EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT dated as of November 7, 1996 (the
"Effective Date") between EXIGENT DIAGNOSTICS, INC., a Delaware corporation (the
"Company") and SMITHKLINE XXXXXXX CORPORATION, a Pennsylvania corporation
("SmithKline") and SMITHKLINE XXXXXXX DIAGNOSTIC SYSTEMS CO., a Pennsylvania
limited liability company ("SBD", and together with SmithKline, "SKB").
W I T N E S S E T H:
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WHEREAS, pursuant to an Asset Purchase Agreement (the "Purchase
Agreement") dated as of the Effective Date, by and among the Company, SBD and
SmithKline Xxxxxxx Clinical Laboratories, Inc., a Pennsylvania corporation
("SBCL"), the Company has purchased the assets and assumed certain liabilities
of SBD and in consideration therefor has issued to SBD shares of the common
stock, par value $.01 per share, of the Company (the "Common Stock") comprising
five percent of (5%) of all issued and outstanding shares of Common Stock (the
"Purchase Agreement Shares");
WHEREAS, pursuant to the Purchase Agreement, the Company may from time
to time issue to SBD, SBCL or an affiliate thereof additional shares of Common
Stock to prevent the dilution of their equity interest in the Company (the
"Antidilution Shares");
WHEREAS, pursuant to a Loan and Security Agreement (the "Loan
Agreement") and a related Promissory Note (the "Note", and together with the
Loan Agreement, the "Loan Documents"), dated as of October 1, 1996, and amended
on December 11, 1996, by and between the Company and SmithKline, the Company
shall from time to time, at the election of SmithKline or as otherwise required
by the Loan Documents, issue to SmithKline, in exchange for a discharge of
principal due on the Note, shares of Common Stock comprising up to an additional
two percent (2%) of all issued and outstanding shares of Common Stock (the
"Conversion Shares"); and
WHEREAS, the Company desires to provide SKB and its successors and
permitted assigns with certain rights regarding the registration of the Purchase
Agreement Shares and any Antidilution Shares or Conversion Shares issued
pursuant to the Purchase Agreement or the Loan Documents, respectively.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements made herein, and other good valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and accepted, the parties hereto
agree as follows:
1. Definitions. As used herein, unless the context otherwise requires,
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the following terms have the following respective meanings:
"Affiliate" has the meaning set forth in Rule 12b-2 under the Exchange
Act.
"Commission" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"Common Stock" has the meaning set forth in the first WHEREAS clause
of the Recitals.
"Demand" has the meaning set forth in Section 2.1.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar federal statute, and the rules and regulations of the Commission
promulgated thereunder, as the same shall be in effect at the time. Reference to
a particular section of the Securities Exchange Act of 1934, as amended, shall
include reference to the comparable section, if any, of any such subsequent
similar federal statute.
"Investors" means the purchasers of the Private Offering Stock (as
such term is defined in the Purchase Agreement).
"Participating Holder" has the meaning set forth in Section 2.1.4.
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"Person" means any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government or department or
agency of a government.
"Public Offering" has the meaning set forth in Section 2.1.7.
"Registrable Common Securities" means the Purchase Agreement Shares,
and any Antidilution Shares or Conversion Shares.
"Registrable Securities" means collectively the Registrable Common
Securities and any other securities issuable in connection therewith or in
replacement thereof by way of a dividend, distribution, recapitalization,
exchange, merger, consolidation or other reorganization. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (a) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (b) they shall have been sold as permitted by, and in compliance
with, Rule 144 (or any successor provision) promulgated under the Securities Act
or (c) they shall have ceased to be outstanding.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Section 2, including, without limitation, all
registration, filing and National Association of Securities Dealers, Inc. fees,
all listing fees, all fees and expenses of complying with securities or blue sky
laws (including, without limitation, reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Registrable Securities), all word processing, duplicating and printing expenses,
messenger and delivery expenses, the fees and disbursements of counsel for the
Company and counsel for SKB (comprising not more than one outside law firm) and
of the Company's independent public accountants, including the expenses of
"comfort" letters required by or incident to such performance and compliance,
and any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities.
"Securities Act" means the Securities Act of 1933, as amended, or any
subsequent similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
References to a particular section of the Securities Act of 1933, as amended,
shall include a reference to the comparable section, if any, of any such
subsequent similar federal statute.
