EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT, dated as of July 9, 1999 (this
"AGREEMENT"), is made by and among Endocardial Solutions, Inc., a Delaware
corporation, with headquarters located at 0000 Xxxxxx Xxxx, Xx. Xxxx, Xxxxxxxxx
(the "COMPANY"), and the investors named on the signature pages hereto (the
"INITIAL INVESTORS").
RECITALS:
A. In connection with the Securities Purchase Agreement dated July 9,
1999 between the Initial Investors and the Company (the "PURCHASE AGREEMENT"),
the Company has agreed, upon the terms and subject to the conditions of the
Purchase Agreement, to issue and sell to the Initial Investors 1,111,111 shares
of the Company's Common Stock (the "COMMON SHARES").
B. In order to induce the Initial Investors to execute and deliver the
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act and applicable state securities laws with
respect to the Common Shares.
In consideration of the premises and the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Initial Investors hereby agree as
follows:
ARTICLE I
DEFINITIONS
Capitalized terms used and not otherwise defined herein have the respective
meanings given them set forth in the Purchase Agreement. In addition, as used in
this Agreement, the following terms have the following meanings:
1.1 "COMMON SHARES" means the shares of Common Stock sold pursuant to
the Purchase Agreement.
1.2 "INVESTORS" means the Initial Investors and any of their
transferees or assignees who agree to become bound by the provisions of this
Agreement in accordance with Article IX hereof.
1.3 "REGISTRABLE SECURITIES" means the Common Shares sold pursuant to
the Purchase Agreement and any shares of capital stock issued or issuable from
time to time (with any adjustments) in exchange for or otherwise with respect to
the Common Shares.
1.4 "REGISTRATION PERIOD" means the period between the date of this
Agreement and the earlier of (i) the date on which all of the Registrable
Securities have been sold and no further Registrable Securities may be issued in
the future, (ii) the date on which all the
Registrable Securities (in the opinion of the Investors' counsel) may be
immediately sold without registration and without restriction (including without
limitation as to volume by each holder thereof) as to the number of Registrable
Securities to be sold, pursuant to Rule 144 or otherwise, or (iii) the second
anniversary of the date of this Agreement.
1.5 "Registration Statement" means a Registration Statement of the
Company filed under the Securities Act.
1.6 The terms "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a Registration Statement or
statements in compliance with the Securities Act and pursuant to Rule 415 and
the declaration or ordering of effectiveness of such Registration Statement by
the SEC.
1.7 "RULE 415" means Rule 415 under the Securities Act, or any
successor Rule providing for offering securities on a continuous basis, and
applicable rules and regulations thereunder.
ARTICLE II
REGISTRATION
2.1 MANDATORY REGISTRATION. The Company will use best efforts to file
with the SEC a Registration Statement on Form S-3 registering the Registrable
Securities and no other securities for resale within 30 business days after the
Closing Date of the purchase of the Common Shares under the Purchase Agreement.
If Form S-3 is not available at that time, then the Company will file a
Registration Statement on such form as is then available to effect a
registration of the Registrable Securities, subject to the consent of the
Initial Investors, which consent will not be unreasonably withheld.
2.2 EFFECTIVENESS OF THE REGISTRATION STATEMENT. The Company will use
its best efforts to cause the Registration Statement to be declared effective by
the SEC as soon as practicable after filing, and in any event no later than the
90th day after the Closing Date (the "REQUIRED EFFECTIVE DATE"). However, so
long as the Company filed the Registration Statement within 30 business days
after the Closing Date, (a) if the SEC takes the position that registration of
the resale of the Registrable Securities by the Investors is not available under
applicable laws, rules and regulation and that the Company must register the
offering of the Registrable Securities as a primary offering by the Company, or
(b) if the Registration Statement receives SEC review, then the Required
Effective Date will be the 120th day after the Closing Date. In the case of an
SEC response described in clause (a), the Company will, within 40 business days
after the date the Company receives such SEC response, file a Registration
Statement as a primary offering. The Company's best efforts will include, but
not be limited to, promptly responding to all comments received from the staff
of the SEC. If the Company receives notification from the SEC that the
Registration Statement will receive no action or review from the SEC, then the
Company will cause the Registration Statement to become effective within five
business days after such SEC notification. Once the Registration Statement is
declared effective by the SEC, the Company will cause the
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Registration Statement to remain effective throughout the Registration Period,
except as permitted under Section 3.
