REGISTRATION RIGHTS AGREEMENT
Exhibit
10.2
THIS
REGISTRATION RIGHTS AGREEMENT
(this
“Agreement”),
dated
as of August 2, 2006, is made and entered into by and among Theragenics
Corporation, a Delaware corporation (the “Purchaser”),
Xxxxx
X. Xxxxxxx, a resident of the State of Texas, on behalf of the Accredited
Sellers (as defined below) in connection with that certain Stock Purchase
Agreement (as defined below) (“Sellers’
Representative”).
The
Company and the Sellers’ Representative are sometimes herein individually
referred to as a “Party”
and,
collectively, as the “Parties.”
W I T N E S S E T H:
WHEREAS,
in
connection with the sale of one hundred percent (100%) of the issued and
outstanding capital stock of Galt Medical Corp., a Texas corporation (the
“Company”),
and
one hundred percent (100%) of the aggregate outstanding Company Stock
Derivatives (as defined in the Stock Purchase Agreement defined below) (the
“Transaction”),
pursuant to the terms and conditions of that certain Stock Purchase Agreement,
dated as of the date hereof (the “Stock
Purchase Agreement”),
by
and among the Purchaser, the Sellers’ Representative, and the holders of capital
stock of the Company and the holders of Company Stock Derivatives (collectively,
the “Sellers”), the
Purchaser will issue shares of its common stock, par value $.01 per share (the
“Common
Stock”)
to
each Seller who qualifies as an “accredited investor” within the meaning of Rule
501 of the Securities Act (collectively, the “Accredited
Sellers”);
WHEREAS,
as a
condition to the consummation of the Transaction, the Purchaser is obligated
to
provide the Accredited Sellers with certain registration rights with respect
to
the Common Stock; and
WHEREAS,
the
Purchaser and the Sellers’ Representative desire to enter into this Agreement
pursuant to which the Purchaser shall register with the SEC the offer and sale
by the Accredited Sellers of the shares of Common Stock received by the
Accredited Sellers in connection with the Transaction, subject to the terms
and
conditions of this Agreement.
NOW,
THEREFORE,
for
good and valuable consideration, the premises and the mutual covenants herein
contained, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
Section
1. Definitions.
As
used
in this Agreement, the capitalized terms shall have the meanings set forth
below.
(a) “Agent”
shall
mean any Person authorized to act and who acts on behalf of a Party with respect
to the transactions contemplated by this Agreement.
(b) “Business
Day”
shall
mean any day on which commercial banks are not authorized or required by law
to
close in the State of Georgia.
(c) “Effectiveness
Period”
shall
have the meaning set forth in Section 3 of this Agreement.
(d) “Indemnified
Party”
shall
have the meaning set forth in Section 6(c) of this Agreement.
(e) “Indemnifying
Party”
shall
have the meaning set forth in Section 6(c) of this Agreement.
(f) “Person”
shall
mean an individual, partnership, corporation, trust or unincorporated
organization, or a government or agency or political subdivision
thereof.
(g) “Prospectus”
shall
mean the prospectus included in the Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by the
Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments and all material incorporated
by
reference in such Prospectus.
(h) “Required
Registration Filing Date”
shall
mean August 2, 2007.
(i) “Registration
Statement”
shall
have the meaning set forth in Section 3 of this Agreement.
(j) “Registrable
Securities”
shall
mean shares of Common Stock issued or issuable by the Purchaser to Accredited
Sellers pursuant to the Stock Purchase Agreement.
(k) “Restricted
Securities”
shall
mean the Registrable Securities upon original issuance thereof, subject to
the
provisions of Section 2(a) of this Agreement.
(l) “Securities
Act”
shall
mean the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, as in effect from time to time.
(m) “SEC”
shall
mean the Securities and Exchange Commission.
(n) “Withdrawn
Registration Statement”
shall
have the meaning set forth in Section 5(a) of this Agreement.
Section
2. Securities
Subject to this Agreement.
(a)
Registrable
Securities.
