Exhibit 4.10
STOCKHOLDERS' AGREEMENT
By and Between
HEMASURE INC.
and
COBE LABORATORIES, INC.
Dated May 3, 1999
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.............................................1
ARTICLE II
GOVERNANCE
SECTION 2.01 Board Representation....................................3
SECTION 2.02 Resignations and Replacements...........................4
SECTION 2.03 Committees..............................................4
ARTICLE III
VOTING OBLIGATIONS
SECTION 3.01 Voting Obligations......................................4
ARTICLE IV
STANDSTILL AND TRANSFER PROVISIONS
SECTION 4.01 Standstill Period.......................................5
SECTION 4.02 Transfer Restrictions...................................5
SECTION 4.03 Acquisition of Additional Shares; Other Restrictions....6
SECTION 4.04 Company Rights of First Negotiation; Permitted Sales....7
SECTION 4.05 Stockholder Rights of First Notice......................8
SECTION 4.06 Anti-Dilutive Rights....................................8
ARTICLE V
REGISTRATION RIGHTS
SECTION 5.01 Restrictive Legend.....................................10
SECTION 5.02 Notice of Proposed Transfer............................10
SECTION 5.03 Required Registrations.................................11
SECTION 5.04 Incidental Registration................................13
SECTION 5.05 Shelf Registration.....................................13
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SECTION 5.06 Obligations of the Company.............................14
SECTION 5.07 Furnish Information....................................17
SECTION 5.08 Expenses of Registration...............................17
SECTION 5.09 Underwriting Requirements..............................17
SECTION 5.10 Indemnification........................................17
SECTION 5.11 Transfer of Registration Rights........................20
SECTION 5.12 Rule 144 Information...................................20
SECTION 5.13 Limitations on Registration Rights.....................21
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.01 Waiver.................................................21
SECTION 6.02 Expenses...............................................21
SECTION 6.03 Notices................................................22
SECTION 6.04 Headings...............................................23
SECTION 6.05 Severability...........................................23
SECTION 6.06 Entire Agreement.......................................23
SECTION 6.07 Assignment.............................................23
SECTION 6.08 No Third Party Beneficiaries...........................23
SECTION 6.09 Amendment..............................................23
SECTION 6.10 Governing Law..........................................23
SECTION 6.11 Arbitration............................................23
SECTION 6.12 Counterparts...........................................25
SECTION 6.13 Specific Performance...................................25
ANNEX A - GENERAL FORM OF STANDSTILL AND VOTING AGREEMENT FOR
PERMITTED TRANSFEREES
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STOCKHOLDER'S AGREEMENT
STOCKHOLDER'S AGREEMENT, dated May 3, 1999 (this "Agreement"), by
and between HEMASURE INC., a Delaware corporation (the "Company"), and COBE
LABORATORIES, INC., a Colorado corporation ("COBE" or the "Stockholder").
WHEREAS, the Company and COBE have entered into the Stock
Subscription Agreement, dated the date hereof (the "Stock Subscription
Agreement"), pursuant to which the Company is issuing to the Stockholder, and
the Stockholder is purchasing from the Company, common stock, par value $ .01
per share, of the Company ("Common Stock"), upon the terms set forth in the
Stock Subscription Agreement and
WHEREAS, the Company and the Stockholder wish to enter into this
Agreement to set forth their agreement as to the matters set forth herein with
respect to, among other things, representation on the Company's Board of
Directors (the "Board"), the sale of securities by the Company and the holding,
acquisition and Transfer (as defined below) of the Common Stock by the
Stockholder;
NOW, THEREFORE, in consideration of these premises, the mutual
agreements and covenants hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Stockholder hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. (a) Unless otherwise defined in this
Agreement, capitalized terms are used herein as defined in the Stock
Subscription Agreement.
(b) As used in this Agreement, the following terms shall have the
following meanings:
"Beneficially Own" has the meaning set forth in Rule 13d-3, as in
effect on the date hereof, under the Exchange Act.
"Director" means a member of the Board.
"Fully Diluted Basis" means, in respect of the Common Stock, the
method of calculating the number of shares of Common Stock issued and
outstanding on an applicable measurement date, pursuant to which the number of
shares of Common Stock issued and outstanding on any such date are aggregated
with the number of shares of
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Common Stock issuable on such date upon exercise or conversion of any other
security of the Company outstanding on such date (including employee stock
options issued pursuant to Company Benefit Plans).
"Register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement or
similar document with the SEC in compliance with the Securities Act and the
declaration or ordering of effectiveness by the SEC of such registration
statement or document.
"Registrable Stock" shall mean any Shares purchased by the
Stockholder pursuant to the Stock Subscription Agreement or Section 4.06(a) of
this Agreement. For purposes of this Agreement, any Registrable Stock shall
cease to be Registrable Stock when (w) a registration statement covering such
Registrable Stock has been declared effective and such Registrable Stock has
been disposed of pursuant to such effective registration statement, (x) such
Registrable Stock is sold by a Person in a transaction in which the rights under
the provisions of Article V are not assigned, (y) such Registrable Stock may be
sold pursuant to Rule 144(k) (or any similar provision then in force, but not
Rule 144(A)) or in a single transaction pursuant to Rule 144(e) (or its
successor) under the Securities Act without registration under the Securities
Act or (z) such Registrable Stock is sold, transferred or otherwise disposed of
in any manner to any Person or entity which, by virtue of this Agreement, is not
entitled to the registration rights provided by this Agreement.
"Stockholder Director" means a Director designated by the
Stockholder pursuant to this Agreement.
(c) The following terms have the meanings set forth in the
Sections set forth below:
Term Location
____ ________
Agreement...............................................Preamble
Anti-Dilutive Rights....................................ss. 4.06(a)
Board...................................................Recitals
COBE....................................................Preamble
Common Stock............................................Recitals
Company.................................................Preamble
Departing Stockholder Director..........................ss. 2.02(a)
Maintenance Shares......................................ss. 4.06(a)
Permitted Transferee....................................ss. 4.02(a)
Proposed Transferee.....................................ss. 4.04(a)(ii)
Shelf Registration......................................ss. 5.05(a)
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Term Location
---- --------
Standstill Period.......................................ss. 4.01
Stock Subscription Agreement............................Recitals
Stockholder.............................................Preamble
Transfer................................................ss. 4.02(a)
(d) References in this Agreement to articles, sections,
paragraphs, clauses, schedules and exhibits are to articles, sections,
paragraphs, clauses, schedules and exhibits in or to this Agreement unless
otherwise indicated. Whenever the context may require, any pronoun includes the
corresponding masculine, feminine and neuter forms. Any term defined by
reference to any agreement, instrument or document has the meaning assigned to
it whether or not such agreement, instrument or document is in effect. The words
"include", "includes" and "including" are deemed to be followed by the phrase
"without limitation". Unless the context otherwise requires, any agreement,
instrument or other document defined or referred to herein refers to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified from time to time. Unless the context
otherwise requires, references herein to any Person include its successors and
assigns. The words "shall" and "will" have the same meaning and effect.
