EXHIBIT 10.1
ASPECT MEDICAL SYSTEMS, INC.
2.50% CONVERTIBLE SENIOR NOTES DUE 2014
REGISTRATION RIGHTS AGREEMENT
June 20, 2007
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Aspect Medical Systems, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the Purchaser (as defined herein) upon the terms
set forth in the Purchase Agreement (as defined herein) its 2.50% Convertible
Senior Notes due 2014 (the "Securities"), which are convertible into shares of
common stock, par value $0.01 per share of the Company. The Company will be able
to satisfy its conversion obligation with respect to the Securities under
certain circumstances using a combination of cash and Stock. As an inducement to
the Purchaser to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Purchaser thereunder, the Company agrees
with the Purchaser for the benefit of the Holders (as defined herein) from time
to time of the Registrable Securities (as defined herein) as follows:
1. Definitions.
(a) Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Purchase Agreement. As used in this Agreement,
the following defined terms shall have the following meanings:
"Affiliate" of any specified person means any other person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with such specified person. For purposes of this definition, control of a person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such person whether by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Automatic Shelf Registration Statement" means an automatic shelf
registration statement within the meaning of Rule 405 under the Securities Act.
"Closing Date" means the First Time of Delivery as defined in the Purchase
Agreement.
"Commission" means the United States Securities and Exchange Commission,
or any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
"Common Stock" means the Company's common stock, par value $0.01 per
share, together with the rights to purchase shares of Series A Junior
Participating Preferred Stock, $0.01 par value per share, of the Company, if
any, to the extent provided in the Rights Agreement dated November 29, 2004
between the Company and EquiServe Trust Company, N.A., as rights agent.
"Effective Failure" has the meaning assigned thereto in Section 7(b)
hereof.
"Effective Time" means the time at which the Commission declares the Shelf
Registration Statement effective or at which the Shelf Registration Statement
otherwise becomes effective.
"Effectiveness Period" has the meaning assigned thereto in Section 2(b)(i)
hereof.
"Electing Holder" has the meaning assigned thereto in Section 3(a)(iii)
hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.
"Holder" means any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security in book-entry form).
"Indenture" means the Indenture, dated as of June 20, 2007, between the
Company and U.S. Bank National Association, as amended and supplemented from
time to time in accordance with its terms.
"Liquidated Damages" has the meaning assigned thereto in Section 7(a)
hereof.
"Managing Underwriters" means the investment banker or investment bankers
and manager or managers that shall administer an underwritten offering, if any,
conducted pursuant to Section 6 hereof.
"NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended from time to time.
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"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Appendix A
hereto.
The term "person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A or Rule 430B under the
Securities Act) included in the Shelf Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by the Shelf
Registration Statement and by all other amendments and supplements to such
prospectus, including all material incorporated by reference in such prospectus
and all documents filed after the date of such prospectus by the Company under
the Exchange Act and incorporated by reference therein.
"Purchase Agreement" means the purchase agreement, dated as of June 14,
2007, between the Purchaser and the Company relating to the Securities.
"Purchaser" means Xxxxxxx, Sachs & Co.
"Registrable Securities" means all or any portion of the Securities issued
from time to time under the Indenture in registered form and the shares of
Common Stock issuable upon conversion of such Securities; provided that a
security ceases to be a Registrable Security when it is no longer a Restricted
Security, and in any event on the second anniversary of the Closing Date.
"Registration Default" has the meaning assigned thereto in Section 7(a)
hereof.
"Restricted Security" means any outstanding Security or share of Common
Stock issuable upon conversion thereof except any such Security or share of
Common Stock which (i) has been effectively registered under the Securities Act
and sold in a manner contemplated by the Shelf Registration Statement, (ii) has
been transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto or similar provision then in effect) or is
transferable pursuant to paragraph (k) of such Rule 144 (or any successor
provision thereto or similar provision then in effect), (iii) is freely
transferable by persons that are not Affiliates of the Company without
registration under the Securities Act, or (iv) has otherwise been transferred
and a new Security or share of Common Stock not subject to transfer restrictions
under the Securities Act has been delivered by or on behalf of the Company in
accordance with the Indenture.
"Rules and Regulations" means the published rules and regulations of the
Commission promulgated under the Securities Act or the Exchange Act, as
applicable, as in effect at any relevant time.
"Securities Act" means the United States Securities Act of 1933, as
amended.
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"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the Holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by the Company pursuant to the
provisions of Section 2 of this Agreement, including the Prospectus contained
therein, any amendments and supplements to such registration statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement.
"Suspension Period" has the meaning assigned thereto in Section 2(c)
hereof.
"Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as the same shall be amended from time to time.
"Underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
"WKSI" means a well-known seasoned issuer that is not an "ineligible
issuer" as such terms are defined in Rule 405 under the Securities Act.
(b) Wherever there is a reference in this Agreement to a percentage of the
"principal amount" of Registrable Securities or to a percentage of Registrable
Securities, shares of Common Stock constituting Registrable Securities shall be
treated as representing the principal amount of Securities that was surrendered
for conversion or exchange in order to receive such number of shares of Common
Stock.
2. Shelf Registration.
(a) The Company shall use commercially reasonable efforts to cause a Shelf
Registration Statement relating to the offer and sale of the Registrable
Securities (which shall be an Automatic Shelf Registration Statement if the
Company is a WKSI at the time of such filing) by the Holders from time to time
in accordance with the methods of distribution elected by such Holders and set
forth in such Shelf Registration Statement to be filed with the Commission no
later than 90 calendar days following the Closing Date and, if such Shelf
Registration Statement is not an Automatic Shelf Registration Statement,
thereafter to cause such Shelf Registration Statement to be declared effective
under the Securities Act no later than 180 calendar days following the Closing
Date; provided that the Company may, upon written notice to all Holders,
postpone filing or having the Shelf Registration Statement declared effective
for a reasonable period not to exceed 90 days if the Company possesses material
non-public information, the disclosure of which would, in the Company's
judgment, have a material adverse effect on the Company and its subsidiaries
taken as a whole; provided, further, that (i) no Holder shall be entitled to be
named as a selling securityholder in the Shelf Registration Statement or to use
the Prospectus forming a part thereof for resales of Registrable Securities
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unless such Holder is an Electing Holder and (ii) no distribution of Registrable
Securities pursuant to such Shelf Registration Statement shall take the form of
an underwritten offering without the Company's prior written consent.