2. Registration Rights.
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2.1 Registration on Demand.
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2.1.1 Demand. After the earlier of the effective date of the initial
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Public Offering of Common Stock and the fifth (5th) anniversary of the Effective
Date, subject to Section 2.1.7, upon the written request (the "Demand") of SKB
that the Company effect the registration under the Securities Act of all or part
of the Registrable Securities, the Company shall cause to be filed, and shall
take all commercially reasonable actions to effect, as soon as practicable and
in any event, subject to the reasonable cooperation of SKB, within 120 days
after the Demand is received from SKB, the registration under the Securities
Act, of the Registrable Securities which the Company has been so requested to
register by SKB.
2.1.2 Registration of Other Securities. Whenever the Company shall effect
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a registration pursuant to this Section 2.1 in connection with an underwritten
offering by SKB of Registrable Securities, holders of securities of the Company
who have "piggyback" registration rights may include all or a portion of such
securities in such registration, offering or sale. If the managing underwriter
of any such offering shall inform the Company by letter of its belief that the
number or type of securities of the Company requested by holders of the
securities of the Company other than SKB to be included in such registration
would materially and adversely affect the underwritten offering, then the
Company shall include in such registration, to the extent of the number and type
of securities which the Company is so advised can be sold in (or during the time
of) such offering, first, all of the Registrable Securities specified by SKB in
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the Demand and second, for each holder of the Company's securities other than
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SKB, the fraction of such holder's securities proposed to be registered which
is obtained by dividing (i) the number of the securities of the Company that
such holder proposes to include in such registration by (ii) the total number of
securities proposed to be included in such registration by all holders other
than SKB.
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2.1.3 Registration Statement Form. Registrations under this Section 2.1
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shall be on such appropriate registration form of the Commission as shall be
selected by the Company. The Company shall include in any such registration
statement all information which, in the opinion of counsel to the Company, is
required to be included.
2.1.4 Expenses. The Company shall pay the Registration Expenses in
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connection with the Demand registration effected pursuant to this Section 2.1,
other than underwriting discounts and selling commissions relating to the sale
or disposition of Registrable Securities. If a registration requested pursuant
to this Section 2.1 is withdrawn or otherwise not effected, other than at the
request of SKB (whether such request is for pricing or other reasons), the
Company shall pay the Registration Expenses in connection therewith. If the
registration pursuant to a Demand is withdrawn at the request of SKB and if SKB
elects not to have such registration count as its Demand registration under this
Section 2.1, SKB shall pay all the Registration Expenses of such registration,
other than the fees and expenses of counsel to Company or of any other holder of
Common Stock participating in the registration (a "Participating Holder"). At
no time shall SKB be required to pay the underwriting discounts or selling
commissions relating to the sale or disposition of shares of Common Stock by
other Persons, or the fees and expenses of any Participating Holder's or the
Company's counsel, except as required by Section 2.6.2 below.
2.1.5 Effective Registration Statement. A registration requested
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pursuant to this Section 2.1 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has become effective, (ii)
if after it has become effective, such registration is interfered with by any
stop order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason and has not thereafter become
effective, or (iii) in the case of an underwritten offering, if the conditions
to closing specified in the underwriting agreement, if any, entered into in
connection with such registration are not satisfied or waived.
2.1.6 Selection of Underwriters. In connection with each underwritten
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offering, (a) the Company shall promptly select the managing underwriter subject
to the approval of SKB (which approval shall not be unreasonably withheld,
delayed or conditioned by SKB) and (b) SKB shall promptly select the co-managing
underwriter subject to the approval of the Company (which approval shall not be
unreasonably withheld, delayed or conditioned by the Company).