2.3 PAYMENTS BY THE COMPANY. If (i) at any time after effectiveness of
the Registration Statement, sales cannot be made thereunder for any reason,
other than suspension of effectiveness of the Registration Statement as
described in Section 3.6, for a period of more than 10 consecutive business
days, or 30 days in the aggregate, during any 12-month period or (ii) the Common
Stock is not listed or included for quotation on Nasdaq, Nasdaq SmallCap, the
NYSE or AMEX for more than an aggregate of 10 business days in any 12-month
period, then the Company will make a cash payment to each Investor as partial
compensation for such delay. The amount of the cash payment made to each
Investor will be equal to 1% of the purchase price paid for the Common Shares
purchased by the Investor and not previously sold by the Investor for the first
30 days that sales cannot be made under the effective Registration Statement or
the Common Stock is not listed or included for quotation on Nasdaq, Nasdaq
SmallCap, the NYSE or AMEX. These payments will be paid to each Investor in cash
within five business days following the end of such 30-day period.
2.4 EFFECT OF LATE REGISTRATION. If the Registration Statement has not
been declared effective by the Required Effective Date, then the Company will
make cash payments to each Investor as partial compensation for such delay (the
"LATE REGISTRATION PAYMENTS"). The Late Registration Payments will be equal to
1% of the purchase price paid for the Common Shares purchased by such Investor
and not previously sold by such Investor for the first 30 days after the
Required Effective Date. The Late Registration Payments will be paid to the
Initial Investors in cash within five business days after the earlier of (i) the
end of the 30-day period following the Required Effective Date or (ii) the
effective date of the Registration Statement. Nothing herein limits any
Investor's right to pursue actual damages for the Company's failure to file a
Registration Statement or to have it declared effective by the SEC on or prior
to the Required Effective Date in accordance with the terms of this Agreement.
2.5 PIGGYBACK REGISTRATIONS.
(a) If, at any time prior to the expiration of the Registration
Period, a Registration Statement is not effective with respect to all of the
Registrable Securities and the Company decides to register any of its securities
for its own account or for the account of others, then the Company will promptly
give the Investors written notice thereof and will use its best efforts to
include in such registration all or any part of the Registrable Securities
requested by such Investors to be included therein (excluding any Registrable
Securities previously included in a Registration Statement). This requirement
does not apply to Company registrations on Form S-4 or S-8 or their equivalents
relating to equity securities to be issued solely in connection with an
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans. Each Investor must
give its request for registration under this paragraph to the Company in writing
within 15 days after receipt from the Company of notice of such pending
registration. If the registration for which the Company gives notice is a public
offering involving an
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underwriting, the Company will so advise the Investors as part of the
above-described written notice. In that event, if the managing underwriter(s) of
the public offering impose a limitation on the number of shares of Common Stock
that may be included in the Registration Statement because, in such
underwriter(s)' judgment, such limitation would be necessary to effect an
orderly public distribution, then the Company will be obligated to include only
such limited portion, if any, of the Registrable Securities with respect to
which such Investors have requested inclusion hereunder. Any exclusion of
Registrable Securities will be made pro rata among all holders of the Company's
securities seeking to include shares of Common Stock in proportion to the number
of shares of Common Stock sought to be included by those holders. However, the
Company will not exclude any Registrable Securities unless the Company has first
excluded all outstanding securities the holders of which are not entitled by
right to inclusion of securities in such Registration Statement or are not
entitled pro rata inclusion with the Registrable Securities.
(b) No right to registration of Registrable Securities under this
Section 2.5 limits in any way the registration required under Section 2.1 above.
The obligations of the Company under this Section 2.5 expire upon the earlier of
(i) the effectiveness of the Registration Statement filed pursuant to Section
2.1 above, (ii) after the Company has afforded the opportunity for the Investors
to exercise registration rights under this Section 2.5 for two registrations
(provided, however, that any Investor that has had any Registrable Securities
excluded from any Registration Statement in accordance with this Section 2.5 may
include in any additional Registration Statement filed by the Company the
Registrable Securities so excluded), (iii) when all of the Registrable
Securities held by any Investor may be sold by such Investor under Rule 144
without being subject to any volume restrictions, or (iv) the second anniversary
of the date of this Agreement.
2.6 ELIGIBILITY TO USE FORM S-3. The Company represents and warrants
that it meets the requirements for the use of Form S-3 for registration of the
sale by the Investors of the Registrable Securities. The Company will file all
reports required to be filed by the Company with the SEC in a timely manner so
as to preserve its eligibility for the use of Form S-3.
