per share
set forth opposite such Stockholder's name on Schedule I hereto (together with
any common stock or other securities of Parent issued as a dividend or other
distribution with respect thereto, or in exchange therefor, or in replacement
thereof, the "Parent Common Stock");
WHEREAS, this Agreement is made pursuant to the Merger Agreement to
set forth Parent's and the Stockholders' understanding as to the registration
rights and other rights and obligations of the parties with respect to such
Parent Common Stock;
NOW, THEREFORE, in consideration of the foregoing premises and mutual
promises made herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms shall
have the following meanings:
"Agreement" has the meaning set forth in the introductory
paragraph hereof.
"Affiliate" has the meaning set forth in Rule 144.
"Beneficially own" has the meaning set forth in Rule 13d-3, as
in effect on the date hereof, under the Exchange Act.
"Blockage Notice" has the meaning set forth in Section 2.5(c)
hereof.
"Blockage Period" has the meaning set forth in Section 2.5(c)
hereof.
"Board of Directors" means the board of directors of Parent.
"Business Day" means any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by Law to be closed in the
City of New York. If any payment or other obligation is due to be made or
performed hereunder on a day that is not a Business Day, such payment or other
obligation shall be made or performed on the next Business Day.
"Commission" means the United States Securities and Exchange
Commission and any successor agency.
"Healthfield" has the meaning set forth in the Recitals hereof.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder.
"Filing Deadline" has the meaning set forth in Section 2.1(a)
hereof.
"Merger Agreement" has the meaning set forth in the Recitals
hereof.
"Merger Sub" has the meaning set forth in the Recitals hereof.
"NASD" means the National Association of Securities Dealers,
Inc. or any of its subsidiaries.
"Officer's Certificate" has the meaning set forth in Section 2.2
hereof.
"Parent" has the meaning set forth in the introductory paragraph
hereof.
"Person" means any individual, firm, corporation, partnership,
limited partnership, limited liability company, association, trust,
unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.
"Piggyback Notice" has the meaning set forth in Section 2.3(a)
hereof.
"Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement or
similar document with the Commission in compliance with the Securities Act and
the declaration or ordering by the Commission of effectiveness of such
registration statement or document.
"Registrable Stock" means at any time, the shares of Parent
Common Stock owned by the Stockholders, whether owned on the date hereof or
acquired hereafter, provided, however, that shares of Registrable Stock shall
not include any shares (i) the sale of which has been registered pursuant to the
Securities Act and which shares have been sold pursuant to such registration or
(ii) which are eligible for sale under Rule 144(k) without any volume, manner of
sale or other restriction.
"Registration Expenses" means any and all expenses incident to
the performance of or compliance with any registration or marketing of
securities pursuant to Article 2, including (a) the fees, disbursements and
expenses of Parent's counsel and accountants in connection with this Agreement
and the performance of Parent's obligations hereunder (including the expenses of
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any annual audit letters and "cold comfort" letters required or incidental to
the performance of such obligations); (b) all expenses, including filing fees,
in connection with the preparation, printing and filing of any registration
statement, any preliminary prospectus or final prospectus, any other offering
document and amendments and supplements thereto and the mailing and delivering
of copies thereof to any underwriters and dealers; (c) the cost of printing and
producing any agreements among underwriters, underwriting agreements, selling
group agreements and any other customary documents in connection with the
marketing of securities pursuant to Article 2; (d) all expenses in connection
with the qualification of the securities to be disposed of for offering and sale
under state securities laws, including the reasonable fees and disbursements of
counsel for the underwriters or the Stockholders in connection with such
qualification and in connection with any "blue sky" and legal investment
surveys, including the cost of printing and producing any such "blue sky" or
legal investment surveys; (e) the filing fees incident to securing any required
review by the National Association of Securities Dealers, Inc. of the terms of
the securities being registered pursuant to Article 2; (f) transfer agents' and
registrars' fees and expenses and the fees and expenses of any other agent or
trustee appointed in connection with such offering; (g) all security engraving
and security printing expenses; (h) all fees and expenses payable in connection
with the listing of the securities on any securities exchange or automated
interdealer quotation system; (i) the costs and expenses of Parent and its
officers relating to analyst or investor presentations, if any, or any "road
show" undertaken in connection with the registration and/or marketing of any
shares of Registrable Stock other than as provided in any underwriting agreement
entered into in connection with such offering; and (j) the reasonable fees and
expenses of no more than one legal counsel to the Stockholders selected by the
Stockholder Representative for each registration statement, as applicable. In no
event shall Registration Expenses be deemed to include underwriting discounts
and commissions, brokerage fees and transfer taxes, if any.
"Rule 144" means Rule 144 promulgated under the Securities Act
as in effect on the date hereof and such rule as from time to time amended and
any successor rule or regulation under the Securities Act.
"Rule 415 Offering" means an offering on a delayed or continuous
basis pursuant to Rule 415 (or any successor rule to similar effect) promulgated
under the Securities Act.
"Securities Act" means the United States Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder.
"Selling Stockholder" means any Stockholder whose shares of
Registrable Stock is included at the request of such Stockholder in the relevant
registration statement.