(b) The Company shall use commercially reasonable efforts:
(i) to keep the Shelf Registration Statement continuously effective
under the Securities Act in order to permit the Prospectus forming a part
thereof to be usable by Holders until the earliest of (1) the sale of all
Registrable Securities registered under the Shelf Registration Statement;
(2) the expiration of the period referred to in Rule 144(k) of the
Securities Act with respect to all Registrable Securities held by persons
that are not Affiliates of the Company; (3) the date on which all
Registrable Securities are freely transferable by persons that are not
Affiliates of the Company; and (4) two years from the Closing Date (such
period being referred to herein as the "Effectiveness Period");
(ii) after the Effective Time of the Shelf Registration Statement,
within 30 days of receiving a completed and signed Notice and
Questionnaire from any Holder of Registrable Securities that is not then
an Electing Holder, together with any other information as the Company may
reasonably request from such Holder, in accordance with Section 3(a)(ii)
hereof, or if use of the Shelf Registration Statement is suspended at the
time of receipt, within 30 days after the expiration of the suspension, to
take any action reasonably necessary to enable such Holder to use the
Prospectus forming a part thereof for resales of Registrable Securities,
including, without limitation, any action necessary to identify such
Holder as a selling securityholder in the Shelf Registration Statement;
provided that the Company shall not be required to file more than one
supplement to the Prospectus or post-effective amendment to the Shelf
Registration Statement in any calendar quarter to add Electing Holders;
and
(iii) if at any time during the Effectiveness Period the Securities,
pursuant to the Indenture, are convertible into securities other than
Common Stock, to cause, or to cause any successor under the Indenture to
cause, such securities to be included in the Shelf Registration Statement
no later than the date on which the Securities may then be convertible
into such securities.
The Company shall be deemed not to have used commercially reasonable efforts to
keep the Shelf Registration Statement effective during the requisite period if
the Company voluntarily takes any action that would result in Holders of
Registrable Securities covered thereby not being able to offer and sell any of
such Registrable Securities during that period, unless such action is (A)
required by applicable law or regulation and the Company thereafter promptly
complies with the requirements of paragraph 3(j) below or (B) permitted pursuant
to Section 2(c) below.
(c) The Company may suspend the use of the Prospectus for a period (such
period being referred to herein as the "Suspension Period") not to exceed 30
days in the aggregate in any three-month period or 90 days in the aggregate in
any 12-month period if the Board of Directors of the Company shall have
determined in good faith that because of valid business
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reasons (not including avoidance of the Company's obligations hereunder),
including the acquisition or divestiture of assets, pending corporate
developments and similar events, it is in the best interests of the Company to
suspend such use, and prior to suspending such use the Company provides the
Holders with written notice of such suspension, which notice need not specify
the nature of the event giving rise to such suspension.
3. Registration Procedures. In connection with the Shelf Registration
Statement, the following provisions shall apply:
(a) (i) Not less than 30 calendar days prior to the Effective Time of the
Shelf Registration Statement (or if the Company is a WKSI and is required
to file an Automatic Shelf Registration Statement under Section 2(a)
hereof, not less than 30 calendar days prior to the filing of the
Automatic Shelf Registration Statement), the Company shall mail the Notice
and Questionnaire to the Holders of Registrable Securities. No Holder
shall be entitled to be named as a selling securityholder in the Shelf
Registration Statement as of the Effective Time, and no Holder shall be
entitled to use the Prospectus forming a part thereof for resales of
Registrable Securities at any time, unless such Holder has returned a
completed and signed Notice and Questionnaire to the Company by the
deadline for response set forth therein; provided that Holders of
Registrable Securities shall have at least 25 calendar days from the date
on which the Notice and Questionnaire is first mailed to such Holders to
return a completed and signed Notice and Questionnaire to the Company.
(ii) After the Effective Time of the Shelf Registration Statement,
the Company shall, upon the request of any Holder of Registrable
Securities that is not then an Electing Holder, promptly send a Notice and
Questionnaire to such Holder. The Company shall not be required to take
any action to name such Holder as a selling securityholder in the Shelf
Registration Statement or to enable such Holder to use the Prospectus
forming a part thereof for resales of Registrable Securities until such
Holder has returned a completed and signed Notice and Questionnaire,
together with any other information as the Company may reasonably request
from such Holder, to the Company.
(iii) The term "Electing Holder" shall mean any Holder of
Registrable Securities that has returned a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(a)(i) or
3(a)(ii) hereof.
(b) If the Company is not required to file an Automatic Shelf Registration
Statement under Section 2(a) hereof, the Company shall furnish to each Electing
Holder, prior to the Effective Time, a copy of the Shelf Registration Statement
initially filed with the Commission (excluding exhibits thereto and any document
or other material incorporated by reference therein). Notwithstanding the
foregoing, the Company shall furnish to each Electing Holder, prior to the
filing thereof with the Commission, (i) copies of each amendment to the Shelf
Registration Statement and each amendment or supplement, if any, to the
Prospectus included therein (excluding, in each case, any document or other
material to be filed with the Commission under the Exchange Act and incorporated
by reference therein) and (ii) each Automatic Shelf Registration Statement
(excluding exhibits thereto and any document or other
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material incorporated by reference therein) to be filed after the Electing
Holder has provided the Company with its Notice and Questionnaire, and shall use
commercially reasonable efforts to reflect in each such document, at the
Effective Time or when so filed with the Commission, as the case may be, such
comments as such Holders and their respective counsel reasonably may propose
relating to such Holders and the distribution of such Holders' Registrable
Securities.
