EXHIBIT 10.1
CONFIDENTIAL TREATMENT
----------------------
CERTAIN INFORMATION HAS BEEN DELETED FROM THIS EXHIBIT AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 406.
ADDENDUM NUMBER ONE
TO
DEVELOPMENT AND LICENSING AGREEMENT
for
SAFETY "SELDINGER" NEEDLE DEVICE
between
MED-DESIGN CORPORATION
and
MEDAMICUS, INC.
THIS ADDENDUM is made this 7th day of September, 2001 to the Development and
Licensing Agreement between Med-Design Corporation and MedAmicus, Inc. dated
August 25, 2000 (the "Agreement").
CONSIDERATION
In consideration of the amendments set forth in this Addendum,
MedAmicus hereby agrees to pay to Med-Design the sum of $2,000,000, payable as
follows: (1) the sum of $1,000,000 in cash payable on October 15, 2001, and (2)
the sum of $1,000,000, payable on October 15, 2001, either in cash or, in the
discretion of MedAmicus, in the form of shares of MedAmicus unregistered common
stock having an aggregate value of $1,000,000, as valued by the lower of the
closing price of MedAmicus stock on the day prior to the signing of this
Addendum, or the closing price on the day of signing of this Addendum. If
MedAmicus elects to pay $1,000,000 in the form of common stock, MedAmicus and
Med-Design agree as follows:
1. Investment Representations. Med-Design represents and
warrants and acknowledges: (i) that it is acquiring the common stock of
MedAmicus hereunder for its own account for investment and not with a
view to, or for sale or other disposition in connection with, any
distribution thereof, nor with any present intention of selling or
otherwise disposing of the same other than pursuant to registration
under the Securities Act of 1933, as amended ("Securities Act"); (ii)
that it is an "accredited investor" in MedAmicus, as that term is
defined in Rule 501 promulgated by the SEC under the Securities Act;
and (iii) that it is fully informed that the shares of MedAmicus common
stock delivered hereunder are being sold pursuant to a private offer
exemption of the Securities Act and are not being registered under the
Securities Act or under the Securities or Blue Sky Laws of any state or
foreign jurisdiction, and that such shares must be held indefinitely
unless they are subsequently registered under the Securities Act and
any applicable State Securities or Blue Sky Laws, or unless an
exemption from registration is available thereunder. Med-Design
acknowledges that it has been provided
copies of MedAmicus' Annual Report on Form 10-KSB for the year ended
December 31, 2000 and subsequent Form 10-QSBs and such other
information as it has deemed necessary in connection with their
investment in MedAmicus stock.
2. Registration Rights. MedAmicus shall file a Registration
Statement with the Securities and Exchange Commission on or before
October 15, 2001, covering all of the shares so delivered under this
Agreement, and will use it best efforts to cause such registration
statement to become effective. MedAmicus and Med-Design will negotiate
registration rights reasonable and customary for transactions of this
nature, and such terms will be attached as Exhibit A to this Addendum
and incorporated herein by reference. MedAmicus and Med-Design each
agree to be bound by the terms of Exhibit A.
THE AGREEMENT SHALL BE AMENDED AS FOLLOWS:
SECTION 1. DEFINITIONS
Section 1.1 shall be modified as follows:
1.1 "Seldinger Needle Device" (also referred to as guidewire
introducer) as used herein shall mean [CONFIDENTIAL TREATMENT
REQUESTED].
Section 1.6 shall be added as follows:
1.6: "Related Fields" as used herein shall mean use of the Product for
non-vascular applications and applications that do not include use of a
guidewire. Related Fields does not include any use of the Product that
is inconsistent with rights previously conveyed to Becton Xxxxxxxxx and
Company, and also specifically excludes spinal, epidural, A/V fistula,
and PICC applications.
SECTION 3. LICENSE TO DISTRIBUTE
The first paragraph of Section 3 shall be modified as follows:
MedAmicus is hereby granted an exclusive, worldwide license under the
Med-Design Patent Rights to make, use, sell, and have made the Product
for the Venous Field, Arterial Field and Related Fields. If MedAmicus
knows that a person is using or selling the Product or will use or sell
the Product for use other than in the licensed fields, MedAmicus will
not sell the Product to such person without prior written consent from
Med-Design. Med-Design will retain the right to purchase the Product
from MedAmicus at a mutually agreed upon price for sale to customers
outside the licensed fields to which MedAmicus has been granted
exclusivity as set forth above.
