REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is made and entered
into as of January ___, 1996, by and between Microtek Medical, Inc. (the
"Company") and Chemical Bank (the "Holder").
For good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following capitalized
terms shall have the following meanings:
BOARD: The Board of Directors of the Company.
COMMON STOCK: The common stock of the Company.
MISSTATEMENT: An untrue statement of a material fact or an omission to
state a material fact required to be stated in a Registration Statement or
Prospectus or necessary to make the statements in a Registration Statement or
Prospectus not misleading.
PERSON: A natural person, partnership, corporation, business trust,
association, joint venture or other entity or a government or agency or
political subdivision thereof.
PROSPECTUS: The prospectus included in any Registration Statement, as
supplemented by any and all prospectus supplements and as amended by any and
all post-effective amendments and including all material incorporated by
reference in such prospectus.
REGISTRATION: A Demand Registration described in Section 2(a) and a
Piggyback Registration described in Section 2(b) hereof.
REGISTRATION EXPENSES: The out-of-pocket expenses of a Registration,
including:
(1) all registration and filing fees (including fees with respect
to filings required to be made with the National Association of Securities
Dealers, Inc.) and any securities exchange on which the Common Stock is
then listed;
(2) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the Registrable
Securities);
(3) printing, messenger, telephone and delivery expenses;
(4) reasonable fees and disbursements of counsel for the Company; and
(5) reasonable fees and disbursements of all independent certified
public accountants of the Company incurred specifically in connection with
such Registration.
REGISTRABLE SECURITIES: (a) The shares of Common Stock acquired by the
Holder or its assigns in connection with the exercise of remedies under that
certain Pledge Agreement, dated as of January , 1996, made by MicroPartners,
L.P. to Holder, (b) any securities issued or issuable with respect to such
Common Stock by way of a stock dividend or stock split or in connection with
a combination of shares, recapitalization, merger, consolidation or
reorganization; PROVIDED that any such share or security shall be deemed to
be Registrable Securities only if and so long as it is a Transfer Restricted
Security.
REGISTRATION STATEMENT: Any registration statement which covers
Registrable Securities pursuant to the provisions of this Agreement,
including the Prospectus included in such registration statement, amendments
(including post-effective amendments) and supplements to such registration
statement, and all exhibits to and all material incorporated by reference in
such registration statement.
SECURITIES ACT: The Securities Act of 1933, as from time to time
amended.
SEC: The Securities and Exchange Commission.
TRANSFER RESTRICTED SECURITY: A security that has not been sold to or
through a broker, dealer or underwriter in a public distribution or other
public securities transaction or sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Rule 144(k) promulgated thereunder (or any successor rule other than Rule
144A). The foregoing notwithstanding, a security shall remain a Transfer
Restricted Security until (i) all stop transfer instructions or notations and
restrictive legends with respect to such security are eligible to be removed
and (ii) the holder of such security has received an opinion of counsel to
the Company, to the effect that such shares in such holder's hands are freely
transferable in any public or private transaction without registration under
the Securities Act (or such holder has waived receipt of such opinion).
UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for distribution
to the public.
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2. REGISTRATIONS.
(a) DEMAND REGISTRATION. If at any time (but only on one occasion) the
Company shall receive from the Holder a written request to register at least
25% of the Registrable Securities owned by the Holder, then the Company
shall, subject to the provisions of subsection (c) below, effect as soon
thereafter as practicable, and in any event within 60 days of the receipt of
such request, the Registration under the Securities Act of all Registrable
Securities which the Holder requests to be registered within 30 days of the
receipt of such notice by the Company. If the Holder initiating the
registration request hereunder intends to distribute the Registrable
Securities covered by their request by means of an Underwritten Offering, it
shall so advise the Company as a part of its request made pursuant to this
subsection. The underwriter shall be selected by the Holder, subject to the
approval (which shall not be unreasonably withheld) by the Company.
(b) PIGGYBACK REGISTRATION. Each time the Company decides to file a
Registration Statement under the Securities Act (other than on Forms S-4 or
S-8 or any successor form for the registration of securities issued or to be
issued in connection with a merger or acquisition or employee benefit plan),
the Company shall give written notice thereof to the Holder. The Company
shall include in such Registration Statement such shares of Registrable
Securities for which it has received written requests to register such shares
within 30 days after such written notice has been given. If the Registration
Statement is to cover an Underwritten Offering for equity securities of the
Company, either (i) such Registrable Securities shall be included in the
underwriting on the same terms and conditions as the securities otherwise
being sold through the underwriters or (ii) the Holder shall agree to such
customary standstill provisions as the underwriters may request. If in the
good faith judgment of the managing underwriter in any Underwritten Offering,
the inclusion of all of the shares of Registrable Securities and any other
Common Stock requested to be registered by third parties holding similar
registration rights would interfere with the successful marketing of a
smaller number of such shares, then the number of shares of Registrable
Securities and other Common Stock to be included in the offering (except for
shares to be issued by the Company in an offering initiated by the Company)
shall be reduced to such smaller number, with the participation in such
offering by the holders of Registrable Securities to be on a prorata basis
(measured on the basis of the number of shares of Common Stock requested to
be so registered) with the participation by other holders of Common Stock.