"Shelf Registration Statement" means a registration statement of
Parent relating to a Rule 415 Offering which covers the resale of all of the
shares of Registrable Stock held by the Stockholders, on Form S-3 under the
Securities Act, or if not eligible to use Form S-3, such other form, and all
amendments and supplements to such registration statement, on the form under the
Securities Act the Parent is then eligible to use, including post-effective
amendments, in each case including the prospectus contained therein, all
exhibits thereto and all materials incorporated by reference therein.
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"Stockholder Representative" has the meaning set forth in the
Recitals hereof.
"Stockholder" has the meaning set forth in the introductory
paragraph hereof, and shall be deemed to include any other Person owning Parent
Common Stock by reason of being a transferee of any Stockholder in accordance
with either Section 2.8(b) or Section 2.8(d) hereof.
"Transfer" means any direct or indirect sale, assignment,
pledge, transfer, hedge, swap or other disposition, whether or not for value.
All other capitalized terms not defined herein shall have the
meaning set forth in the Merger Agreement.
ARTICLE 2
REGISTRATION
2.1 Shelf Registration Statement.
(a) Shelf Registration Statement. Parent shall, on the terms and
conditions hereinafter provided, use its commercially reasonable efforts to
cause to be filed a Shelf Registration Statement, no later than the date which
is 90 days after the date hereof (the "Filing Deadline"), and thereafter proceed
to use its commercially reasonable efforts to cause such Shelf Registration
Statement to be declared effective by the Commission no later than nine months
after the date hereof. Subject to the terms of this Agreement, Parent agrees to
use commercially reasonable efforts to keep the Shelf Registration Statement
continuously effective from the date the Commission declares the Shelf
Registration Statement effective until the earlier of (i) the first date that
the Stockholders or any permitted assignee ceases to hold any shares of
Registrable Stock; or (ii) three years from the date the Registration Statement
has been declared effective by the Commission, provided, that such three-year
period shall be extended by the number of days equal to the cumulative sum of
the number of days representing all Blockage Periods (including any extension
thereof) invoked by Parent under Section 2.5(c). At least twenty-four hours
prior to the filing, the Shelf Registration Statement (and each amendment
thereto, as well any supplement to the prospectus contained therein) shall be
provided to the Stockholders' legal counsel (such counsel being one law firm
designated by the Stockholder Representative) prior to its filing with or other
submission to the Commission.
(b) Adjustment. If at any time the outstanding shares of Registrable
Stock as a class shall have been increased, decreased, changed into or exchanged
for a different number or class of shares or securities as a result of a
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split, combination or exchange of shares or other similar change
in capitalization, then an appropriate and proportionate adjustment shall be\
made to the number of shares of such stock to be registered on the Shelf
Registration Statement.
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(c) Notice of Intended Use of Prospectus. If, at any time on or after
the date which is nine months after the Closing Date, any Stockholder intends to
use or deliver the prospectus forming a part of the Shelf Registration Statement
(or any prospectus supplement or amendment thereto) in connection with any offer
or sale of shares of Registrable Stock covered thereby, such Stockholder shall
first give written notice thereof to Parent at least five (5) Business Days
prior to the first date such prospectus or prospectus supplement will be used or
delivered by such Stockholder in connection with such offer or sale. If
applicable, by the close of business on the Business Day following its receipt
of such notice, Parent shall provide a Blockage Notice to the Stockholder
Representative of any blockage of registration rights pursuant to Section
2.5(c).
2.2 Postponement. Parent shall be entitled to postpone for a period
of time of up to thirty (30) days from the Filing Deadline, the filing of the
Shelf Registration Statement, if Parent furnishes to the Stockholder
Representative, an officer's certificate executed by the Chief Executive Officer
or Chief Financial Officer of Parent ("Officer's Certificate") (subject to the
Stockholders entering into a customary confidentiality obligation as to such
information, which the Stockholders hereby agree to do) stating that Parent or
any of its subsidiaries is engaged in confidential negotiations or other
confidential business activities (or any such executive officer determines that
Parent is at such time otherwise in possession of material non-public
information with respect to Parent or any of its subsidiaries), disclosure of
which, upon the advice of Parent's legal counsel, would be required by
applicable Law in such registration statement, and not otherwise in a report
filed or furnished to the Commission, and Parent determines in good faith that
such disclosure would be detrimental to Parent and its stockholders other than
the Stockholders along with an approximation of the anticipated delay. Any such
postponement of the filing of a registration statement pursuant to this Section
2.2 shall be lifted not later than the thirtieth (30th)day after expiration of
the Filing Deadline, and notice to the Stockholder Representative shall promptly
be given and the registration statement shall be filed forthwith.
2.3 Piggyback Underwritten Offerings
(a) Right to Piggyback. In the event that Parent shall seek to
undertake an underwritten registered offering of Parent Common Stock, whether or
not for sale for its own account (except in the case of an offering registered
on Form S-4 or Form S-8 (or any successor form of either) for the registration
of securities to be offered in a transaction of the type referred to in Rule 145
of the Securities Act or to be offered to directors, officers and employees of
and/or consultants to Parent or any of its subsidiaries), it shall give the
Stockholder Representative written notice (the "Piggyback Notice") at least
thirty (30) Business Days before the initial filing with the Commission of its
intention to do so and of the rights of the Stockholders under this Section 2.3.