The
securities entitled to the benefits of Sections 3 and 4 of this Agreement are
the Registrable Securities; however,
with
respect to any particular Registrable Security, only so long as such security
continues to be a Restricted Security. A Registrable Security ceases to be
a
Restricted Security when (i) it has been effectively registered under the
Securities Act and disposed of in accordance with the Registration Statement,
(ii) as to any Holder, when the Registrable Security held by such Holder could
be sold without restriction pursuant to Rule 144(k) or Rule 145 (or any similar
provisions then in force) under the Securities Act, (iii) it has otherwise
been
transferred in a private transaction in which the transferor’s rights under this
Agreement are not assigned, or (iv) it ceases to be outstanding.
(b)
Holders
of Registrable Securities.
Any
reference herein to a “Holder” or “Holders” of Registrable Securities shall mean
any Accredited Seller and its heirs and personal representatives.
Section
3. Required
Registration.
The
Purchaser shall
prepare
and file with the SEC, no later than the Required
Registration Filing Date,
a
Registration Statement on Form S-3 pursuant
to Rule 415 of the Securities Act (the
“Registration
Statement”)
with
respect to all
of the
Registrable Securities,
and use its commercially reasonable efforts to cause such Registration Statement
to become effective
as soon
as practicable thereafter.
After
the Registration Statement filed pursuant to this Section 3 has become
effective, the Purchaser shall use its commercially reasonable efforts to keep
such Registration Statement (on Form S-3 or such other form as may then be
available to the Purchaser) effective for a period (the “Effectiveness
Period”)
equal
to (i) one year from the initial date that the SEC declares such Registration
Statement effective (subject to any extension pursuant to Sections 5(a) and
5(b)
hereof, or, if such Registration Statement is not effective during any period
within such one-year period, such one-year period shall be extended by the
number of days that the Registration Statement is not effective), or (ii) such
shorter period which shall terminate when all of the Registrable Securities
have
been sold, or are eligible to be sold within a single three-month period
pursuant to Rule 144(k) or any successor thereto. The Purchaser represents
and
warrants that it is eligible to register the Registrable Securities on Form
S-3
under the Securities Act. To the extent that the Purchaser is ineligible to
register the Registrable Securities on Form S-3, the Purchaser shall satisfy
its
obligations under this Agreement to register Registrable Securities on Form
S-1.
Section
4. Registration
Procedures.
With
respect to the registration of the Registrable Securities pursuant to this
Agreement, the Purchaser will as promptly as reasonably
practicable:
(a)
before
filing the Registration Statement, the Prospectus or any amendments or
supplements thereto (excluding documents to be incorporated by reference therein
filed after the effectiveness of the Registration Statement), the Purchaser
will, no later than five (5) Business Days prior to filing, furnish to the
Holders copies of all such documents in substantially the form proposed to
be
filed (including documents incorporated therein by reference other than
documents previously filed with the SEC), to enable the Holders to review such
documents prior to the filing thereof, and the Purchaser shall make such
reasonable changes thereto (including changes to documents incorporated by
reference other than documents previously filed with the SEC) as may be
reasonably requested by the Holders;
(b)
prepare
and file with the SEC such amendments and post-effective amendments to the
Registration Statement as may be necessary to keep the Registration Statement
continuously effective for the Effectiveness Period; cause the Prospectus to
be
supplemented by any required Prospectus supplement, and as so supplemented
to be
filed with the SEC pursuant to Rule 424 under the Securities Act; and comply
with the provisions of the Securities Act with respect to the disposition of
all
securities covered by such Registration Statement during the applicable period
in accordance with this paragraph (b) and the intended methods of disposition
by
the Holders thereof set forth in such Registration Statement or supplement
to
the Prospectus;
(c)
notify
the Holders promptly, and confirm such notice in writing, (1) when the
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (2) of any request by the SEC
for
amendments or supplements to the Registration Statement or the Prospectus or
for
additional information, (3) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the initiation
of
any proceedings for that purpose, (4) of the receipt by the Purchaser of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (5) of the happening of any
event (but not the details of such event) which makes any statement made in
the
Registration Statement, the Prospectus or any document incorporated therein
by
reference untrue or which requires the making of any changes in the Registration
Statement, the Prospectus or any document incorporated therein by reference
in
order to make the statements therein not misleading, so that, in the case of
the
Registration Statement, it 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, and that in the case
of the Prospectus, it 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, in light of the circumstances under which they
were
made, not misleading, and (6) of the Purchaser’s good faith determination that
it is appropriate to amend the Registration Statement or supplement the
Prospectus before sales of the Registrable Securities continue.