ARTICLE II
GOVERNANCE
SECTION 2.01. Board Representation. From and after the date
hereof,
(a) for as long as the Stockholder and any Permitted Transferees,
in the aggregate, Beneficially Own any combination of Company securities
consisting of, or convertible into, in the aggregate, at least 20% of the issued
and outstanding shares of Common Stock, the parties hereto shall use best
efforts and exercise all authority under applicable law to (i) cause the Board
to consist of seven Directors and (ii) cause any slate of Directors presented to
the stockholders of the Company for election to the Board to consist of such
nominees that, if elected, would result in a Board that included two Stockholder
Directors as designated by the Stockholder (which designees shall be subject to
the reasonable satisfaction of the Company).
(b) for as long as the Stockholder and any Permitted Transferees,
in the aggregate, Beneficially Own any combination of Company securities
consisting of, or convertible into, in the aggregate, at least 15% but less than
20% of the issued and outstanding shares of Common Stock, the parties hereto
shall use best efforts and exercise all authority under applicable law to cause
any slate of Directors presented to the
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stockholders of the Company for election to the Board to consist of such nominee
that, if elected, would result in a Board that included one Stockholder Director
as designated by the Stockholder (which designee shall be subject to the
reasonable satisfaction of the Company).
(c) If the Stockholder and any Permitted Transferees, in the
aggregate, Beneficially Own any combination of Company securities consisting of,
or convertible into, in the aggregate, less than 15% of the issued and
outstanding shares of Common Stock, the Company shall have no obligation
pursuant to this Agreement to cause any slate of Directors presented to the
stockholders of the Company for election to the Board to include any designee of
the Stockholder.
SECTION 2.02. Resignations and Replacements. (a) If a Stockholder
Director ceases to serve as a Director for any reason (a "Departing Stockholder
Director"), the Company shall take all action necessary to ensure that the
vacancy created by such Departing Stockholder Director shall be filled by an
individual designated by the Stockholder (which designee shall be to the
reasonable satisfaction of the Company), which individual shall serve out the
remaining term of the Departing Stockholder Director as a Stockholder Director.
(b) In the event that at any time the Stockholder shall no longer
be entitled to designate Directors pursuant to Section 2.01, then the
Stockholder Directors shall be deemed to have resigned immediately upon the
occurrence of such event and the Company and the Stockholder shall take all
action promptly to effect the resignation or removal of such Directors.
SECTION 2.03. Committees. For so long as there are two Stockholder
Directors, the Company will take all actions necessary to cause the appointment
of at least one Stockholder Director to serve on each committee of the Board. If
there is only one Stockholder Director, the Company will not be obligated to
take any such actions; provided that, if the Company forms an executive
committee or a committee by any such other name that performs functions similar
to those typically performed by an executive committee, the Company will take
all actions necessary to cause the appointment of such Stockholder Director to
serve on such committee.
ARTICLE III
VOTING OBLIGATIONS
SECTION 3.01. Voting Obligations. The Stockholder and any
Permitted Transferees agree to vote, and shall vote, at all times all of the
Shares Beneficially Owned by them for the election of the entire slate of Board
nominees established by the Board and submitted to the stockholders of the
Company for approval if, and to the extent that, all of the Stockholder's
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designated Stockholder Directors are included with such nominees; provided that
if the Company is in breach of any of its material obligations under the
Alliance Agreements as finally determined pursuant to the arbitration procedures
set forth in the relevant Alliance Agreement, the Stockholder and any Permitted
Transferees may refrain from voting any shares of Common Stock Beneficially
Owned by them in favor of, but may not vote against, the election of the entire
slate of Board nominees established by the Board; provided further that if such
abstention would have the same effect as a vote against the matter or would act
to make it impossible to obtain a quorum, the Stockholder and any Permitted
Transferees shall vote (and shall be deemed to have voted) all shares of Common
Stock Beneficially Owned by them in the same proportion of the votes cast by the
other stockholders of the Company of the applicable class of Company securities.
ARTICLE IV
STANDSTILL AND TRANSFER PROVISIONS
SECTION 4.01. Standstill Period. The "Standstill Period" shall
mean any period beginning on or after the date hereof during which the
Stockholder and any Permitted Transferees, in the aggregate, Beneficially Own
any combination of Company securities consisting of, or convertible into, in the
aggregate, 5% or more of the issued and outstanding shares of Common Stock. The
Stockholder represents and warrants to the Company that the Stockholder,
together with its "Affiliates" and "associates" (as such term is defined under
Rule 12b-2 of the Exchange Act, or any successor thereto), Beneficially Own an
aggregate, as of the date hereof, of 4,500,000 shares of Common Stock, and no
other securities of the Company whatsoever other than the Option.
SECTION 4.02. Transfer Restrictions. (a) For as long as both (i)
the Standstill Period is in effect and (ii) the Distribution Agreement shall not
have expired and shall not have been terminated in its entirety or with respect
to the United States of America portion of the Territory (as defined in the
Distribution Agreement), the Stockholder shall not, and shall cause any
Permitted Transferees not to, directly or indirectly, sell, transfer, assign,
pledge, hypothecate or otherwise dispose of ("Transfer") any shares of Common
Stock except to any wholly owned subsidiary of the Stockholder that expressly
assumes the Stockholder's obligations under this Agreement relating to such
shares of Common Stock (a "Permitted Transferee").
(b) During any period when either of the conditions described in
clause 4.02(a)(i) or (ii) are absent, the Stockholder or its Permitted
Transferees shall be permitted to Transfer shares of Common Stock only in
accordance with the provisions of Section 4.04.
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(c) The Stockholder agrees that it will not, directly or
indirectly, Transfer its interests in any Permitted Transferee unless prior
thereto the shares of Common Stock held by such entity are transferred to the
Stockholder or to one or more other Permitted Transferees.
(d) Any attempted Transfer in violation of this Section 4.02 shall
be null, void and of no force and effect.