2.1.7 Limitations on Registration on Demand.
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(i) The Company shall not be required to file a registration
statement pursuant to this Section 2.1 which would become effective within (a)
180 days, or such shorter period as agreed to by the managing underwriter for
the Company's initial Public Offering, following the effective date (the "IPO
Effective Date") of a registration statement filed by the Company with the
Commission pertaining to an initial underwritten public offering of convertible
debt securities or equity securities for cash (a "Public Offering") for the
account of the Company, provided that no other holder of the Company's
securities shall have been permitted to participate in such initial Public
Offering, or (b) 120 days following the effective date of a registration
statement (other than a registration statement filed on Form S-8) filed by the
Company with the Commission pertaining to any subsequent Public Offering for the
account of the Company or another holder of securities of the Company if SKB was
afforded the opportunity to include all of its Registrable Securities in such
subsequent registration pursuant to Section 2.2; provided, however, that
notwithstanding anything in this Agreement to the contrary other than Section
2.1.7(iii), the Company shall, at the request of SmithKline pursuant to Section
2.1.1, prepare and file a registration statement pursuant to this Section 2.1
that shall become effective not later than the earlier of (a) 180 days following
the IPO Effective Date and (b) the fifth anniversary of the Effective Date, or
at such other time as SKB and the Company shall mutually agree.
(ii) In no event shall the Company be required to effect more
than one registration pursuant to this Section 2.1.
(iii) Notwithstanding the foregoing, if, in the good faith
determination of the Company's Board of Directors, a registration would
adversely affect certain activities of the Company to the material detriment of
the Company, then the Company may at its option direct that the effective date
of such registration be delayed for a period not in excess of 90 days in the
aggregate from the date of the Company's receipt of the Demand (the "Delay
Period"); provided, however, any action by a Person under a registration or
other agreement with the Company in connection with or triggered by a
registration under this Agreement shall not be considered an adverse effect for
purposes of this sentence; and provided further that if there shall occur any
such delay in a registration hereunder, then SKB shall be entitled to (a) effect
such registration no later
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than any other holder of registration rights, or (b), if the Company shall
effect a Public Offering during any such Delay Period, sell, together with the
Investors, all of their respective Registrable Securities in connection with
such Public Offering, whichever occurs first; provided, however, that if the
managing underwriter of such Public Offering does not agree to include all (or
such lesser amount as SKB shall, in its sole discretion, agree to) of the number
of SKB's Registrable Securities in such registration, then the Company shall
include in such registration, to the extent of the number and type which the
Company is so advised can be sold in (or during the time of) such Public
Offering first, all securities proposed by the Company to be sold for its own
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account, and second, for each of SKB and the Investors, the fraction of such
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holder's securities proposed to be registered which is obtained by dividing (i)
the number of the securities of the Company that such holder proposes to include
in such registration by (ii) the total number of securities proposed to be sold
in such offering by such holders.
2.2 Piggyback Registration.
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2.2.1 Right to Include Registrable Securities. If the Company at any time
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proposes to register any of its securities under the Securities Act by
registration on Forms X-0, X-0, X-0 or any successor or similar form(s) (except
registrations on such Forms or similar forms solely for registration of
securities in connection with (i) an employee benefit plan or dividend
reinvestment plan or a merger or consolidation or (ii) debt securities which are
not convertible into Common Stock), whether or not for sale for its own account,
it shall each such time give written notice to SKB of its intention to do so at
least 30 days prior to the anticipated filing date of a registration statement
with respect to such registration with the Commission. Upon the written request
of SKB made as promptly as practicable and in any event within 10 business days
after the receipt of any such notice, which request shall specify the
Registrable Securities intended to be disposed of by SKB, the Company shall use
commercially reasonable efforts to effect the registration under the Securities
Act of all Registrable Securities which the Company has been so requested to
register by SKB; provided, however, 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 may, at its election, give written
notice of such determination to SKB and (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 any obligation of
the Company to pay the Registration Expenses in connection therewith), without
prejudice, (provided, however, that SKB may request that such registration be
effected as a registration under Section 2.1 hereof) and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities for the same period as the delay in registering such
other securities; and provided further that SKB shall have the right to have its
Registrable Securities included in the initial Public Offering and any
subsequent Public Offering (in accordance with Section 2.2.2) if, and only if,
any other holder of the Company's convertible debt securities or equity
securities shall have the right to have its Registrable Securities included in
such Public Offering. No registration effected under this Section 2.2 shall
relieve the Company of its obligation to effect any registration upon demand
under Section 2.1. The Company shall pay all Registration Expenses in
connection with registration of Registrable Securities requested pursuant to
Section 2.2, other than underwriting discounts and selling commissions relating
to the sale or disposition of Registrable Securities.