ARTICLE III
ADDITIONAL OBLIGATIONS OF THE COMPANY
3.1 CONTINUED EFFECTIVENESS OF REGISTRATION STATEMENT. Subject to the
limitations set forth in Section 3.6, the Company will keep the Registration
Statement covering the Registrable Securities effective under Rule 415 at all
times during the Registration Period.
3.2 ACCURACY OF REGISTRATION STATEMENT. Any Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) filed by the Company covering Registrable Securities will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading. The Company
will prepare and file with the SEC such amendments (including post-effective
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amendments) and supplements to the Registration Statement and the prospectus
used in connection with the Registration Statement as may be necessary to permit
sales pursuant to the Registration Statement at all times during the
Registration Period, and, during such period, will comply with the provisions of
the Securities Act with respect to the disposition of all Registrable Securities
of the Company covered by the Registration Statement until the termination of
the Registration Period, or if earlier, until such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in the
Registration Statement.
3.3 FURNISHING DOCUMENTATION. The Company will furnish to each Investor
whose Registrable Securities are included in a Registration Statement, and to
its legal counsel, (a) promptly after each document is prepared and publicly
distributed, filed with the SEC or received by the Company, one copy of any
Registration Statement filed pursuant to this Agreement and any amendments
thereto, each preliminary prospectus and final prospectus and each amendment or
supplement thereto; and, in the case of a Registration Statement filed under
Section 2.1 above, each letter written by or on behalf of the Company to the SEC
and each item of correspondence from the SEC or the staff of the SEC, in each
case relating to such Registration Statement (other than any portion of any item
thereof which contains information for which the Company has sought confidential
treatment); and (b) a number of copies of a prospectus, including a preliminary
prospectus, and all amendments and supplements thereto, and such other documents
as the Investor may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by the Investor. The Company will immediately
notify by facsimile each Investor whose Registrable Securities are included in
any Registration Statement of the effectiveness of the Registration Statement
and any post-effective amendment.
3.4 ADDITIONAL OBLIGATIONS. The Company will use its best efforts to
(a) register and qualify the Registrable Securities covered by a Registration
Statement under such other securities or blue sky laws of such jurisdictions as
each Investor who holds (or has the right to hold) Registrable Securities being
offered reasonably requests, (b) prepare and file in those jurisdictions any
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain their
effectiveness during the Registration Period, (c) take any other actions
necessary to maintain such registrations and qualifications in effect at all
times during the Registration Period, and (d) take any other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions. Notwithstanding the foregoing, the Company is not required, in
connection such obligations, to (i) qualify to do business in any jurisdiction
where it would not otherwise be required to qualify but for this Section 3.4,
(ii) subject itself to general taxation in any such jurisdiction, (iii) file a
general consent to service of process in any such jurisdiction, (iv) provide any
undertakings that cause material expense or burden to the Company, or (v) make
any change in its charter or bylaws, which in each case the Board of Directors
of the Company determines to be contrary to the best interests of the Company
and its stockholders.
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3.5 UNDERWRITTEN OFFERINGS. If the Investors who hold a majority in
interest of the Registrable Securities being offered in an offering pursuant to
a Registration Statement or any amendment or supplement thereto under this
Agreement select underwriters reasonably acceptable to the Company for such
offering, the Company will enter into and perform its obligations under an
underwriting agreement in usual and customary form including, without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering.
3.6 SUSPENSION OF REGISTRATION.
(a) The Company will notify (by telephone and also by facsimile and
reputable overnight courier) each Investor who holds Registrable Securities
being sold pursuant to a Registration Statement of the happening of any event of
which the Company has knowledge as a result of which the prospectus included in
the Registration Statement as then in effect includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Company will make such notification as
promptly as practicable after the Company becomes aware of the event (but in no
event, without the prior written consent of the Investor, will the Company
disclose to any Investor any of the facts or circumstances regarding the event),
will promptly (but in no event more than ten business days) prepare a supplement
or amendment to the Registration Statement to correct such untrue statement or
omission, and will deliver a number of copies of such supplement or amendment to
each Investor as such Investor may reasonably request.
(b) Notwithstanding the obligations under Section 3.6(a), if in the
good faith judgment of the Company, following consultation with legal counsel,
resales of Registrable Securities made pursuant to the Registration Statement
(i) would be detrimental to the Company and its stockholders due to the
existence of a material development or potential material development involving
the Company which the Company would be obligated to disclose in the Registration
Statement, which disclosure would be premature or otherwise inadvisable at such
time or would have a Material Adverse Effect upon the Company and its
stockholders, or (ii) would adversely affect or require premature disclosure of
the filing of a Company-initiated registration of any class of its equity
securities, the Company will have the right to suspend the use of the
Registration Statement for a period of not more than sixty days, PROVIDED,
HOWEVER, that the Company may so defer or suspend the use of the Registration
Statement no more than one time in any twelve-month period, and PROVIDED,
FURTHER, that, after deferring or suspending the use of the Registration
Statement, the Company may not again defer or suspend the use of the
Registration Statement until a period of thirty days has elapsed after
resumption of the use of the Registration Statement.
