REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
April 15, 1997 by and among Heartport, Inc., a Delaware corporation (the
"Company") and Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx Sachs & Co. and Xxxxx
& Company (the "Initial Purchasers") pursuant to the Placement Agreement, dated
as of April 15, 1997 (the "Placement Agreement"), between the Company and the
Initial Purchasers. In order to induce the Initial Purchasers to enter into the
Placement Agreement the Company has agreed to provide the registration rights
set forth in this Agreement. The execution of this Agreement is a condition to
the closing under the Placement Agreement.
The Company agrees with the Initial Purchasers, (i) for their benefit
as Initial Purchasers and (ii) for the benefit of the holders from time to time
of the Notes (including the Initial Purchasers) and the holders from time to
time of the Common Stock issued upon conversion of the Notes (each of the
foregoing a "Holder" and together the "Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Placement Agreement. As
used in this Agreement, the following terms shall have the following meanings:
Affiliate: "Affiliate" means, with respect to any specified person,
(i) any other person directly or indirectly controlling or controlled by, or
under direct or indirect common control with, such specified person or (ii) any
officer or director of such other person. For purposes of this definition, the
term "control" (including the terms "controlling," "controlled by" and "under
common control with") of a person means the possession, direct or indirect, of
the power (whether or not exercised) to direct or cause the direction of the
management and policies of a person, whether through the ownership of voting
securities, by contract, or otherwise.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
Common Stock: The shares of common stock, $.001 par value per share,
of the Company and any other shares of common stock as may constitute "Common
Stock" for purposes of the Indenture, in each case, as issuable or issued upon
conversion of the Notes.
Damages Accrual Period: See Section 2(e) hereof.
Damages Payment Date: Each of the semi-annual interest payment dates
provided in the Indenture.
Deferral Period: See Section 2(d) hereof.
Effectiveness Period: The period commencing with the date hereof and
ending on the date that all Registrable Securities have ceased to be Registrable
Securities.
Event: See Section 2(e) hereof.
Event Date: See Section 2(e) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Filing Date: See Section 2(a) hereof.
Holder: See the second paragraph of this Agreement.
Indenture: The Indenture, dated as of April 15, 1997, between the
Company and The Bank of New York, as Trustee, pursuant to which the Notes are
being issued, as amended or supplemented from time to time in accordance with
the terms hereof.
Initial Purchasers: Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx, Sachs
& Co. and Xxxxx & Company.
Initial Shelf Registration: See Section 2(a) hereof.
Liquidated Damages: See Section 2(e) hereof.
Losses: See Section 6 hereof.
Managing Underwriters: The investment banking firm or firms that
shall manage or co-manage an Underwritten Offering.
Notes: The 7 1/4% Convertible Subordinated Notes due 2004 of the
Company being issued and sold pursuant to the Placement Agreement and the
Indenture.
Notice Holder: See Section 2(d)(i) hereof.
Placement Agreement: See the first paragraph of this Agreement.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
Record Holder: (i) with respect to any Damages Payment Date relating
to any Note as to which any such Liquidated Damages have accrued, the registered
holder of such Note on the record date with respect to the interest payment date
under the Indenture on which such
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Damages Payment Date shall occur and (ii) with respect to any Damages Payment
Date relating to any Common Stock as to which any such Liquidated Damages have
accrued, the registered holder of such Common Stock 15 days prior to the next
succeeding Damages Payment Date.
Registrable Securities: (A) The Common Stock of the Company into
which the Notes are convertible or converted, whether or not such Notes have
been converted, and at all times subsequent thereto, and any Common Stock issued
with respect thereto upon any stock dividend, split or similar event until, in
the case of any such Common Stock, (i) it is effectively registered under the
Securities Act and resold in accordance with the Registration Statement covering
it, (ii) it is saleable by the holder thereof pursuant to Rule 144(k) or (iii)
it is sold to the public pursuant to Rule 144, and, as a result of the event or
circumstance described in any of the foregoing clauses (i) through (iii), the
legends with respect to transfer restrictions required under the Indenture
(other than any such legends required solely as the consequence of the fact that
such Common Stock (or the Notes, upon the conversion of which, such Common Stock
was issued or is issuable) is owned by, or was previously owned by, the Company
or an Affiliate of the Company) are removed or removable in accordance with the
terms of the Indenture; (B) the Notes, until, in the case of any such Note, (i)
it is converted into shares of Common Stock in accordance with the terms of the
Indenture, (ii) it is effectively registered under the Securities Act and resold
in accordance with the Registration Statement covering it, (iii) it is saleable
by the holder thereof pursuant to Rule 144(k) or (iv) it is sold to the public
pursuant to Rule 144, and, as a result of the event or circumstance described in
any of the foregoing clauses (ii) through (iv), the legends with respect to
transfer restrictions required under the Indenture (other than any such legends
required solely as the consequence of the fact that such Note is owned by, or
was previously owned by, the Company or an Affiliate of the Company) are removed
or removable in accordance with the terms of the Indenture.
Registration Expenses: See Section 5 hereof.
Registration Statement: Any registration statement of the Company
which covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
Selling Period: See Section 2(d)(i) hereof.
