EXHIBIT 10.12
PHOTOELECTRON CORPORATION
REGISTRATION RIGHTS AGREEMENT
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To the undersigned purchaser of Series C Convertible Preferred Stock, $.01
par value (the "Series C Preferred Stock"), of Photoelectron Corporation, a
Massachusetts corporation (the "Company").
Dear Sir or Madam:
This will confirm that in consideration of your agreement to purchase
11,111 shares (the "Preferred Shares") of the Series C Preferred Stock pursuant
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to the Subscription Agreement dated March ___, 1996 between you and the Company
(the "Subscription Agreement"), and as an inducement to you to enter into the
Subscription Agreement, the Company covenants and agrees with you as follows:
1. Certain Definitions. As used in this Agreement, the following
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terms shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission, or any
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other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Common Stock, $.01 par value per share,
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of the Company, as constituted as of the date of this Agreement.
"Conversion Shares" shall mean shares of Common Stock issued upon
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conversion of the Preferred Shares.
" Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Registration Expenses" shall mean the expenses so described in
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Section 6.
"Restricted Stock" shall mean the Conversion Shares, excluding
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Conversion Shares which have been (a) registered under the Securities Act
pursuant to an effective registration statement filed thereunder and disposed of
in accordance with the registration statement covering them, or (b) publicly
sold pursuant to Rule 144 under the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
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any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 6.
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2. Restrictive Legend. Each certificate representing Preferred
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Shares or Conversion Shares shall, except as otherwise provided in this Section
2 or in Section 3, be stamped or otherwise imprinted with a legend substantially
in the following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended. These shares have been
acquired for investment and not with a view to distribution or resale
and may not be sold, mortgaged, pledged, hypothecated or otherwise
transferred without an effective registration statement for such sales
under the Securities Act of 1933, or an opinion of counsel for the
corporation that registration is not required under such Act. The
shares represented by this certificate are also subject to the
provisions of a certain Subscription Agreement dated and may
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not be transferred except in accordance with the provisions of that
agreement."
A certificate shall not bear such legend if, in the opinion of counsel to the
Company, the securities being sold thereby may be publicly sold without
registration under the Securities Act.
3. Notice of Proposed Transfer. Prior to any proposed transfer of
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any Preferred Shares or Conversion Shares (other than under the circumstances
described in Section 5), the holder thereof shall give written notice to the
Company of its intention to effect such transfer. Each such notice shall
describe the manner of the proposed transfer and, if requested by the Company,
shall be accompanied by an opinion of counsel to the Company to the effect that
the proposed transfer may be effected without registration under the Securities
Act, whereupon the holder of such stock shall be entitled to transfer such stock
in accordance with the terms of its notice; provided, however, (a) that no such
opinion of counsel shall be required for a transfer to one or more partners of
the transfer or (in the case of a transferor that is a partnership) or to an
affiliated corporation (in the case of a transferor that is a corporation) and
(b) nothing in this Agreement shall supersede the restrictions on transfer and
other limitations set forth in the Subscription Agreement dated as of this date
between the Company and each of you. Each certificate for any Preferred Shares
or Conversion Shares transferred as above provided shall bear the legend set
forth in Section 2, except that such certificate shall not bear such legend if
(i) such transfer is in accordance with the provisions of Rule 144 (or any other
rule permitting public sale without registration under the Securities Act) or
(ii) the opinion of counsel to the Company is to the further effect that the
transferee and any subsequent transferee (other than an affiliate of the
Company) would be entitled to transfer such securities in a public sale without
registration under the Securities Act. The restrictions provided for in this
Section 3 shall not apply to securities which are not required to bear the
legend prescribed by Section 2 in accordance with the provisions of that
Section. The provisions of this Section 3 shall terminate upon the effective
date of an initial public offering of shares of the Common Stock.
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4. Incidental Registration. If the Company at any time proposes to
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register any of its securities under the Securities Act for sale to the public,
whether for its own account or for the account of other security holders or both
(except with respect to registration statements on Forms X-0, X-0 or any other
form not available for registering the Restricted Stock for sale to the public),
each such time it will give written notice to all holders of outstanding
Restricted Stock of its intention so to do. Upon the written request of any such
holder, received by the Company within 20 days after the giving of any such
notice by the Company, to register any of its Restricted Stock (which request
shall state the intended method of disposition thereof), the Company will use
its reasonable efforts to cause the Restricted Stock as to which registration
shall have been so requested to be included in the securities to be covered by
the registration statement proposed to be filed by the Company, all to the
extent necessary to permit the sale or other disposition by the holder (in
accordance with its written request) of such Restricted Stock so registered. In
the event that any registration pursuant to this Section 4 shall be, in whole or
part, an underwritten public offering of Common Stock, the number of shares of
Restricted Stock to be included in such an underwriting may be reduced (pro rata
among the requesting holders based upon the number of shares of Restricted Stock
owned by such holders) if and to the extent that the managing underwriter shall
be of the opinion that all or a portion of such Restricted Stock would adversely
affect the marketing of the securities to be sold therein. Notwithstanding the
foregoing provisions, the Company may withdraw any registration statement
referred to in this Section 4 without thereby incurring any liability to the
holders of Restricted Stock.
