Neopath, Inc.
Registration Rights Agreement
Dated
as of
June 23, 1997
CONTENTS
l. Certain Definitions 1
2. Form S-3 Registration 2
3. Obligations of the Company 3
4. Furnish Information 4
5. Expenses of Registration 4
6. Indemnification 4
7. Reports Under the 1934 Act 7
8. Termination of Registration Rights 7
9. Notices 8
10. Amendments and Waivers 8
11. Severability 8
12. Governing Law 8
13. Counterparts 8
14. Entire Agreement 8
Page i
INDEX OF DEFINED TERMS
1934 Act 3
Act 1
Company 1
Form S-3 1
Losses 3
register 1
registered 1
Registrable Securities 1
registration 1
SEC 2
Shareholder 1
Shares 1
Violation 3
Page ii
Neopath, Inc.
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT is entered into as of June 23, 1997, by
and among NEOPATH, INC., a Washington corporation (the "Company"), and COMPUCYTE
CORPORATION (the "Shareholder").
RECITALS
A. The Company is proposing to issue newly authorized shares of its
Common Stock (including the shares to be held in escrow, the "Shares") to the
Shareholder as partial consideration for the purchase of certain assets from the
Shareholder pursuant to Purchase and Sale Agreement dated as of June 23, 1997
between the Company and the Shareholder (the "Purchase Agreement").
B. The execution of this Agreement by the parties hereto is a condition
to the obligation of the Shareholder to sell such assets to the Company.
C. The Company and the Shareholder desire to enter into this Registration
Rights Agreement to facilitate the issuance of the Shares.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
l. Certain Definitions
For purposes of this Agreement:
(a) The term "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or ordering of effectiveness of such registration
statement or document;
(b) The term "Registrable Securities" means (i) the Shares and
(ii) any Common Stock of the Company issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of, the Shares or such Common Stock, excluding in all cases,
however, any Registrable Securities that are at the time of registration,
transferable by the holder thereof in a single brokerage transaction under the
provisions and within the volume limitations of Rule 144(e)(1) promulgated under
the Act or any successor to such Rule;
Page 1
(c) The term "Form S-3" means such form under the Act as in effect on
the date hereof or any registration form under the Act subsequently adopted by
the Securities and Exchange Commission (the "SEC") that similarly permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
2. Form S-3 Registration
The Company shall, subject to the limitations set forth below, use
commercially reasonable efforts to effect as soon as practicable the
registration of all Registrable Securities on Form S-3.
3. Obligations of the Company
Whenever required under this Agreement to effect the registration of
any Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the
Shareholder, keep such registration statement effective for up to 90 days after
the last Registrable Securities are released from escrow as provided for in the
Escrow Agreement.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Shareholder such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as it may reasonably request
in order to facilitate the disposition of all securities covered by such
registration statement.
(d) Use commercially reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as shall be reasonably requested by the
Shareholder, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
(e) Notify the Shareholder, during the time when a prospectus
relating thereto covered by such registration statement is required to be
delivered under the Act, of 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 a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
Page 2
(f) Use its best efforts to list the Registrable Securities with any
securities exchange on which the Common Stock of the Company is then listed.
4. Furnish Information
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Agreement with respect to the Registrable
Securities that the Shareholder shall furnish to the Company such information
regarding itself, the Registrable Securities held by it and the intended method
of disposition of such securities as shall be reasonably required to effect the
registration of such Registrable Securities and to execute such documents in
connection with such registration as the Company may reasonably request.
5. Expenses of Registration
In connection with any registration pursuant to this Agreement, the
Company shall be responsible for the payment of all expenses of the
registration, with the exception of underwriting discounts and commissions,
which shall be paid by the Company, the Shareholder and any other selling
shareholders in proportion to the aggregate value of the securities offered
for sale by each of them. The expenses to be paid by the Company shall
include, without limitation, all registration, filing and qualification fees,
listing fees and fees of transfer agent and registrar, printing and
accounting fees, the fees and disbursements of counsel for the Company.
6. Indemnification
In the event any Registrable Securities are included in a
registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless the Shareholder, its officers, directors, agents and employees,
any underwriter (as defined in the Act) for the Shareholder and each person, if
any, who controls the Shareholder or underwriter within the meaning of the Act
or the Securities Exchange Act of 1934, as amended (the "1934 Act"), against any
losses, claims, damages or liabilities (joint or several) (collectively,
"Losses") to which they or any of them may become subject under the Act, the
1934 Act or other federal or state law, insofar as such Losses arise out of or
are based upon any of the following statements, omissions or violations
(collectively, a "Violation"): (i) any statement or alleged statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein, or any amendments
or supplements thereto, untrue or alleged to be untrue in light of the
circumstances under which they were made, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or (iii) any violation or alleged violation by the Company
of the Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act, the 1934 Act or any state securities law. The
Company will reimburse the Shareholder, the officers, directors, agents and
employees of the
Page 3
Shareholder, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
Losses; provided, however, that the indemnity agreement contained in this
Section 6(a) shall not apply to amounts paid in settlement of any such Losses if
such settlement is effected without the consent of the Company, which consent
shall not be unreasonably withheld, nor shall the Company be liable in any such
case for any such Losses to the extent the Losses arise out of or are based upon
a Violation that occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by,
or on behalf of, the Shareholder, underwriter or controlling person.