(c) GENERAL. The Company may defer the filing of a Registration
Statement hereunder, or defer the use of a Registration Statement already
filed, for a period of up to 30 days based on the good faith judgment of its
Board of Directors that such delay is needed to avoid premature disclosure of
a matter the Board has determined
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should not, in the best interest of the Company, and need not be, currently
disclosed; PROVIDED, that the Company shall promptly notify the Holder in
writing of any such action and PROVIDED, FURTHER, that the Company shall bear
all expenses which would otherwise have been charged to the Holder in
connection with such withdrawn Registration Statement; and PROVIDED STILL
FURTHER that no request by the Holder pursuant to this Section 2 with respect
to such withdrawn Registration Statement shall be counted for purposes of the
limitation described above.
3. REGISTRATION PROCEDURES. If and whenever the Company is required to
register Registrable Securities, the Company will use its best efforts to
effect such registration to permit the sale of such Registrable Securities in
accordance with the intended plan of distribution thereof, and pursuant
thereto the Company will as expeditiously as possible:
(a) prepare and file with the SEC as soon as practicable a
Registration Statement with respect to such Registrable Securities and use
its best efforts to cause such Registration Statement to become effective
and remain effective until the Registrable Securities covered by such
Registration Statement have been sold;
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement, and such supplements to the
Prospectus, as may be requested by the Holder, or any underwriter of
Registrable Securities or as may be required by the rules, regulations or
instructions applicable to the registration form used by the Company or by
the Securities Act or rules and regulations thereunder to keep the
Registration Statement effective until all Registrable Securities covered
by such Registration Statement are sold in accordance with the intended
plan of distribution set forth in such Registration Statement or supplement
to the Prospectus;
(c) deliver to the Holder and the underwriters, if any, without
charge, as many copies of each Prospectus (and each preliminary prospectus)
as such Persons may reasonably request (the Company hereby consenting to
the use of each such Prospectus (or preliminary prospectus) by the selling
Holder and the underwriters, if any, in connection with the offering and
sale of the Registrable Securities covered by such Prospectus (or
preliminary prospectus) and a reasonable number of copies of the then-
effective Registration Statement and any post-effective amendments thereto
and any supplements to the Prospectus, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
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(d) prior to any public offering of Registrable Securities, register
or qualify or cooperate with the Holder, the underwriters, if any, and
their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as such selling Holder or
underwriters may designate in writing and do anything else necessary or
advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the Registration Statement; PROVIDED that
the Company shall 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;
(e) cause all such Registrable Shares to be listed on each securities
exchange or automated quotation system on which similar securities issued
by the Company are then listed;
(f) provide a transfer agent and registrar for all such Registrable
Shares not later than the effective date of such Registration Statement;
(g) advise each seller of such Registrable Shares, promptly after it
shall receive notice or obtain knowledge thereof, of the issuance of any
stop order by the SEC suspending the effectiveness of such Registration
Statement or the initiation or threatening of any proceeding for such
purpose and promptly use its reasonable best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order
should be issued;
(h) at least three days prior to the filing of any Registration
Statement or prospectus or any amendment or supplement to such Registration
Statement or prospectus or any document that is to be incorporated by
reference into such Registration Statement or prospectus, furnish a copy
thereof to each seller of such Registrable Shares;
(i) notify the Holder at any time when a prospectus relating to such
Registration Statement is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus
included in such Registration Statement, as then in effect, includes a
Misstatement, and then to correct such Misstatement as set forth in Section
7; and
(j) permit a representative of the Holder, the underwriters, if any,
and any attorney or accountant retained by such Holder or underwriter to
participate, at each such Person's own expense, in the preparation of the
Registration Statement, and cause the Company's officers, directors and
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employees to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with the
Registration; provided, however, that such representatives, underwriters,
attorneys or accountants enter into a confidentiality agreement, in form
and substance reasonably satisfactory to the Company, prior to the release
or disclosure of any such information.