SECTION 4.03. Acquisition of Additional Shares; Other
Restrictions. Subject to the provisions of Sections 4.05 and 4.06 and subject to
the Stockholder's right to exercise the Option under the Stock Subscription
Agreement, during a Standstill Period, except with the prior approval of the
Board, the Stockholder shall not, directly or indirectly, and shall cause its
Permitted Transferees not to, directly or indirectly:
(a) acquire, offer to acquire, or agree to acquire beneficial ownership of
any additional equity or debt securities of the Company;
(b) make, or in any way participate in, directly or indirectly, any
"solicitation" of "proxies" or become a "participant" in any "election contest"
with respect to the Company, or execute any written consent in lieu of a meeting
of stockholders of the Company;
(c) initiate, propose or otherwise solicit stockholders for the approval of
one or more stockholder proposals with respect to the Company or induce or
attempt to induce any other Person to initiate any stockholder proposal;
(d) seek nomination or election to the Board, serve on the Board if
elected, seek to place a representative on the Board or seek the removal of any
member of the Board (except with respect to the Stockholder's rights to
designate Stockholder Directors);
(e) subject to the Stockholder's rights to consult with the Stockholder
Directors, call or seek to have called any meeting of the stockholders of the
Company;
(f) otherwise act, directly or indirectly, alone or in concert with others,
to (i) subject to the Stockholder's rights to consult with the Stockholder
Directors, seek to control the management of the Company or the Board or the
policies or affairs of the Company, (ii) subject to the Stockholder's rights to
consult with the Stockholder Directors, solicit, propose, seek to effect or
negotiate with any other Person with respect to any form of business combination
transaction with the Company or any Subsidiary thereof, or any restructuring,
recapitalization or similar transaction with respect to the Company or any
Subsidiary thereof, (iii) solicit, make or propose or encourage, or negotiate
with any other Person with respect to, or announce an intention to make, any
837578.1
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tender offer or exchange offer for any debt or equity securities of the Company,
(iv) disclose an intention, purpose, plan or proposal with respect to the
Company or any debt or equity securities of the Company, or (v) subject to the
Stockholder's rights to consult with the Stockholder Directors, assist,
participate in, facilitate, encourage or solicit any effort or attempt by any
Person to do or seek to do any of the foregoing; provided, however, that nothing
in this Section 4.03(f) shall apply to discussions between or among officers,
employees or agents of the Stockholder, the Permitted Transferees and the
Stockholder Directors;
(g) request the Company (or its Directors, officers, employees or agents),
directly or indirectly, to amend or waive any material provisions set forth
herein; or
(h) encourage or render advice to or make any recommendation or proposal to
any Person to engage in any of the actions covered hereby.
Nothing contained in this Section 4.03 shall be deemed or construed to
limit any Stockholder Director from casting any vote in his or her capacity as a
member of the Board (or otherwise acting at the direction of the Board, in such
capacity) or the exercise by the Stockholder or any Permitted Transferee of its
voting rights with respect to any shares of Common Stock it Beneficially Owns.
SECTION 4.04. Company Rights of First Negotiation; Permitted Sales.
a) During any period that the condition described in clause (ii) of Section
4.02(a) shall no longer exist but there shall be a Standstill Period, if the
Stockholder or any Permitted Transferee shall desire to Transfer any shares of
Common Stock owned by it other than to a Permitted Transferee, then the Company
and the Stockholder shall negotiate in good faith in order to reach a mutually
agreeable disposition of all shares of Common Stock owned by the Stockholder and
any Permitted Transferees to one or more third parties or for the repurchase by
the Company of all of such shares of Common Stock; provided that neither the
Company nor the Stockholder (nor any Permitted Transferee) shall be obligated to
effect any such disposition or repurchase, and neither party shall be obligated
to so negotiate for a period in excess of six months. If after such six-month
period the parties are unable to reach a definitive agreement with respect to a
mutually agreeable disposition or repurchase of the Shares, then the Stockholder
and any such Permitted Transferee may sell its shares of Common Stock as
follows:
(i) in unsolicited broker transactions as contemplated by Rule
144 under the Securities Act;
(ii) in one or more private transactions to any third party
("Proposed Transferee"), but only if such Proposed Transferee
executes and delivers to the Company the standstill, voting and
transfer limitation agreement in the form of Annex A hereto; and
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(iii) in a widely disbursed underwritten public offering of
such shares of Common Stock pursuant to which no Person or entity
acquires more than 5% of the number of shares of Common Stock issued
and outstanding at the time of such offering.
To the extent the Stockholder and any Permitted Transferees are permitted to
Transfer any shares of Common Stock pursuant to this Section 4.04(a), the
Company shall cause to be issued to the Stockholder and such Permitted
Transferees, at their written request, new stock certificates representing such
shares without a restrictive legend regarding this Agreement (and the old stock
certificates shall be surrendered in order to receive the new stock
certificates). Notwithstanding anything herein to the contrary, no shares of
Common Stock may be sold, transferred, assigned or otherwise disposed of unless
registered by the Company pursuant to the Securities Act and any applicable
state laws, or unless an exemption therefrom is available.
(b) During any period in which the conditions described in both clauses (i)
and (ii) of Section 4.02(a) shall no longer exist, the Stockholder and any
Permitted Transferees shall be permitted to freely Transfer any and all shares
of Common Stock without restriction and the Company shall cause to be issued to
the Stockholder and any Permitted Transferees, at their written request, new
stock certificates representing shares of Common Stock without a restrictive
legend regarding this Agreement (and the old stock certificates shall be
surrendered in order to receive the new stock certificates). Notwithstanding
anything herein to the contrary, no shares of Common Stock may be sold,
transferred, assigned or otherwise disposed of unless registered by the Company
pursuant to the Securities Act and any applicable state laws, or unless an
exemption therefrom is available.
SECTION 4.05. Stockholder Rights of First Notice. Following the
Option Closing, if any, in the event the Company determines to issue and sell to
a third party any Company securities (other than Company securities issued and
sold by the Company in a widely disbursed public offering, Company securities
issued pursuant to a registration statement on Securities Act Form S-4 or S-8,
or its successors, or options issued pursuant to the Company Benefit Plans or
similar plans), the Company shall deliver to the Stockholder not less than 30
days' prior written notice of its intention to do so. Following the delivery of
such notice to the Stockholder, the Company shall negotiate with the Stockholder
for such thirty-day period for the purpose of permitting the Stockholder to
make, in its sole discretion, one or more proposals to the Company regarding the
Stockholder's desire to acquire the Company securities. Following the expiration
of such thirty-day period, the Company may effect the issuance and sale of the
Company securities to any such third party, without limitation or further
obligation to the Stockholder. Notwithstanding anything herein to the contrary,
in no event shall the Company be obligated, for any reason, to issue and sell to
the Stockholder any Company securities.