(b) To the extent permitted by law, the Shareholder will indemnify
and hold harmless the Company, its officers, directors, agents and employees,
each person, if any, who controls the Company within the meaning of the Act and
each underwriter, against any Losses to which the Company, such officer,
director, agent, employee, controlling person or underwriter may become subject
under the Act, the 1934 Act or other federal or state law, insofar as such
Losses arise out of or are based upon any Violation, in each case to the extent
(and only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by, or on behalf of, the
Shareholder expressly for use in connection with such registration; and the
Shareholder will reimburse any legal or other expenses reasonably incurred by
the Company, its officers, directors, agents, employees, and underwriters in
connection with investigating or defending any such Losses; provided, however,
that (i) the indemnity agreement contained in this Section 6(b) shall not apply
to amounts paid in settlement of any such Losses if such settlement is effected
without the consent of the Shareholder, which consent shall not be unreasonably
withheld and (ii) the obligations of the Shareholder hereunder shall be limited
to an amount equal to the gross proceeds, before expenses and commissions,
received by the Shareholder from the sale of the Registrable Securities as
contemplated herein.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 6, deliver to
the indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if, in the opinion of counsel for the indemnifying
party, representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable period of time of the commencement of any
such action shall relieve such indemnifying party of any liability to the
indemnified party under this Section 6 to the extent prejudicial to its ability
to defend such action, but the omission so to deliver written notice to
Page 4
the indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 6.
(d) In order to provide for just and equitable contributions to joint
liability under the Act in any case in which either (i) the Shareholder
exercising rights under this Agreement, or any controlling person of the
Shareholder, makes a claim for indemnification pursuant to this Section 6 but it
is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 6 provides for indemnification
in such case, or (ii) contribution under the Act may be required on the part of
the Shareholder or any such controlling person in circumstances for which
indemnification is provided under this Section 6; then, in each such case, the
Company and the Shareholder will contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (after contribution from
others) in such proportion so that the Shareholder is responsible for the
portion represented by the percentage that the public offering price of the
Shareholder's Registrable Securities offered by and sold under the registration
statement bears to the public offering price of all securities offered by and
sold under such registration statement, and the Company and other selling
shareholders are responsible for the remaining portion, provided, however, that,
in any such case (A) the Shareholder will not be required to contribute any
amount in excess of the public offering price of all such Registrable Securities
offered and sold by the Shareholder pursuant to such registration statement; and
(B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) will be entitled to contribution from any
person or entity who was not guilty of such fraudulent misrepresentations.
(e) The obligations of the Company and the Shareholder under this
Section 6 shall survive the completion of any offering of Registrable Securities
in a registration statement under this Agreement, and otherwise.
7. Reports Under the 1934 Act
With a view to making available to the Shareholder the benefits of
SEC Rule 144 promulgated under the Act and any other rule or regulation of the
SEC that may at any time permit the Shareholder to sell securities of the
Company to the public without registration, the Company agrees to use
commercially reasonable efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times;
(b) File with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(c) Furnish to the Shareholder forthwith upon request (i) a written
statement by the Company that it has complied with the reporting requirements of
the 1934
Page 5
Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested in availing the
Shareholder of any rule or regulation of the SEC that permits the selling of any
such securities without registration.
8. Termination of Registration Rights
The registration rights granted pursuant to this Agreement shall
terminate on the earlier of (i) the date on which the Shareholder is entitled
to transfer all of the Registrable Securities in a single transaction under
Rule 144 or (ii) the second anniversary of this Agreement.
9. Notices
Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given
upon personal delivery to the party to be notified or upon deposit with
the United States Post Office, postage prepaid, registered or certified
with return receipt requested and addressed to the party to be notified at
the address indicated for such party on the signature page hereof, or at
such other address as such party may designate by ten days' advance
written notice to the other parties given in the foregoing manner.
10. Amendments and Waivers
Any term of this Agreement may be amended and the observance of any
term may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the
Company and the Shareholder.
11. Severability
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement, and the balance of this Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance
with its terms.
12. Governing Law
This Agreement shall be governed by and construed under the laws of
the State of Washington as applied to agreements among Washington residents
entered into and to be performed entirely within the State of Washington.
13. Counterparts
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
Page 6
14. Entire Agreement
This Agreement constitutes the full and entire understanding and
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
THE COMPANY:
NEOPATH, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SHAREHOLDER:
COMPUCYTE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Its: President & CEO
Address:
Page 7