Upon receipt of a Piggyback Notice, the Stockholder Representative shall
promptly notify all Stockholders of such Piggyback Notice. Subject to the terms
and conditions hereof, such notice shall offer each Stockholder the opportunity
to include in such registration statement such number of shares of Registrable
Stock as such Stockholder may request (subject to Section 2.3(c)).
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(b) Notice of participation in Piggyback Offerings. The Stockholder
Representative shall advise Parent in writing within ten (10) Business Days
after the date of receipt of a Piggyback Notice, specifying the number of shares
of Registrable Stock, if any, each such Stockholder seeks to include in such
underwritten offering. Parent shall thereupon include in such underwritten
offering the number of shares of Registrable Stock so requested by such
Stockholders to be included, subject to Section 2.3(c), and shall use
commercially reasonable efforts to effect the registration under the Securities
Act of all shares of Registrable Stock which Parent has been so requested to
register, provided, that if at any time after giving a written notice of its
intention to register any shares of Registrable Stock and prior to the effective
date of the registration statement filed in connection with such registration,
Parent shall determine for any reason not to undertake an underwritten
registered offering, Parent may, at its election, give written notice of such
determination to the Stockholder Representative and thereupon Parent shall be
relieved of its obligation to register such shares of Registrable Stock.
(c) Priority on Piggyback Offerings. Subject to Section 2.3(d), if
the managing underwriter of the underwritten offering pursuant to which shares
of Registrable Stock is included pursuant to this Section 2.3 advises Parent in
writing that, in its good faith view, the inclusion of all or a part of such
shares of Registrable Stock in such registration would be likely to have an
adverse effect upon the price, timing or distribution of the offering and sale
of the shares of Parent Common Stock then contemplated, Parent shall include in
such underwritten offering:
(i) first, all the shares of Parent Common Stock that Parent proposes
to sell for its own account; and
(ii) second, shares of Registrable Stock (allocated as necessary, on a
pro rata basis in accordance with the number of securities
proposed to be included in such registration by all participating
Stockholders), which in the good faith view of such managing
underwriter, can be so sold without so adversely affecting such
offering in the manner described above.
(d) Over-allotment Option. Notwithstanding anything to the contrary
herein, if in the first underwritten registered offering of Parent Common Stock
by Parent for its own account following the date hereof, the underwriters of the
underwritten offering exercise an over-allotment option granted by Parent in
connection therewith, Parent shall include in such registration such number of
shares of Registrable Stock as such Selling Stockholders may request, up to the
full amount of such over-allotment option, and without regard to the limitations
in Section 2.3(c) hereof.
2.4 Expenses. Except as provided herein, Parent shall pay all Registration
Expenses under this Article 2 with respect to a particular offering (or proposed
offering). Each Selling Stockholder shall bear the fees and expenses of its own
counsel as well as all underwriting discounts and commissions, brokerage fees
and taxes.
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2.5 Registration Procedures.
(a) Actions to be Taken by Parent. If and when Parent is required to
effect the registration of any shares of Registrable Stock under the Securities
Act as provided in Sections 2.1 or 2.3, Parent shall as promptly as practicable,
but subject to the other provisions of this Agreement:
(i) prepare and file with the Commission a registration statement on
any appropriate form under the Securities Act with respect to such shares of
Registrable Stock and thereafter use its commercially reasonable efforts to
cause such registration statement to become effective as promptly as practicable
under the circumstances and to remain effective for the period set forth in
Section 2.1(a)(ii);
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement until the
earlier of such time as all of such securities have been disposed of in
accordance with the intended methods of distribution thereof;
(iii) furnish to Stockholders such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus),
any documents incorporated by reference therein and such other documents as
Stockholders may reasonably request in order to facilitate the disposition of
the shares of Registrable Stock owned by Stockholders (it being understood that,
subject to Section 2.3(c) and the requirements of the Securities Act and
applicable state securities laws, Parent consents to the use of the prospectus
and any amendment or supplement thereto by Stockholders in connection with the
offering and sale of the shares of Registrable Stock covered by the registration
statement of which such prospectus, amendment or supplement is a part);
(iv) use its commercially reasonable efforts to register or qualify
such shares of Registrable Stock under such other securities or blue sky laws of
such jurisdictions within the United States of America as Stockholders may
reasonably request; use its commercially reasonable efforts to keep each such
registration or qualification (or exemption therefrom) effective during the
period in which such registration statement is required to be kept effective and
take any other action which may be reasonably necessary or advisable to enable
Stockholders to consummate the disposition in such jurisdictions of the shares
of Registrable Stock being disposed of by Stockholders, provided, however, that
Parent will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subparagraph or (B) consent to general service of process in any such
jurisdiction;
(v) promptly notify the Stockholder Representative (A) when the
registration statement, any prospectus or any prospectus supplement or
post-effective amendment has been filed and, with respect to a registration
statement or any post-effective amendment, when the same has become effective,
(B) of the issuance by any state securities or other regulatory authority of any
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order suspending the qualification or exemption from qualification of any of the
shares of Registrable Stock under state securities or "blue sky" laws or the
initiation of any proceedings for that purpose and (C) of the happening of any
event which makes any statement made in a registration statement or related
prospectus untrue or which requires the making of any changes in such