The third paragraph of Section 3 shall be deleted in its entirety.
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SECTION 4. ROYALTIES
The first sentence of Section 4.1 shall be amended to read as follows:
As consideration for the licenses granted hereunder, MedAmicus will pay
to Med-Design royalties at the following rates:
1. On all units sold annually, [CONFIDENTIAL TREATMENT
REQUESTED], MedAmicus will Pay Med-Design royalties of 20% of
the net sales price of the Product.
2. On all units sold annually, [CONFIDENTIAL TREATMENT
REQUESTED], MedAmicus will pay Med-Design royalties of 17% of
the net sales price of the Product.
3. In no case will the royalty rate be [CONFIDENTIAL TREATMENT
REQUESTED].
SECTION 5. MINIMUMS
All of section 5 shall be deleted and replaced with the following:
In order to retain the licenses granted in the Agreement and this
Addendum, MedAmicus must sell, either alone or as part of a kit, not
less than the number of units of the Product during each royalty year
under this Agreement as set forth in Exhibit C attached to the
Agreement. In the event MedAmicus does not sell the minimum quantities
recited for each year in Exhibit C, MedAmicus may retain license rights
granted herein per the following:
(a) MedAmicus may retain exclusive license rights to all licensed
fields described herein by paying the royalty for that number
of units which would be sufficient to meet the applicable
minimum quantities. For purposes of making this additional
royalty payment, MedAmicus shall calculate an average unit
selling price of the Product actually sold during the royalty
year, and shall multiply that average unit selling price times
the number of units that would be sufficient to meet the
applicable minimum quantities, and then multiply that total
times the appropriate royalty rate. In the event less than
twenty per cent of the minimum quantities recited for a year
were actually sold for that year, then the average selling
price for the above calculation shall be set at [CONFIDENTIAL
TREATMENT REQUESTED]; or
(b) MedAmicus may retain exclusive license rights to the Venous
Field described herein and non-exclusive license rights to the
Arterial Fields and Related Fields described herein by paying
the royalty for that number of units which would be sufficient
to meet the applicable minimum quantities. For purposes of
making this additional royalty payment, MedAmicus shall
multiply the number of units that would be sufficient to meet
the applicable minimum quantities times [CONFIDENTIAL
TREATMENT REQUESTED].
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(c) Even if MedAmicus makes no additional royalty payments beyond
the royalty payments made in accordance with those units
actually sold during the royalty year, MedAmicus shall retain
exclusive license rights to the Venous Field.
If MedAmicus does not sell the minimum quantities set forth in Exhibit
C, and chooses not to pay the additional royalties described in
sections (a) and (b) above to retain either exclusive or non-exclusive
license rights to the Arterial Field and Related Field described
herein, then Med-Design has the option, in its sole discretion, (a) to
convert the exclusive license for only the Arterial Field and the
Related Field to a non-exclusive license; or (b) to terminate only the
license granted herein to the Arterial Field and the Related Field.
Med-Design may not terminate or declare the Agreement non-exclusive as
it pertains to the Venous Field.
SECTION 6.3
The lead in to the first sentence of Section 6.3 is amended to read as follows:
If MedAmicus is sued in the United States by a third party in an action
for patent infringement based on the manufacture, sale or use of the
Product for the Venous or Arterial Fields in the United States under
the Patent Rights, then the following shall apply: . . .
SECTION 8. TERM OF AGREEMENT AND TERMINATION
Section 8.2 shall be deleted and replaced with the following:
As set forth in Section 5, Med-Design's sole remedy for MedAmicus'
failure to meet the minimum quantities as set forth in Exhibit C or to
pay the additional royalties described in Section 5, shall be to
terminate or declare this agreement non-exclusive as it pertains to the
Arterial and Related Fields. Med-Design may not terminate or declare
the agreement non-exclusive as it pertains to the Venous Field.
EXHIBIT C. MINIMUM PURCHASE QUANTITIES
The quantity set forth in Exhibit C as Royalty Year 5 to Contract Termination
shall be adjusted [CONFIDENTIAL TREATMENT REQUESTED].