(c) The Company shall promptly take such action as may be necessary so
that (i) each of the Shelf Registration Statement and any amendment thereto and
the Prospectus forming a part thereof and any amendment or supplement thereto
(and each report or other document incorporated therein by reference in each
case) complies in all material respects with the Securities Act and the Exchange
Act and the respective rules and regulations thereunder, (ii) each of the Shelf
Registration Statement and any amendment thereto does not, when it becomes
effective, 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 (iii) each of the Prospectus forming a part of the
Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not at any time during the Effectiveness Period (except during
the periods specified in Section 2(c) above) include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(d) The Company shall promptly advise each Electing Holder, and shall
confirm such advice in writing if so requested by any such Electing Holder:
(i) when a Shelf Registration Statement and any amendment thereto
has been filed with the Commission and when a Shelf Registration Statement
or any post-effective amendment thereto has become effective, in each case
making a public announcement thereof by release made to Reuters Economic
Services and Bloomberg Business News;
(ii) of any request by the Commission for amendments or supplements
to the Shelf Registration Statement or the Prospectus included therein or
for additional information;
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Shelf Registration Statement or the initiation of
any proceedings for such purpose;
(iv) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the securities included in the
Shelf Registration Statement for sale in any jurisdiction or the
initiation of any proceeding for such purpose; and
(v) of the occurrence of any event or the existence of any state of
facts that requires the making of any changes in the Shelf Registration
Statement or the Prospectus included therein so that, as of such date,
such Shelf Registration Statement and Prospectus do not contain an untrue
statement of a material fact and do not omit to
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state a material fact required to be stated therein or necessary to make
the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading (which advice
shall be accompanied by an instruction to such Holders to suspend the use
of the Prospectus until the requisite changes have been made).
(e) The Company shall use commercially reasonable efforts to prevent the
issuance, and if issued to obtain the withdrawal at the earliest reasonable
possible time, of any order suspending the effectiveness of the Shelf
Registration Statement.
(f) The Company shall furnish to each Electing Holder, without charge, at
least one copy of the Shelf Registration Statement and all post-effective
amendments thereto, including financial statements and schedules, and, if such
Electing Holder so requests in writing, all reports, other documents and
exhibits that are filed with or incorporated by reference in the Shelf
Registration Statement.
(g) The Company shall, during the Effectiveness Period, deliver to each
Electing Holder, without charge, as many copies of the Prospectus (including
each preliminary Prospectus) included in the Shelf Registration Statement and
any amendment or supplement thereto as such Electing Holder may reasonably
request; and the Company consents (except during the periods specified in
Section 2(c) above or during the continuance of any event or the existence of
any state of facts described in Section 3(d)(iii), (iv) or (v) above) to the use
of the Prospectus and any amendment or supplement thereto by each of the
Electing Holders in connection with the offering and sale of the Registrable
Securities covered by the Prospectus and any amendment or supplement thereto
during the Effectiveness Period.
(h) Prior to any offering of Registrable Securities pursuant to the Shelf
Registration Statement, the Company shall use commercially reasonable efforts to
(i) register or qualify or cooperate with the Electing Holders 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 within the United States as any Electing Holder may
reasonably request, (ii) keep such registrations or qualifications in effect and
comply with such laws so as to permit the continuance of offers and sales in
such jurisdictions for so long as may be necessary to enable any Electing Holder
or underwriter, if any, to complete its distribution of Registrable Securities
pursuant to the Shelf Registration Statement, and (iii) take any and all other
actions reasonably necessary or advisable to enable the disposition in such
jurisdictions of such Registrable Securities; provided that in no event shall
the Company be obligated to (A) qualify as a foreign corporation or as a dealer
in securities in any jurisdiction where it would not otherwise be required to so
qualify but for this Section 3(h), (B) file any general consent to service of
process in any jurisdiction where it is not as of the date hereof so subject or
(C) subject itself to taxation in any jurisdiction where it is not as of the
date hereof so subject.
(i) Unless any Registrable Securities shall be in book-entry only form,
the Company shall use commercially reasonable efforts to cooperate with the
Electing Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to the
Shelf Registration Statement, which certificates, if so required by any
securities
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exchange upon which any Registrable Securities are listed, shall be penned,
lithographed or engraved, or produced by any combination of such methods, on
steel engraved borders, and which certificates shall be free of any restrictive
legends and in such permitted denominations and registered in such names as
Electing Holders may request in connection with the sale of Registrable
Securities pursuant to the Shelf Registration Statement.
(j) Subject to the Company's right to suspend the use of the Prospectus
during the periods specified in Section 2(c) above, upon the occurrence of any
event or the existence of any state of facts contemplated by paragraph 3(d)(v)
above, the Company shall promptly prepare a post-effective amendment to any
Shelf Registration Statement or an amendment or supplement to the related
Prospectus or file any other required document so that, as thereafter delivered
to purchasers of the Registrable Securities included therein, the Prospectus
will not include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the Company
notifies the Electing Holders of the occurrence of any event or the existence of
any state of facts contemplated by paragraph 3(d)(v) above, the Electing Holder
shall suspend the use of the Prospectus until the requisite changes to the
Prospectus have been made.
(k) Not later than the Effective Time of the Shelf Registration Statement,
the Company shall provide a CUSIP number for the Registrable Securities that are
debt securities.
(l) The Company shall use commercially reasonable efforts to comply with
all applicable Rules and Regulations, and to make generally available to its
securityholders as soon as practicable, but in any event not later than eighteen
months after (i) the effective date (as defined in Rule 158(c) under the
Securities Act) of the Shelf Registration Statement, (ii) the effective date of
each post-effective amendment to the Shelf Registration Statement, and (iii) the
date of each filing by the Company with the Commission of an Annual Report on
Form 10-K that is incorporated by reference in the Shelf Registration Statement,
an earning statement of the Company and its subsidiaries complying with Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158).
(m) Not later than the Effective Time of the Shelf Registration Statement,
the Company shall use commercially reasonable efforts to cause the Indenture to
be qualified under the Trust Indenture Act; in connection with such
qualification, the Company shall cooperate with the Trustee under the Indenture
and the Holders (as defined in the Indenture) to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in accordance
with the terms of the Trust Indenture Act; and the Company shall execute, and
shall use commercially reasonable efforts to cause the Trustee to execute, all
documents that may be required to effect such changes and all other forms and
documents required to be filed with the Commission to enable such Indenture to
be so qualified in a timely manner. In the event that any such amendment or
modification referred to in this Section 3(m) involves the appointment of a new
trustee under the Indenture, the Company shall appoint a new trustee thereunder
pursuant to the applicable provisions of the Indenture.