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Shelf Registration: See Section 2(a) hereof.
Special Counsel: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation, or such successor counsel as shall be specified by the Holders of a
majority of the Registrable Securities, the fees and expenses of which will be
paid by the Company pursuant to Section 5 hereof.
Subsequent Shelf Registration: See Section 2(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The Trustee under the Indenture.
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
2. SHELF REGISTRATION.
(a) SHELF REGISTRATION. The Company shall prepare and file with
the SEC, as soon as practicable but in any event on or prior to the date ninety
(90) days following the latest date of original issuance of the Notes (the
"Filing Date"), a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 of the Securities Act (a "Shelf
Registration") registering the resale from time to time by Holders thereof of
all of the Registrable Securities (the "Initial Shelf Registration"). The
Initial Shelf Registration shall be on Form S-3 or another appropriate form
permitting registration of such Registrable Securities for resale by the Holders
in the manner or manners designated by them (including, without limitation, one
or more Underwritten Offerings). The Company shall use reasonable efforts to
cause the Initial Shelf Registration to be declared effective under the
Securities Act as soon as practicable and to keep the Initial Shelf Registration
continuously effective under the Securities Act until the earlier of the
expiration of the Effectiveness Period or the date a Subsequent Shelf
Registration, as defined below, covering all of the Registrable Securities has
been declared effective under the Securities Act.
(b) If the Initial Shelf Registration or any Subsequent Shelf
Registration, as defined below, ceases to be effective for any reason as a
result of the issuance of a stop order by the SEC at any time during the
Effectiveness Period, the Company shall use reasonable efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof, and in any
event shall within thirty (30) days of such cessation of effectiveness amend the
Shelf Registration in a manner reasonably expected to obtain the withdrawal of
the order suspending the effectiveness thereof, or file an additional Shelf
Registration covering all of the Registrable Securities (a "Subsequent Shelf
Registration"). If a Subsequent Shelf Registration is filed, the Company shall
use reasonable efforts to cause the Subsequent Shelf Registration to be declared
effective as soon as practicable after such filing and to keep such Registration
Statement continuously effective until the end of the Effectiveness Period.
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(c) The Company shall supplement and amend the Shelf
Registration if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration, if
required by the Securities Act, or if reasonably requested by the Initial
Purchasers or by the Trustee on behalf of a majority of the Holders of the
Registrable Securities covered by such Registration Statement or by any Managing
Underwriter of such Registrable Securities in the event of an Underwritten
Offering of the Registrable Securities.
(d) Each Holder of Registrable Securities agrees that if such
Holder wishes to sell its Registrable Securities pursuant to a Shelf
Registration and related Prospectus, it will do so only in accordance with this
Section 2(d). Each Holder of Registrable Securities agrees to give written
notice to the Company at least three Business Days prior to any intended
distribution of Registrable Securities under the Shelf Registration, which
notice shall specify the date on which such Holder intends to begin such
distribution and any information with respect to such Holder and the intended
distribution of Registrable Securities by such Holder as may be required to
amend the Registration Statement or supplement the related Prospectus with
respect to such intended distribution of Registrable Securities by such Holder
(the "Requisite Information"). In the event the Holder fails to provide the
Requisite Information in its initial notice of its intention to distribute the
Registrable Securities pursuant to the Registration Statement, the Company will
promptly request such Holder to provide such Requisite Information. As soon as
practicable after the date such notice is provided, and in any event within two
Business Days after such date, the Company shall either:
(i) (A) If necessary, prepare and file with the Commission
a post-effective amendment to the Shelf Registration or a supplement to the
related Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that such
Registration Statement will not contain 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, and so that, as thereafter delivered
to purchasers of the Registrable Securities being sold thereunder, such
Prospectus will not contain 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, in light of the circumstances under which they were made,
not misleading; (B) provide each Notice Holder (as defined below) copies of any
documents filed pursuant to Section 2(d)(i)(A); and (C) inform each Notice
Holder that the Company has complied with its obligations in Section 2(d)(i)(A)
(or that, if the Company has filed a post-effective amendment to the Shelf
Registration which has not yet been declared effective, the Company will notify
the Notice Holder to that effect, will use reasonable efforts to secure the
effectiveness of such post-effective amendment and will immediately notify the
Notice Holder when the amendment has become effective); each Holder who has
given notice of intention to distribute such Holder's Registrable Securities in
accordance with Section 2(d) hereof (a "Notice Holder") will sell all or any of
such Registrable Securities pursuant to the Shelf Registration and related
Prospectus only during the 45-day period commencing with the date on which the
Company gives notice, pursuant to Section 2(d)(i)(C), that the Registration
Statement and Prospectus may be used for such purpose (such 45-day period is
referred to as a "Selling Period"). The Notice Holders will not sell any
Registrable Securities pursuant to such
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Registration Statement or Prospectus after such Selling Period without giving a
new notice of intention to sell pursuant to Section 2(d) hereof and receiving a
further notice from the Company pursuant to Section 2(d)(i)(C) hereof.