(c) Subject to the Company's rights under this Section 3, the Company
will use its best efforts to prevent the issuance of any stop order or other
suspension of effectiveness of a Registration Statement and, if such an order is
issued, will use its best efforts to obtain the withdrawal of such order at the
earliest possible time and to notify each Investor that holds Registrable
Securities being sold (or, in the event of an underwritten offering, the
managing
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underwriters) of the issuance of such order and the resolution thereof.
(d) Notwithstanding anything to the contrary contained herein or in the
Purchase Agreement, if the use of the Registration Statement is suspended by the
Company, the Company will promptly give notice of the suspension to all
Investors whose securities are covered by the Registration Statement, and will
promptly notify each such Investor as soon as the use of the Registration
Statement may be resumed. Notwithstanding anything to the contrary contained
herein or in the Purchase Agreement, the Company will cause the Transfer Agent
to deliver unlegended shares of Common Stock to a transferee of an Investor in
accordance with the terms of the Purchase Agreement in connection with any sale
of Registrable Securities with respect to which such Investor has entered into a
contract for sale prior to receipt of notice of such suspension and for which
such Investor has not yet settled.
3.7 REVIEW BY THE INVESTORS. The Company will permit a single firm of
legal counsel, designated by the Investors who hold a majority in interest of
the Registrable Securities being sold pursuant to a Registration Statement, to
review the Registration Statement and all amendments and supplements thereto (as
well as all requests for acceleration or effectiveness thereof) a reasonable
period of time prior to their filing with the SEC, and will not file any
document in a form to which such counsel reasonably objects, unless otherwise
required by law in the opinion of the Company's counsel. The sections of any
such Registration Statement including information with respect to the Investors,
the Investors' beneficial ownership of securities of the Company or the
Investors' intended method of disposition of Registrable Securities must conform
to the information provided to the Company by each of the Investors.
3.8 INFORMATION. The Company will make generally available to its
security holders as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement (in a form complying
with the provisions of Rule 158 under the Securities Act) covering a 12-month
period beginning not later than the first day of the Company's fiscal quarter
next following the effective date of the Registration Statement.
3.9 COMFORT LETTER; LEGAL OPINION. At the request of the Investors who
hold a majority in interest of the Registrable Securities being sold pursuant to
a Registration Statement, and on the date that Registrable Securities are
delivered to an underwriter for sale in connection with the Registration
Statement, the Company will furnish to the Investors and the underwriters (i) a
letter, dated such date, from the Company's independent certified public
accountants, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters; and (ii) an opinion, dated such date, from
counsel representing the Company for purposes of the Registration Statement, in
form and substance as is customarily given in an underwritten public offering,
addressed to the underwriters and Investors.
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3.10 DUE DILIGENCE; CONFIDENTIALITY.
(a) The Company will make available for inspection by any Investor
whose Registrable Securities are being sold pursuant to a Registration
Statement, any underwriter participating in any disposition pursuant to the
Registration Statement, and any attorney, accountant or other agent retained by
any such Investor or underwriter (collectively, the "INSPECTORS"), all pertinent
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the "RECORDS"), as each Inspector reasonably deems
necessary to enable the Inspector to exercise its due diligence responsibility.
The Company will cause its officers, directors and employees to supply all
information that any Inspector may reasonably request for purposes of performing
such due diligence.
(b) Each Inspector will hold in confidence, and will not make any
disclosure (except to an Investor) of, any Records or other information that the
Company determines in good faith to be confidential, and of which determination
the Inspectors are so notified, unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, (ii) the release of such Records is ordered pursuant to a subpoena or
other order from a court or government body of competent jurisdiction, (iii) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement (to the
knowledge of the relevant Inspector), (iv) the Records or other information was
developed independently by an Inspector without breach of this Agreement, (v)
the information was known to the Inspector before receipt of such information
from the Company, or (vi) the information was disclosed to the Inspector by a
third party without restriction. The Company is not required to disclose any
confidential information in the Records to any Inspector unless and until such
Inspector has entered into a confidentiality agreement (in form and substance
satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section 3.11. Each Investor will, upon
learning that disclosure of Records containing confidential information is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the Company, at
the Company's expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, the Records deemed confidential. Nothing
herein will be deemed to limit the Investor's ability to sell Registrable
Securities in a manner that is otherwise consistent with applicable laws and
regulations.