registration statement, prospectus or documents so that they will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading (or with respect to the prospectus, in light of the circumstance
under which such statements were made), and, subject to Section 2.5(c), as
promptly as reasonably practicable thereafter, prepare and file with the
Commission and furnish a supplement or amendment to such prospectus so that, as
thereafter deliverable to the purchasers of such shares of Registrable Stock,
such prospectus will not contain any untrue statement of a material fact or omit
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(vi) if requested by the Stockholder Representative, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the Stockholder Representative reasonably requests to be included
therein and promptly make all required filings of such prospectus supplement or
post-effective amendment;
(vii) as promptly as reasonably practicable after the filing with the
Commission of any document which is incorporated by reference into a
registration statement (in the form in which it was incorporated), deliver
copies of each such document to the Stockholder Representative;
(viii) cooperate with the Stockholder Representative to facilitate
the timely preparation and delivery of certificates (which shall not bear any
restrictive legends unless required under applicable law) representing
securities sold under any registration statement, and enable such securities to
be in such denominations and registered in such names as the Stockholder
Representative may request and keep available and make available to Parent's
transfer agent prior to the effectiveness of such registration statement a
supply of such certificates;
(ix) cause the shares of Registrable Stock included in any
registration statement to be listed on each securities exchange, if any, on
which the Parent Common Stock is then listed;
(x) provide a transfer agent and registrar for all shares of
Registrable Stock registered hereunder and provide a CUSIP number for the shares
of Registrable Stock included in any registration statement not later than the
effective date of such registration statement;
(xi) cooperate with the Stockholder Representative and his counsel in
connection with any filings required to be made with the NASD;
(xii) during the period when the prospectus is required to be
delivered under the Securities Act, promptly file all documents required to be
filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act;
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(xiii) notify Stockholder Representative promptly of any request by
the Commission for the amending or supplementing of such registration statement
or prospectus or for additional information;
(xiv) prepare and file with the Commission as promptly as reasonably
practicable any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for Parent, is required in
connection with the distribution of the shares of Registrable Stock; and
(xv) advise the Stockholder Representative, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop order by
the Commission suspending the effectiveness of such registration statement or
the initiation or threatening of any proceeding for such purpose and promptly
use its commercially reasonable efforts to prevent the issuance of any stop
order or to obtain its withdrawal at the earliest possible moment if such stop
order should be issued;
(xvi) use reasonable efforts to obtain from its counsel an opinion or
opinions in customary form for delivery to the Stockholder Representative; and
(xvii) in the event of an underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering.
(b) Information to be Provided by Stockholders. Parent may require
the Stockholders to furnish to Parent such information regarding the
Stockholders and the distribution of the shares of Registrable Stock as Parent
may from time to time reasonably request in writing in connection with Parent's
performance of its obligations hereunder.
(c) Blockage Period. If (i) there has been or there is pending a
material development or change in the business, affairs or prospects of Parent
or any of its subsidiaries; (ii) Parent's U.S. securities counsel has advised
Parent in writing that such material development or change should be disclosed
in the Shelf Registration Statement, the prospectus included therein, or an
amendment or supplement thereto in order to ensure that the Shelf Registration
Statement and such prospectus, as amended or supplemented, will not contain any
misstatement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading (or
with respect to the prospectus, in light of the circumstance under which such
statements were made); and (iii) in the good faith judgment of the Chief
Executive Officer or the Chief Financial Officer of Parent, disclosure of such
development or change would either (x) have a material adverse effect on the
business or operations of Parent or (y) if the disclosure otherwise relates to a
material financing or acquisition of assets which has not yet been disclosed and
such disclosure would have a material adverse effect on the likelihood of
consummating such material transaction, then Parent may deliver written
notification to the Stockholder Representative on behalf of all Stockholders
that shares of Registrable Stock may not be sold pursuant to the Shelf
Registration Statement (a "Blockage Notice"). Upon receipt of a Blockage Notice,
the Stockholder Representative shall promptly notify all Stockholders of such
Blockage Notice. No Stockholder shall sell any shares of Registrable Stock
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pursuant to the Shelf Registration Statement for the period (the "Blockage
Period") beginning on the date such Blockage Notice was received by the
Stockholder Representative and ending on the date on which Parent notifies the
Stockholder Representative that the Blockage Period has ended which Blockage
Period shall not exceed an aggregate of ninety (90) days in any calendar year,
provided, that such Blockage Period shall be extended for any period, not to
exceed forty-five (45) days in any calendar year, during which the Commission is
reviewing any proposed amendment to the Shelf Registration (and Parent agrees
promptly to notify the Stockholder Representative if the circumstances giving
rise to such Blockage Period no longer apply). Parent shall promptly prepare and
file any amendment or supplement to the Shelf Registration Statement or the
prospectus included therein necessary so that at the conclusion of the Blockage
Period, the Shelf Registration Statement and the prospectus included therein do
not contain any misstatements of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading (or with respect to the prospectus, in light of the circumstance
under which such statements were made) and notify the Stockholder Representative
of such amendment or supplement and of the conclusion of the Blockage Period.