(ii) in the event (A) of the happening of any event of the
kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v), or 3(c)(vi)
hereof or (B) that, in the judgment of the Company, it is advisable to suspend
use of the Prospectus for a discrete period of time due to pending material
corporate developments or similar material events that have not yet been
publicly disclosed and as to which the Company believes public disclosure will
be prejudicial to the Company, the Company shall deliver a certificate in
writing, signed by an authorized executive officer of the Company, to the Notice
Holders, the Special Counsel and the Managing Underwriters, if any, to the
effect of the foregoing and, upon receipt of such certificate, each such Notice
Holder's Selling Period will not commence until such Notice Holder's receipt of
copies of the supplemented or amended Prospectus provided for in Section
2(d)(i)(A) hereof, or until it is advised in writing by the Company that the
Prospectus may be used and has received copies of any additional or supplemental
filings that are incorporated or deemed incorporated by reference in such
Prospectus. The Company will use reasonable efforts to ensure that the use of
the Prospectus may be resumed, and the Selling Period will commence, as soon as
practicable and, in the case of a pending development or event referred to in
Section 2(d)(ii)(B) hereof, as soon as the earlier of (x) public disclosure of
such pending material corporate development or similar material event or (y) in
the judgment of the Company, public disclosure of such material corporate
development or similar material event would not be prejudicial to the Company.
Notwithstanding any other provision in this Agreement, the Company shall not
under any circumstances be entitled to exercise its right under this Section
2(d)(ii) to defer the commencement of a Selling Period except as follows: the
Company may defer the commencement of a Selling Period in accordance with this
Section 2(d)(ii) for a period not to exceed 30 days in any three-month period,
or not to exceed an aggregate of 60 days in any 12-month period, and the period
in which a Selling Period is suspended shall not exceed fifteen (15) days unless
the Company shall deliver to such Notice Holders a second notice to the effect
set forth above, which shall have the effect of extending the period during
which such Selling Period is deferred by up to an additional fifteen (15) days,
or such shorter period of time as is specified in such second notice. In no
event shall the Company be permitted to extend the period during which such
Selling Period is deferred (a "Deferral Period") beyond such thirty (30) day
period from and after the date a Notice Holder provides notice to the Company in
accordance with this Section 2(d) of its intention to distribute Registrable
Securities.
(e) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf Registration
has not been filed on or prior to the Filing Date, (ii) prior to the end of the
Effectiveness Period, the SEC shall have issued a stop order suspending the
effectiveness of the Shelf Registration or proceedings have been initiated with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act, (iii) the aggregate number of days in any one Deferral Period exceeds the
periods permitted pursuant to Section 2(d)(ii) hereof or (iv) the number of
Deferral Periods exceeds the number permitted pursuant to Section 2(d)(ii)
hereof (each of the events of a type described in any of the foregoing
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clauses (i) through (iv) are individually referred to herein as an "Event," and
the Filing Date in the case of clause (i), the date on which the effectiveness
of the Shelf Registration has been suspended or proceedings with respect to the
Shelf Registration under Section 8(d) or 8(e) of the Securities Act have been
commenced in the case of clause (ii), the date on which the duration of a
Deferral Period exceeds the periods permitted by Section 2(d)(ii) hereof in the
case of clause (iii), and the date of the commencement of a Deferral Period that
causes the limit on the number of Deferral Periods under Section 2(d)(ii) hereof
to be exceeded in the case of clause (iv), being referred to herein as an "Event
Date"). Events shall be deemed to continue until the date of the termination of
such Event, which shall be the following dates with respect to the respective
types of Events: the date the Initial Registration Statement is filed in the
case of an Event of the type described in clause (i), the date that all stop
orders suspending effectiveness of the Shelf Registration have been removed and
the proceedings initiated with respect to the Shelf Registration under Section
8(d) or 8(e) of the Securities Act have terminated, as the case may be, in the
case of Events of the types described in clause (ii), termination of the
Deferral Period which caused the aggregate number of days in any one Deferral
Period to exceed the number permitted by Section 2(d)(ii) to be exceeded in the
case of Events of the type described in clause (iii), and termination of the
Deferral Period the commencement of which caused the number of Deferral Periods
permitted by Section 2(d)(ii) to be exceeded in the case of Events of the type
described in clause (iv).