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(n) Subject to the Company's right to suspend the use of the Prospectus
during the periods specified in Section 2(c) above, in the event of an
underwritten offering conducted pursuant to Section 6 hereof, the Company shall,
if requested in writing, promptly include or incorporate in a prospectus
supplement or post-effective amendment to the Shelf Registration Statement such
information as the Managing Underwriters reasonably agree should be included
therein and to which the Company does not reasonably object and shall make all
required filings of such prospectus supplement or post-effective amendment as
soon as practicable after it is notified of the matters to be included or
incorporated in such prospectus supplement or post-effective amendment.
(o) The Company shall enter into such customary agreements (including an
underwriting agreement in customary form in the event of an underwritten
offering conducted pursuant to Section 6 hereof) and take all other appropriate
action in order to expedite and facilitate the registration and disposition of
the Registrable Securities, and in connection therewith, if an underwriting
agreement is entered into, use commercially reasonable efforts to cause the same
to contain indemnification provisions and procedures substantially identical to
those set forth in Section 5 hereof with respect to all parties to be
indemnified pursuant to Section 5 hereof.
(p) The Company shall:
(i)(A) make reasonably available for inspection by the Electing
Holders, any underwriter participating in any disposition pursuant to the
Shelf Registration Statement, and any attorney, accountant or other agent
retained by such Electing Holders or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties
of the Company and its subsidiaries, and (B) cause the Company's officers,
directors and employees to supply all information reasonably requested by
such Electing Holders or any such underwriter, attorney, accountant or
agent in connection with the Shelf Registration Statement, in each case,
as is customary for similar due diligence examinations; provided that all
records, information and documents that are designated in writing by the
Company, in good faith, as confidential shall be kept confidential by such
Electing Holders and any such underwriter, attorney, accountant or agent,
unless such disclosure is made in connection with a court proceeding or
required by law, or such records, information or documents become
available to the public generally or through a third party without an
accompanying obligation of confidentiality; and provided, further, that if
the foregoing inspection and information gathering would otherwise disrupt
or interfere with the Company's conduct of its business, such inspection
and information gathering shall, to the greatest extent possible, be
coordinated on behalf of the Electing Holders and the other parties
entitled thereto by one counsel designated by and on behalf of the
Electing Holders and other parties;
(ii) in connection with any underwritten offering conducted pursuant
to Section 6 hereof, make such representations and warranties to the
Electing Holders participating in such underwritten offering and to the
Managing Underwriters, in form, substance and scope as are customarily
made by the Company to underwriters in
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primary underwritten offerings of equity and convertible debt securities
and covering matters including, but not limited to, those set forth in the
Purchase Agreement;
(iii) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, obtain opinions of counsel to the Company
(which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the Managing Underwriters) addressed to each
Electing Holder participating in such underwritten offering and the
underwriters, covering such matters as are customarily covered in opinions
requested in primary underwritten offerings of equity and convertible debt
securities and such other matters as may be reasonably requested by such
Electing Holders and underwriters (it being agreed that such opinions
shall include a statement to the effect that no facts have come to the
attention of such counsel that have caused such counsel to believe that
(A) the Shelf Registration Statement as of the Effective Time or as of the
date of the most recent post-effective amendment thereto, as the case may
be, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or (B) the Prospectus, as of its date or
as of the date of such opinion, contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading);
(iv) in connection with any underwritten offering conducted pursuant
to Section 6 hereof, obtain "cold comfort" letters and updates thereof
from the independent public accountants of the Company (and, if necessary,
from the independent public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements
and financial data are, or are required to be, included in the Shelf
Registration Statement), addressed to each Electing Holder participating
in such underwritten offering (if such Electing Holder has provided such
letter, representations or documentation, if any, required for such cold
comfort letter to be so addressed) and the underwriters, in customary form
and covering matters of the type customarily covered in "cold comfort"
letters in connection with primary underwritten offerings;
(v) in connection with any underwritten offering conducted pursuant
to Section 6 hereof, deliver such documents and certificates as may be
reasonably requested by any Electing Holders participating in such
underwritten offering and the Managing Underwriters, if any, including,
without limitation, certificates to evidence compliance with Section 3(j)
hereof and with any conditions contained in the underwriting agreement or
other agreements entered into by the Company.
(q) The Company will use commercially reasonable efforts to cause the
Common Stock issuable upon conversion of the Securities to be listed on the
NASDAQ Global Market on or prior to the Effective Time of the Shelf Registration
Statement hereunder.
(r) In the event that any broker-dealer registered under the Exchange Act
shall be an "affiliate" (as defined in Rule 2720(b)(1) of the NASD Rules (or any
successor provision
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thereto)) of the Company or has a "conflict of interest" (as defined in Rule
2720(b)(7) of the NASD Rules (or any successor provision thereto)) and such
broker-dealer shall underwrite, participate as a member of an underwriting
syndicate or selling group or assist in the distribution of any Registrable
Securities covered by the Shelf Registration Statement, whether as a Holder of
such Registrable Securities or as an underwriter, a placement or sales agent or
a broker or dealer in respect thereof, or otherwise, the Company shall assist
such broker-dealer in complying with the requirements of the NASD Rules,
including, without limitation, by (A) engaging a "qualified independent
underwriter" (as defined in Rule 2720(b)(15) of the NASD Rules (or any successor
provision thereto)) to participate in the preparation of the registration
statement relating to such Registrable Securities, to exercise usual standards
of due diligence in respect thereto and to recommend the public offering price
of such Registrable Securities, (B) indemnifying such qualified independent
underwriter to the extent of the indemnification of underwriters provided in
Section 5 hereof, and (C) providing such information to such broker-dealer as
may be required in order for such broker-dealer to comply with the requirements
of the NASD Rules.
(s) The Company shall use commercially reasonable efforts to take all
other steps necessary to effect the registration, offering and sale of the
Registrable Securities covered by the Shelf Registration Statement contemplated
hereby.