SECTION 4.06. Anti-Dilutive Rights. (a) Except as provided in
Section 4.06(c) below, the Company shall not issue, sell or Transfer, whether in
private issuances or sales or in a registered public offering, any Common Stock
or securities convertible into Common Stock to
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any Person unless the Stockholder and any Permitted Transferees are offered in
writing the right to purchase, at the same price and on the same terms proposed
to be issued and sold, an amount of such Common Stock or other securities (the
"Maintenance Shares") as is necessary for the Stockholder and any Permitted
Transferees to maintain, individually, the level of their respective percentage
Beneficial Ownership of Common Stock (on a Fully Diluted Basis) as it owned
immediately prior to such issuance ("Anti-Dilutive Rights"). In the case of a
public offering, the Company shall, as part of its offer, provide a copy of any
preliminary prospectus and other information concerning the offering reasonably
requested by the Stockholder or any Permitted Transferees. The Stockholder and
any Permitted Transferee shall have the right, during the period specified in
Section 4.06(b), to accept the offer for any or all of the Maintenance Shares
offered to each of them.
(b) If the Stockholder or any Permitted Transferee does not deliver to the
Company written notice of acceptance of any offer made pursuant to Section
4.06(a) within 10 Business Days after the Stockholder's or any such Permitted
Transferee's receipt of such offer, the Stockholder or such Permitted
Transferee, as the case may be, shall be deemed to have waived its right to
purchase all or any part of its Maintenance Shares as set forth in such offer,
but the Stockholder or any such Permitted Transferee shall retain its rights
under this Section 4.06 with respect to future offers; provided, however, that
the applicable number of Maintenance Shares shall be reduced and recalculated
immediately prior to any such future issuance.
(c) The Anti-Dilutive Rights set forth in this Section 4.06 shall not apply
to the grant or exercise of options to purchase Common Stock to employees or
Directors of the Company or any of its Subsidiaries or otherwise pursuant to a
Company Benefit Plan or similar plan in existence on the date hereof or
otherwise adopted by the Board hereafter (whether or not such options were
issued prior to the date hereof, or are hereafter issued), (ii) the issuance of
shares of Common Stock issuable upon exercise of any option, warrant,
convertible security or other rights to purchase or subscribe for Common Stock
which, in each case, had been issued by the Company prior to the date of this
Agreement or (iii) securities issued pursuant to any stock split, stock dividend
or other similar stock recapitalization.
(d) A closing for the purchase of shares of Common Stock pursuant to this
Section 4.06 shall occur on the later of (i) the date on which such public or
private issuance occurs and (ii) such date as may be mutually agreed to by the
Company and the Stockholder or the Permitted Transferee, as the case may be, and
shall take place at the offices of the Company or at such other reasonable
location as the Company may otherwise notify the Stockholder and/or a Permitted
Transferee, as the case may be, at the time specified by the Company in such
notice provided to the Stockholder or the Permitted Transferee, as the case may
be, at least five days prior to such closing date. In connection with such
closing, the Company and the Stockholder or Permitted Transferee, as the case
may be, shall provide such closing certificates and other closing deliveries
provided in the transaction giving rise to the rights specified in Section 4.06.
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(e) Solely to the extent that the Stockholder suffers dilution as a result
of the exercise of employee stock options, then, notwithstanding the provisions
of Section 4.03, the Stockholder at any time thereafter may purchase shares of
Common Stock from a third party or through one or more open market purchases for
the purposes of maintaining its percentage level of Beneficial Ownership of
Common Stock. The Company and the Stockholder shall use all commercially
reasonable efforts to cooperate with each other so as to permit the
Stockholder to exercise its rights under this Section 4.06(e) in an accurate,
orderly and nondisruptive manner (provided that in no event shall any purchase
be affected more than once in any fiscal quarter).
ARTICLE V
REGISTRATION RIGHTS
SECTION 5.01. Restrictive Legend. Each certificate representing
shares of Common Stock held by Stockholder shall, except as otherwise provided
in this Article V, be stamped or otherwise imprinted with a legend substantially
in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
THE SECURITY REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND CERTAIN RESTRICTIONS ON VOTING CONTAINED
IN THE STOCKHOLDER'S AGREEMENT, DATED AS OF MAY 3 ,1999, BY AND
BETWEEN THE COMPANY AND COBE LABORATORIES, INC.
A certificate shall not bear the Securities Act legend or the legend regarding
this Agreement, as the case may be, if in the opinion of counsel satisfactory to
the Company (it being agreed that Shearman & Sterling shall be satisfactory),
the shares being sold thereby may be publicly sold without registration under
the Securities Act or may be sold without being subject to the restrictions on
sale specified in Article IV.
SECTION 5.02. Notice of Proposed Transfer. Prior to any proposed
Transfer of any shares of Registrable Stock (other than under the circumstances
described in Section 5.03, 5.04 or 5.05), the Stockholder 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 whereupon the Stockholder
shall be entitled to Transfer such stock in accordance with the terms of its
notice, except as may be precluded hereunder and subject in any event to the
restrictions set forth in this
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Agreement. Each certificate representing shares of Common Stock transferred as
above provided shall bear the legends set forth in Section 5.01, except that
such certificate (a) shall not bear the Securities Act legend if (i) such
Transfer is in accordance with the provisions of Rule 144 of the Securities Act
(or any other rule permitting public sale without registration under the
Securities Act, but not Rule 144A of the Securities Act) or (ii) the opinion of
counsel referred to above 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 and (b) shall not bear the legend related to this Agreement if
such Transfer is to a third party in accordance with the provisions of Article
IV and such transferee is not subject to the restrictions on Transfer set forth
in this Agreement. The restrictions provided for in this Section 5.02 shall not
apply to securities that are not required to bear the legends prescribed by
Section 5.01 in accordance with the provisions of Section 5.01.
SECTION 5.03. Required Registrations. (a) Commencing at any time
after September 15, 1999, for as long as the Stockholder holds five percent or
more of the outstanding shares of Common Stock of the Company, the Stockholder
may request in a written notice (which request shall state the number of
Registrable Shares to be so registered, the intended method of distribution and
a certification as to the market value of such shares, as described below), that
the Company file a registration statement under the Securities Act (or a similar
document pursuant to any other statute then in effect corresponding to the
Securities Act) covering the registration of any or all Registrable Stock owned
by the Stockholder and any Permitted Transferee, provided that either (i) such
Registrable Stock has an aggregate offering price of at least $3,000,000 (based
on the last reported sale price for the Common Stock on the Business Day
preceding the date of such written request, as reported by the OTC Bulletin
Board or any other exchange or market on which the Common Stock is then listed
or included for quotation) or (ii) such Registrable Stock represents 100% of any
combination of Company securities consisting of, or convertible into, shares of
Common Stock Beneficially Owned by the Stockholder and its Permitted
Transferees. Following receipt of any notice under this Section 5.03, the
Company shall use its best efforts to cause to be registered under the
Securities Act all Registrable Stock that the Stockholder requested be
registered in accordance with the manner of disposition specified in such
notice.