2.6 Indemnification.
(a) Indemnification by Parent. Parent agrees to indemnify and
reimburse, to the fullest extent permitted by law, the Stockholders and their
respective employees, advisors, agents, representatives, shareholders, members,
partners, officers, and directors and each Person who controls the Stockholder
(within the meaning of the Securities Act or the Exchange Act) and any agent or
investment advisor thereof (collectively, the "Stockholder Affiliates") (i)
against any and all losses, claims, damages, liabilities, judgments and
expenses, joint or several (including reasonable attorneys' fees and
disbursements, subject to Section 2.6(c)) based upon, arising out of, related to
or resulting from any untrue or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
or any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading or any violation or
alleged violation by Parent of the Securities Act, the Exchange Act or any state
securities laws (including any rule or regulation promulgated thereunder), (ii)
against any and all loss, liability, claim, damage, and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any
litigation or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon, arising out of,
related to or resulting from any such untrue statement or omission or alleged
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untrue statement or omission or violation or alleged violation and (iii) against
any and all costs and expenses (including fees and disbursements of counsel) as
may be reasonably incurred in investigating, preparing, or defending against any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon, arising out of,
related to or resulting from any such untrue statement or omission or alleged
untrue statement or omission or violation or alleged violation to the extent
that any such expense or cost is not paid under clauses (i) or (ii) above,
provided, however, that Parent shall not be liable in any such case to the
extent that such statements are made in reliance upon and in strict conformity
with information furnished in writing to Parent by the Stockholders or any
Stockholder Affiliate expressly for use therein or arise from the Stockholders'
or any Stockholder Affiliate's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after Parent
has furnished the Stockholder Representative or such Stockholder Affiliate with
a sufficient number of copies of the same. The reimbursements required by this
Section 2.6(a) will be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred,
provided further that the indemnification shall not apply to losses, claims,
damages or liabilities attributable to a failure of a Stockholder, underwriter
or other Person on their behalf to comply with a Blockage Notice.
(b) Indemnification by the Stockholders. In connection with any
registration statement in which Stockholders are participating, the Stockholders
will furnish to Parent in writing such information as Parent reasonably requests
for use in connection with any such registration statement or prospectus and, to
the fullest extent permitted by law, each Stockholder will severally and not
jointly indemnify and reimburse Parent and its employees, advisors, agents,
representatives, officers (who have signed the registration statement) and
directors and each Person who controls Parent (within the meaning of the
Securities Act or the Exchange Act) against any and all losses, claims, damages,
liabilities, judgments and expenses (including reasonable attorneys' fees and
disbursements, subject to Section 2.6(c)) based upon, arising out of, related to
or resulting from any untrue or alleged untrue statement of a material fact
contained in such registration statement, prospectus, or such preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein in light of the circumstances under which they
were made not misleading or any violation or alleged violation by the
Stockholders of the Securities Act, the Exchange Act or any state securities
laws (including any rule or regulation promulgated thereunder), but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission or violation or alleged violation is contained in any
information so furnished in writing by Stockholders or any Stockholder Affiliate
specifically for inclusion in such registration statement; provided, that such
liability will be limited to, the net amount received by such Stockholders from
the sale of Registrable Securities pursuant to such registration statement;
provided, however, that Stockholders shall not be liable in any such case to the
extent that prior to the filing of any such registration statement (or amendment
thereof) or prospectus or supplement thereto, Stockholders have furnished in
writing to Parent information expressly for use in such registration statement
(or any amendment thereof) or prospectus or supplement thereto which corrected
or made not misleading information previously furnished to Parent.
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(c) Notice of claims, etc. Each party indemnified under Section
2.6(a) and Section 2.6(b) above shall, promptly after receipt of notice of a
claim or action against such indemnified party in respect of which indemnity may
be sought hereunder, notify the indemnifying party in writing of the claim or
action and the indemnifying party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such indemnified party, and
shall assume the payment of all fees and expenses in connection therewith;
provided that the failure of any indemnified party so to notify the indemnifying
party shall not relieve the indemnifying party of its obligations hereunder
except to the extent that the indemnifying party is materially prejudiced by
such failure to notify, but the omission so to notify the indemnifying party
will not relieve it of any liability it may have to any indemnified party
otherwise under this Section 2.6 hereof. In any such action, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the sole expense of such indemnified party unless
(i) the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel or (ii) the indemnifying party shall have
failed to assume the defense of such action or engage counsel reasonably
satisfactory to the indemnified party or (iii) in the reasonable judgment of
such indemnified party representation of both parties by the same counsel would
be inappropriate due to material differing interests between them or there may
be one or more legal defenses available to the indemnified party that are
different from or additional to those available to such the indemnified party
or, in which case the reasonable fees and expenses of such counsel shall be at
the sole expense of the indemnifying party. It is understood that the
indemnifying party shall not, in connection with any claim or action or related
proceeding in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to one local
counsel) at any time for all such indemnified parties, and that all such
reasonable fees and expenses shall be reimbursed as they are incurred. In the
case of any such separate firm for the Stockholders as indemnified parties, such
firm shall be designated in writing by the indemnified party or the indemnified
parties holding a majority of the shares of Registrable Stock included in such
registration. The indemnifying party shall not be liable for any settlement of
any claim or action effected without its written consent, which consent shall
not be unreasonably withheld or delayed or conditioned, but if settled with such
consent, or if there be a final judgment for the plaintiff, the indemnifying
party shall indemnify and hold harmless such indemnified parties from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of or
consent to the entry of a judgment with respect to any pending or threatened
claim or action in respect of which any indemnified party is or could have been
a party and indemnity or contribution may be or could have been sought hereunder
by such indemnified party, unless such settlement or compromise or judgment
includes an unconditional release of such indemnified party from all liability
arising out of such proceeding.