4. Registration Expenses. Except as otherwise provided in Section 3, the
Company shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2, 3 and 6 hereof and shall bear
or reimburse the Electing Holders for the reasonable fees and disbursements, not
to exceed $25,000, of a single counsel selected by a plurality of all Electing
Holders who own an aggregate of not less than 25% of the Registrable Securities
covered by the Shelf Registration Statement to act as counsel therefore in
connection therewith. Each Electing Holder shall pay all underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of such Electing Holder's Registrable Securities pursuant to the Shelf
Registration Statement.
5. Indemnification and Contribution.
(a) Indemnification by the Company. Upon the registration of the
Registrable Securities pursuant to Section 2 hereof, the Company shall indemnify
and hold harmless each Electing Holder and each underwriter, selling agent or
other securities professional that may be deemed an underwriter pursuant to
Section 2(11) of the Securities Act, if any (each, an "Indemnified Party"),
which facilitates the disposition of Registrable Securities, and each of their
respective officers and directors and each person who controls such Electing
Holder, underwriter, selling agent or other securities professional within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(each such person being sometimes referred to as an "Indemnified Person")
against any losses, claims, damages or liabilities, joint or several, to which
such Indemnified Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Shelf Registration
Statement under which such Registrable Securities are registered under the
Securities Act, or any Prospectus contained therein or furnished by the
12
Company to any Indemnified Person, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company hereby agrees to reimburse
such Indemnified Person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such action or claim as
such expenses are incurred; provided that the Company shall not be liable to any
such Indemnified Person in any such case to the extent that (i) any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such Shelf
Registration Statement or Prospectus, or amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by such
Indemnified Person expressly for use therein or (ii) any such loss, claim,
damage or liability arises solely as a result of the use by an indemnified party
of a Prospectus during a Suspension Period or in contravention of Section 3(j)
above, provided that the Company shall have provided proper notice (in
accordance with Section 2(c) or 3(j), as applicable) of such Suspension Period
or event specified in Section 3(j) hereof prior to such use.
(b) Indemnification by the Electing Holders and any Agents and
Underwriters. Each Electing Holder agrees, as a consequence of the inclusion of
any of such Electing Holder's Registrable Securities in such Shelf Registration
Statement, and each underwriter, selling agent or other securities professional,
if any, which facilitates the disposition of Registrable Securities shall agree,
as a consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors, officers who sign any Shelf Registration Statement and each person,
if any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which the Company or such other persons may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in such Shelf Registration Statement or Prospectus, or any amendment
or supplement, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Electing
Holder, underwriter, selling agent or other securities professional expressly
for use therein, and (ii) reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party under this Section 5, notify such indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under the indemnification provisions of or
contemplated by subsection (a) or (b) above. In case any such action shall be
brought against
13
any indemnified party and it shall notify an indemnifying party of the
commencement thereof, such indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, such indemnifying party shall
not be liable to such indemnified party under this Section 5 for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) Contribution. If the indemnification provided for in this Section 5 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 5(d) were determined by
pro rata allocation (even if the Electing Holders or any underwriters, selling
agents or other securities professionals or all of them were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 5(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. 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 obligations of the Electing Holders and any underwriters,
selling agents or other securities professionals in this Section 5(d) to
contribute shall be several in proportion to the percentage
14
of principal amount of Registrable Securities registered or underwritten, as
the case may be, by them and not joint.
(e) Notwithstanding any other provision of this Section 5, in no event
will any (i) Electing Holder be required to undertake liability to any person
under this Section 5 for any amounts in excess of the dollar amount of the
proceeds to be received by such Holder from the sale of such Holder's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Shelf Registration Statement under which
such Registrable Securities are to be registered under the Securities Act and
(ii) underwriter, selling agent or other securities professional be required to
undertake liability to any person hereunder for any amounts in excess of the
discount, commission or other compensation payable to such underwriter, selling
agent or other securities professional with respect to the Registrable
Securities underwritten by it and distributed to the public.
(f) The obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have to any
Indemnified Person and the obligations of any Indemnified Person under this
Section 5 shall be in addition to any liability which such Indemnified Person
may otherwise have to the Company. The remedies provided in this Section 5 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.
6. Underwritten Offering. Any Holder of Registrable Securities who desires
to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided that (i) the Company shall have agreed to an
underwritten offering, it being understood that the Company may in its sole
discretion refuse to undertake an underwritten offering; (ii) the Electing
Holders of at least 33-1/3% in aggregate principal amount of the Registrable
Securities then covered by the Shelf Registration Statement shall request such
an offering and (iii) at least such aggregate principal amount of such
Registrable Securities shall be included in such offering. Upon receipt of such
a request, the Company shall provide all Holders of Registrable Securities
written notice of the request, which notice shall inform such Holders that they
have the opportunity to participate in the offering. In any such underwritten
offering, the investment banker or bankers and manager or managers that will
administer the offering will be selected by, and the underwriting arrangements
with respect thereto (including the size of the offering) will be approved by,
the holders of a majority of the Registrable Securities to be included in such
offering; provided that such investment bankers and managers and underwriting
arrangements must be reasonably satisfactory to the Company. No Holder may
participate in any underwritten offering contemplated hereby unless (a) such
Holder agrees to sell such Holder's Registrable Securities to be included in the
underwritten offering in accordance with any approved underwriting arrangements,
(b) such Holder completes and executes all reasonable questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such approved underwriting arrangements,
and (c) if such Holder is not then an Electing Holder, such Holder returns a
completed and signed Notice and Questionnaire to the Company in accordance with
Section 3(a)(ii) hereof within a reasonable amount of time before such
underwritten offering. The Holders participating in any underwritten offering
shall be responsible for any underwriting discounts and commissions and fees
and, subject to Section 4 hereof, expenses of their own
15
counsel. The Company shall pay all expenses customarily borne by issuers in an
underwritten offering, including but not limited to filing fees, the fees and
disbursements of its counsel and independent public accountants and any printing
expenses incurred in connection with such underwritten offering. Notwithstanding
the foregoing or the provisions of Section 3(n) hereof, upon receipt of a
request from the Managing Underwriter or a representative of holders of a
majority of the Registrable Securities to be included in an underwritten
offering to prepare and file an amendment or supplement to the Shelf
Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days if the Board of Directors of the Company shall have determined
in good faith that the Company has a bona fide business reason for such delay.