(b) If the Stockholder intends to have the Registrable Stock distributed by
means of an underwritten offering, the Stockholder and the Company shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters which shall contain any customary provisions (including customary
provisions with respect to indemnification by the Company of the underwriters)
as the underwriters may reasonably request. Such underwriter or underwriters
shall be selected by the Stockholder and shall be approved by the Company, which
approval shall not be unreasonably withheld.
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(c) Notwithstanding any provision of this Agreement to the contrary:
(i) The Company shall not be required to effect a registration
pursuant to this Section 5.03 during this period starting with the date
which is 30 days prior to the date of the initial public filing by the
Company of, and ending on a date 120 days following the effective date of,
a registration statement pertaining to a public offering of securities for
the account of the Company or on behalf of the selling stockholders under
any other registration rights agreement which the Stockholder has been
entitled to join pursuant to Section 5.04; provided that the Company shall
actively employ in good faith all reasonable efforts to cause such
registration statement to become effective as soon as possible;
(ii) if (A) (i) the Company is in possession of material
nonpublic information relating to the Company or any Subsidiary and (ii)
the Company determines in good faith that public disclosure of such
material nonpublic information would not be in the best interests of the
Company and its stockholders, (B) (i) the Company has made a public
announcement relating to an acquisition or business combination transaction
that includes the Company and/or one or more of its Subsidiaries that is
material to the Company and its Subsidiaries, taken as a whole and (ii) the
Company determines in good faith that (x) offers and sales of Registrable
Stock pursuant to any registration statement prior to the consummation of
such transaction (or such earlier date as the Company shall determine) is
not in the best interests of the Company and its stockholders or (y) it
would be impracticable at the time to obtain any financial statements
relating to such acquisition or business combination transaction that would
be required to be set forth in a registration statement or (C) the Company
shall furnish to the Stockholder a certificate signed by the president of
the Company stating that in the good faith opinion of the Board such
registration would interfere with any material transaction or financing,
confidential negotiations or business activities then being pursued by the
Company or any of its Subsidiaries, then, in any such case, the Company's
obligation to use all reasonable efforts to file a registration statement
shall be deferred, or the effectiveness of any registration statement may
be suspended, in each case for a period not to exceed 120 days; provided
that the Company may not delay the filing or suspend the effectiveness of
any registration statement under this Section 5.03(ii) on more than one
occasion in any consecutive 12-month period;
(iii) the Company shall not be required to effect a registration
pursuant to this Section 5.03 if the Registrable Stock requested by the
Stockholder to be registered pursuant to such registration is included in,
and eligible for sale under, a Shelf Registration (as defined below); and
(iv) the Company shall not be required to effect a registration
pursuant to this Section 5.03 within six months after the effective date of
any other registration statement registering shares to be sold by the
Company.
837578.1
12
(d) The Company shall not be obligated to effect and pay for more than two
registrations pursuant to this Section 5.03 (both of which may be Shelf
Registrations requested pursuant to Section 5.05); provided that a registration
requested pursuant to this Section 5.03 shall not be deemed to have been
effected for purposes of this Section 5.03(d) unless (i) it has been declared
effective by the SEC, (ii) it has remained effective for the period set forth in
Section 5.06(a) and (iii) the offering of Registrable Stock pursuant to such
registration is not subject to any stop order, injunction or other order or
requirement of the SEC (other than any such stop order, injunction, or other
requirement of the SEC prompted by any act or omission of the Stockholder).
SECTION 5.04. Incidental Registration. (a) Subject to Section
5.09, if at any time the Company determines that it shall file a registration
statement under the Exchange Act for the registration of Common Stock (other
than a registration statement on a Form S-4 or S-8 or an offering of securities
solely to the Company's existing stockholders) on any form that would also
permit the registration of the Registrable Stock and such filing is to be on its
behalf or on behalf of selling holders of its securities for the general
registration of Common Stock to be sold for cash, the Company shall each such
time promptly give the Stockholder written notice of such determination setting
forth the date on which the Company proposes to file such registration
statement, which date shall be no earlier than 15 days from the date of such
notice, and advising the Stockholder of its right to have Registrable Stock
included in such registration. Upon the written request of the Stockholder
received by the Company no later than 10 days after the date of the Company's
notice (which request shall state the number of Registrable Shares to be so
registered and the intended method of distribution), the Company shall, subject
to Section 5.04(b) below, use all reasonable efforts to cause to be registered
under the Securities Act all of the Registrable Stock that the Stockholder has
so requested to be registered; provided that the Company shall have the right to
postpone or withdraw any registration effected pursuant to this Section 5.04
without obligation or liability to the Stockholder.
(b) If, in the opinion of the managing underwriter (or, in the case of a
non-underwritten offering, in the good faith reasonable opinion of the
Company), the total amount of such securities to be so registered, including
such Registrable Stock, will exceed the maximum amount of the Company's
securities which can be marketed (i) at a price reasonably related to the then
current market value of such securities or (ii) without otherwise materially and
adversely affecting the entire offering, then the Company shall be entitled to
reduce the number of shares of Registrable Stock to be sold in such offering by
the Stockholder and any other stockholder of the Company requesting to be
included in the registration in proportion (as nearly as practicable) to the
amount of shares of Common Stock requested to be included by the Stockholder and
each other stockholder at the time of filing the registration statement.
SECTION 5.05. Shelf Registration. (a) The Stockholder may use its
two request registration rights granted pursuant to Section 5.03, subject to the
limitations of Section 5.03(d), to request that the Company file a "shelf'
registration statement pursuant to Rule 415 under the
837578.1
13
Securities Act or any successor rule (the "Shelf Registration" with respect to
the Registrable Stock. The Company shall (i) use all reasonable efforts to have
the Shelf Registration filed within 30 days of such request and declared
effective as soon as reasonably practicable following such request and (ii)
subject to Section 5.03(c)(iii), use all reasonable efforts to keep the Shelf
Registration continuously effective from the date such Shelf Registration is
declared effective until at least the earlier of such time as (A) all such
Registrable Stock has been sold thereunder or (B) the first anniversary of such
effective date in order to permit the prospectus forming a part thereof to be
usable by the Stockholder during such period.