Accordingly, upon the occurrence of any Event and until such time as
there are no Events which have occurred and are continuing (a "Damages Accrual
Period"), commencing on the Event Date on which such Damages Accrual Period
began, the Company agrees to pay, as liquidated damages, and not as a penalty,
an additional amount (the "Liquidated Damages"): (A)(i) to each holder of a
Note that is a Notice Holder, accruing at a rate equal to one-half of one
percent per annum (50 basis points) on the aggregate principal amount of Notes
held by such Notice Holder and (ii) to each holder of Common Stock that is a
Notice Holder, accruing at a rate equal to one-half of one percent per annum (50
basis points) calculated on an amount equal to the product of (x) the
then-applicable Conversion Price (as defined in the Indenture), times (y) the
number of shares of Common Stock held by such holder; and (B) if the Damages
Accrual Period continues for a period in excess of thirty (30) days from the
Event Date, from and after the end of such thirty (30) days until such time as
there are no Events which have occurred and are continuing, (i) to each holder
of a Note (whether or not a Notice Holder), accruing at a rate equal to one-half
of one percent per annum (50 basis points) on the aggregate principal amount of
Notes held by such holder and (ii) to each holder of Common Stock (whether or
not a Notice Holder), accruing at a rate equal to one-half of one percent per
annum (50 basis points) calculated on an amount equal to the product of (x) the
then applicable Conversion Price (as defined in the Indenture), times (y) the
number of shares of Common Stock held by such holder. Notwithstanding the
foregoing, no Liquidated Damages shall accrue under clause (A) for the preceding
sentence during any period for which Liquidated Damages accrue under clause (B)
of the preceding sentence or as to any Registrable Securities from and after the
expiration of the Effectiveness Period. The rate of accrual of the Liquidated
Damages with respect to any period shall not exceed the rate provided for in
this paragraph notwithstanding the occurrence of multiple concurrent Events.
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The Company shall pay the Liquidated Damages due on any Notes or
Common Stock by depositing with the Trustee under the Indenture, in trust, for
the benefit of the holders of Notes or Common Stock or Notice Holders, as the
case may be, entitled thereto, at least one Business Day prior to the applicable
Damages Payment Date, sums sufficient to pay the Liquidated Damages accrued or
accruing since the last preceding Damages Payment Date through such Damages
Payment Date. The Liquidated Damages shall be paid by the Company to the Record
Holders on each Damages Payment Date by wire transfer of immediately available
funds to the accounts specified by them or by mailing checks to their registered
addresses as they appear in the Note register (as defined in the Indenture), in
the case of the Notes, and in the register of the Company for the Common Stock,
in the case of the Common Stock, if no such accounts have been specified on or
before the Damage Payment Date; provided, however, that any Liquidated Damages
accrued with respect to any Note or portion thereof called for redemption on a
redemption date, redeemed or repurchased in connection with a Fundamental Change
(as defined in the Indenture) on a repurchase date, or converted into Common
Stock on a conversion date prior to the Damages Payment Date, shall, in any such
event, be paid instead to the holder who submitted such Note or portion thereof
for redemption, repurchase or conversion on the applicable redemption date,
repurchase date or conversion date, as the case may be, on such date (or
promptly following the conversion date, in the case of conversion of a Note).
The Trustee shall be entitled, on behalf of the holders of Notes, holders of
Common Stock and Notice Holders, to seek any available remedy for the
enforcement of this Agreement, including for the payment of such Liquidated
Damages. Notwithstanding the foregoing, the parties agree that the sole damages
payable for a violation of the terms of this Agreement with respect to which
Liquidated Damages are expressly provided shall be such Liquidated Damages.
Nothing shall preclude a Notice Holder or Holder of Registrable Securities from
pursuing or obtaining specific performance or other equitable relief with
respect to this Agreement, in addition to the payment of Liquidated Damages.
All of the Company's obligations set forth in this Section 2(e) which
are outstanding with respect to any Registrable Securities at the time such
security ceases to be a Registrable Security shall survive until such time as
all such obligations with respect to such security have been satisfied in full
(notwithstanding termination of the Agreement pursuant to Section 8(o)).
The parties hereto agree that the Liquidated Damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities (other than the Initial
Purchasers) by reason of the failure of the Shelf Registration to be filed or
declared effective or unavailable (absolutely or as a practical matter) for
effecting resales of Registrable Securities, as the case may be, in accordance
with the provisions hereof.
3. REGISTRATION PROCEDURES. In connection with the Company's
registration obligations under Section 2 hereof, the Company shall effect such
registrations to permit the sale of the Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
the Company shall as expeditiously as possible:
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(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by the Holders thereof in
accordance with the intended method or methods of distribution thereof, and use
reasonable efforts to cause each such Registration Statement to become effective
and remain effective as provided herein; provided, that before filing any such
Registration Statement or Prospectus or any amendments or supplements thereto
(other than documents that would be incorporated or deemed to be incorporated
therein by reference and that the Company is required by applicable securities
laws or stock exchange requirements to file) the Company shall furnish to the
Initial Purchasers, the Special Counsel and the Managing Underwriters of such
offering, if any, copies of all such documents proposed to be filed, which
documents will be subject to the review of the Initial Purchasers, the Special
Counsel and such Managing Underwriters, and the Company shall not file any such
Registration Statement or amendment thereto or any Prospectus or any supplement
thereto (other than such documents which, upon filing, would be incorporated or
deemed to be incorporated by reference therein and that the Company is required
by applicable securities laws or stock exchange requirements to file) to which
the Holders of a majority of the Registrable Securities covered by such
Registration Statement, the Initial Purchasers or the Special Counsel shall
reasonably object in writing within two full Business Days.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective for the applicable
period specified in Section 2; cause the related Prospectus to be supplemented
by any required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) 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 and Prospectus during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement as so amended or such Prospectus as so supplemented.