2.2.2 Priority in Piggyback Registrations.
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Notwithstanding anything in Section 2.2.1 above to the contrary and except as
provided in Section 2.1.7, if the managing underwriter of any underwritten
offering shall inform the Company by letter of its belief that the number or
type of Registrable Securities requested to be included in such registration
would materially and adversely affect such offering, then the Company shall
promptly notify SKB of such fact. If the managing underwriter does not agree to
include all (or such lesser amount as SKB shall, in its sole discretion, agree
to) of the number of the Registrable Securities initially requested by SKB to be
included in such registration, then the Company shall include in such
registration, to the extent of the number and type which the Company is so
advised can be sold in (or during the time of) such offering first, all
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securities proposed by the Company to be sold for its own account, if the
Company initiated such registration, or by the holder of securities who
initiated such demand registration, if any, second, for each of SKB, Exigent
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Partners, L.P., Xxxxxxx Xxxxx Securities, Incorporated and the Investors, other
than the holder of the securities who initiated such demand registration, if
any, the fraction of such holder's securities proposed to be registered which is
obtained by dividing (i) the number of the securities of the Company that such
holder proposes to include in such registration by (ii) the total number of
securities proposed to be sold in such offering by such holders, and third, for
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each remaining holder of the Company's securities, other than the holder of the
securities who initiated such demand registration and the holders listed above,
if any, the fraction of such holder's securities proposed to be registered which
is obtained by dividing (i) the number of the securities of the Company that
such holder
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proposes to include in such registration by (ii) the total number of securities
proposed to be sold in such offering by such holders.
2.3 Registration Procedures.
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2.3.1 In connection with the registration of any Registrable Securities
under the Securities Act as provided in Sections 2.1 and 2.2, the Company shall
as promptly as practicable:
(i) prepare and file with the Commission the requisite registration
statement to effect such registration and thereafter use commercially reasonable
efforts to cause such registration statement to become and remain effective;
(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 provisions of the Securities Act with respect to the disposition
of all Registrable Securities covered by such registration statement for 180
days or such shorter period as may be required for the disposition of all of
such Registrable Securities by the underwriters;
(iii) furnish to SKB such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such number of copies of such other documents as SKB may reasonably request;
(iv) use commercially reasonable efforts (x) to register or qualify
all Registrable Securities and other securities covered by such registration
statement under such other securities or Blue Sky laws of such States of the
United States of America where an exemption is not available and as SKB shall
reasonably request, (y) to keep such registration or qualification in effect for
so long as such registration statement remains in effect, and (z) to take any
other action which may reasonably be necessary or advisable to enable SKB to
consummate the disposition in such jurisdictions of the Registrable Securities
to be sold by SKB, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not, but for the requirements of this paragraph
(iv), be obligated to be so qualified or to consent to general service of
process in any such jurisdiction;
(v) use commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or authorities as
may be necessary in the opinion of counsel to the Company and counsel to SKB to
consummate the disposition of such Registrable Securities in accordance with
their intended method of disposition;
(vi) furnish to SKB, (x) an opinion of outside counsel for the
Company, and (y) a copy of a "comfort" letter addressed to the Company and/or
any managing underwriter signed by the certified independent public accountants
who have certified the Company's financial statements included or incorporated
by reference in such registration statement, each covering substantially the
same matters with respect to such registration statement (and the prospectus
included therein) and, in the case of the accountant's comfort letter, with
respect to events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in accountant's comfort
letters delivered to the underwriters in underwritten public offerings of
securities (and dated the dates such opinions and comfort letters are
customarily dated);
(vii) notify SKB when a prospectus relating thereto is required to be
delivered under the Securities Act, upon discovery that, or upon the happening
of any event as a result of which, the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, in the light of the circumstances
under which they were made, and at the request of SKB to use its best efforts to
promptly prepare and furnish to SKB such number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made;
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(viii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security-
holders, as soon as reasonably practicable, an earnings statement meeting the
requirements of Section 11(a) of the Securities Act, which the Company shall be
entitled to satisfy by complying with the requirements of Rule 158 promulgated
thereunder, and promptly furnish a copy of the same to SKB;
(ix) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement; and
(x) use commercially reasonable efforts to list all Registrable
Securities covered by such registration statement on any national securities
exchange or over-the-counter market, if any, on which Registrable Securities of
the same class, and if applicable, series, covered by such registration
statement are then listed.