7. Liquidated Damages.
(a) Notwithstanding any postponement of effectiveness permitted by Section
2(a) hereof, if (i) on or prior to the 90th day following the Closing Date, a
Shelf Registration Statement has not been filed with the Commission (and has not
become automatically effective upon filing, if the Company is at such time a
WKSI) or (ii) on or prior to the 180th day following the Closing Date, such
Shelf Registration Statement is not declared effective by the Commission if the
Company is not a WKSI on the date the Shelf Registration Statement is filed
(each, a "Registration Default"), the Company shall be required to pay
liquidated damages ("Liquidated Damages"), from and including the day such
Registration Default occurs to but excluding the date such Shelf Registration
Statement is either so filed or so filed and subsequently declared effective, as
applicable, at a rate per annum equal to an additional one-quarter of one
percent (0.25%) of the principal amount of Registrable Securities, to and
including the 90th day following such Registration Default, and one-half of one
percent (0.50%) of the principal amount of the Registrable Securities, from and
after the 91st day following such Registration Default.
(b) In the event that (i) the Shelf Registration Statement ceases to be
effective, (ii) the Company suspends the use of the Prospectus pursuant to
Section 2(c) or 3(j) hereof, (iii) the Holders are not authorized to use the
Prospectus pursuant to Section 3(g) hereto or (iv) the Holders are otherwise
prevented or restricted by the Company from effecting sales pursuant to the
Shelf Registration Statement (an "Effective Failure") for more than 30 days in
the aggregate, whether or not consecutive, in any three-month period, or for
more than 90 days in the aggregate, whether or not consecutive, during any
12-month period, then the Company shall pay Liquidated Damages at a rate per
annum equal to an additional one-quarter of one percent (0.25%) of the principal
amount of Registrable Securities from and including the 31st day of the
applicable 90-day period, or one-half of one percent (0.50%) of the principal
amount of such Registrable Securities from and including the 91st day of the
applicable 12-month period, as the case may be, that any such Effective Failure
has existed until the earlier of (1) the time the Holders of Registrable
Securities are again able to make sales under the Shelf Registration Statement
or (2) the expiration of the Effectiveness Period.
(c) Any amounts to be paid as Liquidated Damages pursuant to paragraphs
(a) or (b) of this Section 7 shall be paid in cash semi-annually in arrears,
with the first semi-annual
16
payment due on the first Interest Payment Date (as defined in the Indenture), as
applicable, following the date of such Registration Default or Effective
Failure, as applicable. Such Liquidated Damages will accrue in respect of the
Securities at the rates set forth in paragraphs (a) or (b) of this Section 7, as
applicable, on the principal amount of the Securities.
(d) Except as provided in Section 8(b) hereof, the Liquidated Damages as
set forth in this Section 7 shall be the exclusive monetary remedy available to
the Holders of Registrable Securities for such Registration Default or Effective
Failure. In no event shall the Company be required to pay Liquidated Damages (i)
in excess of the applicable maximum amount of one-half of one percent (0.50%)
set forth above, regardless of whether one or multiple Registration Defaults or
Effective Failures exist; (ii) for any period after the second anniversary of
the Closing Date or (iii) if the Shelf Registration Statement has been declared
effective but there is an Effective Failure, on Securities that are not
Registrable Securities.
(e) For purposes of the Indenture and the Securities, Liquidated Damages
shall be treated as additional interest due on the Securities, and shall be
subject to all provisions in the Indenture relating to interest payments,
including but not limited to record date provisions.
(f) No Liquidated Damages will be payable in respect of Common Stock in
the event of a Registration Default or Effective Failure, even if such shares of
Common Stock are Registrable Securities.
8. Miscellaneous.
(a) Other Registration Rights. The Company may grant registration rights
that would permit any person that is a third party the right to piggy-back on
any Shelf Registration Statement, provided that if the Managing Underwriter of
any underwritten offering conducted pursuant to Section 6 hereof notifies the
Company and the Electing Holders that the total amount of securities which the
Electing Holders and the holders of such piggy-back rights intend to include in
any Shelf Registration Statement is so large as to materially threaten the
success of such offering (including the price at which such securities can be
sold), then the amount, number or kind of securities to be offered for the
account of holders of such piggy-back rights will be reduced to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount, number and kind recommended by the Managing Underwriter
prior to any reduction in the amount of Registrable Securities to be included in
such Shelf Registration Statement.
(b) Specific Performance. The parties hereto acknowledge that there would
be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Purchaser and the Holders from time to time
may be irreparably harmed by any such failure, and accordingly agree that the
Purchaser and such Holders, in addition to any other remedy to which they may be
entitled at law or in equity and without limiting the remedies available to the
Electing Holders under Section 7 hereof, shall be entitled to compel specific
performance of the obligations of the Company under this Registration Rights
Agreement in
17
accordance with the terms and conditions of this Registration Rights Agreement,
in any court of the United States or any State thereof having jurisdiction.
(c) Amendments and Waivers. This Agreement, including this Section 8(c),
may be amended, and waivers or consents to departures from the provisions hereof
may be given, only by a written instrument duly executed by the Company and the
holders of a majority in aggregate principal amount of Registrable Securities
then outstanding. Each Holder of Registrable Securities outstanding at the time
of any such amendment, waiver or consent or thereafter shall be bound by any
amendment, waiver or consent effected pursuant to this Section 8(c), whether or
not any notice, writing or marking indicating such amendment, waiver or consent
appears on the Registrable Securities or is delivered to such Holder.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be given as provided in the Indenture.
(e) Parties in Interest. The parties to this Agreement intend that all
Holders of Registrable Securities shall be entitled to receive the benefits of
this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities which are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto and any Holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any
Holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.
(f) 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 shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
18
(j) Survival. The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Electing Holder, any director, officer or partner of such Holder, any agent or
underwriter, any director, officer or partner of such agent or underwriter, or
any controlling person of any of the foregoing, and shall survive the transfer
and registration of the Registrable Securities of such Holder.