All other terms of the Agreement shall remain in full force and effect. This
Addendum may be executed in one or more counterparts, all of which taken
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Addendum:
THE MED-DESIGN CORPORATION MEDAMICUS, INC.:
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxx
-------------------------------- --------------------------------
Signature Signature
Xxxxxxx X. Xxxxxxx Xxxx X. Xxxxx
-------------------------------- --------------------------------
Print Name Print Name
COO/EVP VP/GM
-------------------------------- --------------------------------
Title Title
9/7/01 9/7/01
-------------------------------- --------------------------------
Date Date
5
EXHIBIT A
REGISTRATION RIGHTS
CERTIFICATE
The undersigned, MedAmicus, Inc. ("MedAmicus") and Med-Design Corporation
("Med-Design"), agree to be bound by the terms of the attached Registration
Rights Agreement, effective as of September 28, 2001, and direct that the
attached Registration Rights Agreement be attached to that certain Addendum
Number One to Development and Licensing Agreement for Safety "Seldinger" Needle
Device between MedAmicus and Med-Design dated September 7, 2001 and incorporated
therein by reference.
MEDAMICUS, INC. MED-DESIGN CORPORATION
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxxxxxx, III
----------------------------------- -----------------------------------
By: Xxxxx X. Xxxxxxx By: Xxxxxx X. Xxxxxxxxxxx, III
------------------------------ ------------------------------
Its: President and CEO Its: Vice President and Secretary
------------------------------ ------------------------------
EXHIBIT A
---------
REGISTRATION RIGHTS AGREEMENT
-----------------------------
1. Definitions. As used in this Agreement, the following terms shall
have the meanings set forth below:
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms of "affiliated", "controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" means any day except a day on which the Nasdaq National
Market, the NYSE or the AMEX, as applicable, if the Common Stock is listed for
trading or quoted thereon at such time, is closed, and if the Common Stock is
not listed for trading or quoted on any of the Nasdaq National Market, the NYSE
or the AMEX at such time, then "Business Day" shall mean any day except
Saturday, Sunday and any day which shall be a legal holiday or a day on which
banking institutions in the State of Minnesota generally are authorized or
required by law or other government actions to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's Common Stock, par value $.01 per
share.
"Company" means MedAmicus, Inc.
"Effectiveness Period" shall have the meaning set forth in Section 2.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Filing Date" means October 15, 2001.
"Holder" or "Holders" means the holder or holders, as the case may be,
from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section 5(c).
"Indemnifying Party" shall have the meaning set forth in Section 5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
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"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" means a prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to such
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"Registrable Securities" means the shares of Common Stock issued to
Med-Design Corporation pursuant to that certain Addendum Number One to
Development and License Agreement for Safety "Seldinger" Needle Device between
Med-Design Corporation and the Company, dated September 7, 2001.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of Common Stock,
including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" shall have the meaning set forth in
Section 2.
2. Shelf Registration. The Company shall prepare and file with the
Commission a Registration Statement covering all Registrable Securities for an
offering to be made on a continuous basis pursuant to Rule 415 (the "Shelf
Registration Statement") on or prior to the Filing Date. The Shelf Registration
Statement shall be on Form S-3 (or if the Company is not then eligible to
register for resale the Registrable Securities on Form S-3, such registration
shall be on another appropriate form in accordance herewith which form shall be
reasonably acceptable to the Holders). The Company shall use its best efforts to
cause the Shelf Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof, and to keep
such Shelf Registration Statement continuously effective
2
under the Securities Act until the date which is two (2) years after the date
that such Shelf Registration Statement is declared effective by the Commission
or such earlier date when (i) all Registrable Securities covered by such Shelf
Registration Statement have been sold or (ii) all Registrable Securities still
held by the Holders may be sold under Rule 144 under the Act in any 90-day
period (the "Effectiveness Period").
3. Registration Procedures. In connection with the Company's
registration obligations hereunder, the Company shall:
(a) Use its best efforts to prepare and file with the
Commission, on or prior to the Filing Date, a Registration Statement on Form S-3
(or if the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, such registration shall be on another appropriate form
in accordance herewith which Form shall be reasonably acceptable to the Holders)
in accordance with the method or methods of distribution thereof as specified by
the Holders, and cause such Shelf Registration Statement to become effective and
remain effective as provided herein.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Shelf Registration Statement as may
be necessary to keep the Shelf Registration Statement continuously effective as
to the applicable Registrable Securities for the Effectiveness Period; (ii)
cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; (iii) respond as promptly as practicable to any comments
received from the Commission with respect to the Shelf Registration Statement or
any amendment thereto; and (iv) comply with the provisions of the Securities Act
and the Exchange Act with respect to the disposition of all Registrable
Securities covered by the Shelf Registration Statement during the applicable
period in accordance with the intended methods of disposition by the Holders
thereof set forth in the Shelf Registration Statement, as it may be amended, or
in the Prospectus.