SKB agrees that upon receipt of any notice from the Company of the
happening of an event of the kind described in Section 2.3.1(vii), SKB shall
forthwith discontinue its disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until SKB's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 2.3.1(vii).
2.4 Underwritten Offerings.
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2.4.1 Requested Underwritten Offerings. If requested by the underwriters
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for any underwritten offering by SKB pursuant to a registration requested under
Section 2.1, 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, SKB and the underwriters, and to contain such
representations and warranties by the Company and SKB and such other terms as
are generally prevailing in agreements of that type, including, without
limitation, indemnities to the effect and to the extent provided in Section 2.6
or as are generally prevailing in agreements of that type. SKB shall cooperate
with the Company in the negotiation of the underwriting agreement and shall give
consideration to the reasonable suggestions of the Company regarding the form
and substance thereof. SKB shall be a party to such underwriting agreement.
SKB 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 SKB, SKB's Registrable Securities, SKB's
intended method of distribution and any other representations or warranties
required by law or customarily given by selling shareholders in an underwritten
public offering or as reasonably required by the managing underwriter of the
offering of Registrable Securities.
2.4.2 Piggyback Underwritten Offerings. If the Company proposes to register
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any of its securities under the Securities Act as contemplated by Section 2.2
and such securities are to be distributed by or through one or more
underwriters, subject to the priority and other provisions of Section 2.2.2, the
Company shall, if requested by SKB, arrange for such underwriters to include all
the Registrable Securities to be offered and sold by SKB among the securities of
the Company to be distributed by such underwriters. SKB shall become a party to
the underwriting agreement negotiated between the Company and such underwriters.
SKB 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 SKB, SKB's Registrable Securities and SKB's
intended method of distribution or any other representations or warranties
required by law or customarily given by selling shareholders in an underwritten
public offering or as reasonably required by the managing underwriter of the
offering of Registrable Securities.
2.4.3 Holdback Agreements.
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(i) In connection with the initial Public Offering or any registration
of Registrable Securities in connection with an underwritten public offering,
SKB agrees if required by the underwriter or underwriters not to effect any
public sale or distribution, including any sale pursuant to Rule 144 under the
Securities Act, of any Registrable Securities, and not to effect any such public
sale or distribution of any other equity security of the Company or of any
security convertible into or exchangeable or exercisable for any equity security
of the Company (in each case, other than as part of such underwritten public
offering) during the 180-day period, or such shorter period set forth in the
underwriting agreement with respect to such offering as the managing underwriter
of such offering shall reasonably require, beginning on, the effective date of
such registration statement, provided that (a) SKB has received written notice
of such registration at least 15 days prior to such effective date and (b), with
respect to any offering other than pursuant to a firm commitment underwriting,
the
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underwriters continue to actively market the Registrable Securities until the
earlier of the end of such lock-up period and the closing with respect to the
sale of all, or the final portion of, the Registrable Securities offered by SKB;
provided, however, that the restrictions imposed on SKB by this Section 2.4.3(i)
shall terminate on the earlier of the end of such lock-up period and thirty (30)
days after such closing.
(ii) If any registration of Registrable Securities shall be in
connection with an underwritten public offering, the Company agrees (x) if
required by the underwriter or underwriters, not to effect any public sale or
distribution of any of its equity securities or of any security convertible into
or exchangeable or exercisable for any equity security of the Company (other
than in connection with any employee stock option or other benefit plan which
has been duly adopted by the Company and which provides for the distribution to
participants in the plan of equity securities of the Company or securities
convertible or exchangeable or exercisable for equity securities of the Company,
or in connection with a merger or acquisition approved by the Board of Directors
of the Company) during the 180-day period, or such shorter period as the
managing underwriter of such offering shall reasonably require, beginning on the
effective date of such registration statement (except as part of such
registration) and (y) that any agreement entered into after the date of this
Agreement pursuant to which the Company issues or agrees to issue any privately
placed equity securities shall contain a provision under which holders of such
securities agree that, if required by the underwriter or underwriters, they will
not effect any public sale or distribution of any such securities during the
period referred to in the foregoing clause (x), including any sale pursuant to
Rule 144 under the Securities Act (except as part of such registration, if
permitted), if such holder is participating in the offering pursuant to such
registration.