(d)
use its
commercially reasonable efforts to obtain the withdrawal of any order suspending
the effectiveness of the Registration Statement at the earliest possible
time;
(e)
furnish
to the Holders, without charge, a reasonable number of conformed copies of
the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by
reference);
(f)
deliver
to the Holders as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such Persons may
reasonably request; the Purchaser hereby consents to the use of the Prospectus
or any amendment or supplement thereto by the Holders in connection with the
offering and sale of the Registrable Securities covered by the Prospectus or
any
amendment or supplement thereto;
(g)
use
its
commercially reasonable efforts to register or qualify such Registrable
Securities for offer and sale prior to the date on which the Registration
Statement is declared effective, under the securities or blue sky laws of such
jurisdictions as any Holder reasonably requests in writing and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statement; provided,
that
the Purchaser will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which
would
subject it to general service of process in any such jurisdiction where it
is
not then so subject;
(h)
cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing
any
restrictive legends; and enable such Registrable Securities to be in such
denominations and registered in such names as the Holders may request at least
two (2) Business Days prior to any such sale of Registrable
Securities;
(i)
upon
the
occurrence of any event contemplated by paragraph (c)(5) above, promptly prepare
a supplement or post-effective amendment to the Registration Statement or the
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Securities, the Prospectus will not contain an untrue statement
of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and
(j)
provide
a
transfer agent and registrar for all Registrable Securities.
The
Purchaser may require the Holders to furnish to the Purchaser such information
and documents regarding the distribution of the Registrable Securities by the
Holders as the Purchaser may from time to time reasonably request in writing,
and the Purchaser’s obligations with respect to registration are subject to such
information being provided on a timely basis.
Each
of
the Holders hereby agrees by acquisition of the Registrable Securities that,
upon receipt of any notice from the Purchaser of the happening of any event
of
the kind described in Section 4(c)(5) hereof, such Holder will forthwith
discontinue disposition of Registrable Securities until such Holder’s receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
4(i) hereof, or until it is advised in writing by the Purchaser that the use
of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in the Prospectus,
and,
if so directed by the Purchaser, each Holder will deliver to the Purchaser
(at
the Purchaser’s expense) all copies, other than permanent file copies then in
such Holder’s possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.
Section
5. Effect
of Withdrawal and Suspension.
(a) Withdrawal.
If the
Purchaser shall withdraw the Registration Statement prior to the expiration
of
the Effectiveness Period (a “Withdrawn
Registration Statement”),
the
Holders that continue to hold the Registrable Securities, which shares were
covered by the Withdrawn Registration Statement, shall be entitled to an
additional Registration Statement, and the Purchaser shall use its commercially
reasonable efforts to (i) prepare and file with the SEC, as soon as practicable
following the date of withdrawal of the Withdrawn Registration Statement, an
additional Registration Statement on Form S-3, and (ii) keep such additional
Registration Statement effective for the remainder of the Effectiveness Period
of the Withdrawn Registration Statement. The Purchaser shall reimburse the
Holders for all reasonable legal and other advisory fees incurred by the Holders
in connection with the Withdrawn Registration Statement.
(b) Suspended
Sales.
If the
Purchaser shall give any notice to suspend the disposition of Registrable
Securities pursuant to Section 4(c)(5) hereof, the Purchaser shall extend the
period of time during which the Purchaser is required to maintain the
effectiveness of the Registration Statement pursuant to Section 3 of this
Agreement by the number of days during the period from and including the date
of
the giving of such notice to and including the date the Holders either are
advised by the Purchaser that the use of the Prospectus may be resumed or
receive copies of the supplemented or amended Prospectus contemplated by Section
4(i).
Section
6. Indemnification.
(a)
Indemnification
by Purchaser.