5. Registration Procedures. If and whenever the Company is
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required by the provisions of Section 4 to use its reasonable efforts to effect
the registration of any shares of Restricted Stock under the Securities Act, the
Company will, as soon as reasonably possible:
(a) prepare and file with the Commission a registration statement
with respect to such securities and use reasonable efforts to cause such
registration statement to become and remain effective for the period of the
distribution contemplated thereby (determined as hereinafter provided);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in paragraph (a) above and comply with the provisions of
the Securities Act with respect to the disposition of all Restricted Stock
covered by such registration statement in accordance with the sellers intended
method of disposition set forth in such registration statement for such period;
(c) furnish to each seller of Restricted Stock such number of copies
of the registration statement and the prospectus included therein (including
each preliminary prospectus) as such persons reasonably may request in order to
facilitate the public sale or other disposition of the Restricted Stock covered
by such registration statement;
(d) use reasonable efforts to register or qualify the Restricted
Stock covered by such registration statement under the securities or "blue sky"
laws of such jurisdictions as the
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sellers of Restricted Stock shall request, provided, however, that the Company
shall not for any such purpose be required to qualify generally to transact
business as a foreign corporation in any jurisdiction where it is not so
qualified or to consent to general service of process in any such jurisdiction;
(e) use reasonable efforts to list the Restricted Stock covered by
such registration statement with any securities exchange on which the Common
Stock of the Company is then listed; and
(f) make available for inspection by each seller of Restricted
Stock, any underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant or other agent retained by
such seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with such
registration statement.
In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as reasonably shall
be necessary in order to assure compliance with federal and applicable state
securities laws.
6. Expenses. All expenses incurred by the Company in complying
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with Sections 4 and 5, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
"blue sky" laws, fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars, and costs of insurance,
but excluding any Selling Expenses, are called "Registration Expenses". All
underwriting discounts and selling commissions applicable
to the sale of Restricted Stock are called "Selling Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement filed in compliance with Sections 4 and 5. All Selling
Expenses in connection with any registration under this Agreement shall be borne
by the participating sellers in proportion to the number of shares sold by each.
7. Indemnification and Contribution. (a) In the event of a
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registration of any of the Restricted Stock under the Securities Act pursuant to
this Agreement, the Company will indemnify and hold harmless each seller of
such Restricted Stock thereunder, each underwriter of such Restricted Stock
thereunder and each other person, if any, who controls such seller or
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such seller,
underwriter or controlling 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 any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
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under which such Restricted Stock was registered under the Securities Act
pursuant to this Agreement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, 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 will reimburse each such seller, each such underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case if and to the extent that 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 so made in conformity with information
furnished by any such seller, any such underwriter or any such controlling
person in writing specifically for use in such registration statement or
prospectus.
(b) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to this Agreement, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer, director, underwriter or controlling 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 any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Restricted Stock
was registered under the Securities Act pursuant to this Agreement, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, 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 will reimburse the
Company and each such officer, director, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that such seller will be liable hereunder in any such case if
and only to the extent that 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 reliance upon and in conformity with information
pertaining to such seller, as such, furnished in writing to the Company by such
seller specifically for use in such registration statement or prospectus, and
provided, further, however, that the liability of each seller hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering, price of the shares
sold by such seller under such registration statement bears to the total public
offering price of all securities sold thereunder, but not in any event to exceed
the proceeds received by such seller from the sale of Restricted Stock covered
by such registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be
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made against the indemnifying party hereunder, notify the indemnifying party in
writing thereof, but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to such indemnified party other
than under this Section 7 and shall only relieve it from any liability which it
may have to such indemnified party under this Section 7 if and to the extent the
indemnifying party is prejudiced by such omission. In case any such action shall
be brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party,
and, after notice from the indemnifying party to such indemnified party of its
election so to assume and undertake the defense thereof, the indemnifying party
shall not be liable to such indemnified party under this Section 7 for any legal
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation and of liaison with
counsel so selected, provided, however, that, if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, the indemnified party shall have the right to select a separate counsel
and to assume such legal defenses and otherwise to participate in the defense of
such action, with the expenses and fees of such separate counsel and other
expenses related to such participation to be reimbursed by the indemnifying
party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Restricted Stock exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 7 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
to the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 7 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling holder or any such controlling
person in circumstances for which indemnification is provided under this Section
7; then, and in each such case, the Company and such holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such holder
is responsible for the portion represented by the percentage that the public
offering price of its Restricted Stock offered by the registration statement
bears to the public offering price of all securities offered by such
registration statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such holder will be
ruled to contribute any amount in excess of the public offering price of all
such Restricted Stock offered by it pursuant to such registration statement; and
(B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any person or entity who was not guilty of such fraudulent
misrepresentation.