(c) The Company will hold in confidence, and will not make any
disclosure of, information concerning an Investor provided to the Company under
this Agreement unless (i) disclosure of such information is necessary to comply
with federal or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered pursuant to a
subpoena or other order from a court or governmental body of competent
jurisdiction, (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement (v) the information was disclosed to the Company by a third party
without restriction or (vi) such Investor consents to the form and content of
any such disclosure. If the Company learns that
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disclosure of such information concerning an Investor is sought in or by a court
or governmental body of competent jurisdiction or through other means, the
Company will give prompt notice to such Investor prior to making such disclosure
and allow such Investor, at its expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, such information.
3.11 LISTING. The Company will (i) cause all of the Registrable
Securities covered by each Registration Statement to be listed on each national
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) to the
extent the securities of the same class or series are not then listed on a
national securities exchange, secure the designation and quotation of all of the
Registrable Securities covered by each Registration Statement on Nasdaq and,
without limiting the generality of the foregoing, arrange for at least two
market makers to register with the National Association of Securities Dealers,
Inc. as such with respect to such Registrable Securities.
3.12 TRANSFER AGENT; REGISTRAR. The Company will provide a transfer
agent and registrar, which may be a single entity, for the Registrable
Securities not later than the effective date of the Registration Statement.
3.13 SHARE CERTIFICATES. The Company will cooperate with the Investors
who hold Registrable Securities being sold and with the managing underwriter(s),
if any, to facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legends) representing Registrable Securities to be
offered pursuant to a Registration Statement and will enable such certificates
to be in such denominations or amounts as the case may be, and registered in
such names as the Investors or the managing underwriter(s), if any, may
reasonably request, all in accordance with Article V of the Purchase Agreement.
3.14 PLAN OF DISTRIBUTION. At the request of the Investors holding a
majority in interest of the Registrable Securities registered pursuant to a
Registration Statement, the Company will promptly prepare and file with the SEC
such amendments (including post-effective amendments) and supplements to the
Registration Statement, and the prospectus used in connection with the
Registration Statement, as may be necessary in order to change the plan of
distribution set forth in such Registration Statement.
3.15 SECURITIES LAWS COMPLIANCE. The Company will comply with all
applicable laws related to any Registration Statement relating to the sale of
Registrable Securities and to offering and sale of securities and with all
applicable rules and regulations of governmental authorities in connection
therewith (including, without limitation, the Securities Act, the Exchange Act
and the rules and regulations promulgated by the SEC).
3.16 FURTHER ASSURANCES. The Company will take all other reasonable
actions as any Investor or the underwriters, if any, may reasonably request to
expedite and facilitate disposition by such Investor of the Registrable
Securities pursuant to the Registration Statement.
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3.17 NO ADDITIONAL SELLING SHAREHOLDERS. The Company will not, and will
not agree to, allow the holders of any securities of the Company to include any
of their securities in any Registration Statement under Section 2.1 hereof, or
any amendment or supplement thereto under Section 3.2 hereof, without the
consent of the holders of a majority in interest of the Registrable Securities.
ARTICLE IV
OBLIGATIONS OF THE INVESTORS
4.1 INVESTOR INFORMATION. As a condition to the obligations of the
Company to complete any registration pursuant to this Agreement with respect to
the Registrable Securities of each Investor, such Investor will furnish to the
Company such information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable Securities held by it
as is reasonably required by the Company to effect the registration of the
Registrable Securities. At least 10 business days prior to the first anticipated
filing date of a Registration Statement for any registration under this
Agreement, the Company will notify each Investor of the information the Company
requires from that Investor if the Investor elects to have any of its
Registrable Securities included in the Registration Statement. If, within three
business days prior to the filing date, the Company has not received the
requested information from an Investor, then the Company may file the
Registration Statement without including Registrable Securities of that
Investor.
4.2 FURTHER ASSURANCES. Each Investor will cooperate with the Company,
as reasonably requested by the Company, in connection with the preparation and
filing of any Registration Statement hereunder, unless such Investor has
notified the Company in writing of such Investor's election to exclude all of
such Investor's Registrable Securities from the Registration Statement.
4.3 SUSPENSION OF SALES. Upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 3.6, each Investor
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities until it
receives copies of the supplemented or amended prospectus contemplated by
Section 3.6. If so directed by the Company, each Investor will deliver to the
Company (at the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in the Investor's possession (other than
a limited number of file copies) of the prospectus covering such Registrable
Securities that is current at the time of receipt of such notice.