(d) Contribution. Each party hereto agrees that, if for any reason
the indemnification provisions contemplated by Section 2.6(a) or Section 2.6(b)
are unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities, judgments or expenses (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
12
result of such losses, claims, liabilities, judgments or expenses (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and the indemnified party in connection with the
actions which resulted in the losses, claims, damages, liabilities, judgments or
expenses 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 the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
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 statement or omission; provided that in
no event shall the obligation of any indemnifying party to contribute under this
Section 2.6(d) exceed the amount that such indemnifying party would have been
obligated to pay by way of indemnification if the indemnification provided for
under Section 2.6(a) or Section 2.6(b) had been available under the
circumstances. The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 2.6(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 2.6(d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages,
liabilities, or expenses (or actions in respect thereof) referred to above shall
be deemed to include any legal or other fees or expenses reasonably incurred by
such indemnified party in connection with investigating or, except as provided
in Section 2.6(c), defending any such action or claim. Notwithstanding the
provisions of this Section 2.6(d), no Stockholder shall be required to
contribute an amount greater than the dollar amount by which the net proceeds
received by such Stockholder with respect to the sale of any Registrable
Securities exceeds the amount of damages which such Stockholder has otherwise
been required to pay by reason of any and all untrue or alleged untrue
statements of material fact or omissions or alleged omissions of material fact
made in any registration statement, (including any amendment thereto) or any
prospectus or supplement thereto related to such sale of Registrable Stock. The
Stockholders' obligation to contribute pursuant to this Section 2.6(d) are
several and not joint. 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. If indemnification is available under this Section 2.6, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Section 2.6(a) and Section 2.6(b) without regard to the relative
fault of said indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 2.6(d) subject, in the case of
Stockholders, to the limits set forth in Section 2.6(b).
(e) The indemnification and contribution provided for under this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director, or
controlling Person of such indemnified party and will survive the Transfer of
Registrable Stock.
2.7 Rule 144. Parent shall use commercially reasonable efforts to ensure that
the conditions to the availability of Rule 144 set forth in paragraph (c)
thereof shall at all times be satisfied in order to permit resales of the
Registrable Stock by the Stockholders thereunder.
13
2.8 Transfer Restrictions
(a) Lock-up Period. Notwithstanding anything to the contrary herein,
each Stockholder hereby agrees that (i) such Stockholder shall not Transfer any
of the shares of Parent Common Stock received in the Merger for a period of nine
(9) months following the date hereof other than as provided by Section 2.3(d)
hereof and Section 2.8(d) hereof, and (ii) such Stockholder shall not Transfer
more than fifty percent (50%) of the shares of Parent Common Stock received in
the Merger (less any shares Transferred pursuant to clause (i) above) for a
period of twelve (12) months following the expiration of such nine month period
in the preceding clause.
(b) Additional Transfer Restrictions. Each Stockholder further
agrees, other than as contemplated in clause (i) of Section 2.8(a) hereof, not
to make any Transfer of all or any portion of its Registrable Stock (or any
right or interest therein) unless and until:
(i) there is then in effect a registration statement under the
Securities Act covering such proposed Transfer and such Transfer
is made in accordance with such registration statement; or
(ii) (a) such Transfer is made in accordance with Rule 144 under the
Securities Act and Parent has received an opinion of counsel for
such Stockholder (which opinion may rely on customary
certifications as to factual matters), reasonably satisfactory to
Parent, that such transfer is made in accordance with Rule 144
under the Securities Act; or (b) (i) such Transfer is to a
transferee that has agreed in writing to be bound by these
transfer restrictions; (ii) such Stockholder shall have notified
Parent of the proposed Transfer; and (iii) if reasonably
requested by Parent and the transferee is not an Affiliate,
immediate family member, trust or estate of the Stockholder, such
Stockholder shall have furnished Parent with an opinion of
counsel for such Stockholder (which opinion may rely on customary
certifications as to factual matters), reasonably satisfactory to
Parent, that such Transfer does not require registration of the
shares of Registrable Stock under the Securities Act. In
connection with a Transfer pursuant to clause (b) of the
immediately preceding sentence, the transferee of all or any
portion of the shares of Registrable Stock will be deemed a
Stockholder hereunder and a party hereto as soon as Parent
receives (A) written notice stating the name and address of the
transferee and identifying the number of shares of Registrable
Stock, as applicable, transferred, (B) a written agreement, in
form and substance acceptable to Parent and the Stockholder
Representative, from such transferee to Parent whereby such
transferee agrees to be bound by the terms of this Agreement as a
Stockholder and (C) if required under clause (b)(iii) above, the
opinion referred to therein.