(b) Subject to Section 5.03(c)(iii), the Company shall supplement or amend
the Shelf Registration (i) as required by the registration form utilized by the
Company or by the instructions applicable to such registration form or by the
Securities Act, (ii) to include in such Shelf Registration any additional
securities that become Registrable Stock by operation of the definition thereof
and (iii) following the written request of the Stockholder pursuant to Section
5.05(c), to cover offers and sales of all or a part of the Registrable Stock by
means of an underwriting. The Company shall furnish to the Stockholder copies of
any such supplement or amendment sufficiently in advance (but in no event less
than five Business Days in advance) of its use or filing with the SEC to allow
the Stockholder a meaningful opportunity to comment thereon.
(c) The Stockholder may, at its election and upon written notice by the
Stockholder to the Company, subject to the limitations set forth in Section
5.03(c)(iii), effect offers and sales under the Shelf Registration by means of
one or more underwritten offerings, in which case the provisions of Section
5.03(b) shall apply to any such underwritten distribution of securities under
the Shelf Registration and such underwriting shall, if sales of Registrable
Stock pursuant thereto shall have closed, be regarded as the exercise of one of
the registration rights contemplated by Section 5.03.
SECTION 5.06. Obligations of the Company. Whenever required under
Sections 5.03 and 5.05 to effect the registration of any Registrable Stock under
the Securities Act, the Company shall:
(a) in a reasonably timely manner, file with the SEC a registration
statement with respect to such Registrable Stock, and use best efforts to cause
such registration statement to become and remain effective for the period of the
distribution contemplated thereby determined as provided hereafter; provided
that the Company shall not be required to keep any Registration Statement (other
than the Shelf Registration) effective more than 90 days;
(b) as expeditiously as possible, prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to comply with the provisions
of the Securities
837578.1
14
Act with respect to the disposition of all Registrable Stock
covered by such registration statement;
(c) as expeditiously as possible, furnish to the Stockholder such
reasonable numbers of copies of the registration statement and the prospectus
included therein (including each preliminary prospectus and any amendments or
supplements thereto) in conformity with the requirements of the Securities Act,
any exhibits filed therewith and such other documents and information as they
may reasonably request;
(d) as expeditiously as possible, use best efforts to register or qualify
the Registrable Stock covered by such registration statement under such other
securities or "blue sky" laws of such states as shall be reasonably requested by
the Stockholder for the distribution of the Registrable Stock covered by the
registration statement; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business in or to file a general consent to service of process in any
jurisdiction wherein it would not but for the requirements of this paragraph
(except that the Company will use its best efforts to register or qualify
Registrable Stock in such additional jurisdiction as the Stockholder may request
subject to the foregoing proviso and at the Stockholder's own expense) be
obligated to do so; and provided further that the Company shall not for any
purpose be required to qualify such Registrable Stock in any jurisdiction in
which the securities regulatory authority requires that the Stockholder submit
any shares of Registrable Stock to the terms, provisions and restrictions of any
escrow, lockup or similar agreement(s) for consent to sell Registrable Stock in
such jurisdiction unless the Stockholder agrees to do so;
(e) promptly notify the Stockholder, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances under
which they were made, and at the request of the Stockholder promptly prepare and
furnish to the Stockholder a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include 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 in light of the circumstances under which they were made. In the
event the Company shall give such notice, the Company shall extend the period
during which such Registration Statement shall be maintained effective as
provided in Section 5.06(a) (or, in the case of the Shelf Registration, Section
5.05(a)) by the number of days during the period from and including the date of
the giving of such notice to the date when the Company shall make available to
the Stockholder such supplemented or amended prospectus;
837578.1
15
(f) furnish, at the request of the Stockholder, if the method of
distribution is by means of an underwriting, on the date that the shares of
Registrable Stock are delivered to the underwriters for sale pursuant to such
registration or, if such Registrable Stock is not being sold through
underwriters, on the date that the registration statement with respect to such
shares of Registrable Stock becomes effective, (1) a signed opinion, dated on or
about such date, of the independent legal counsel representing the Company for
the purpose of such registration, addressed to the underwriters, if any, and if
such Registrable Stock is not being sold through underwriters, then to the
Stockholder, as to such matters as such underwriters or the Stockholder, as the
case may be, may reasonably request and as would be customary in such a
transaction, and (2) letters dated on or about such date and the date the
offering is priced from the independent certified public accountants of the
Company, addressed to the underwriters, if any, and if such Registrable Stock is
not being sold through underwriters, then to the Stockholder, if such
accountants refuse to deliver such letters to the Stockholder, then to the
Company (i) stating that they are independent certified public accountants
within the meaning of the Securities Act and that, in the opinion of such
accountants, the financial statements and other financial data of the Company
included in the registration statement or the prospectus, or any amendment or
supplement thereto, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and (ii) covering such
other financial matters (including information as to the period ending not more
than five Business Days prior to the date of such letters) with respect to the
registration in respect of which such letter is being given as such underwriters
or the Stockholder, as the case may be, may reasonably request and as would be
customary in such a transaction;
(g) enter into customary agreements (including, if the method of
distribution is by means of an underwriting, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of the Registrable Stock to be so
included in the registration statement;
(h) otherwise use best efforts to comply with all applicable rules and
regulations of the SEC, and make available to its securityholders, as soon as
reasonably practicable, but not later than 18 months after the effective date of
the registration statement, an earnings statement covering the period of at
least 12 months beginning with the first full month after the effective date of
such registration statement, which earnings statements shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; and
(i) use all reasonable efforts to list the Registrable Stock covered by
such registration statement with any U.S. nationally recognized securities
exchange on which the Company Common Stock is then listed.
837578.1
16
For purposes of Sections 5.06(a) and 5.06(b), the period of distribution of
Registrable Stock in a firm commitment underwritten public offering shall be
deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Registrable Stock
in any other registration shall be deemed to extend until the earlier of the
sale of all Registrable Stock covered thereby and six months after the effective
date thereof.
SECTION 5.07. Furnish Information. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to
Article V of this Agreement that the Stockholder shall furnish to the Company
such information regarding the Stockholder, the Registrable Stock held by it,
and the intended method of disposition of such securities as the Company shall
reasonably request and as shall be required in connection with the action to be
taken by the Company.