(c) Notify the Holders of Registrable Securities to be sold:
(i)(A) when a Prospectus or Prospectus supplement covering any Registrable
Securities or post-effective amendment to the Shelf Registration Statement
covering any Registrable Securities is proposed to be filed, (B) when the
Commission notifies the Company whether there will be a "review" of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement, and (C) with respect to any such Registration Statement
or any post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Shelf Registration Statement or Prospectus
covering any Registrable Securities or for additional information (and the
Company shall promptly prepare and file such amendments or supplements, or
promptly provide such information); (iii) of the issuance by the Commission of
any stop order suspending the effectiveness of any Registration Statement
covering any or all of the Registrable Securities or the initiation of any
Proceedings for that purpose (and the Company shall use its best efforts to
prevent the issuance of any such stop order and to obtain as soon as possible
its lifting, if issued); (iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of
3
any of the Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose (and the Company
shall use its best efforts to prevent the institution of any such proceeding,
and to obtain as soon as possible the lifting of any suspension, if issued); and
(v) of the occurrence of any event that makes any statement made in the Shelf
Registration Statement or Prospectus covering any Registrable Securities or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires any revisions to such Registration
Statement, Prospectus or other documents so that, in the case of such
Registration Statement or Prospectus, as the case may be, it will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(d) Furnish to each Holder, without charge, at least one
conformed copy of the Shelf Registration Statement and each amendment thereto,
including financial statements and schedules, and all exhibits to the extent
requested by such Person promptly after the filing of such documents with the
Commission.
(e) Promptly deliver to each Holder, without charge, as many
copies of the Prospectus or Prospectuses covering any Registrable Securities
(including each form of prospectus) and each amendment or supplement thereto as
such Persons may reasonably request; and the Company hereby consents to the use
of such Prospectus and each amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto.
(f) Use its best efforts to register or qualify or cooperate
with the selling Holders in connection with the registration or qualification
(or exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Shelf Registration
Statement; provided, however, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to general service of process in any
such jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.
(g) Upon the occurrence of any event contemplated by Section
3(c)(v), as promptly as practicable, prepare and file with the Commission, and
provide to the Holders, a supplement or amendment, including a post-effective
amendment, to the Shelf Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as thereafter
delivered, neither such Registration Statement nor such Prospectus will contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
4
(h) Use its best efforts to cause all Registrable Securities
relating to the Shelf Registration Statement to be listed on The Nasdaq Stock
Market and any other securities exchange, quotation system, market or
over-the-counter bulletin board, if any, on which similar securities issued by
the Company are then listed.
(i) The Company may require each selling Holder to furnish to
the Company such information, including information regarding the distribution
of such Registrable Securities, as is required by law to be disclosed in the
Shelf Registration Statement covering such Registrable Securities and the
Company may exclude from such registration the Registrable Securities of any
such Holder who fails to furnish such information within a reasonable time after
receiving such request. The failure by the Company to file the Shelf
Registration Statement by the Filing Date, to cause it to become effective or to
maintain its effectiveness for the Effectiveness Period, if due to the breach of
a Holder's obligations under this Section, shall not be deemed a breach of the
Company's obligations to such Holder under this Agreement.
If the Shelf Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (if such reference to such Holder by name or otherwise
is not required by the Securities Act or any similar Federal statute then in
force) the deletion of the reference to such Holder in any amendment or
supplement to such Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.
Each Holder covenants and agrees that (i) it will not sell any
Registrable Securities under the Shelf Registration Statement until it has
received copies of the Prospectus relating thereto as then amended or
supplemented as contemplated in Section 3(e) and notice from the Company that
such Registration Statement and any post-effective amendments thereto have
become effective as contemplated by Section 3(c); and (ii) the Holder and its
officers, directors or Affiliates, if any, will comply with the Prospectus
delivery and any other requirements of the Securities Act applicable to them in
connection with sales of Registrable Securities pursuant to such Shelf
Registration Statement.
Each Holder agrees by its acquisition of such Registrable Securities
that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv) or 3(c)(v), such
Holder will forthwith discontinue disposition of such Registrable Securities
under the Shelf Registration Statement until such Holder's receipt of the copies
of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(g), or until it is advised in writing by the Company
that the use of the applicable Prospectus may be resumed.