2.5 Preparation; Reasonable Investigation. In connection with the
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preparation and filing of any registration statement under the Securities Act in
which SKB is a selling shareholder, the Company shall give SKB not less than 30
days prior written notice of the preparation of such registration statement and
give SKB and its counsel and accountants the opportunity to participate, at
SKB's expense, in the preparation of such registration statement, each
prospectus included therein or filed with the Commission, and each amendment
thereof or supplement thereto (provided that SKB shall furnish the Company with
comments on any such amendment or supplement as promptly as the Company shall
reasonably require), and give each of them such access to its books and records,
such opportunities to discuss the business of the Company with officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of SKB's counsel, to conduct a reasonable
investigation within the meaning of the Securities Act. Any expenses incurred
by SKB in connection with any such investigation shall be borne by SKB, other
than the reasonable fees and disbursements of SKB's outside counsel.
2.6 Indemnification.
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2.6.1 Indemnification by the Company. In the event of any registration of
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any securities of the Company under the Securities Act in which SKB is or may be
a selling shareholder, the Company shall, and hereby does, indemnify and hold
harmless, SKB, its directors, officers, employees, agents and affiliates and, to
the extent required by any underwriting agreement entered into by the Company,
each other Person who participates as an underwriter in the offering or sale of
such securities and each other Person who controls SKB or any such underwriter
within the meaning of the Securities Act, insofar as losses, claims, damages, or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon (a) any untrue statement or
alleged untrue statement of any fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus, or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a fact required to be stated therein or necessary to
make the statements therein in light of the circumstances in which they were
made not misleading, or (b) any violation by the Company, its directors,
officers, employees or agents of this Agreement or any law applicable to and in
connection with such registration, and the Company shall reimburse SKB and each
such director, officer, agent or affiliate, and, to the extent required by any
underwriting agreement entered into by the Company, underwriter and controlling
Person for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, liability,
action or proceeding described in clauses (a) or (b); provided, however, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by SKB,
specifically stating that it is for use in the preparation thereof. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of SKB or any such director, officer, agent or affiliate or
controlling Person and shall survive the transfer of such securities by SKB.
-8-
2.6.2 Indemnification by SKB. If any Registrable Securities are included in
----------------------
any registration statement, SKB shall indemnify and hold harmless (in the same
manner and to the same extent as set forth in Section 2.6.1 above) the Company,
each director of the Company, each officer of the Company and each employee of
the Company and, to the extent required by any underwriting agreement entered
into by SKB, each other Person who participates as an underwriter in the
offering or sale of such securities and each other Person who controls any such
underwriter within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by SKB specifically stating that it
is for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement;
provided, however, that in no event shall the liability of SKB under this
Section 2.6.2 exceed the amount of the proceeds to SKB from the sale of the
Registrable Securities in any such registration.
2.6.3 Notice of Claims, Etc. Promptly after receipt by an indemnified party
----------------------
of notice of the commencement of any action or proceeding involving a claim
referred to in the preceding paragraphs of this Section 2.6, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party, immediately give written notice to the latter of the commencement of such
action; provided, however, that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 2.6, except to the
extent that the indemnifying party is materially prejudiced by such failure.
The indemnified party shall be entitled to receive the indemnification payments
described in Section 2.6.6 after providing such written notice to the
indemnifying party. In case any such action is brought against an indemnified
party, unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist in respect
of such claim, the indemnifying party shall be entitled to participate in and to
assume the defense thereof, jointly with any other indemnifying party similarly
notified to the extent that the indemnifying parties may agree, with counsel
reasonably satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable out of pocket costs
related to the indemnified party's cooperation with the indemnifying party,
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties arises in respect of such
claim after the assumption of the defense thereof. No indemnifying party shall
be liable for any settlement of any action or proceeding effected without its
written consent, which consent shall not be unreasonably withheld, delayed or
conditioned. Consent of the indemnified party shall be required for the entry of
any judgment or to enter into a settlement only when such judgment or settlement
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
such claim or litigation.