19
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
Aspect Medical Systems, Inc
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
By: /s/ Xxxxxxx, Sachs & Co.
---------------------------
(Xxxxxxx, Xxxxx & Co.)
20
APPENDIX A
Aspect Medical Systems, Inc.
INSTRUCTION TO DTC PARTICIPANTS
(Date of Mailing)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE:
The Depository Trust Company ("DTC") has identified you as a DTC
Participant through which beneficial interests in the Aspect Medical Systems,
Inc. (the "Company") 2.50% Convertible Senior Notes due 2014 (the "Securities")
are held.
The Company is in the process of registering the Securities under the
Securities Act of 1933 for resale by the beneficial owners thereof. In order to
have their Securities included in the registration statement, beneficial owners
must complete and return the enclosed Notice of Registration Statement and
Selling Securityholder Questionnaire.
It is important that beneficial owners of the Securities receive a copy of
the enclosed materials as soon as possible as their rights to have the
Securities included in the registration statement depend upon their returning
the Notice and Questionnaire by ___________. Please forward a copy of the
enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact:
Investor Relations
Aspect Medical Systems, Inc.
Xxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
A-1
Aspect Medical Systems, Inc.
Notice of Registration Statement
and
Selling Securityholder Questionnaire
___________, 200
Aspect Medical Systems, Inc. (the "Company") has filed with the United
States Securities and Exchange Commission (the "Commission") a registration
statement on Form S-3 (the "Shelf Registration Statement") for the registration
and resale under Rule 415 of the United States Securities Act of 1933, as
amended (the "Securities Act"), of the Company's 2.50% Convertible Senior Notes
due 2014 (the "Securities") and the shares of common stock, par value $0.01 per
share (the "Common Stock"), issuable upon conversion thereof, in accordance with
the Registration Rights Agreement, dated as of June 20, 2007 (the "Registration
Rights Agreement"), between the Company and the purchaser named therein. A copy
of the Registration Rights Agreement is available from the Company upon request
at the address set forth below. All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.
In order to have Registrable Securities (as defined below) included in the
Shelf Registration Statement (or a supplement or amendment thereto), this Notice
of Registration Statement and Selling Securityholder Questionnaire ("Notice and
Questionnaire") must be completed, executed and delivered to the Company at the
address set forth herein for receipt ON OR BEFORE ___________. Beneficial owners
are encouraged to complete and deliver this Selling Securityholder Questionnaire
prior to the effectiveness of the Shelf Registration Statement so that such
beneficial owner can be named as selling securityholder at the time of the
effectiveness of the Shelf Registration Statement. Beneficial owners of
Registrable Securities who do not complete, execute and return this Notice and
Questionnaire by such date (i) will not be named as selling securityholders in
the Shelf Registration Statement or the initial related Prospectus and (ii) may
not use the Prospectus forming a part thereof for resales of Registrable
Securities until the Prospectus has been supplemented to include that beneficial
owner as a selling securityholder.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and related Prospectus.
The term "Registrable Securities" is defined in the Registration Rights
Agreement to mean all or any portion of the Securities issued from time to time
under the Indenture in registered form and the shares of Common Stock issuable
upon conversion of such Securities; provided that a security ceases to be a
Registrable Security when it is no longer a Restricted Security, and in any
event on the second anniversary of the Closing Date.
A-2
The term "Restricted Security" is defined in the Registration Rights
Agreement to mean any outstanding Security or share of Common Stock issuable
upon conversion thereof except any such Security or share of Common Stock that
(i) has been effectively registered under the Securities Act and sold in a
manner contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto or similar provision then in effect) or is
transferable pursuant to paragraph (k) of such Rule 144 (or any successor
provision thereto or similar provision then in effect), (iii) is freely
transferable by persons that are not Affiliates of the Company without
registration under the Securities Act, or (iv) has otherwise been transferred
and a new Security or share of Common Stock not subject to transfer restrictions
under the Securities Act has been delivered by or on behalf of the Company in
accordance with the Indenture.
A-3
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and listed below in Item (3).
The undersigned, by signing and returning this Notice and Questionnaire, agrees
to be bound with respect to such Registrable Securities by the terms and
conditions of this Notice and Questionnaire and the Registration Rights
Agreement, including, without limitation, Section 5 of the Registration Rights
Agreement, as if the undersigned Selling Securityholder were an original party
thereto.
Upon any sale of Registrable Securities pursuant to the Shelf Registration
Statement, the Selling Securityholder will be required to deliver to the Company
and the Trustee the Notice of Transfer (completed and signed) set forth in
Exhibit 1 to this Notice and Questionnaire.
The Selling Securityholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:
A-4
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Securityholder:
______________________________________________________________
(b) Full Legal Name of Registered Holder (if not the same as in
(a) above) of Registrable Securities Listed in Item (3) Below:
______________________________________________________________
(c) Full Legal Name of DTC Participant (if applicable and if not
the same as (b) above) Through Which Registrable Securities
Listed in Item (3) Below are Held:
(2) Address for Notices to Selling Securityholder:
_______________________
_______________________
_______________________
Telephone: _______________________
Fax: _______________________
Contact Person: _______________________
(3) Beneficial Ownership of Securities:
Except as set forth below in this Item (3), the undersigned
Selling Securityholder does not beneficially own any
Securities or shares of Common Stock issued upon conversion of
any Securities.
(a) Principal amount of Registrable Securities (as defined in the
Registration Rights Agreement) beneficially owned: ___________
CUSIP No(s). of such Registrable Securities:__________________
Number of shares of Common Stock (if any) issued upon
conversion of Registrable Securities:_________________________
(b) Principal amount of Securities other than Registrable
Securities beneficially owned: _______________________________
CUSIP No(s). of such other Securities: _______________________
Number of shares of Common Stock (if any) issued upon
conversion of such other Securities: _________________________
(c) Principal amount of Registrable Securities which the
undersigned wishes to be included in the Shelf Registration
Statement: ___________________________________________________
CUSIP No(s). of such Registrable Securities to be included in
the Shelf Registration Statement: ____________________________
Number of shares of Common Stock (if any) issued upon
conversion of Registrable Securities which are to be included
in the Shelf Registration Statement: _________________________
(4) Beneficial Ownership of Other Securities of the Company:
Except as set forth below in this Item (4), the undersigned Selling
Securityholder is not the beneficial or registered owner of any shares
of Common Stock or any other securities of the Company, other than the
Securities and shares of Common Stock listed above in Item (3).