4.4 UNDERWRITTEN OFFERINGS.
(a) If Investors holding a majority in interest of the Registrable
Securities being registered (with the approval of the Initial Investors)
determine to engage the services of an underwriter, each Investor will enter
into and perform such Investor's obligations under an underwriting agreement, in
usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing underwriter of
such offering, and will take such other actions as are reasonably required in
order to expedite
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or facilitate the disposition of the Registrable Securities, unless such
Investor has notified the Company in writing of such Investor's election to
exclude all of its Registrable Securities from such Registration Statement.
(b) Without limiting any Investor's rights under Section 2.1 hereof,
no Investor may participate in any underwritten distribution hereunder unless
such Investor (a) agrees to sell such Investor's Registrable Securities on the
basis provided in any underwriting arrangements approved by the Investors
entitled hereunder to approve such arrangements, (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements, and (c) agrees to pay its pro rata share of all underwriting
discounts and commissions and other fees and expenses of investment bankers and
any manager or managers of such underwriting, and legal expenses of the
underwriter, applicable with respect to its Registrable Securities, in each case
to the extent not payable by the Company under the terms of this Agreement.
ARTICLE V
EXPENSES OF REGISTRATION
The Company will bear all reasonable expenses, other than underwriting
discounts and commissions, and transfer taxes, if any, incurred in connection
with registrations, filings or qualifications pursuant to Articles II and III of
this Agreement, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, the fees and disbursements of
counsel for the Company, and the reasonable fees and disbursements of one firm
of legal counsel selected by the Initial Investors pursuant to Section 3.8
hereof.
ARTICLE VI
INDEMNIFICATION
In the event that any Registrable Securities are included in a Registration
Statement under this Agreement:
6.1 To the extent permitted by law, the Company will indemnify and hold
harmless each Investor that holds such Registrable Securities, any underwriter
(as defined in the Securities Act) for the Investors, any directors or officers
of such Investor or such underwriter and any person who controls such Investor
or such underwriter within the meaning of the Securities Act or the Exchange Act
(each, an "INDEMNIFIED PERSON") against any losses, claims, damages, expenses or
liabilities (joint or several) (collectively, and together with actions,
proceedings or inquiries by any regulatory or self-regulatory organization,
whether commenced or threatened in respect thereof, "CLAIMS") to which any of
them become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims arise out of or are based upon any of the following
statements, omissions or violations in a Registration Statement filed pursuant
to this Agreement, any post-effective amendment thereof or any prospectus
included therein: (a) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any
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post-effective amendment thereof or 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, (b) any untrue statement or alleged untrue
statement of a material fact contained in the prospectus (as it may be amended
or supplemented) or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading, or
(c) any violation or alleged violation by the Company of the Securities Act, the
Exchange Act or any other law, including without limitation any state securities
law or any rule or regulation thereunder (the matters in the foregoing clauses
(a) through (c) being, collectively, "VIOLATIONS"). Subject to the restrictions
set forth in Section 6.3 with respect to the number of legal counsel, the
Company will reimburse the Investors and each such underwriter or controlling
person and each such other Indemnified Person, promptly as such expenses are
incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6.1 (i) does not apply to a
Claim arising out of or based upon a Violation that occurs in reliance upon and
in conformity with information furnished in writing to the Company by any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto, if
such prospectus was timely made available by the Company pursuant to Section 3.3
hereof; and (ii) does not apply to amounts paid in settlement of any Claim if
such settlement is made without the prior written consent of the Company, which
consent will not be unreasonably withheld. This indemnity obligation will remain
in full force and effect regardless of any investigation made by or on behalf of
the Indemnified Persons and will survive the transfer of the Registrable
Securities by the Investors under Article IX of this Agreement.
6.2 In connection with any Registration Statement in which an Investor
is participating, each such Investor will indemnify and hold harmless, to the
same extent and in the same manner set forth in Section 6.1 above, the Company,
each of its directors, each of its officers who signs the Registration
Statement, each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act, and any other stockholder selling
securities pursuant to the Registration Statement or any of its directors or
officers or any person who controls such stockholder within the meaning of the
Securities Act or the Exchange Act (each an "INDEMNIFIED PERSON") against any
Claim to which any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such Claim arises out of or is based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use in connection with
such Registration Statement. Subject to the restrictions set forth in Section
6.3, such Investor will promptly reimburse any legal or other expenses (promptly
as such expenses are incurred and due and payable) reasonably incurred by them
in connection with investigating or defending any such Claim. However, the
indemnity agreement contained in this Section 6.2 does not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent will not be unreasonably
withheld, and no Investor will be liable under this Agreement (including this
Section 6.2 and
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Article VII) for the amount of any Claim that exceeds the net proceeds actually
received by such Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement. This indemnity will remain in full
force and effect regardless of any investigation made by or on behalf of an
Indemnified Party and will survive the transfer of the Registrable Securities by
the Investors under Article IX of this Agreement.