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8. Changes in Common Stock or Preferred Stock. If, and as often
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as, there is any change in the Common Stock or the Preferred Stock by way of a
stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the Common
Stock or the Preferred Stock as so changed.
9. Rule 144 Reporting. With a view to making available the benefits
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of certain rules and regulations of the Commission which may at any time permit
the sale of the Restricted Stock to the public without registration, at all
times after 90 days after any registration statement covering a public offering
of securities of the Company under the Securities Act shall have become
effective, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) furnish to each holder of Restricted Stock forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as such
holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing such holder to sell any Restricted Stock without
registration.
10. Miscellaneous.
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(a) All covenants and agreements contained in this Agreement by or
on behalf of each of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto (including without
limitation transferees of any Preferred Shares or Restricted Stock), whether so
expressed or not, provided, however, that registration rights conferred herein
on any holder of Preferred Shares or Restricted Stock shall only inure to the
benefit of a transferee of Preferred Shares or Restricted Stock if (i) there is
transferred to such transferee at least 20% of the total shares of Restricted
Stock originally issued pursuant to the Subscription Agreement to the direct or
indirect transferor of such transferee or (ii) such transferee is a partner,
shareholder or affiliate of a party hereto.
(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be mailed by certified or registered
mail, return receipt requested, postage prepaid, or telexed, in the case of non-
U.S. residents, addressed as follows:
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if to the Company or any other party hereto, at the address of such
party set forth in the Subscription Agreement;
if to any subsequent holder of Preferred Shares or Restricted Stock,
to it at such address as may have been furnished to the Company in
writing by such holder;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Preferred Shares or
Restricted Stock) or to the undersigned purchaser of Preferred Shares or
Restricted Stock (in the case of the Company) in accordance with the provisions
of this paragraph.
(c) This Agreement shall be governed by and construed in accordance
with the laws of The Commonwealth of Massachusetts, without regard to conflicts
of law principles.
(d) This Agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and the
undersigned purchaser.
(e) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) The obligations of the Company to register shares of Restricted
Stock under this Agreement shall terminate on the later to occur of (i) the
eighth anniversary of the date of this Agreement, or (ii) the second anniversary
of the effective date of the Company s initial public offering.
(g) If requested in writing by the underwriters for the initial
underwritten public offering of securities of the Company, the undersigned
purchaser shall agree not to sell publicly any shares of Restricted Stock or any
other shares of Common Stock (other than shares of Restricted Stock or other
shares of Common Stock being registered in such offering), without the consent
of such underwriters, for a period of not more than 180 days following the
effective date of the registration statement relating to such offering;
provided, however, that all persons entitled to registration rights with respect
to shares of Common Stock who are not parties to this Agreement, all other
persons selling shares of Common Stock in such offering and all executive
officers and directors of the Company shall also have agreed not to sell
publicly their Common Stock under the circumstances and pursuant to the terms
set forth in this Section 10(g).
(h) Notwithstanding the provisions of this Agreement, the Company's
obligation to file a registration statement, or to cause such registration
statement to become and remain effective, shall be suspended for a period not to
exceed 90 days in any 12-month period if there exists at the time material non-
public information relating to the Company which, in the reasonable opinion of
the Company, should not be disclosed.
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(i) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this Agreement
shall be a binding agreement between the Company and you.
Very truly yours,
PHOTOELECTRON CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
Vice President and Chief
Title: Operating Officer
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Date: March 14, 1996
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Agreed to and accepted as of
the date set forth below
INVESTOR
BY: /s/ X. Xxxxxxxxxxxx
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Title (if applicable):
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Date: 3/12/96
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