The
Purchaser will indemnify and hold harmless, to the full extent permitted by
law,
each Holder and its Agents and each Person who controls such Holder or any
of
its Agents (within the meaning of the Securities Act) against all losses,
claims, damages, liabilities and expenses to which any such Person may be
subject, under the Securities Act or otherwise, and reimburse all such Persons
for any legal or other expenses incurred with investigating or defending against
any such losses, claims, damages or liabilities, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue or alleged
untrue statement of a material fact contained in a Registration Statement,
Prospectus or preliminary prospectus or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make
the statements therein not misleading, or any violation or alleged violation
by
the Purchaser of the Securities Act, the Securities Exchange Act of 1934, as
amended, or applicable “blue sky” laws, except insofar as the same arise out of
or are based upon an untrue statement of a material fact or omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, which statement or omission is made therein in reliance
upon and in conformity with information furnished in writing to the Purchaser
by
such Holder, expressly for use therein.
(b)
Indemnification
by Holders.
Each
Holder will, severally but not jointly, indemnify and hold harmless, to the
full
extent permitted by law, the Purchaser, its directors and officers and each
Person who controls the Purchaser (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses to which any
such
Person may be subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon any untrue
or alleged untrue statement of a material fact contained in the Registration
Statement or Prospectus or preliminary prospectus or any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, to the extent, but only if and to the
extent, that such untrue or alleged untrue statement or omission or alleged
omission is made therein in reliance upon and in conformity with the information
furnished in writing by such Holder or any Agent of a Holder specifically for
inclusion therein.
(c)
Conduct
of Indemnification Proceedings.
Any
Person entitled to indemnification (the “Indemnified
Party”)
hereunder will (i) give prompt notice to the indemnifying party (the
“Indemnifying
Party”)
of any
claim with respect to which it seeks indemnification, and (ii) unless, in
such
Indemnified Party’s reasonable judgment, a conflict of interest may exist
between such Indemnified Party and Indemnifying Party with respect to such
claim, permit such Indemnifying Party to assume at its own expense the defense
of such claim with counsel reasonably satisfactory to the Indemnified Party.
The
Indemnified Party shall have the right to participate in the conduct of such
defense by the Indemnifying Party provided that it will pay for the fees
of its
own counsel. Whether or not such defense is assumed by the Indemnifying Party,
the Indemnifying Party will not be subject to any liability for any settlement
made without its consent. No Indemnifying Party will consent to entry into
any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified
Party
of a release from all liability in respect to such claim or litigation. An
Indemnifying Party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than
one
counsel for all parties indemnified by such Indemnifying Party with respect
to
such claim, unless in the reasonable judgment of any Indemnified Party and
any
other of such Indemnified Parties with respect to such claim, such Indemnified
Parties reasonably believe that due to conflict of interests, one counsel
will
not be in a position to adequately represent all Indemnified Parties, in
which
event the Indemnifying Party shall be obligated to pay the fees and expenses
of
such additional counsel or counsels. Failure to give prompt written notice
shall
not release the Indemnifying Party from its obligations hereunder, except
to the
extent that the Indemnifying Party demonstrates that the defense of such
claim
has been materially prejudiced by the Indemnified Party’s failure to give such
notice.
(d)
Continued
Effect.
The
indemnification provided for under this Agreement shall remain in full force
and
effect regardless of any investigation made by or on behalf of the Indemnified
Party or any officer, director, Agent or person who controls such Indemnified
Party and shall survive the transfer of the Registrable Securities.
(e)
Contribution.
If the
indemnification provided for in Section 6(a) or 6(b) is due in accordance with
the terms hereof, but is held by a court of competent jurisdiction to be
unavailable or unenforceable with respect to any losses, claims, damages,
liabilities or expenses referred to herein, then each Indemnifying Party in
lieu
of indemnifying such Indemnified Party shall contribute to the amount paid
or
payable by such Indemnified Party as a result of the losses, liabilities, claims
or damages referred to in Section 6(a) or 6(b) in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the
one
hand and any Indemnified Party on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims
or
damages. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the
omission or alleged omission to state a material fact relates to information
initially supplied or developed by the Indemnifying Party or such Indemnified
Party and such parties’ relative intent, knowledge, access to information and
opportunity to correct such untrue statement or omission. The amount paid by
an
Indemnified Party as a result of the losses, liabilities, claims or damages
referred to in the first sentence of this Section 6(e) shall be deemed to
include any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any action or claim which
is
the subject of this Section 6(e). No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
Section
7. Miscellaneous.
(a)
Termination.