(c) Notify the Notice Holders, the Initial Purchasers, the
Special Counsel and the Managing Underwriters, if any, promptly, and (if
requested by any such person) confirm such notice in writing, (i) when a
Prospectus, any Prospectus supplement, a Registration Statement or a
post-effective amendment to a Registration Statement has been filed with the
SEC, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the SEC or
any other federal or state governmental authority for amendments or supplements
to a Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation or threatening of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) of the existence of any fact
or happening of any event which makes any statement of a material fact in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue or which would require the
making of any changes in the Registration
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Statement or Prospectus in order 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 the light of the circumstances under which they were made, not
misleading, and (vi) of the Company's determination that a post-effective
amendment to a Registration Statement would be appropriate.
(d) Use reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest possible
moment.
(e) If reasonably requested by the Initial Purchasers or the
Managing Underwriters, if any, or the Holders of a majority of the Registrable
Securities being sold, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Initial Purchasers, the Special Counsel, the Managing Underwriters, if any, or
such Holders, in connection with any offering of Registrable Securities, agree
should be included therein as required by applicable law, and (ii) make all
required filings of such Prospectus supplement or such post-effective amendment
as soon as reasonably practicable after the Company has received notification of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment; provided, that the Company shall not be required to take any actions
under this Section 3(e) that are not, in the reasonable opinion of counsel for
the Company, in compliance with applicable law.
(f) Furnish to each selling Holder, the Special Counsel and the
Initial Purchasers, and each Managing Underwriter, if any, without charge, at
least one conformed copy of the Registration Statement or Statements and any
amendment thereto, including financial statements but excluding schedules, all
documents incorporated or deemed to be incorporated therein by reference and all
exhibits (unless requested in writing by such selling Holder, counsel, the
Initial Purchasers or underwriter).
(g) Deliver to each selling Holder, the Special Counsel and the
Initial Purchasers and each Managing Underwriter, if any, in connection with any
offering of Registrable Securities, without charge, as many copies of the
Prospectus or Prospectuses relating to such Registrable Securities (including
each preliminary prospectus) and any amendment or supplement thereto as such
persons may reasonably request; and the Company hereby consents to the use of
such Prospectus or each amendment or supplement thereto by each of the selling
Holders of Registrable Securities and the underwriters, if any, in connection
with any offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the selling Holders, the Managing
Underwriters, if any, and the Special Counsel in connection with the
registration or qualification (or exemption from such registration
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or qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any selling Holder or Managing Underwriter reasonably requests in writing; keep
each such registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept effective
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
applicable Registration Statement; provided, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it is
not then so qualified or (ii) take any action that would subject it to general
service of process in suits or to taxation in any such jurisdiction where it is
not then so subject.
(i) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States, except as may be
required solely as a consequence of the nature of such selling Holder, in which
case the Company will cooperate in all reasonable respects with the filing of
such Registration Statement and the granting of such approvals, as may be
necessary to enable the selling Holder or Holders thereof or the Managing
Underwriters, if any, to consummate the disposition of such Registrable
Securities.
(j) During any Selling Period (other than during a Deferral
Period), immediately upon the existence of any fact or the occurrence of any
event as a result of which a Registration Statement shall contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or a
Prospectus shall 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 the light of the circumstances under which they were
made, not misleading, promptly prepare and file (subject to the proviso in
Section 3(a)) a post-effective amendment to each Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document (such as a Current Report on Form
8-K) that would be incorporated by reference into the Registration Statement so
that the Registration Statement shall 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 so that the
Prospectus 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 the light of the circumstances under which they were
made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to a Registration Statement, use its reasonable efforts
to cause it to become effective as soon as practicable.
(k) Enter into such agreements (including, in the event of an
Underwritten Offering, an underwriting agreement in form, scope and substance as
is customary in Underwritten Offerings) and take all such other actions in
connection therewith (including, in the event of an Underwritten Offering, those
reasonably requested by the Managing Underwriters, if any, or the Holders of a
majority of the Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Registrable Securities and in such
11
connection, whether or not an underwriting agreement is entered into, and if the
registration is an underwritten registration, (i) make such representations and
warranties, subject to the Company's ability to do so, to the Holders of such
Registrable Securities and the underwriters with respect to the business of the
Company and its subsidiaries, the Registration Statement, Prospectus and
documents incorporated by reference or deemed incorporated by reference, if any,
in each case, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings (provided that the scope and substance
shall not be materially different than those contained in the Placement
Agreement) and confirm the same if and when requested; (ii) use its best efforts
to obtain opinions of counsel to the Company and updates thereof (which counsel
and opinions (in form, scope and substance) shall be reasonably satisfactory to
the Managing Underwriters, if any, Special Counsel and the Holders of a majority
of the Registrable Securities being sold) addressed to each of the underwriters
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such Special
Counsel and Managing Underwriters; (iii) use its best efforts to obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other certified public
accountants of any business acquired or to be acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each of the Managing Underwriters, if
any, such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with Underwritten
Offerings; and (iv) deliver such documents and certificates as may be reasonably
requested by the Holders of a majority of the Registrable Securities being sold,
the Special Counsel and the Managing Underwriters, if any, to evidence the
continued validity of the representations and warranties of the Company and its
subsidiaries made pursuant to clause (i) above and to evidence compliance with
any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company. The above shall be done at each closing
under such underwriting or similar agreement as and to the extent required
thereunder.