SECTION 5.08. Expenses of Registration. All expenses incurred in
connection with each registration pursuant to Sections 5.03, 5.04 and 5.05 of
this Agreement, excluding underwriters' discounts and commissions, but
including, without limitation, all registration, filing and qualification fees,
word processing, duplicating, printers' and accounting fees (including the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance), fees of the National Association of
Securities Dealers, Inc. or listing fees, messenger and delivery expenses, all
fees and expenses of complying with state securities or "blue sky" laws, and the
fees and disbursements of counsel for the Company, and the reasonable fees and
disbursements of counsel for the Stockholder (which counsel shall be selected by
the Stockholder), shall be paid by the Company; provided, however, that if a
registration request pursuant to Section 5.03 or 5.05 is subsequently withdrawn
by the Stockholder, the Company shall not be required to pay any expenses of
such registration proceeding and the Stockholder shall bear such expenses. The
Stockholder shall bear and pay the underwriting commissions and discounts
applicable to securities offered for its account and the fees and disbursements
of its counsel in connection with any registrations, filings and qualifications
made pursuant to this Agreement.
SECTION 5.09. Underwriting Requirements. In connection with any
underwritten offering, the Company shall not be required under Section 5.04 to
include shares of Registrable Stock in such underwritten offering unless the
Stockholder accepts the terms of the underwriting of such offering that have
been reasonably agreed upon between the Company and the underwriters selected by
the Stockholder.
SECTION 5.10. Indemnification. In the event any Registrable Stock
is included in a registration statement under this Agreement:
(a) The Company shall indemnify and hold harmless the Stockholder, the
Stockholder's directors and officers, each Person who participates in the
offering of such Registrable Stock, and each Person, if any, who controls the
Stockholder or participating
837578.1
17
Person within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the Securities Act, the Exchange Act, state securities or "blue sky" laws or
otherwise, insofar as such losses, claims, damages or liabilities (or
proceedings in respect thereof) arise out of or are based on any untrue or
alleged untrue statement of any material fact contained in such registration
statement on the effective date thereof (including any preliminary prospectus or
prospectus filed under Rule 424 under the Securities Act or any amendments or
supplements 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 shall reimburse the
Stockholder, the Stockholder's directors and officers, such participating Person
or controlling Person for any legal or other expenses reasonably incurred by
them (but not in excess of expenses incurred in respect of one counsel for all
of them unless there is an actual conflict of interest between any indemnified
parties, which indemnified parties may be represented by separate counsel) in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 5.10(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company; provided further that the Company shall not
be liable to the Stockholder, the Stockholder's directors and officers,
participating Person or controlling Person in any such case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in connection with such registration statement,
preliminary prospectus, final prospectus or amendments or supplements thereto,
in reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by the Stockholder, the
Stockholder's directors and officers, participating Person or controlling
Person. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Stockholder, the Stockholder's
directors and officers, participating Person or controlling Person, and shall
survive the Transfer of such securities by the Stockholder.
(b) The Stockholder shall indemnify and hold harmless the Company, each of
its directors and officers, each Person, if any, who controls the Company within
the meaning of the Securities Act, and each agent and any underwriter for the
Company (within the meaning of the Securities Act) against any losses, claims,
damages or liabilities, joint or several, to which the Company or any such
director, officer, controlling Person, agent or underwriter may become subject,
under the Securities Act, the Exchange Act, state securities or "blue sky" laws
or otherwise, insofar as such losses, claims, damages or liabilities (or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement on the effective date thereof (including any preliminary
prospectus or prospectus filed under Rule 424 under the Securities Act or any
amendments or
837578.1
18
supplements 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, 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 such registration
statement, preliminary or final prospectus, or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
by or on behalf of the Stockholder expressly for use in connection with such
registration; and the Stockholder shall reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
Person, agent or underwriter (but not in excess of expenses incurred in respect
of one counsel for all of them unless there is an actual conflict of interest
between any indemnified parties which indemnified parties may be represented by
separate counsel) in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 5.10(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Stockholder, which consent
shall not be unreasonably withheld or delayed, and provided further that the
liability of the Stockholder hereunder shall be limited to the proportion of any
such loss, claim, damage,liability or expense which is equal to the proportion
that the net proceeds from the sale of the shares of Common Stock sold by the
Stockholder under such registration statement bears to the total net proceeds
from the sale of all securities sold thereunder, but not in any event to exceed
the net proceeds received by the Stockholder from the sale of Registrable Stock
covered by such registration statement.
(c) Promptly after receipt by an indemnified party under this Section 5.10
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 5.10, notify the indemnifying party in writing of the commencement
thereof and the indemnifying party shall have the right to participate in and
assume the defense thereof with counsel selected by the indemnifying party and
reasonably satisfactory to the indemnified party; provided, however, that an
indemnified party shall have the right to retain its own counsel, with all fees
and expenses thereof to be paid by such indemnified party, and to be apprised of
all progress in any proceeding the defense of which has been assumed by the
indemnifying party. The failure to notify an indemnifying party promptly of the
commencement of any such action shall not relieve the indemnifying party from
any liability in respect of such action which it may have to such indemnified
party on account of the indemnity contained in this Section 5.10, unless (and
only to the extent) the indemnifying party was prejudiced by such failure, and
in no event shall such failure relieve the indemnifying party from any other
liability which it may have to such indemnified party. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any claim or pending or threatened proceeding in respect of which
the indemnified party is or could have been a party and indemnity could have
been
837578.1
19
sought hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all liability arising
out of such claim or proceeding.
(d) To the extent any indemnification by an indemnifying party is
prohibited or limited by applicable law, the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the indemnifying party and the indemnified party in connection with the
actions which resulted in such losses, claims, damages or liabilities 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 any action in question, including any untrue or
alleged untrue statement of material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses, claims,
damages or liabilities referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 5.10(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
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.
SECTION 5.11. Transfer of Registration Rights. Subject to Article
IV, the registration rights of the Stockholder under this Agreement with respect
to any Registrable Stock may be transferred to any Permitted Transferee of such
Registrable Stock; provided, however, that (i) the Stockholder shall give the
Company written notice at or prior to the time of such Transfer stating the name
and address of the Permitted Transferee and identifying the securities with
respect to which the rights under this Agreement are being transferred; (ii)
such Permitted Transferee shall agree in writing, in form and substance
reasonably satisfactory to the Company, to be bound by the provisions of this
Agreement as if it were a stockholder of the Company; and (iii) immediately
following such Transfer, the further disposition of such securities by such
transferee is restricted under the Securities Act.
SECTION 5.12. Rule 144 Information. Subject to Article IV, and
with a view to making available the benefits of certain rules and regulations of
the SEC which may at any time
837578.1
20
permit the sale of the Registrable Stock to the public without registration, at
all times after ninety (90) days after any Shelf 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 SEC 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 the Stockholder 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 the Stockholder may reasonably request in availing
itself of any rule or regulation of the SEC allowing the Stockholder to sell any
Registrable Stock without registration.