14
(c) No Other Transfers. Other than in accordance with Section 2.1
(subject to Section 2.8(a)), Section 2.8(b), Section 2.8(d) or Section 2.5),
Stockholders may not Transfer any shares of Registrable Stock to any Person
(including Affiliates). Any attempted Transfer of shares of Registrable Stock by
Stockholders in violation of this Agreement shall be null and void.
(d) Permitted Transfers. (i) Notwithstanding anything herein to the
contrary, the provisions of Sections 2.8(a), (b), and (c) shall not apply to:
(x) any Transfer of shares of Parent Common Stock by a Stockholder by gift or
bequest or through inheritance to, or for the benefit of, any member or members
of his or her immediate family (which shall include any spouse, lineal ancestor
or descendant or sibling) or to a trust, partnership or limited liability
company for the exclusive benefit of such members, or (y) any Transfer of shares
of Parent Common Stock by a Stockholder to a trust in respect of which he or she
serves as trustee, provided that the trust instrument governing said trust shall
provide that such Stockholder, as trustee, shall retain sole and exclusive
control over the voting and disposition of said shares of Parent Common Stock
until the termination of this Agreement or (z) any Transfer by a Stockholder
which is a corporation to any Affiliate, officer, director, partner, member, or
employee of such Stockholder or, any Transfer by a Stockholder which is a
partnership to a partner of such partnership or a retired partner of such
partnership who retires after the date hereof, or to the estate of any such
partner or retired partner or any Transfer by a Stockholder which is a limited
liability company to a member of such limited liability company or a retired
member who retires after the date hereof or to the estate of any such member or
retired member; and
(ii) In the event of any such Transfer, the transferee of the shares
of Registrable Stock shall be deemed a "Stockholder" hereunder and a party
hereto, and hold such shares so acquired with all the rights conferred by, and
subject to all the restrictions imposed by this Agreement, and as a condition to
such Transfer, each such transferee shall execute and deliver an instrument of
accession in form and substance acceptable to Parent whereby such transferee
agrees to be bound by the provisions of this Agreement.
ARTICLE III
LEGENDS
3.1 Legend. The stock certificates for the shares of Registrable
Stock shall bear the following legend:
"The shares represented by this certificate are subject to certain
obligations and restrictions as set forth in a registration rights
agreement, dated as of February 28, 2006, as it may thereafter be amended,
supplemented or modified, and may not be sold or transferred except in
accordance therewith. A copy of such registration rights agreement is on
file at the principal executive offices of the issuer and may be obtained
upon request."
3.2 Removal of Legend. Upon receipt of a written opinion of counsel
reasonably satisfactory to Parent confirming that either (i) the shares of
Registrable Stock have ceased to be subject to any obligations or restrictions
set forth in this Agreement or (ii) shares of Registrable Stock are being
Transferred in accordance with, and shall not be subject to any Transfer
restrictions after such Transfer pursuant to, the terms and conditions of this
Agreement, Parent shall, upon a Stockholder's written request, issue to such
Stockholder a new certificate evidencing such shares of Registrable Stock
without the legend required by Section 3.1.
15
ARTICLE IV
TERMINATION
4.1 Termination. The provisions of this Agreement shall terminate as
to a particular Stockholder at such time as Stockholder no longer holds any
shares of Registrable Stock.
ARTICLE V
MISCELLANEOUS
5.1 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given (i) when delivered
personally by hand (with written confirmation of receipt), (ii) when sent by
facsimile (with written confirmation of transmission) or (iii) one Business Day
following the day sent by overnight courier (with written confirmation of
receipt), in each case at the following addresses and facsimile numbers (or to
such other address or facsimile number as a party may have specified by notice
given to the other party pursuant to this provision):
(a) if to Parent or Healthfield, to:
Gentiva Health Services, Inc.
0 Xxxxxxxxxx Xxxxxxxxxx 000X
Xxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx, General Counsel
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
(b) if to the Stockholder Representative, to:
Xxxxxx X. Xxxxxxx
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
16
with a copy (which shall not constitute notice) to:
Xxxxxxxxx Traurig, LLP
The Forum
0000 Xxxxxxxxx Xxxxxxx, XX
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
5.2 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware, applicable to contracts
executed in and to be performed entirely within that State.
5.3 Submission to Jurisdiction. All actions and proceedings arising
out of or relating to this Agreement shall be heard and determined in the
Chancery Court of the State of Delaware or any federal court sitting in the
Delaware, and the parties hereby irrevocably submit to the exclusive
jurisdiction of such courts (and, in the case of appeals, appropriate appellate
courts therefrom) in any such action or proceeding. The parties irrevocably
waive the defense of an inconvenient forum to the maintenance of any such action
or proceeding. The consents to jurisdiction set forth in this paragraph shall
not constitute general consents to service of process in the State of Delaware
and shall have no effect for any purpose except as provided in this paragraph
and shall not be deemed to confer rights on any Person other than the parties.