2.6.4 Contribution. If the indemnification provided for in this Section 2.6
------------
shall for any reason be held by a court to be unavailable to an indemnified
party under Section 2.6.1 or 2.6.2 hereof in respect of any loss, claim, damage
or liability, or any action in respect thereof, then, in lieu of the amount paid
or payable under Sections 2.6.1 or 2.6.2 hereof, the indemnified party and the
indemnifying party under Sections 2.6.1 or 2.6.2 hereof shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating the same), (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on one hand and SKB on the other or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect the relative fault of the Company
on one hand and SKB on the other that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. No Person guilty of fraudulent misrepresentation (within the
meaning of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. In addition, no Person
shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim, effected without such Person's written
consent, which consent shall not be unreasonably withheld. In no event shall
the liability of SKB under this Section 2.6.4 exceed the amount of the proceeds
to SKB from the sale of the Registrable Securities in the related registration.
2.6.5 Other Indemnification. Indemnification and contribution similar to
---------------------
that specified in the preceding paragraphs of this Section 2.6 (with appropriate
modifications) shall be given by the Company and SKB with respect to any
required registration or other qualification of securities under any federal or
state law or regulation of any governmental authority other than the Securities
Act.
-9-
3. Rule 144. With a view to making available the benefits of certain rules
--------
and regulations of the Commission that may permit the sale of the Registrable
Securities to the public without registration after an initial Public Offering,
the Company agrees to:
(a) provide information and such other assistance requested by SKB as
is customarily provided by issuers in connection with sales of their common
stock by directors or affiliates under Rule 144, promulgated under the
Securities Act;
(b) make and keep public information available, as those terms are
understood and defined in Rule 144 promulgated under the Securities Act at all
times;
(c) use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act; and
(d) deliver a written statement as to whether it has complied with such
requirements of this Section, to SKB
upon SKB's request.
4. Modification; Waivers. This Agreement may be modified or amended only
---------------------
with the written consent of each party hereto. No party shall be released from
its obligations hereunder without the written consent of the other party. The
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) by the party
entitled to enforce such term, but any such waiver shall be effective only if in
a writing signed by the party against which such waiver is to be asserted.
Except as otherwise specifically provided herein, no delay on the part of any
party hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party hereto of any
right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any right, power or privilege hereunder.
5. Entire Agreement. This Agreement represents the entire understanding and
----------------
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.
6. Severability. If any provision of this Agreement, or the application of
------------
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Agreement or the application of such provision to other
Persons or circumstances, to the extent permitted by law, shall not be affected
thereby; provided, that the parties shall negotiate in good faith with respect
to an equitable modification of the provision or application thereof held to be
invalid.
7. Notices.
-------
(i) Any notice or communication to any party hereto shall be duly given
if in writing and delivered in person, receipt requested, or courier
guaranteeing next day delivery, or facsimile (with written confirmation of
receipt) to such other party's address or facsimile number set forth below.
If to Exigent Diagnostics, Inc.:
0 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Attention: X. Xxxxxxx Stoughton
Facsimile:
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Pepper, Xxxxxxxx & Xxxxxxx
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
-10-
If to SmithKline Xxxxxxx Corporation:
SmithKline Xxxxxxx Corp.
Xxx Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention:
Facsimile:
with a copy to:
SmithKline Xxxxxxx Corp.
Xxx Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to SmithKline Xxxxxxx Diagnostic System Co.:
SmithKline Xxxxxxx Corp.
Xxx Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention:
Facsimile:
with a copy to:
SmithKline Xxxxxxx Corp.
Xxx Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
(ii) All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered or facsimiled
(with written confirmation of receipt); and the next business day after timely
delivery to the courier, if sent by courier guaranteeing next day delivery.
8. Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and shall be binding upon the Company and SKB and their respective successors
and permitted assigns. SKB may assign its rights under this Agreement to any
Person to whom SKB transfers any of the Registrable Securities or any interest
therein without the necessity of obtaining any consent to such assignment,
provided that such Person becomes a party to that certain stockholders
agreement, by and among the Company, SKB and certain other holders of the Common
Stock. In the event that SKB assigns its rights to a holder or holders of only a
portion of the Registrable Securities, then all references to SKB herein shall
also be deemed to refer to such other holder or holders, but in such event SKB
shall have the sole right to make all decisions by and give notices for such
holder or holders under this Agreement; provided, that if SKB no longer owns any
Registrable Securities, then all decisions and notices hereunder shall be made
by the holders of not less than a majority of the Registrable Securities
outstanding and all other holders of Registrable Securities shall be bound by
any such decision.
9. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which for all purposes shall be deemed to be an original
and all of which together shall constitute the same agreement.
10. Headings. The Section headings in this Agreement are for
--------
convenience of reference only, and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.
11. Construction. This Agreement shall be governed, construed and
------------
enforced in accordance with the laws of the Commonwealth of Pennsylvania without
regard to its principles of conflict of laws.
-11-
12. No Inconsistent Agreements. The Company has not previously, and shall
--------------------------
not hereafter, enter into any agreement with respect to its securities which is
inconsistent with the rights granted to SKB in this Agreement.
13. Recapitalizations, etc. In the event that any capital stock or other
----------------------
securities are issued in respect of, in exchange for, or in substitution of, any
Registrable Securities by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the shares of Registrable Securities or any other
similar change in the Company's capital structure, appropriate adjustments shall
be made in this Agreement so as to fairly and equitably preserve, as far as
practicable, the original rights and obligations of the parties hereto under
this Agreement.
14. Arbitration. Any controversy or claim arising out of or relating to
-----------
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Rules of the American Arbitration Association in effect at
the time such arbitration is instituted. The arbitration panel shall be composed
of three arbitrators, one of whom shall be chosen by the Company, one of whom
shall be chosen by SKB, and one of whom shall be chosen by the two arbitrators
previously designated. If both or either of the Company and/or SKB fails to
choose an arbitrator within fourteen (14) calendar days after receiving notice
of commencement of arbitration or if the two arbitrators fail to choose a third
arbitrator within fourteen (14) calendar days of their appointment, such
arbitrators shall be chosen by the American Arbitration Association. Unless the
parties to the arbitration shall otherwise agree to a different place of
arbitration, the place of arbitration shall be Philadelphia, PA. The arbitration
award shall be final and binding upon the parties thereto and may be entered in
any court having jurisdiction. Each party shall bear (i) its own expenses in
connection with such arbitration and (ii) one-half of the fees and expenses of
the American Arbitration Association and all arbitrators. No arbitration award
shall contain any provision which is inconsistent with the preceding sentence.
15. Specific Performance. The parties hereto agree that the Registrable
--------------------
Securities of the Company cannot be purchased or sold in the open market and
that, for these reasons, among others, the holder or holders of the Registrable
Securities will be irreparably damaged in the event that this Agreement is not
specifically enforceable. Accordingly, in the event of any controversy
concerning the Registrable Securities which are the subject of this Agreement,
or any right or obligation to register such securities, such right or obligation
determined as part of an arbitration award described in Section 14 shall be
enforceable in a court of equity by specific performance. The rights granted in
this Section 15 shall be cumulative and not exclusive, and shall be in addition
to any and all other rights which the parties hereto may have hereunder, at law
or in equity. SKB consents to the jurisdiction of the federal courts of the
Commonwealth of Pennsylvania in any suit, action or proceeding brought pursuant
to this Section 15, waives any objection it may have to the laying of venue in
any such suit, action or proceeding in any of such court, and agrees that
service of any court paper may be made in such manner as may be provided under
applicable laws or court rules governing service of process.
16. Term. This Agreement shall continue in full force and effect until
----
the earlier of (i) ten (10) years after the last issuance of any Antidilution
Shares or Conversion Shares and (ii) the first date on which SKB and its
permitted assigns may sell all of the Registrable Securities held by them in a
ninety (90) day period pursuant to Rule 144 under the Securities Act.
-12-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the date first above written and delivered by their respective duly
authorized officers.
EXIGENT DIAGNOSTICS, INC.
By: /s/ X. Xxxxxxx Stoughton
---------------------------------------------
Name: X. Xxxxxxx Stoughton
Title: Chairman and Chief Executive Officer
SMITHKLINE XXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Attorney-in-fact
SMITHKLINE XXXXXXX DIAGNOSTIC SYSTEMS CO.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Attorney-in-fact