(l) If requested in connection with a disposition of Registrable
Securities pursuant to a Registration Statement, make available for inspection
by a representative of the Holders of Registrable Securities being sold, any
Managing Underwriter participating in any disposition of Registrable Securities,
if any, and any attorney or accountant retained by such selling Holders or
underwriter, financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the executive
officers, directors and employees of the Company and its subsidiaries to supply
all information reasonably requested by any such representative, Managing
Underwriter, attorney or accountant in connection with such disposition; subject
to reasonable assurances by each such person that such information will only be
used in connection with matters relating to such Registration Statement;
provided, however, that such persons shall first agree in writing with the
Company that any information that is reasonably and in good faith designated by
the Company in writing as confidential at the time of delivery of such
information shall be kept confidential by such persons and shall be used solely
for the purposes of exercising rights under this Agreement, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities, (ii) disclosure
of such information is required by law (including any disclosure requirements
pursuant to Federal securities laws in connection with the filing of any
12
Registration Statement or the use of any prospectus referred to in this
Agreement), (iii) such information becomes generally available to the public
other than as a result of a disclosure or failure to safeguard by any such
person or (iv) such information becomes available to any such person from a
source other than the Company and such source is not bound by a confidentiality
agreement.
(m) Comply with all applicable rules and regulations of the SEC
and make generally available to its securityholders earning statements (which
need not be audited) satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated under
the Securities Act) no later than 45 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period is a fiscal
year) (i) commencing at the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company
commencing after the effective date of a Registration Statement, which
statements shall cover said 12-month periods.
(n) Cooperate with the selling Holders of Registrable Securities
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 such Holders may request.
(o) Provide the Trustee under the Indenture and the transfer
agent for the Common Stock with printed certificates for the Registrable
Securities which are in a form eligible for deposit with The Depository Trust
Company.
(p) Cause the Common Stock covered by the Registration Statement
to be listed on each securities exchange or quoted on each automated quotation
system on which any of the Company's "Common Stock," as that term is defined in
the Indenture, is then listed or quoted) no later than the date the Registration
Statement is declared effective and, in connection therewith, to the extent
applicable, to make such filings under the Exchange Act (e.g., the filing of a
Registration Statement on Form 8-A) and to have such filings declared effective
thereunder.
(q) Cooperate and assist in any filings required to be made with
the National Association of Securities Dealers, Inc.
4. HOLDER'S OBLIGATIONS. Each Holder agrees, by acquisition of the
Notes and Registrable Securities, that no Holder of Registrable Securities shall
be entitled to sell any of such Registrable Securities pursuant to a
Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with the notice required pursuant to Section
2(d) hereof and such other information regarding such Holder and the
distribution of such Registrable Securities as may be required to be included in
the Registration Statement or the Prospectus or as the Company may from time to
time reasonably request. The Company may exclude from such registration the
Registrable Securities of any Holder who does not furnish such information
provided above for so long as such information is not so furnished. Each Holder
of Registrable Securities as to which any Registration Statement is being
effected agrees
13
promptly to furnish to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such Holder
not misleading. Any sale of any Registrable Securities by any Holder shall
constitute a representation and warranty by such Holder that the information
relating to such Holder and its plan of distribution is as set forth in the
Prospectus delivered by such Holder in connection with such disposition, that
such Prospectus does not as of the time of such sale contain any untrue
statement of a material fact relating to such Holder or its plan of distribution
and that such Prospectus does not as of the time of such sale omit to state any
material fact relating to such Holder or its plan of distribution necessary to
make the statements in such Prospectus, in light of the circumstances under
which they were made, not misleading.
5. REGISTRATION EXPENSES. All fees and expenses incident to the
Company's performance of or compliance with this Agreement shall be borne by the
Company whether or not any of the Registration Statements become effective.
Such fees and expenses shall include, without limitation, (i) all registration
and filing fees (including, without limitation, fees and expenses (x) with
respect to filings required to be made with the SEC or the National Association
of Securities Dealers, Inc. and (y) relating to compliance with federal
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of Special Counsel in connection with Blue Sky qualifications of
the Registrable Securities under the laws of such jurisdictions as the Managing
Underwriters, if any, or Holders of a majority of the Registrable Securities
being sold may designate)), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities in a
form eligible for deposit with The Depository Trust Company and of printing
prospectuses if the printing of prospectuses is requested by the Special Counsel
or the Holders of a majority of the Registrable Securities included in any
Registration Statement), (iii) the reasonable fees and disbursements of the
Trustee and its counsel and of the registrar and transfer agent for the Common
Stock, (iv) messenger, telephone and delivery expenses relating to the
performance of the Company's obligations hereunder, (v) reasonable fees and
disbursements of counsel for the Company and the Special Counsel in connection
with the Shelf Registration (provided that the Company shall not be liable for
the fees and expenses of more than one separate firm, in addition to counsel for
the Company, for all parties participating in any transaction hereunder), (vi)
fees and disbursements of all independent certified public accountants referred
to in Section 3(k)(iii) hereof (including the expenses of any special audit and
"cold comfort" letters required by or incident to such performance) and (vii)
Securities Act liability insurance, to the extent obtained by the Company in its
sole discretion. In addition, the Company shall pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange on which similar
securities issued by the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company. Notwithstanding
the provisions of this Section 5, each seller of Registrable Securities shall
pay all underwriting discounts, selling commissions and stock transfer taxes
applicable to the Registrable Securities, all selling expenses and all
registration expenses to the extent that the Company is prohibited by applicable
Blue Sky laws from paying for or on behalf of such seller of Registrable
Securities.