4. Registration Expenses. The Company shall bear all fees and expenses
incident to the performance of or compliance with this Agreement by the Company,
including, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses with respect to filings required to be
paid to The Nasdaq Stock Market and in compliance with state securities or Blue
Sky laws); (ii) printing expenses and (iii) fees and disbursements of counsel
for the Company. In addition, the Company shall be responsible for all of its
internal
5
expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement.
5. Limitation on Registration. The rights of each Holder to have any
Registrable Securities registered by the Company or for the Company to keep
effective any Registration Statement shall terminate at such time as legal
counsel to the Company delivers its opinion to the Holders that the Holders are
able to sell all of the Registrable Securities still owned by them in any 90-day
period pursuant to Rule 144. In any event, the Company shall not be required to
keep the Shelf Registration Statement effective beyond the Effectiveness Period
and may terminate the registration at the conclusion of the Effectiveness
Period.
6. Indemnification.
(a) Indemnification by the Company. The Company shall
indemnify and hold harmless each Holder, the officers, directors, agents,
investment advisors and employees of each of them, each Person who controls any
such Holder (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, agents and employees of
each such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of or relating to any untrue
or alleged untrue statement of a material fact contained in the Shelf
Registration Statement or any other Registration Statement covering any
Registrable Securities, any Prospectus or any form of prospectus covering any
Registrable Shares or in any amendment or supplement thereto or in any
preliminary prospectus covering any Registrable Shares, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that such untrue statements or omissions are based
solely upon information regarding such Holder or such Holder's proposed method
of distribution of Registrable Securities furnished to the Company by such
Holder in writing expressly for use therein.
(b) Indemnification by Holders. Each Holder shall, severally
and not jointly, indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses
arising out of or based upon any untrue statement of a material fact contained
in the Shelf Registration Statement or any other Registration Statement covering
any Registrable Securities, any Prospectus, or any form of prospectus covering
Registrable Shares, or arising out of or based upon any omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading to the extent, but only to the extent, that such untrue statement
or omission is based solely upon information regarding such Holder or such
Holder's proposed method of distribution of Registrable Securities furnished by
such Holder to the Company in writing specifically for inclusion in the Shelf
Registration Statement or such other Registration Statement or such Prospectus.
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(c) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity hereunder
(an "Indemnified Party"), such Indemnified Party promptly shall notify the
Person from whom indemnity is sought (the "Indemnifying Party") in writing, and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel satisfactory to the Indemnified Party, in its reasonable
judgment, and the payment of all fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except to the extent that such failure
shall have materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel satisfactory to such
Indemnified Party, in its reasonable judgment, in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that there may be one or
more legal defenses available to it which are different from or additional to
those available to the Indemnifying Party (in which case, if such Indemnified
Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and such counsel
shall be at the expense of the Indemnifying Party); provided that if more than
one Indemnified Party is seeking indemnification with respect to the same
Proceeding, the Indemnifying Party shall not be required to pay the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all such Indemnified Parties as a group, and all such fees and
expenses shall be reimbursed as incurred. The Indemnifying Party shall not be
liable for any settlement of any such Proceeding effected without its written
consent, which consent shall not be unreasonably withheld. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.
(d) Contribution. If the indemnification provided for in this
Section 6 is unavailable to an Indemnified Party with respect to any Losses,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such Losses in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party on the one hand and the Indemnified
Party on the other in connection with the statements or omissions that resulted
in such Losses, as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent
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such statement or omission. Notwithstanding the foregoing, no Holder shall be
obligated to make contributions hereunder other than with respect to Losses (i)
for which such Holder would have been required to provide indemnity pursuant to
Section 6(b) had indemnification been available thereunder or (i) that, in the
aggregate, exceed the amount for which such Holder would have been liable
pursuant to Section 6(b) had indemnification been available thereunder. In no
event shall a Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) be entitled to contribution from any
Person who was not guilty of fraudulent representation.
7. Rule 144. The Company shall file the reports required to be filed by
it under the Securities Act and the Exchange Act in a timely manner and, if at
any time the Company is not required to file such reports, it will, upon the
request of any Holder, make publicly available other information so long as
necessary to permit sales of its securities pursuant to Rule 144. The Company
further covenants that it will take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act pursuant to Rule 144. Upon the request of any Holder, the Company shall
deliver to such Holder a written certification of a duly authorized officer as
to whether it has complied with such requirements.
8. Transfer or Assignment of Registration Rights. The rights of each
Holder hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, may not
be transferred or assigned to a transferee or assignee of any shares of
Registrable Securities without the consent of the Company, which will not be
unreasonably withheld.
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