The parties agree that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by applicable law.
5.3 Successors and Assigns. Except as provided in Section 2.8 or the
last sentence of this Section 5.3, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, in whole or in part, by
operation of Law or otherwise, by any of the parties without the prior written
consent of the other parties, provided that the Stockholder Representative may
provide consent for an on behalf of all Stockholders. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and permitted
assigns.
5.4 Amendment and Waivers. No failure or delay on the part of Parent
or Stockholders in exercising any right, power or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to Parent
or Stockholder at law or in equity or otherwise. Any provision of this Agreement
may be amended, supplemented, modified or waived if, but only if, such
amendment, supplement, modification or waiver is in writing and is signed by the
party against whom enforcement of any such amendment, supplement, modification
or waiver is sought.
17
5.5 Severability. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any law or public policy,
all other terms or provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal, or incapable of being enforced, the parties hereto, with
the Stockholder Representative acting on behalf of all Stockholders, shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
5.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement. This Agreement may be executed by facsimile or other
electronic means.
5.7 Entire Agreement. This Agreement (including the Schedule attached
hereto) constitutes the entire agreement, and supersede all other prior
agreements and understandings, both written and oral, among the parties, or any
of them, with respect to the subject matter hereof and thereof and, except as
provided in Section 2.6 hereof, is not intended to and shall not confer upon any
Person other than the parties any rights or remedies hereunder. The parties
agree that time is of the essence with respect to the performance of all
obligations provided in this Agreement and effectuation of the transactions
contemplated thereby.
5.8 Specific Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in the Chancery Court of the State of
Delaware or any federal court sitting in Delaware, without bond or other
security or proof of damages being required, this being in addition to any other
remedy to which they are entitled at law or in equity.
5.9 Rules of Construction. Unless the context otherwise requires, the
singular shall include the plural and vice-versa, each pronoun in any gender
shall include all other genders, and provisions apply to successive events and
transactions. The words "hereof", "hereby", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. The word
"including" or any variation thereof means "including, without limitation" and
shall not be construed to limit any general statement that it follows to the
specific or similar items or matters immediately following it. The titles and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK **
18
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be executed as of the date first written above.
GENTIVA HEALTH SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President, Chief Financial
Officer & Treasurer
/s/ Xxxxxx X. Xxxxxxx
------------------------------------------------------
XXXXXX X. XXXXXXX, as Stockholder Representative,
pursuant to Power of Attorney
19
REGISTRATION RIGHTS AGREEMENT
SCHEDULE I
----------
STOCKHOLDERS AND PARENT COMMON STOCK HELD
------------------------------------------------------------------------------ --------------------------
STOCKHOLDER PARENT COMMON STOCK HELD
------------------------------------------------------------------------------ --------------------------
------------------------------------------------------------------------------ --------------------------
Xxxxxx X. Xxxxxxx 1,404,153
------------------------------------------------------------------------------ --------------------------
Xxxxxx X. Xxxxxxx 2005 Grantor Retained Annuity Trust 119,170
------------------------------------------------------------------------------ --------------------------
H. Xxxxxxx Xxxxxxx 168,797
------------------------------------------------------------------------------ --------------------------
Estate of Xxxx X. Xxxxx, Xx. 158,613
------------------------------------------------------------------------------ --------------------------
Xxx Xxxx 23,878
------------------------------------------------------------------------------ --------------------------
Xxxxxxx X. Xxxxxxx 155,254
------------------------------------------------------------------------------ --------------------------
Xxxx X. Xxxxxx 101,466
------------------------------------------------------------------------------ --------------------------
Xxxxxxx X. Xxxxxxx 74,756
------------------------------------------------------------------------------ --------------------------
Xxxxx Xxxxxxxxxxx 32,003
------------------------------------------------------------------------------ --------------------------
Xxxxxx X. Xxxxxxxxx 23,878
------------------------------------------------------------------------------ --------------------------
Xxxx X. Xxxxxxxxx 32,003
------------------------------------------------------------------------------ --------------------------
RT Management, LLC 158,801
------------------------------------------------------------------------------ --------------------------
Xxxxxx X. Xxxxxxx 121,127
------------------------------------------------------------------------------ --------------------------
Xxxxxx X. Xxxxxx Living Trust Dated May 3, 2001 32,491
------------------------------------------------------------------------------ --------------------------
Sound Captial, LLC 26,671
------------------------------------------------------------------------------ --------------------------
Hospice Services, Inc. 351,552
------------------------------------------------------------------------------ --------------------------
Xxxxx Xxxxxx 79,551
------------------------------------------------------------------------------ --------------------------
Chatham Investment Fund II, LLC 59,663
------------------------------------------------------------------------------ --------------------------
Xxx Xxxxxx 70,310
------------------------------------------------------------------------------ --------------------------
TOTAL: 3,194,137
------------------------------------------------------------------------------ --------------------------