14
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall indemnify
and hold harmless the Initial Purchasers, each Holder and each person, if any,
who controls the Initial Purchasers or any Holder (within the meaning of either
Section 15 of the Securities Act or Section 20(a) of the Exchange Act) from and
against all losses, liabilities, damages and expenses (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) (collectively, "Losses"),
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement or Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or based upon 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, except insofar as such Losses arise out of or are based upon the
information relating to the Initial Purchasers or any Holder furnished to the
Company in writing by the Initial Purchasers or such Holder expressly for use
therein; provided, that the Company shall not be liable to any Holder of
Registrable Securities (or any person controlling such Holder) to the extent
that any such Losses arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any preliminary
prospectus if either (A)(i) such Holder failed to send or deliver a copy of the
Prospectus with or prior to the delivery of written confirmation of the sale by
such Holder to the person asserting the claims from which such Losses arise and
(ii) the Prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, or (B)(x) such untrue statement
or alleged untrue statement, omission or alleged omission is corrected in an
amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such Holder thereafter fails to deliver such Prospectus
as so amended or supplemented, with or prior to the delivery of written
confirmation of the sale of a Registrable Security to the person asserting the
claim from which such Losses arise. The Company shall also indemnify each
underwriter and each person who controls such person (within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act) to the
same extent and with the same limitations as provided above with respect to the
indemnification of the Initial Purchasers or the Holders of Registrable
Securities.
(b) INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES. Each
Holder agrees, and such agreement shall be evidenced by the Holder delivering
the notice described in Section 2(d) hereof, severally and not jointly to
indemnify and hold harmless the Initial Purchasers, the other selling Holders,
the Company, its directors, its officers who sign a Registration Statement, and
each person, if any, who controls the Company, the Initial Purchasers and any
other selling Holder (within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act), from and against all losses arising out
of or based upon any untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus or arising out of
or based upon any omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, to the extent, but only
to the extent, that such untrue statement or omission is contained in any
information relating to such Holder so furnished in writing by such Holder to
the Company expressly for use in such Registration Statement or Prospectus. In
no event shall the liability of
15
any selling Holder of Registrable Securities hereunder be greater in amount than
the dollar amount of the proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (a) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Initial Purchasers and all persons, if
any, who control the Initial Purchasers within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, (b) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Holders and all persons, if any, who control any Holder within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
and (c) the fees and expenses of more than one separate firm (in addition to any
local counsel) for the Company, its directors, its officers who sign a
Registration Statement and each person, if any, who controls the Company within
the meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Company, and such directors, officers and control persons of the Company, such
firm shall be designated in writing by the Company. In such case involving the
Initial Purchasers and persons who control the Initial Purchasers, such firm
shall be designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated. In such
case involving the Holders and such persons who control Holders, such firm shall
be designated in writing by the Holders of the majority of Registrable
Securities sold pursuant to the Registration Statement. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party, shall not have reimbursed the indemnified party in
accordance
16
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability or claims
that are the subject matter of such proceeding.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 6 is unavailable to an indemnified party under Section 6(a) or 6(b)
hereof in respect of any Losses or is insufficient to hold such indemnified
party harmless, then each applicable 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 such Losses, (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the initial placement (before deducting expenses) of the Notes
pursuant to the Placement Agreement. Benefits received by the Initial
Purchasers shall be deemed to be equal to the total purchase discounts and
commissions received by them pursuant to the Placement Agreement and benefits
received by any other Holders shall be deemed to be equal to the value of
receiving Notes registered under the Securities Act. Benefits received by any
underwriter shall be deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus forming a part of
the Registration Statement which resulted in such Losses. The relative fault of
the Holders on the one hand and the Company on the other hand 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 supplied by the Holders or by the Company
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this paragraph are several in
proportion to the respective number of Registrable Securities they have sold
pursuant to a Registration Statement, and not joint.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method or allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding this Section 6(d), an
indemnifying party that is a selling Holder of Registrable Securities shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such indemnifying party and
17
distributed to the public were offered to the public exceeds the amount of any
damages which such indemnifying party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. 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.
The indemnity, contribution and expense reimbursement obligations of
the Company hereunder shall be in addition to any liability the Company may
otherwise have hereunder, under the Placement Agreement or otherwise. The
provisions of this Section 6 shall survive so long as Registrable Securities
remain outstanding, notwithstanding any transfer of the Registrable Securities
by any Holder or any termination of this Agreement.