This
Agreement shall terminate upon termination of the Effectiveness Period, and
shall thereupon be of no further force and effect; provided
that
Section 6 shall survive the termination of this Agreement.
(b)
No
Inconsistent Agreements.
The
Purchaser will not on or after the date of this Agreement enter into any
agreement with respect to its securities which is inconsistent with the rights
granted to the Holders or otherwise conflicts with the provisions
hereof.
(c)
Notices.
All
notices, requests, demands and other communications required or permitted to
be
given hereunder shall be given in accordance with Section 8.01 of the Stock
Purchase Agreement.
(d)
Entire
Agreement.
This
Agreement contains the entire agreement among the Parties with respect to the
subject matter hereof, and supersedes all prior agreements, written or oral,
with respect thereto.
(e)
Waivers
and Amendments.
This
Agreement may be amended, superseded, cancelled, renewed or extended, and the
terms hereof may be waived, only by a written instrument signed by the Parties
or, in the case of a waiver, by the Party waiving compliance. No delay on the
part of any Party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof.
(f)
Remedies
Cumulative.
No
remedy made available by any of the provisions of this Agreement is intended
to
be exclusive of any other remedy, and each and every remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity; provided, however, that in no event
shall any party be entitled to recover more than once in respect of any
claim.
(g)
Binding
Effect; No Assignment.
This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors. This Agreement is not assignable by the Holders
(other than to the heirs and personal representatives of a deceased Holder)
without the prior written consent of the Purchaser and any other purported
assignment shall be null and void.
(h)
Counterparts.
This
Agreement may be executed by the Parties hereto in multiple counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.
(i)
Interpretive
Provisions.
(i)
The
words
“hereof,” “herein,” “hereunder” and “hereto” 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. Except as expressly set forth herein,
the term “including” when used with or without the term “without limitation”
shall be deemed to be inclusive, and not to the exclusion of any other item
except when used with a negative predicate.
(ii)
All
references herein to Sections, subsections, and clauses shall be deemed
references to such parts of this Agreement, unless the context shall otherwise
require.
(j)
Headings.
The
headings in this Agreement are for reference only and shall not affect the
interpretation of this Agreement.
(k)
Severability
of Provisions.
If any
provision or any portion of any provision of this Agreement or the application
of such provision or any portion thereof to any Person or circumstance, shall
be
held invalid or unenforceable, the remaining portion of such provision and
the
remaining provisions of this Agreement, or the application of such provision
or
portion of such provision as is held invalid or unenforceable to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby.
(l)
Choice
of Law. This
Agreement shall be governed and construed in accordance with the laws of the
State of Georgia without regard to the conflicts of laws principles thereof.
Each Party hereby irrevocably submits to the exclusive jurisdiction of Xxxxxx
County, State of Georgia, in any action or proceeding arising out of or relating
to this Agreement and hereby irrevocably agrees, on behalf of itself and on
behalf of such Party’s successors, that all claims in respect of such action or
proceeding may be heard and determined in any such court and irrevocably waives
any objection such Party may now or hereafter have as to the venue of any such
suit, action or proceeding brought in such a court or that such court is an
inconvenient forum.
(m)
Waiver
of Jury Trial.
The
Parties hereby waive trial by jury in any judicial proceeding involving,
directly or indirectly, any matter (whether in tort, contract or otherwise)
in
any way arising out of, related to, or connected with this
Agreement.
(n)
Expenses.
The
Purchaser shall pay all expenses associated with the preparation and filing
of
each Registration Statement and the maintaining of its effectiveness. However,
the Holders shall be responsible for the filing fees.
(o)
Third
Party Beneficiaries.
The
Holders are third party beneficiaries of each and every provision of this
Agreement purporting to provide rights to any Holder.
IN
WITNESS WHEREOF,
the
Parties have executed this Agreement as of the date first above
written.
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PURCHASER:
THERAGENICS
CORPORATION
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| By: | /s/ M. Xxxxxxxxx Xxxxxx | |
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M.
Xxxxxxxxx Xxxxxx
Chief
Executive Officer
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SELLERS’
REPRESENTATIVE:
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/s/
Xxxxx.X. Xxxxxxx
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Xxxxx
X. Xxxxxxx
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