6.3 Promptly after receipt by an Indemnified Person under this Article
VI of notice of the commencement of any action (including any governmental
action), such Indemnified Person will, if a Claim in respect thereof is to be
made against any indemnifying party under this Article VI, deliver to the
indemnifying party a written notice of the commencement thereof. The
indemnifying party may participate in, and, to the extent the indemnifying party
so desires, jointly with any other indemnifying party similarly given notice,
assume control of the defense thereof with counsel mutually satisfactory to the
indemnifying parties and the Indemnified Person. In that case, the indemnifying
party will diligently pursue such defense. If, in the reasonable opinion of
counsel retained by the indemnifying party, the representation by such counsel
of the Indemnified Person and the indemnifying party would be inappropriate due
to actual or potential conflicts of interest between the Indemnified Person and
any other party represented by such counsel in such proceeding or the actual or
potential defendants in, or targets of, any such action including the
Indemnified Person, and any such Indemnified Person reasonably determines that
there may be legal defenses available to such Indemnified Person that are
different from or in addition to those available to the indemnifying party, then
the Indemnified Person is entitled to assume such defense and may retain its own
counsel, with the fees and expenses to be paid by the indemnifying party. The
Company will pay for only one separate legal counsel for the Investors
collectively, and such legal counsel will be selected by the Investors holding a
majority in interest of the Registrable Securities. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action does not relieve an indemnifying party of any
liability to an Indemnified Person under this Article 6, except to the extent
that the indemnifying party is prejudiced in its ability to defend such action.
The indemnification required by this Article 6 will be made by periodic payments
of the amount thereof during the course of the investigation or defense, as such
expense, loss, damage or liability is incurred and is due and payable.
ARTICLE VII
CONTRIBUTION
To the extent that any indemnification provided for herein is prohibited or
limited by law, the indemnifying party will make the maximum contribution with
respect to any amounts for which it would otherwise be liable under Article 6 to
the fullest extent permitted by law. However, (a) no contribution will be made
under circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in Article 6, (b) no seller
of Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any seller of Registrable Securities who was not guilty of such fraudulent
misrepresentation, and (c) contribution (together with any indemnification or
other
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obligations under this Agreement) by any seller of Registrable Securities will
be limited in amount to the net amount of proceeds received by such seller from
the sale of such Registrable Securities.
ARTICLE VIII
EXCHANGE ACT REPORTING
In order to make available to the Investors the benefits of Rule 144 or any
similar rule or regulation of the SEC that may at any time permit the Investors
to sell securities of the Company to the public without registration, the
Company will:
(a) File with the SEC in a timely manner, and make and keep
available, all reports and other documents required of the Company under the
Securities Act and the Exchange Act so long as the Company remains subject to
such requirements (it being understood that nothing herein limits the Company's
obligations under Section 4.3 of the Purchase Agreement) and the filing and
availability of such reports and other documents is required for the applicable
provisions of Rule 144; and
(b) Furnish to each Investor, so long as such Investor holds
Registrable Securities, promptly upon the Investor's request, (i) a written
statement by the Company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents filed by the Company with the SEC and (iii) such other information as
may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
ARTICLE IX
ASSIGNMENT OF REGISTRATION RIGHTS
The rights of the Investors hereunder, including the right to have the
Company register Registrable Securities pursuant to this Agreement, will be
automatically assigned by the Investors to transferees or assignees of all or
any portion of the Registrable Securities, but only if (a) the Investor agrees
in writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment, (b) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being transferred or assigned, (c) after such transfer
or assignment, the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act and applicable state securities
laws, (d) at or before the time the Company received the written notice
contemplated by clause (b) of this sentence, the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained
herein, (e) such transfer is made in accordance with the applicable requirements
of the Purchase Agreement, and (f) the transferee is an "accredited investor" as
that term is defined in Rule 501 of Regulation D.