The indemnity and contribution provisions contained in this Section 6
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Initial Purchasers, any Holder or any person controlling any Holder, or the
Company, its officers or directors or any person controlling the Company and
(iii) the sale of any Registrable Securities by any Holder.
7. INFORMATION REQUIREMENTS.
(a) The Company shall file the reports required to be filed by
it under the Securities Act and the Exchange Act, and if at any time the Company
is not required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act. The Company further covenants that it will cooperate with any
Holder of Registrable Securities and take such further reasonable action as any
Holder of Registrable Securities may reasonably request (including, without
limitation making such reasonable representations as any such Holder may
reasonably request), all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 and Rule 144A
under the Securities Act. Upon the request of any Holder of Registrable
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such filing requirements. Notwithstanding the
foregoing, nothing in this Section 7 shall be deemed to require the Company to
register any of its securities under any section of the Exchange Act.
(b) The Company shall file the reports required to be filed by
it under the Exchange Act and shall comply with all other requirements set forth
in the instructions to Form S-3 in order to allow the Company to be eligible to
file registration statements on Form S-3.
8. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company of its
obligations under this Agreement, each Holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement; provided that the sole damages payable
18
for a violation of the terms of this Agreement for which Liquidated Damages are
expressly provided pursuant to Section 2(e) hereof shall be such Liquidated
Damages. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) NO CONFLICTING AGREEMENTS. The Company has not, as of the
date hereof and shall not, on or after the date of this Agreement, enter into
any agreement with respect to its securities which conflicts with the rights
granted to the Holders of Registrable Securities in this Agreement. The Company
represents and warrants that the rights granted to the Holders of Registrable
Securities hereunder do not in any way conflict with the rights granted to the
holders of the Company's securities under any other agreements.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of a majority of the then outstanding Common Stock constituting Registrable
Securities (with Holders of Notes deemed to be the Holders, for purposes of this
Section, of the number of outstanding shares of Common Stock into which such
Notes are convertible). Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other Holders of Registrable Securities may
be given by Holders of at least a majority of the Registrable Securities being
sold by such Holders; provided, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.
(d) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing and shall be deemed given (i)
when made, if made by hand delivery, (ii) upon confirmation, if made by
telecopier or (iii) one business day after being deposited with a reputable
next-day courier, postage prepaid, to the parties as follows:
(i) if to a Holder of Registrable Securities, at the most
current address given by such Holder to the Company in accordance with the
provisions of Section 8(e);
(ii) if to the Company, to:
Heartport, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000 (Confidential)
19
with a copy to:
Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx &
Xxxxxxxxx, LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
and
(iii) if to the Special Counsel to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
or to such other address as such person may have furnished to the other persons
identified in this Section 8(d) in writing in accordance herewith.
(e) OWNER OF REGISTRABLE SECURITIES. The Company will maintain,
or will cause its registrar and transfer agent to maintain, a register with
respect to the Registrable Securities in which all transfers of Registrable
Securities of which the Company has received notice will be recorded. The
Company may deem and treat the person in whose name Registrable Securities are
registered in such register of the Company as the owner thereof for all
purposes, including without limitation, the giving of notices under this
Agreement.
(f) APPROVAL OF HOLDERS. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, (i) Holders of Notes shall be deemed to be Holders, for such
purposes, of the number of outstanding shares of Common Stock into which such
Notes are convertible and (ii) Registrable Securities held by the Company or its
affiliates (as such term is defined in Rule 405 under the Securities Act) (other
than the Initial Purchasers or subsequent Holders of Registrable Securities if
such subsequent Holders are deemed to be such affiliates solely by reason of
their holdings of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
(g) SUCCESSORS AND ASSIGNS. Any person who purchases any
Registrable Securities from an Initial Purchasers shall be deemed, for purposes
of this Agreement, to be an assignee of such Initial Purchasers. This Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties and shall inure to the benefit of and be binding upon each
Holder of any Registrable Securities.
(h) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed
20
shall be deemed to be original and all of which taken together shall constitute
one and the same agreement.
(i) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
(k) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated thereby, and the parties hereto
shall use their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, illegal, void or unenforceable.
(l) ENTIRE AGREEMENT. This Agreement is intended by the parties
as a final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable Securities. Except as
provided in the Placement Agreement, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such registration rights.
(m) ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
(n) FURTHER ASSURANCES. Each of the parties hereto shall use
all reasonable efforts to take, or cause to be taken, all appropriate action, do
or cause to be done all things reasonably necessary, proper or advisable under
applicable law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and the other
documents contemplated hereby and consummate and make effective the transactions
contemplated hereby.
(o) TERMINATION. This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the Effectiveness Period,
except for any liabilities or obligations under Sections 4, 5 or 6 hereof and
the obligations to make payments of and provide
21
for Liquidated Damages under Section 2(e) hereof to the extent such damages
accrue prior to the end of the Effectiveness Period, each of which shall remain
in effect in accordance with their terms.
22
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
HEARTPORT, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President, Finance and
Chief Financial Officer
Accepted as of the date first above written:
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX SACHS & CO.
XXXXX & COMPANY
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Xxxxxx Xxxxxx, Vice President