SECTION 5.13. Limitations on Registration Rights. Notwithstanding
anything herein to the contrary, neither the Stockholder nor any Permitted
Transferee shall be entitled to exercise any registration rights specified in
this Article V for so long as the Stockholder is in material breach of any of
its covenants, agreements or other obligations under the Distribution Agreement.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.01. Waiver. The Company and the Stockholder may (a)
extend the time for the performance of any of the obligations or other acts of
the other party or (b) waive compliance with any of the agreements or conditions
of the other party contained herein. Any such extension or waiver shall be valid
only if set forth in an instrument in writing signed by the party to be bound
thereby. Any waiver of any term or condition shall not be construed as a waiver
of any subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition, of this Agreement. The failure of
any party to assert any of its rights hereunder shall not constitute a waiver of
any of such rights.
SECTION 6.02. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel and financial advisors, incurred in connection with
this Agreement shall be paid by the party incurring such costs and expenses.
837578.1
21
SECTION 6.03. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by courier service, by cable, by telecopy, by telegram, by telex or
by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such other address for
a party as shall be specified in a notice given in accordance with this Section
6.03):
(a) if to the Company:
HemaSure Inc.
000 Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Fax: 000-000-0000
Attention: President and Chief Executive Officer
with a copy to:
Battle Xxxxxx LLP
Park Avenue Tower
00 Xxxx 00x Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax: 000-000-0000
Attention: Xxxx X. Xxxxxx, III, Esq.
(b) if to COBE:
COBE Laboratories, Inc.
0000 Xxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Fax: 000-000-0000
Attention: Xxxxxx X. Xxxx
837578.1
22
With a copy to:
Legal Department
COBE Laboratories, Inc.
0000 Xxx Xxxxxx
Xxxxxxxx, XX 00000
Telecopy: 000-000-0000
and
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: 212-848-7179
Attention: Xxxxx X. Xxxxx, Esq. and
Xxxxxxx X. Xxxxxxxxxxxx, Esq.
SECTION 6.04. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 6.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
SECTION 6.06. Entire Agreement. This Agreement and the other
Alliance Agreements constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and thereof and supersedes all prior
agreements and undertakings, both written and oral, between the Company and COBE
with respect to the subject matter hereof and thereof.
SECTION 6.07. Assignment. This Agreement may not be assigned
without the express written consent of the Company and the Stockholder (which
consent shall not be unreasonably withheld or delayed by the Company or the
Stockholder, as the case may be); provided, however, that all covenants and
agreements contained in this Agreement by or on behalf of any parties hereto
will bind and inure to the benefit of their respective successors and assigns.
837578.1
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SECTION 6.08. No Third Party Beneficiaries. Except for the
provisions of Section 5.10 relating to indemnified parties, this Agreement shall
be binding upon and inure solely to the benefit of the parties hereto and their
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other Person any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 6.09. Amendment. This Agreement may not be amended or
modified except (a) by an instrument in writing signed by, or on behalf of, the
Company and COBE or (b) by a waiver in accordance with Section 6.01.
SECTION 6.10. Governing Law. This Agreement shall be governed by
the laws of the State of New York, excluding (to the greatest extent permissible
by law) any rule of law that would cause the application of the laws of any
jurisdiction other than the State of New York.
SECTION 6.11. Arbitration. (a) If a dispute arises from or relates
to this Agreement or the breach thereof, whether of law or fact, of any nature
whatsoever, and such dispute cannot be settled through direct discussions
between the parties, the parties agree to endeavor first to settle the dispute
in an amicable manner by mediation administered by the American Arbitration
Association under its Commercial Mediation Rules before resorting to litigation.
Mediation shall take place in New York, New York. If the dispute cannot be
resolved within 60 days of the initiation thereof by such party, any party may
initiate arbitration in accordance with the provisions of Section 6.11(b) below.
(b) All disputes arising under this Agreement that cannot be
amicably resolved under Section 6.11(a) above shall be settled by binding
arbitration. Judgment upon the award rendered may be entered in any court in the
New York, New York metropolitan area. Each party agrees to the following
arbitration procedures:
(i) Any party requesting arbitration shall serve a written demand
for arbitration on the other party. The demand shall set forth in
reasonable detail a statement of the nature of the dispute, the amount
involved and the remedies sought. No later than 20 calendar days after
a demand for arbitration is served, the parties shall jointly select
and appoint a retired judge of the Courts of the State of New York to
act as the arbitrator. In the event that the parties do not agree on
the selection of an arbitrator, the party seeking arbitration shall
apply to the United States District Court for the Southern District of
New York, as applicable, for appointment of a retired judge to serve as
arbitrator.
(ii) No later than 10 calendar days after appointment of an
arbitrator, the parties shall jointly prepare and submit to the
arbitrator a set of rules for the arbitration. In the event that the
parties cannot agree on the rules for the arbitration, the arbitrator
shall establish the rules. No later than 10 calendar days after the
arbitrator is appointed, such arbitrator shall arrange for a hearing to
commence on a mutually convenient date.
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The hearing shall commence no later than 120 calendar days after the
arbitrator is appointed and shall continue from day to day until
completed.
(iii) The arbitrator shall issue his or her award in writing no
later than 20 calendar days after the conclusion of the hearing. The
arbitration award shall be final and binding regardless of whether any
party fails or refuses to participate in the arbitration. The
arbitrator is empowered to hear and determine all disputes between the
parties hereto concerning the subject matter of this Agreement, and the
arbitrator may award money damages (but specifically not punitive
damages), injunctive relief, rescission, restitution, costs, and
attorneys' fees. The arbitrator shall not have the power to amend this
Agreement in any respect.
(iv) In the event that any party serves a proper demand for
arbitration under this Agreement, all parties may pursue discovery in
accordance with the Rules of Civil Procedure of the State of New York,
the provisions of which are incorporated herein by reference, with the
following exceptions: (A) the parties hereto may conduct all discovery,
including depositions for discovery purposes, without leave of the
arbitrator; and (B) all discovery shall be completed no later than the
commencement of the arbitration hearing or 120 calendar days after the
date that a proper demand for arbitration is served, whichever occurs
earlier, unless upon a showing of good cause the arbitrator extends or
shortens that period.
SECTION 6.12. Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 6.13. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
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IN WITNESS WHEREOF, the Company and the Stockholder have caused this
Agreement to be executed as of the date first above written by their respective
officers thereunto duly authorized.
HEMASURE INC.
By: /s/Xxxx X. XxXxxxx
--------------------------------------------
Name: Xxxx X. XxXxxxx
Title: President and Chief Executive Officer
COBE LABORATORIES, INC.
By: /s/ Xxxxxx X. Xxxx, Xx.
-------------------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Vice President
837578.1