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ARTICLE X
AMENDMENT OF REGISTRATION RIGHTS
This Agreement may be amended and the obligations hereunder may be waived
(either generally or in a particular instance, and either retroactively or
prospectively) only with the written consent of the Company and of the Investors
who then hold a majority in interest of the Registrable Securities (but not
including any Investor who is not affected by such amendment or waiver). Any
amendment or waiver effected in accordance with this Article X is binding upon
each Investor and the Company. Notwithstanding the foregoing, no amendment or
waiver will retroactively affect any Investor without its consent, or will
prospectively adversely affect any Investor who no longer owns any Registrable
Securities without its consent. Neither Article VI nor Article VII hereof may be
amended or waived in a manner adverse to an Investor without its consent.
ARTICLE XI
MISCELLANEOUS
11.1 CONFLICTING INSTRUCTIONS. A person or entity is deemed to be a
holder of Registrable Securities whenever such person or entity owns of record
such Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company will act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.
11.2 NOTICES. Any notices required or permitted to be given under the
terms of this Agreement will be given as set forth in the Purchase Agreement.
11.3 WAIVER. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, does not operate as a waiver thereof.
11.4 GOVERNING LAW. This Agreement will be governed by and interpreted
in accordance with the laws of the State of Delaware without regard to the
principles of conflict of laws. The parties hereto hereby submit to the
exclusive jurisdiction of the United States federal and state courts located in
the State of Delaware with respect to any dispute arising under this Agreement,
the agreements entered into in connection herewith or the transactions
contemplated hereby or thereby.
11.5 SEVERABILITY. If any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
will be deemed modified in order to conform with such statute or rule of law.
Any provision hereof that may prove invalid or unenforceable under any law will
not affect the validity or enforceability of any other provision hereof.
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11.6 ENTIRE AGREEMENT. This Agreement, the Purchase Agreement, the
Certificate of Designations, the Escrow Agreement (including all schedules and
exhibits thereto) constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein or therein. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
11.7 SUCCESSORS AND ASSIGNS. Subject to the requirements of Article 9
hereof, this Agreement inures to the benefit of and is binding upon the
successors and assigns of each of the parties hereto. Notwithstanding anything
to the contrary herein, including, without limitation, Article 9, the rights of
an Investor hereunder are assignable to and exercisable by a bona fide pledgee
of the Registrable Securities in connection with an Investor's margin or
brokerage accounts.
11.8 USE OF PRONOUNS. All pronouns refer to the masculine, feminine or
neuter, singular or plural, as the context may require.
11.9 HEADINGS. The headings of this Agreement are for convenience of
reference only, are not part of this Agreement and do not affect its
interpretation.
11.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which is deemed an original but all of which constitute
one and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission, and facsimile
signatures are binding on the parties hereto.
11.11 FURTHER ASSURANCES. Each party will do and perform, or cause to
be done and performed, all such further acts and things, and will execute and
deliver all other agreements, certificates, instruments and documents, as
another party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
11.12 CONSENTS. All consents and other determinations to be made by the
Investors pursuant to this Agreement will be made by the Initial Investors or
the Investors holding a majority in interest of the Registrable Securities.
11.13 NO STRICT CONSTRUCTION. The language used in this Agreement is
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
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IN WITNESS WHEREOF, the undersigned Investors and the Company have caused
this Agreement to be duly executed as of the date first above written.
COMPANY:
ENDOCARDIAL SOLUTIONS, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
[Signatures continued on next page]
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INVESTORS:
THE XXXXXXXX FUND, INC.
By: /s/ Xxxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxx
Its: Chairman
RESIDENCE:
ADDRESS:
The Xxxxxxxx Fund, Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
[Signatures continued on next page]
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INVESTORS:
XXXXXXX VARIABLE LIFE INVESTMENT
FUND SMALL COMPANY GROWTH
By: /s/ Xxx X. XxXxx
------------------------------------
Name: Xxx X. XxXxx
Its: Vice President
RESIDENCE:
ADDRESS:
c/o Xxxxxxx Xxxxxx Investments
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
[Signatures continued on next page]
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INVESTORS:
AST XXXXXX SMALL CAP GROWTH
By: /s/ Xxx X. XxXxx
------------------------------------
Name: Xxx X. XxXxx
Its: Vice President
RESIDENCE:
ADDRESS:
c/o Xxxxxxx Xxxxxx Investments
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
[Signatures continued on next page]
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INVESTORS:
XXXXXXX 21ST CENTURY GROWTH FUND
By: /s/ Xxx X. XxXxx
------------------------------------
Name: Xxx X. XxXxx
Its: Vice President
RESIDENCE:
ADDRESS:
c/o Xxxxxxx Xxxxxx Investments
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
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