State any exceptions here:
(5) State below the identity of all entities and natural persons who
exercise sole or shared voting or dispositive powers over your Notes,
your Common Stock or other securities listed in Item (3) or (4).
(6) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder nor any
of its affiliates, officers, directors or principal equity holders (5%
or more) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates)
during the past three years.
State any exceptions here:
(7) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder
intends to distribute the Registrable Securities listed above in Item
(3) only as follows (if at all): Such Registrable Securities may be
sold from time to time directly by the undersigned Selling
Securityholder or, alternatively, through underwriters, broker-dealers
or agents. Such Registrable Securities may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time
of sale, at varying prices determined at the time of sale, or at
negotiated prices. Such sales may be effected in transactions (which
may involve crosses or block transactions) (i) on any national
securities exchange or quotation service on which the Registrable
Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such
exchanges or services or in the over-the-counter market, or (iv)
through the writing of options. The Selling Securityholder may also
sell Registrable Securities short and deliver Registrable Securities to
close out such short positions, or loan or pledge Registrable
Securities to broker-dealers that in turn may sell such securities.
State any exceptions here:
Note: In no event may such method(s) of distribution take the
form of an underwritten offering of the Registrable Securities
without the prior agreement of the Company.
(8) Broker-dealers and their affiliates:
If the Selling Securityholder is a broker-dealer or an
affiliate of a broker-dealer and did not purchase its notes in
the ordinary course of business or, at the time of the
purchase, had any agreements or understandings, directly or
indirectly, to distribute the securities, we may have to
identify the Selling Securityholder as an underwriter in the
Shelf Registration Statement or related prospectus. Persons
identified as underwriters in the Shelf Registration Statement
or related prospectus may be subject to additional potential
liabilities under the Securities Act.
(a) Are you a broker-dealer registered pursuant to Section 15 of
the Exchange Act?
[ ] Yes.
[ ] No.
(b) If your response to (a) above is "No," are you an "affiliate"
of a broker-dealer that is registered pursuant to Section 15
of the Exchange Act?
[ ] Yes.
[ ] No.
For the purposes of this Item 8(b), an "affiliate" of a
registered broker-dealer includes any company that directly,
or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, such
broker-dealer.
(c) Did you acquire the securities listed in Item 3 above in the
ordinary course of business?
[ ] Yes.
[ ] No.
(d) At the time of your purchase of the securities listed in Item
3 above, did you have any agreements or understandings,
directly or indirectly, with any person to distribute the
securities?
[ ] Yes.
[ ] No.
(e) If your response to (d) above is yes, please describe such
agreements or understandings:
(f) Did you receive the securities listed in Item 3 above as
compensation for investment banking services or as investment
shares?
[ ] Yes.
[ ] No.
(g) If your response to (f) above is yes, please describe the
circumstances.
By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
prospectus delivery and other provisions of the Securities Act and the Exchange
Act and the rules and regulations thereunder, particularly Regulation M.
In the event that the Selling Securityholder transfers all or any
portion of the Registrable Securities listed in Item (3) above after the date on
which such information is provided to the Company, the Selling Securityholder
agrees to notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Registration Rights
Agreement.
By signing below, the Selling Securityholder consents to the disclosure
of the information contained herein in its answers to Items (1) through (8)
above and the inclusion of such information in the Shelf Registration Statement
and related Prospectus. The Selling Securityholder understands that such
information will be relied upon by the Company in connection with the
preparation of the Shelf Registration Statement and related Prospectus.
In accordance with the Selling Securityholder's obligation under
Section 3(a) of the Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Securityholder agrees to promptly notify the Company of any inaccuracies
or changes in the information provided herein which may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains in
effect. All notices hereunder and pursuant to the Registration Rights Agreement
shall be made in writing, by hand-delivery, first-class mail, or air courier
guaranteeing overnight delivery as follows:
(i) To the Company:
Aspect Medical Systems, Inc.
Xxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
(000) 000-0000
Attention: Director of Financial Accounting and
External Reporting
(ii) With a copy to:
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
(000) 000-0000
Attention: Xxxx Xxxxxxxxx
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company, the terms of this Notice and
Questionnaire, and the representations and warranties contained herein, shall be
binding on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder (with respect to the Registrable
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above). This Agreement shall be governed in all respects by the laws of the
State of New York.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
__________________________________________________________________________
Selling Securityholder
(Print/type full legal name of beneficial owner of Registrable Securities)
By: ______________________________________________________________________
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO THE COMPANY
AT:
Aspect Medical Systems, Inc.
Xxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
(000) 000-0000
Attention: Director of Financial Accounting and External Reporting
EXHIBIT 1
TO APPENDIX A
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
Aspect Medical Systems, Inc.
Xxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Director of Financial Accounting and External Reporting
U.S. Bank National Association
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Re: Aspect Medical Systems, Inc. (the "Company")
2.50% Convertible Senior Notes due 2014 (the "Notes")
Dear Sirs:
Please be advised that _____________________ has transferred
$___________ aggregate principal amount of the above-referenced Notes or shares
of the Company's common stock, issued upon conversion of Notes, pursuant to an
effective Registration Statement on Form S-3 (File No. 333-____) filed by the
Company.
We hereby certify that the prospectus delivery requirements, if any, of
the Securities Act of 1933, as amended, have been satisfied with respect to the
transfer described above and that the above-named beneficial owner of the Notes
or common stock is named as a selling securityholder in the Prospectus dated
___________, or in amendments or supplements thereto, and that the aggregate
principal amount of the Notes or number of shares of common stock transferred
are [a portion of] the Notes or shares of common stock listed in such Prospectus
as amended or supplemented opposite such owner's name.
Very truly yours,
________________________________
(Name)
By: ________________________________
(Authorized Signature)