4. REGISTRATION EXPENSES. Except as other provided in paragraph 2(c)
above, the Registration Expenses of all Demand Registrations shall be borne
by the Holder. The Registration Expenses of all Piggyback Registrations
shall be borne by the Company, except that (i) any incremental expenses
associated with the inclusion of the Holder's shares shall be borne by the
Holder and (ii) the fees and disbursements of any counsel to the selling
security holders shall be paid by such holders if such security holders are
unwilling to be represented by counsel to the Company. It is acknowledged by
the Holder that the Holder will bear all incremental selling expenses
relating to the sale of the Registrable Securities, such as underwriters'
commissions and discounts, brokerage fees and underwriter marketing costs.
5. REQUIREMENTS FOR PARTICIPATION IN UNDERWRITTEN OFFERINGS. No person
may participate in any Underwritten Offering for equity securities of the
Company pursuant to a Registration initiated by the Company hereunder unless
such Person (a) agrees to sell such Person's securities on the basis provided
in any underwriting arrangements approved by the Company and (b) completes
and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements; PROVIDED, that the terms of such underwriting
arrangement in connection with the sale of Registrable Securities shall be no
less favorable than the terms afforded to any other holder of securities
participating in the Underwritten Offering.
6. INDEMNIFICATION.
(a) The Company agrees to indemnify, to the extent permitted by law,
the holder of Registrable Shares, its officers and directors and each
Person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses (including
attorneys' fees) caused by any untrue or alleged untrue statement of
material fact contained in any Registration Statement, prospectus or
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 not misleading, except
insofar as the same are caused by or contained in any information furnished
in writing to the Company by such holder expressly for use therein or by
such holder's failure to deliver a copy of
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the Registration Statement or prospectus or any amendments or supplements
thereto after the Company has furnished such holder with a sufficient
number of copies of the same. In connection with an Underwritten Offering,
the Company will indemnify such underwriters, their officers and directors
and each Person who controls such underwriters (within the meaning of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the holder.
(b) In connection with any Registration Statement in which a holder
of Registrable Shares is participating, such holder will furnish to the
Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such Registration
Statement or prospectus and, to the extent permitted by law, will indemnify
the Company, its directors and officers and agents and each Person who
controls the Company (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses (including without
limitation reasonable attorneys' fees) resulting from any untrue statement
of material fact contained in the Registration Statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or
any omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that
such untrue statement or omission is contained in any information or
affidavit so furnished in writing by such holder expressly for use therein;
provided that the obligation to indemnify will be several, not joint and
several, among such holders of Registrable Shares, and the liability of
each such holder of Registrable Shares will be in proportion to and limited
to the net amount received by such holder from the sale or Registrable
Shares pursuant to such Registration Statement.
(c) Any person entitled to indemnification herein will (i) give
prompt written notice to 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 between such indemnified
and indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its consent (but such
consent will not be unreasonably withheld). 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 a
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conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim.
(d) The indemnification 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
securities. The Company also agrees to make such provisions as are
reasonably requested by any indemnified party for contribution to such
party in the event the Company's indemnification is unavailable for any
reason.
7. SUSPENSION OF SALES. Upon receipt of written notice from the
Company that a Registration Statement or Prospectus contains a Misstatement,
the holder shall forthwith discontinue disposition of Registrable Securities
until such holder has received copies of a supplemented or amended Prospectus
correcting the Misstatement (it being understood that the Company hereby
covenants to prepare and file such supplement or amendment as soon as
practicable after the time of such notice), or until such holder is advised
in writing by the Company that the use of the Prospectus may be resumed.
8. MISCELLANEOUS
(a) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier or air courier guaranteeing overnight
delivery: (i) if to a holder of Registrable Securities, at the most current
address set forth in the Company's stock transfer books and, if to the
Holder, at 633 Third Avenue, 7th Floor, New York, New York 10017 (attention:
Credit Deputy) and (ii) if to the Company, at 512 Lehmberg Road, Columbus,
Mississippi 39704. All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand (including by telecopy),
if personally delivered; five business days after being deposited in the
mail, postage prepaid, if mailed; when answered back, if telexed; when
receipt acknowledged, if to an air courier guaranteeing overnight delivery.
(b) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of the Company. This
Agreement may not be assigned by the Holder without the prior written consent
of the Company (which shall not be withheld in the case of the sale or
transfer of substantially all of the Registrable Securities to not more than
one party).
(c) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when
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so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
(d) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Mississippi.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
MICROTEK MEDICAL, INC.
By:
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Kimber L. Vought,
President
CHEMICAL BANK
By:
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Its:
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